31 May

TRTA Update: Regular Over, Special Starts

Regular Session Ends, A Special Session Begins…

What You Need to Know

The complete TRTA recap of the 82nd Regular Legislative Session will appear in The VOICE (the TRTA quarterly publication) next month. For now, here are key highlights about the end of the regular session and what you should know about the special session that starts today. TRTA has good news to report about your hard work paying off this regular session. However, we must remain vigilant that there are no “take-backs” from what we attained over the last 140 days during the special session.

TRS-Care Funding

TRS-Care participants were told very early that their health care premiums may increase as much as 80%. After months of intense grassroots lobbying by all TRTA members, your premiums for the coming biennium are safe and should NOT INCREASE AT ALL!

We still must work to safeguard your benefit structure and educate legislators on this important benefit. Even as we celebrate a victory today, we know that next session this issue will be back. The impact of lost TRS-Care contributions by a reduced active workforce, increased retirements and the loss of federal dollars in 2014 will put intense pressure on the health care program.

TRS Pension Fund

The TRS pension trust fund remains one of the best managed and well-funded plans in the world. TRTA worked to ensure that the Legislature did not regress completely to the minimum state contribution allowed under the Texas Constitution. This was a major victory and we are very pleased with the end result: an additional $100 million in funding for the TRS trust fund that was not there at the start of the session.

The additional $100 million will not make the system “actuarially sound,” but it does keep pressure on the Legislature to not lower their contribution when times are tough. By maintaining funding levels equal to what active employees contribute for at least one year of the biennium, the TRS trust fund will be on a path to actuarial soundness. This is a critical step in ensuring a true, permanent cost-of-living increase for all TRS retirees.

TRS Board Structure

TRTA won another victory with the passing of HB 2120. This bill creates an “open seat” on the TRS Board. Presently, the position is reserved for a higher education member. TRTA argued that it makes more sense to have an open seat for which any TRS member is eligible to run. The Legislature agreed, and the bill is now on its way to the Governor. We hope that Governor Perry will sign the bill into law.

No Supplemental Payment, No Pension Increase

TRTA is very disappointed that a bill by Representative Larry Gonzales (R-Round Rock) passed in the House but never received a hearing in the Senate. This bill would have made it possible for retirees to receive a supplemental payment based on several conditions. The conditional nature of the bill was designed to protect the system while providing a path for a payment to be issued. This was one of the most creative and unique ideas introduced to help TRS retirees this session. TRTA applauds Representative Gonzales for his innovation. We believe this is an idea that could be reintroduced easily next session.

Numerous other bills were introduced that would have provided retirees with a pension increase. These bills did not get very far due to the TRS fund’s actuarial condition (even though the fund is over 81% funded, it is still not “actuarially sound” according to Texas statute). TRTA will advocate for a permanent cost-of-living increase for all retirees and will make every effort to enact another consumer price index (CPI) catch-up plan in future sessions.

As the 82nd Legislature adjourned their regular session yesterday, they guaranteed TRS retirees will endure a full decade of no cost-of-living increases. This is a travesty and we must press future legislatures to end this downward spiral.

Elimination of the Defined Benefit Retirement Plan

TRTA members defeated a growing movement to transition the TRS benefit structure from a traditional defined benefit plan to a privatized defined contribution plan. While we were successful this session, the defined contribution advocates are well-financed, extremely motivated and are not going to give up. These groups have targeted public schools, and public school and government employees. Their goal is to end these plans permanently. Think about this, TRTA is the largest organization for public education retirees in the country. We are the front line of defense against these highly financed, politically motivated organizations wanting to end traditional defined benefit plans for public school employees. Our strength is an educated, active, motivated, and large group of retired school employees WHO VOTE! This session’s fight on defined benefit versus defined contribution was only a beginning. We must take the actions necessary to protect our defined benefit plan. Again, membership will make a critical difference on this issue, as well!

TRTA will fight any effort to transition TRS to a defined contribution plan every step of the way. We must make everyone aware of these privatization efforts in order to protect current retirees and active school employees alike.

Special Session

Now begins a 30 day special session. The major issues are school finance and statewide health care reforms. TRTA will work with legislators to protect what you fought so hard to achieve in the regular session.

TRTA will monitor every action taken, including SB 7 by Senator Jane Nelson. This legislation may impact TRS-Care and all health insurance programs statewide. We worked closely with Senator Nelson’s staff during the regular session with a similar bill (SB 8) to protect your TRS-Care program. We will do the same during the special session.


TRTA members made a profound difference this session. The reality is that the results could have been much worse for TRS retirees. If not for the thousands of members making calls, sending emails, travelling to Austin for our Day at the Capitol, and making personal visits to legislators in Austin and back home, there is no doubt that things would have been worse for TRS retirees. To each and every one of you, please accept my sincerest “Thank You!” Our membership really does make a difference.

I want to extend a personal thank you to the TRTA Board of Directors for their ongoing leadership, the State Legislative Committee for their tireless work, the District Presidents and Legislative chairs, our local leaders, all Inside Line subscribers, everyone who sent an email through our web site and the TRTA office staff for their dedication.

In addition, I want to thank my good friend and TRTA State Legislative Coordinator Mr. Bill Barnes and his wife, Janice. Bill spent many nights in Austin working on behalf of the TRTA membership. He is one of the most dedicated volunteers I have ever worked with!

I also want to thank our Legislative Consultant, the Honorable Barry Telford, for his expert advice and support.

We say goodbye to the regular session of the 82nd Legislature, knowing that our work is not done. We will remain strong and active during the special session and interim.

