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29 Apr 2011
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TRTA Legislative Update Week End April 29, 2011

TRTA Updates: Comptroller Security Breach, Legislative Progress, and Budget Slow Down

TRTA members reported that the CSIdentity website created to enroll TRS and other state workers/pensioners into a free credit monitoring program was having technical difficulties. A data field on the web enrollment form was not accepting information even though it was correctly entered. This resulted in the user being kicked out of the enrollment process. TRTA reported this issue to the Comptroller’s office and it is now reported to be resolved after some re-programming of the site.

In addition, TRTA members have asked questions about the call center made available for people who have not been able to enroll successfully in the program online or for those who prefer to do so over the phone. The call center is staffed by agents working for CSIdentity. While the initial call may be answered by an operator, TRTA has been advised that the people enrolling individuals into the free credit monitoring program do work for CSIdentity.

The call center can only process so many calls a day. Due to the large volume of calls, individuals may hear a busy signal or may be on hold for 8 to 10 minutes before speaking with an agent. If you are willing to enroll online, but were not successful earlier today, you may want to try again this weekend since the programming issues have been reported as resolved. If you choose to call in with your enrollment, please be prepared to hold or return the call if you are unable to reach an agent.

As of 4:30 this afternoon, CSIdentity reported enrolling just over 15,000 individuals.

A number of TRTA members have asked if they can cancel with Experian or with CSIdentity if they purchased a program before the free CSIdentity program was announced. TRTA has been advised that both Experian and CSIdentity offer cancellation policies and individuals should contact the company they purchased the program from for more information.

The “fee-based” program offered through CSIdentity does offer additional service/protection options that the “free program” does not. These services include: criminal records monitoring, public records monitoring, payday loan monitoring, sex offender monitoring, change of address monitoring and $10,000 worth of insurance.  Many TRTA members may not need or want the additional protections, and cancellation of the fee-based service is an option to consider.

TRTA will continue to ask questions and provide information in an effort to make this enrollment process easier and faster. Thank you for your feedback today.

Please be advised that as of right now there is no mass mailing or other communication plan underway to inform people about the free credit monitoring program available through CSIdentity. You may want to advise your family, friends, fellow retirees and colleagues about this service.

Information on the free CSIdentity credit monitoring program is available by clicking here.

News from the Legislature

A number of TRS bills moved out of committee yesterday and today. TRTA wants to thank Chairwoman Vicki Truitt for her efforts to move these bills through the legislative process.

  • HB 3542 by Representative Larry Gonzales (R-Round Rock) that authorizes TRS to use investment earnings above 8 percent to provide TRS retirees with a supplemental payment passed out of the House Pensions, Investments, and Financial Services Committee yesterday. The vote was not unanimous, but it did pass 8-1 (Chair Truitt, Yes; Vice Chair Anchia, Yes; Anderson, Yes; Creighton, Yes; Hernandez-Luna, Yes; Legler, No; Nash, Yes; Orr, Yes; Veasey, Yes). TRTA will work with the House Calendars Committee and the House leadership to get this bill to the House floor for a vote as quickly as possible.
  • HB 3353 by Chairwoman Truitt (R-Southlake) allows a retiree to return to work after 12 consecutive months in retirement. The bill’s intent is to simplify the current retirement rules, which are onerous and complicated. This legislation does not impact the surcharge assessed in hiring a retiree, and does not have a fiscal impact on the TRS fund.
  • HB 2120 by Representative Doug Miller (R-New Braunfels) modifies the TRS Board of Trustee position dedicated to a representative from higher education to become a position that is “open” to any member of TRS. This change makes it possible for a wider array of candidates to run for the trustee position and encourages a broader level of interest in the board election.
  • HB 3747 by Representative McClendon (D-San Antonio) allows for the direct election of the TRS member trustees.

Senate Budget Debate

The Texas Senate is still planning to debate its version of the Texas budget. TRTA will keep you posted on the progress and how it may impact the funding for the TRS trust fund and the TRS-Care health insurance fund.

Thank you for your help this week. With only a few weeks left in the regular session, we will all be working hard to ensure that retirees are not forgotten this session.

