19 Apr 2013

Let’s Make These Bills Better

Dear TRTA Members,

Thank you for your commitment to improving retirement benefits for TRS retirees. This session has been far more positive on our issues than two years ago. This is due to your steadfast dedication to our work in the legislative process!

We are at a critical moment in the legislative process.

Our actions now may mean the difference between actuarial soundness and financial relief for TRS retirees, or not making the progress we need to protect the future of TRS.

Many of you responded to our recent email about the ongoing discussions to make the pension fund actuarially sound and provide an increase for some TRS retirees. Thank you for providing us with your feedback.

After long and productive days at the Capitol, changes in HB 1884 (Callegari) and SB 1458 (Duncan) are being discussed thoroughly by our friends in the Texas Legislature.

A comment that we hear in nearly every office we visit is “we want to help our retired TRS members, and we want to help them now.

These legislators know the needs are many and the time has come to focus on the pension fund’s actuarial soundness and relief for TRS retirees.

TRTA also has made it a priority to partner with our friends in active educator organizations and seek their counsel as we discuss potential changes to TRS.

The good news is that we are all working tirelessly to achieve similar goals: make the fund actuarially sound, avoid the impact of the Governmental Accounting Standards Board (GASB) changes in 2014, minimize the negative impact on our active school employees, and provide some financial relief to TRS retirees.

TRTA has met directly with both Senator Robert Duncan and Representative Bill Callegari, the lead authors of the bills, to discuss changes that we believe make them more agreeable than they are in their present form.

We are stressing that more TRS retirees need to be included in a benefit increase. Many of our friends in the Legislature want to achieve that goal as well.

TRTA knows that both Senator Duncan and Representative Callegari are true supporters of the TRS defined benefit plan and that their goals are to strengthen the fund’s actuarial condition and make it strong for all TRS retirees—both now and in the future. Many of you want this too.

Now is the time for action. Now is the time to be bold, and build these ideas into long-term, workable solutions!

We are asking you to help us. The bills as they are written do not offer enough help to retirees and have a large potential downside for active school employees. The legislative process is a progression, with bills improved by stakeholder input.

Those discussions ARE taking place and TRTA is heavily involved. Our goal is to be the voice for all TRS retirees, and the message is being sent loud and clear by your Austin legislative team.

While these bills are not perfect, they are what we have to work with and they absolutely can and should be improved! If they do not move, then we will miss this opportunity to make good things happen for all TRS retirees.

Within just a few short hours, over 4,500 emails were sent by TRTA members supporting these ongoing discussions. Thank you.

We need you to keep applying pressure. Keep emailing! If you already have sent an email, click here to send another one!

In addition, we are asking you to call your legislator and thank them for standing strong with TRS retirees and with TRTA.

There has been tremendous support for maintaining the TRS defined benefit plan. These bills, if adjusted appropriately, will make our pension fund actuarially sound and give our retirees much needed financial relief.

We hear your voice. We want the same thing you do: a guarantee to help retirees and more of them! This is possible this session. Our legislators need to HEAR from all of us!

It is imperative that your legislator receives a call from you as soon as possible. They need to hear you say:

“Thank you for not giving up on TRS retirees. SB 1458 and HB 1884 need improvement, but we know they are leading us in the right direction. It will take all of us working together to get them passed. TRTA supports this endeavor. Retirees need help now.”

Use our hotline to contact your Senator and Representative: 1.888.674.3788.

These bills need a chance. Please understand that some people want these bills to die simply because they want to change the TRS defined benefit structure to a defined contribution structure.

Let’s not let people steal this retirement system from us. Now is the time for action!

We cannot stress enough the need for your help. This is a call to action for all TRTA members who want to get the system actuarially sound, improve these bills for both retired and active TRS members, and achieve some financial relief for TRS retirees. Please help us! Make your call today.

TRTA Legislator Hotline: 1.888.674.3788.

Click here to send an email to your legislators!

Click here to learn who your legislators are!