Please look for the complete wrap-up next month in the The Voice. If you are not a member but would like to join TRTA, please contact our office at 1.800.880.1650 and we will answer any questions you have.


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27 May

Bad Politics, Questionable Policy for TRS-Care

Good News on Budget Agreement for TRS Retirees, BUT…

Last Minute Budget Maneuver May Have TRS Jumping Through Hoops

The long-awaited conference committee report on the state budget was released last night, with good and bad news for TRS retirees.

The Good News

Legislative conferees agreed to keep the funding for the TRS-Care health insurance program and TRS pension trust fund intact (this is the Senate version that appropriates more to TRS and TRS-Care).

As you may recall, the TRS-Care component is critical to prevent premium increases that could have been as high as 80 percent. TRTA members have worked hard to maintain the TRS-Care health insurance program and current cost structure. With Senate and House conferees agreeing to the funding for TRS-Care, we are close to ensuring that all TRS-Care participants will not have a premium increase in the coming biennium!

Conferees also agreed to the plan that funds the TRS pension fund at a higher rate in the second year of the biennium. The state contribution to the TRS pension fund drops to 6 percent in the first year of the biennium, but increases to 6.4 percent in the second year. This results in almost $100 million more in funding for the pension trust fund. TRTA members’ efforts have held legislators accountable for more adequate state funding for the TRS trust fund.

The Bad News

This is from the Conference Committee report on HB 1. Article IX, Section 18.27.

Sec. 18.27. Teacher Retirement System and Employees Retirement System: Pilot Program to Test Alternative Payment Systems. Out of funds appropriated elsewhere in this Act to the Teacher Retirement System (TRS) and the Employees Retirement System (ERS), TRS and ERS are each authorized to establish a pilot program under which physicians and health care providers who provide health care services to employees and retirees and their dependents participating in the group benefits programs administered by TRS and ERS are compensated under a payment system designed to test alternatives to traditional fee-for-service payments. To the extent practicable, the program must be based on nationally recognized quality of care standards and evidence-based best practices, and must include policies designed to promote provider collaboration and other policies and practices as necessary to ensure high-quality and effective health care services.

This section is the resurrection of an attempt last session to create a new method of payment for medical providers that is sometimes known as outcomes-based payments. This is a break from the traditional fee-for-service payment structure most common in traditional health insurance plans today.

TRTA has NEVER opposed having a discussion about new methods of care and payment models that may save retirees money while improving their overall quality of care. The issue with this budget maneuver is that it has removed all constituent groups from the debate on this important issue.

A nearly identical bill was proposed last session, and the House removed TRS-Care from the alternative method of payment study at that time. The proposal represented a major shift in how TRS-Care may be managed, and more importantly, how TRS-Care participants may receive care.

In addition, the implementation of a pilot program costs money. The language for this section states “out of funds appropriated elsewhere in this Act to the Teacher Retirement System…TRS is authorized to establish a pilot program.” There are no other funds appropriated in this act for TRS to implement a pilot program; that is, unless, the budget writers are suggesting funds appropriated to preventing TRS-Care premiums from increasing or dollars dedicated to the TRS pension fund (the same fund that the legislature is already underfunding) be used.

The state did not appropriate dollars for this study, and the pension fund cannot afford to pay for it. TRTA will resist any use of TRS-Care or TRS funds to be used for the study. These funds are designated for the benefit of TRS retirees. If this study is that important to state decision makers, they should involve TRTA and other constituent groups in open meetings and public hearings!

The bottom line here is communication: language has been added to the budget proposal and not one constituent group was able to participate in the debate.

This is bad politics and questionable policy. TRTA is more than agreeable to working with political and agency decision makers to develop new methods of efficient, high quality health care. Adding a study in a budget deal in the last days of session is an inefficient and suspect way of forcing something on to the people who served the state so faithfully.

As a final note, the State Employees Retirement System was NOT excluded from last session’s alternative methods of payment study. The lack of evidence offered to the Texas Legislature about how this alternative method of payment study saved the ERS health care plan any money is quite telling. If this plan was so successful, where is the proof and why was it not presented this session?

Now that this issue has been made public, TRTA will NOT let it go unchecked. In the final hours of the legislative session, we will communicate with Legislators about our concerns. However, the real fight over how this plan may be considered and who will pay for it likely will fall on the shoulders of the TRS Board of Trustees. TRTA has a tremendous relationship with the TRS Board and we will work closely with them to protect your TRS-Care insurance program!

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25 May

Update on TRS Board Bill — Going to the Governor

HB 2120 Passes Senate

Now Awaits Governor’s Decision

HB 2120 passed the Senate unanimously on Tuesday, May 24. The bill, which would allow the designated higher education retiree position on the TRS Board of Trustees to be open to any member of TRS, now goes to the Governor for his signature or veto.

HB 2120 would allow public education retirees as well as active members of TRS the possibility of greater representation on the TRS Board of Trustees. Currently, the TRS Board consists of one higher education retiree, one public education retiree, two active members and two representatives from the Texas State Board of Education. TRTA believes the passage of this bill would stimulate more interest among retirees to pursue board positions and encourage their involvement in decision-making at TRS.

TRTA members are grateful to Representative Doug Miller (R, New Braunfels) for authoring the bill and to Senator Robert Duncan (R, Lubbock) for his support in passing HB 2120 in the Senate.

Much gratitude also goes to all of you for contacting your legislators and encouraging them to vote yes on HB 2120 this session. Thank you for your support and hard work!

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