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28 Apr 2011
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Comptroller Meets with TRTA; Issues Statement

Comptroller Combs Meets with TRTA, Assures Retirees She is Working on the Problem
Texas Comptroller of Public Accounts Susan Combs met with TRTA officials per our request this week to discuss what actions will be taken to protect the people whose information was exposed on a public computer server for over a year. Comptroller Combs expressed her deep regret over this incident and assured TRTA she would provide additional protections to all individuals affected by this security lapse.
Today, she released a statement regarding several measures that will help resolve this issue. “I am deeply sorry this incident occurred and I take full responsibility for it,” Combs said. “This incident has affected the lives of Texans that I have dedicated my life to serving, and I am determined to restore their faith in the Comptroller’s office. That’s why we are taking additional actions to assist those who were affected and implementing new policies and procedures to help ensure this never happens again.”
Starting tomorrow (April 29), those who have had their personal information posted due to this security lapse will be able to sign up for free credit monitoring and internet surveillance.
Comptroller Combs also stated that identity restoration services for enrollees whose personal information is misused as a result of the lapse will be paid for by Combs’ campaign fund.
TRTA members can read the complete statement by clicking here (or you can read her statement below).
The posting of personal information of more than 3.5 million records from the Teacher Retirement System, the Employees Retirement System and the Texas Workforce Commission was a serious mistake that has put these individuals at risk of identity theft and fraud. TRTA asked the Comptroller to provide free credit monitoring for everyone impacted by this security lapse. The announcement today is a step in the right direction.
TRTA members should visit the Comptroller’s web site at http://www.txsafeguard.org/ and read about protecting your personal information. Starting tomorrow, TRTA members are encouraged to sign up for the free credit monitoring and internet surveillance program offered through the Comptroller’s office (the service itself is being provided through CSIdentity). Information about signing up for this free service is also provided on the web site above.
Please note, you are NOT automatically enrolled in this program. The free credit monitoring and internet surveillance program requires you to enroll online or by phone. If you know someone who may not have a computer or who does not receive the Inside Line, please get the word out about this free service.
TRTA has not yet seen the web site that will be used for enrollees, so we welcome your feedback on how the enrollment process works. Again, enrollment for 1-year free credit monitoring and internet surveilance begins Friday, April 29 and ends on July 27, 2011.
While this is a difficult situation and one that we wish had never happened, we do want to express our appreciation to Comptroller Combs for personally meeting with TRTA officials. Her sincerity in working to resolve this issue is clear, and we expect that her office will develop the safeguards necessary to always protect TRS retired and active members now and in the future.
Thank you for your membership in TRTA. We know these have been challenging months and that the legislative session has been filled with uncertainty. The good news is that TRTA members are making a difference this session! If you are not a member but would like to join, please contact the TRTA office at 1.800.880.1650.
From the Office of Susan Combs, Texas Comptroller of Public Accounts
“For Immediate Release              Contact: Allen Spelce
April 28, 2011                                                                                                                       R.J. DeSilva
                                                                                                                                          (512) 463-4070                                                                                                                 Comptroller Combs Takes Additional Actions to Assist People Affected by Unauthorized Data Posting and to Enhance Data Security
Free Credit Monitoring Offered As of Friday Morning 
Combs to Cover Cost of Identity Restoration Services
(AUSTIN) — Texas Comptroller Susan Combs today announced a series of additional actions her office is taking to address the unauthorized posting of certain personal information on one of the agency’s file transfer servers.
“I am deeply sorry this incident occurred and I take full responsibility for it,” Combs said. “This incident has affected the lives of Texans that I have dedicated my life to serving, and I am determined to restore their faith in the Comptroller’s office. That’s why we are taking additional actions to assist those who were affected and implementing new policies and procedures to help ensure this never happens again.”
The additional measures being taken to assist those affected by the incident include:
  • Beginning at 7 a.m., April 29, 2011, one year of credit monitoring and Internet surveillance offered at no charge to those affected by the unauthorized posting of their personal information; and
  • Identity restoration services for enrollees whose personal information is misused as a result of the data posting, paid for by Combs’ campaign fund.
As previously announced, a website (www.TXsafeguard.org) is available to provide affected people with information about protective measures they can take. A call center for affected individuals also has been established.
The additional measures being taken to help ensure that a similar incident does not happen again include:
  • Installing software that will provide automatic alerts when certain sensitive personal information moves into or out of the agency;
  • Adding staff and reorganizing lines of reporting to enhance information security. The agency will hire a Chief Privacy Officer who, along with the existing positions of Chief Technology Officer, Information Security Officer and Internal Auditor, will report directly to the agency’s Deputy Comptroller;
  • Providing enhanced security awareness and training for appropriate personnel;
  • Implementing a new secure file transfer system that provides enhanced encryption; and
  • Obtaining an information security risk assessment from one of the world’s leading information technology consulting firms.
The agency already has secured all existing personal data it maintains on its file transfer servers and has implemented around-the-clock manual monitoring of databases until the automatic alert system is installed.
The free credit monitoring service, provided through CSIdentity, alerts subscribers to certain activity associated with their credit files, such as credit inquiries, or account openings, closings or delinquencies. Subscribers will also receive CSIdentity’s Internet surveillance service, which monitors chat rooms and websites for personal information. 
Information about the program offer is available at https://txfreecredit.csidentity.com. For confidentiality reasons, CSIdentity requires that each affected person enroll directly through the website, rather than through the Comptroller’s office. Enrollment for free credit monitoring will be available to affected individuals during a 90-day period beginning 7 a.m., April 29, 2011, through July 27, 2011. Those who do not have online access may call toll free 1-877-219-1189 beginning April 29, 2011.
In a separate service paid for by Combs’ campaign fund, CSIdentity will provide identity restoration services to anyone whose personal information is misused as a result of the data posting. To qualify for this offer, individuals must be enrolled in CSIdentity’s free credit monitoring service offered to those affected. There is no indication that anyone’s personal information has been misused in connection with this incident. 
Some people whose personal information was affected may have already signed up for discounted credit monitoring and identity protection services offered by several service providers through the Comptroller’s office. Those companies have cancellation and refund policies, and individuals who signed up can contact the companies if they wish to cancel.
The general toll-free number for the Texas Safeguard program is 1-855-474-2065, or people can visit www.TXsafeguard.org.”