Thank you for your ongoing support. We are making a difference. The passage of bills designed to help the TRS fund and help ALL TRS retirees is TRTA’s number one priority. Please contact your network of TRTA members and let them know about this action alert. We have already achieved some great accomplishments–like getting more than 100 co-authors on HB 1383!–and now is the time for TRTA to generate a grassroots action campaign that we know no one else in the state can match.

We are working with our friends in the legislature, we are working very closely with our friends in the active school employee/employer community. We can do this! A benefit increase for retirees is definitely possible this session. TRTA can lead the way in this endeavor.

Please remember to be positive and express appreciation to the legislators or their staff (this time of session, it is always nice to hear a pleasant voice on the phone!). Let your legislator know how important it is to make this TRS fund actuarially sound. Let them know how important a benefit increase would be to you! Let them know we are in this fight together and that we can accomplish great things. Tell them we can improve SB 1458 and HB 1884 to protect TRS now and in the future.

Thank you TRTA members. You are all doing an amazing job and I believe it is making a BIG difference!

Sincerely yours,

Tim Lee

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19 Apr 2013

TRTA Issues Front-and-Center Next Week

Pension Increase Bills in Committee; Action on TRS Pension Bills

Special Update on TRS Legislation–New! Updated Email Campaign, click here to send New Email!!

TRTA members have answered the call! Over 5,000 emails have been sent since yesterday. We do not know how many TRTA members have made phone calls, but we know that every office we visited today talked about the “nice and passionate” TRTA members calling in to support efforts on SB 1458 and HB 1884.

Your actions are so appreciated! We are a long way from the finish line, though, and we must keep up this pressure.

Every TRTA member that wants to help us make the pension fund actuarially sound this session needs to contact their legislators. Any TRTA member that would like to help their fellow retirees and themselves get a much needed pension benefit increase must also help send emails and make phone calls.

Some TRTA members have commented that this much effort should NOT be necessary to help our retirees. We agree! There are, however, many interests trying to minimize our agenda.

We want to cut through the noise that is constantly attacking TRS retirees and the TRS defined benefit plan. As we reported yesterday, some groups would rather do nothing simply to advance their agenda of worsening the TRS fund and pushing the idea of defined contribution plans.

Enough is enough! TRS retirees need help and we need it now. Please, if this issue is important to you or someone you know who is a TRS retiree, we need you to email and call your legislators.

TRTA is taking a lead role to work with legislators and active educator stakeholders. Together, we can make SB 1458 and HB 1884 the bills that improve TRS for generations to come.

These bills are expected to be heard in committee on Monday. We believe that TRTA members can generate over 10,000 emails by that meeting. We have posted a newly updated email campaign in this email.

Please click here to send your legislators an email about this vital issue.

In addition, please call your legislators on Monday and ask them to work with Senator Robert Duncan and Representative Bill Callegari to improve these bills. Retirees and active school employees are working together to protect TRS. We can make a difference if we work together.

TRTA Call Your Legislator Hotline: 1.888.674.3788

TRTA Email Campaign: Click Here!

Find out who represents you: Click Here!

Additional Legislative Action Set for Monday

A number of other bills will be heard in the House Pensions Committee on Monday afternoon. One of those bills, HB 103 by Representative Larry Gonzales, would authorize TRS retirees to receive a supplemental payment this year.

Representative Gonzales authored similar legislation last session and it passed out of the House with overwhelming support. Representative Gonzales championed this idea as a way to help the thousands of TRS retirees that have not received a benefit increase since the last supplemental payment in 2008.

No TRS retiree has seen a permanent cost of living raise since 2001, but the supplemental payment that was received in 2008 was equivalent to three-years worth of increases paid in one lump-sum (based on a one-time cost of living raise equal to 3 percent).

While this bill did not pass in the Senate last session, Representative Gonzales promised to reintroduce the bill and keep fighting for TRS retirees.

