- Pension fund update reveals fund is at historical high!
- Your pension fund is healthy and capable of providing a much-needed COLA while still remaining actuarially sound!
- TRTA turning up the heat for a pension increase this session!
- TRS Board discusses how to address pending changes to return-to-work provisions for retirees
- TRS Board adopts emergency rule to allow retirees to return this summer as substitutes to help students with the COVID-19 “summer slide”
- No sublessee found yet for Indeed Tower space leased by TRS
The Teacher Retirement System of Texas (TRS) Board of Trustees met Friday, April 16. During the meeting, TRS Executive Director Brian Guthrie discussed the pension fund’s actuarial valuation performed on February 28, 2021.
He reiterated testimony he has provided to the Texas Legislature that the funding period is at 26 years. On February 28, the fund was at $177 billion, up from $165 billion on August 31, 2020.
TRS Chief Investment Officer Jace Auby added that the pension fund is at an “all-time high of $185 billion as of this morning.”
The Texas Retired Teachers Association (TRTA) is proud to tell members that their TRS fund is healthy and robust! TRTA believes this news about the pension fund’s growth only strengthens the possibility of retirees receiving a much-needed cost-of-living adjustment (COLA) this session!
More importantly, TRTA believes NOW IS THE TIME FOR THE LEGISLATURE TO ACT to provide a COLA!
As our members know, HB 3214 (Rep. Capriglione) passed out of the House Pensions, Investments, and Financial Services (PIFS) Committee on April 9. If passed, the bill would provide a 6 percent COLA (capped at $100 per month) to all TRS retirees who retired on or before August 31, 2019.
Passing a COLA for retirees via HB 3214 will enable the pension fund to remain actuarially sound! It will also help hundreds of thousands of retirees—many of whom have never received a pension increase!
The last time the system was sound enough to grant a COLA was in 2013. The 3 percent COLA (capped at $100 per month) was granted for retirees who retired prior to September 1, 2004.
Now—8 years later—the TRS trust fund can afford another COLA. Timing is critical! In 2013, the Legislature promised TRS retirees that when the system was able, they would finish the job of giving ALL eligible retirees a pension increase. Now is that time!
While no one can predict the future, history shows us that markets move in cycles. Those turns can happen with some predictability or may occur when least expected. We need to act now while the markets are favorable. We need to help our TRS retirees!
Waiting until it is too late may delay any help for retirees for years to come. Many retirees have been waiting seventeen years without a permanent pension increase!
More than half of all TRS retirees (200,000+) have never had a permanent increase in their annuity. TRS retirees pay a higher share of their health care costs which drastically increased in 2017, and 95 percent of school district employees are not covered by SS. Many TRS retirees are impacted by the federal Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), reducing their earned benefits as well as reducing or eliminating their spousal benefits entirely.
The Legislature must be persuaded to act on the COLA this session! The 87th Legislative Session is entering its final stretch and we need to see the COLA bills moving through the process. Without action soon, the likelihood of a COLA being passed is very slim.
If no action is taken on COLA, the Texas Legislature will pass on one of the most opportune moments in recent memory to provide retirees with a pension increase. This simply should not happen!
The Texas Legislature and TRTA work very well together. We CAN get this done. We can pass a COLA for TRS retirees this session, but we need the help of all TRS retirees!
It is time for TRTA members to make their voices heard! Retirees need a COLA and action is needed to make this a reality. It is time to turn up the heat!
TRS Executive Director Reports to TRS Board About Pending Sunset Legislation
Executive Director Brian Guthrie provided a report to the board about the status of certain bills during the current 87thLegislative Session. Specifically, he referenced several changes that will result upon the passage of Sunset legislation.
As members of TRTA may have read in previous editions of the Inside Line, the House version of the Sunset bill, HB 1585, has already passed the House unanimously. The Senate version, SB 706, passed out of the Senate Finance Committee this week and has a few amendments that must be considered by the entire Senate before they can be included.
One of the most significant changes in the Sunset legislation impacts penalties for retirees who exceed their monthly allotted work hours when they return to work in a school district. The bills propose a three strikes system that begins with a warning on the first strike, a dollar-for-dollar penalty on the second strike and requiring a retiree to pay back a full month’s annuity on the third strike. Currently, retirees who make a violation automatically lose an entire month’s pension.
TRS Board Chairman Jarvis Hollingsworth asked Guthrie about the agency’s plan to address the proposed changes to penalties in employment after retirement rules, wanting to know how retirees will be kept informed about any violations.
Historically, there has been a lag time between when a school district reports a violation and when TRS receives the notice and informs the retiree. Hollingsworth said there is concern that TRS may not receive the notice until a month after it occurred and by the time TRS informs the retiree, the retiree has unknowingly committed a second violation.
Guthrie answered Hollingsworth’s query, saying in the proposed legislation that “the first strike doesn’t count until they get notified.” Guthrie also added that the TRS staff will be working on the rulemaking details during the summer of 2021.
Guthrie also reminded trustees about the creation of an ombudsman position that will serve both active and retired TRS members and report directly to the Board of Trustees. TRTA fully supports this position.
Finally, Guthrie said an amendment will be considered by the Senate to reset the retirement date of retirees who want to return to work without penalties to January 1, 2021 (anyone who retired prior to this year would be able to come back to work without restrictions). The current date is 2011. Please note, this possible rule change will not impact future TRS retirees, only those who retired on or before January 1, 2021.
Related to this matter, the TRS Board Policy Committee met earlier this week to consider an emergency rule. This rule would expand the definition of a substitute to include service retirees that return to work during summer 2021 on a temporary basis due to the imminent peril of the learning loss as a result of the COVID-19 “summer slide.” The full TRS Board of Trustees voted on and adopted the rule on April 16.
In a brief long-term facilities update, TRS Chief Operations and Administration Officer Andrew Roth said TRS is still attempting to find a sublessee for the space it will lease in the Indeed Tower. As TRTA mentioned in previous updates, TRS will begin paying rent on this space in November 2021 if the space has not been sub-leased by that time. The TRS Investment Management Division has extended its lease at 816 Congress in lieu of moving into the Indeed Tower.
Thank you for being a member of TRTA and supporting issues that affect retired Texas public school personnel. If you’re not a member already, join us today.
You can also download the TRTA app to receive all of the latest updates and communicate with your fellow retirees.