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26 Apr 2011
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TRTA Against Defined Contribution Bill

TRTA Testifies Against Bill Creating Defined Contribution Plan

The House Pensions, Investments, and Financial Services (PIFS) Committee received public testimony on HB 2506 by Representative Warren Chisum. This legislation would eliminate the defined contribution for the future TRS employees, it would allow current active TRS members the ability to withdraw from the current defined benefit plan to participate in a privatized 401 (k) style program and it would exacerbate the current unfunded liability situation with the TRS trust fund. It would do all this and at the same time would save the state no money in budgetary appropriation, potentially open the state up to a new cost for federally mandated Social Security contributions, and jeopardize the retirement security for over 1.3 million current retired and active TRS employees.

The preservation of the TRS defined benefit retirement plan is TRTA’s core legislative value. Many TRTA members appeared to testify against the bill and many others registered witness cards against this legislation. These members stayed at the Capitol and participated in the legislative process many hours during the day and we appreciate their commitment to this organization and the cause of preserving the TRS defined benefit plan.

In addition, we want to thank all of our TRTA members that sent letters encouraging the members to vote against this legislation. Your phone calls, emails, and personal visits have helped define this issue for our legislative members and we know they are listening to your position on this legislation.

A copy of the testimony by Tim Lee, TRTA Executive Director, is provided below for your information.

HB 2506 was left “pending” in the House Pensions, Investments, and Financial Services Committee with no vote taken on the bill.

TRTA will follow this legislation throughout the entire session. In the event that it moves through the committee process, we will launch a new email advocacy campaign for you to issue your opposition to HB 2506.

Thank you for your continued support and hard work. Your membership in TRTA is making a big difference on our issues this session. If you are not a member and would like to join TRTA in our efforts to protect TRS pension and health care benefits, please contact our office at 1.800.880.1650 and we will be happy to answer any questions you may have.

Copy of Testimony by Tim Lee, TRTA Executive Director

April 26, 2011

Honorable Vicki Truitt
Chairman
House Pensions, Investments, and Financial Services Committee

Public Testimony on HB 2506

Chairwoman Truitt and Members of the House Pensions, Investments, and Financial Services Committee:

Thank you for the opportunity to testify on HB 2506. The Texas Retired Teachers Association (TRTA) opposes this legislation on the basis that the adoption of this proposal would effectively eliminate retirement security for public education employees in Texas.

As has already been discussed in various capacities this session, and are principles that TRTA agrees with and endorses, retirement plans that are designed with certain core values promote retirement security. Those core values are:

  • Mandatory participation;

  • Mandatory employee contributions;

  • Pooled assets invested by professionals, and;

  • Benefits that cannot be outlived, i.e., paid as an annuity.

A retirement plan featuring pooled assets that are professionally managed, and requiring mandatory annuitization of benefits is a more efficient method for delivering retirement benefits. Administrative and investment costs are lower, and investment earnings are greater. These plans, also known as defined benefit plan, such a plan is similar to retirement insurance, as it pools various risks, particularly investment and longevity risk, to ensure a benefit that cannot be outlived.

By contrast, individual accounts, which are the central feature of defined contribution plans, have higher administrative costs; lower investment earnings; and higher rates of leakage, which occurs when employees cash out or withdraw their assets prior to retirement. DC plans also provide no assurance that the assets will endure the life of the participant. In a retirement sense, a DC plan is analogous to insuring one’s auto or home individually, rather than taking advantage of the efficiencies generated by pooling assets and risks.