TRTA awarded Representative Larry Gonzales and Senator Robert Deuell (who carried a companion bill in the Senate) their “Legislation of the Year” award in 2011. These bills represent a creative way to help retirees while also protecting the overall value of the TRS fund by authorizing the supplemental payment only if the fund’s value exceeds 80 percent and if the system earned its expected investment return of 8 percent.

TRTA does support HB 103 and Representative Gonzales for his work on this issue. We are very grateful for Representative Gonzales and his steadfast support of doing all he can to help TRS retirees.

TRTA will also support the bills authored by our good friends Representative Alma Allen, Representative Armando “Mando” Martinez, and Representative Ana Hernandez Luna. These bills all address retirees receiving a pension increase.

Concluding Comments

Thank you for your hard work and dedication. We are making a difference for TRS retirees this session. We still have time to improve and pass these important bills.

Your TRTA membership is what allows us to advocate on your behalf. If you are not a member but want more information about joining in our efforts, please call us at 1.800.880.1650. The TRTA membership fee is $25 per year.

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16 Apr 2013

TRTA Supports Raise for Retirees

Expansion and Certainty are Key Points

Two bills moving through the legislative process would provide some TRS retirees with a pension increase. The raise is contingent upon the passage of other benefit changes for future TRS retirees. It also suggests the raise will only be provided when other conditions are met. The proposed 3% cost-of-living increase would be provided to those who retired August 31, 1994 or before. For a complete overview of the SB 1458/HB 1884, please click here.

TRTA has heard from numerous members and our friends in the active educator community. The groups representing active employees are working with legislators to address their concerns with the proposed legislation.

TRTA primarily is focused on three key concepts of this proposed TRS legislation.

  • We believe the pension fund needs to be actuarially sound (or have a measurable funding period) this session;
  • TRTA believes the state contributions to the TRS pension fund have been unreasonable since 1995. TRTA supports passage of HB 1383, a bill in the Texas House with over 100 co-sponsors. HB 1383 sets the pension fund contributions at 6.9% in FY 2014 and 7.4% in FY 2015;
  • TRTA believes that any benefit increase provided through legislation should go into effect immediately. We also believe more people should benefit from the increase than is proposed currently.

TRTA is working to get as many TRS retirees a raise as possible this session and make TRS actuarially sound! We need your help. Please click here and send an email to your Senator and your House member and ask them to support TRTA efforts with SB 1458 and HB 1884! These bills still need some work, but let’s get our legislators’ attention on this issue!!

Actuarial Soundness/Funding Period
As of August 31, 2007, the TRS pension fund was actuarially sound. That funding condition, along with TRTA’s work in the Legislature, allowed TRS to issue its first-ever 13th check to TRS retirees. At the time, it provided immediate relief for retirees that had not had an increase in many years. It was also considered a “first step” towards getting TRS back on track, and giving retirees a real cost-of-living increase.

We know the rest of the story. In September of 2008, the market declines were underway, and the country was entering a great recession. TRS investments were not immune. By February 2009, the system reported a funding level of only 67% and a total actuarial loss of over $40 billion.

Since then, the fund has recovered, with a funding level of just over 81%! TRS has earned back billions in actuarial value, with total assets now exceeding $113 billion.

Still, the fund is not able to amortize its unfunded liability within 31 years. This is the statutory hurdle that must be overcome in order to receive a pension increase. Perhaps worse, the pension fund has a “never” funding period. Put simply, the pension fund will run out of assets by 2072 if nothing is done to fix this issue.

The picture will be bleaker if action is not taken this session to address the funding period. A national regulatory group known as the Governmental Accounting Standards Board (GASB) has a new set of guidelines for pension fund accounting methodologies. These standards go into effect January 2014.

If the Texas Legislature fails to ensure the fund’s long-term funding period (a date when it will be funded versus depleted), GASB will require the state to book its pension liabilities at a much higher rate. This means our problem will look worse than it is, and may carry with it unwelcome changes to our pension plan.

Action this session is imperative. TRS Texas is one of the healthiest plans in the country. Now is the time to preserve this plan for multiple generations to follow!