TRTA supports the plan design that is used for Texas TRS members. This plan design promotes important policy outcomes for our state public education employees that include retirement security for workers, enabling employers to attract and retain qualified workers to perform essential public services, and providing a retirement benefit that is cost-effective and whose cost is reasonably stable and predictable.

The Texas Legislature has done an excellent job of achieving these objectives through our TRS pension trust fund. The fund is well-managed, well-funded, and provides a life-long benefit at a low cost.

In addition, the majority of Texas school employees do not participate in the federal Social Security program. For these school district employees, their TRS benefit will be their only assured source of retirement income. Texas taxpayers save an estimated $1.5 billion annually by not participating in Social Security; an amount equal almost to the entire amount the state contributes each year to TRS.

When considering HB 2506, there are several questions that should be asked about how this bill will impact millions of Texans.

Will this legislation save the State of Texas any money?

No, the legislation will still provide for the same biennial fiscal impact for active member and state contributions, but to a less secure and more costly retirement benefit program. In addition, the bill will cost the TRS pension trust fund tens of billions of dollars, as these assets will be transferred away from the trust fund and into private retirement accounts. The result will be a weakened retirement fund that must still provide benefits to hundreds of thousands of Texans. This legislation will cost the state considerably more in budget costs that maintaining the current defined benefit structure.

Will this legislation present a new financial burden on the state?

Yes, it is very likely that the federal government will not look favorably on Texas abandoning its 70-plus year-old qualified defined benefit pension plan that has provided retirement security for thousands of Texans who have not participated in Social Security. In the event that Congress forces Texas into mandatory Social Security, the cost could be an additional $1.5 billion annually.

Will this legislation promote the hiring of the best possible employees in Texas schools and will the legislation incentivize the retention of these employees?

No, HB 2506 will discourage people from entering the teaching profession. The lack of retirement security for school district employees will certainly make qualified candidates think twice about entering a career-oriented profession such as education.

Does this legislation protect the retirement security of our current TRS retiree population?

No, HB 2506 jeopardizes the retirement security of current TRS retirees as the measure allows active TRS employees the ability to liquidate their contributions at their full actuarial value. This will result in a drain on the current TRS fund by tens of billions of dollars further worsening the condition of the TRS fund. It will certainly downgrade the TRS present funded status that is now over 80 percent to something far less and far more dangerous for current, and soon-to-be retirees.

Does this legislation help the Texas economy?

No, HB 2506 would have a severe long-term impact on the Texas economy. As many already know, the TRS trust fund is an economic engine for Texas. It pays out $6.6 billion in annual pension payments that residents use to buy goods and services and promote local Texas economies (95 percent of TRS Texas pensioners still reside in the state). In addition, retirement benefits generated an estimated $640 million in state revenues and $260 million in local government revenues in 2010.

Does HB 2506 represent good public policy for all Texans?

No, HB 2506 attempts to “fix” a problem that does not exist and in doing so will diminish the retirement security of all Texas public education retirees and employees. The bill has a large fiscal impact on the Texas budget and it potentially drains the current TRS pension trust fund of tens of billions of dollars while jeopardizing the fund’s ability to meet current obligations and raising the state’s budget commitment to make these payments and keep the system solvent. HB 2506 raises the potential of higher employment costs for Texas taxpayers and the unenviable position of sending more Texas taxpayer dollars to Washington, D.C. at a cost of over $1.5 billion. Where as other states may have mismanaged their public pension funds and the federal government has made defined benefit plans less advantageous for more and more workers due to over regulation, Texas TRS is well funded, well managed, and has been cared for with great regard by many previous legislatures. This has helped Texas TRS become one of the most highly recognized and largest pension funds in America and in the world. We should and must do all we can to protect this system. It is as much a part of Texas as our state constitution and we cannot deny the many benefits it provides to all Texas citizens. Good schools, excellent career personnel serving in those schools, mandatory participation, mandatory employee contributions, pooled assets invested by professionals, benefits that cannot be outlived, pensioners who are an integral component of the state and every local economy, TRS investments holdings in 96 percent of the 100 largest public traded employers in Texas…these are but a few of the major reasons why we MUST maintain our TRS pension trust fund and do as much as possible to keep that system healthy, fiscally stable, and open for business.

Thank you for the opportunity to testify.

Tim Lee
Executive Director
Texas Retired Teachers Association

Cc: House Pensions, Investments, and Financial Services Committee

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