Contributions to the TRS Fund
Contributions to the TRS fund have been unreasonable since 1995. The state cut funding to the pension plan in 1995 from 7.31% to 6%, the constitutional minimum.

After 1995, the state funded at a higher level in only 5 of the past 18 years. This shortsighted budget strategy has cost the pension fund over $8 billion in contributions and interest earnings.

Consider the key points: only 5% of Texas school districts pay into Social Security; the average private sector hourly worker receives an employer sponsored 9.5% contribution to their retirement security (Social Security and an employer-sponsored contribution to a private retirement plan).

The vast majority of Texas career educators depend on TRS as their primary source of retirement security. With no Social Security, TRS is their foundation.

The state has saved billions by not covering school employees under both Social Security and TRS. Many school districts also have saved billions by making minimal levels of contributions to other retirement savings for its employees.

We know this is a politically divisive issue. School districts can point to the state for not making school funding a larger priority. TRTA is not assigning blame, we are stating a fact. The public servants in our schools have not received a reasonable contribution towards their retirement costs for more than a decade, period. The bottom line is that we must all work TOGETHER to protect this fund.

On the issue of funding, TRTA believes that more must be done by the Texas Legislature. Active school employees are being asked to put a lot of “skin in the game.” This could amount to several billion dollars in benefit modifications for future education employees.

The state is upping its contribution by a much more modest $120 million. TRTA supports HB 1383 and its proposed state contribution levels.

Putting more money in the fund today means future costs are far more manageable. It also ensures our traditional defined benefit plan will remain intact for future retirees.

Cost-of-Living Increase
TRTA members received a 13th check in 2008. It was a much needed benefit at the time and helped hundreds of thousands of TRS retirees. Now, the Texas Legislature is focused on a plan that will ensure TRS actuarial soundness and begin to provide raises to TRS retirees.

This legislative proposal focuses on helping as many of our senior retirees as possible. TRS retirees that have been retired since 1994 are in desperate need of help now. We believe all reasonable efforts should be made to provide a retirement increase to as many TRS retirees as possible.

Areas that Still Need Work
SB 1458 and HB 1884 are far from perfect. Many organizations and active public school employees have good reasons to dislike them. TRTA is working with all our friends in the Texas Legislature as well as our partners in the active school community to support solutions to these legislative proposals.

TRTA wants to see more people eligible to receive an increase. We believe all retirees are in need and that they need the increase now. Some TRTA members have asked about a 13th check versus a cost-of-living raise. Generally speaking, 13th checks are less costly over time than raises and can impact more people. The downside is that the base annuity is not affected long-term like a real cost-of-living raise. We are working with our legislative friends on this section of the bill.

It is quite an accomplishment by TRTA members that we are even discussing any benefit increase for TRS retirees, considering that at the start of session we were focused on restoring contribution cuts from the last biennium and fending off attacks of the defined benefit plan.

The most controversial part of this bill is the age-adjusted annuity for future retirees. This proposal reduces an employee’s benefit by 5% for every year of age less than 62 at the time of retirement. The provision has a grandfather clause exempting a large percentage of active workers from being impacted by this legislation. If you are:

  • Age 50, or;
  • Meet the Rule of 70, or;
  • Have accrued 25 years of service already, you will not be impacted by this proposal.

We know that this is a very discouraging benefit change proposal. We are working with our friends in the active educator community to address this portion of the bill.

These bills are a work-in-progress. There are many issues at stake and we must all be engaged to know how these proposals can benefit the long-term health of the system and provide financial relief to our current TRS retirees.

TRTA supports a unified approach on these bills. We must recognize the great need that so many TRS retirees are experiencing. We also must ensure that the Legislature is doing all it can through the budget process to minimize future retirement benefit changes as much as possible.

Thank You
TRTA members are the most active and prepared grassroots advocates. Thank you for your support and strong efforts as we work through these various legislative proposals.

If you are not a TRTA member and want to join in our advocacy efforts to protect TRS and improve benefits for all retirees, please call us at1.800.880.1650.

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