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16 Nov
0

Senate State Affairs Committee Gets Update on TRS

TRTA Testifies on Issues that Matter to You

The Senate State Affairs Committee is charged with oversight of the Teacher Retirement System of Texas (TRS).  Yesterday the committee held a hearing on the status of the pension and health insurance trust funds.

Senator Robert Duncan, Chairman of the Senate State Affairs Committee, was unable to attend the hearing (due to a professional obligation with his law practice).  Senator Bob Deuell, committee Vice-Chair, led the meeting and a good discussion about helping public education retirees that have not had a pension increase in 10 years.  Senator Deuell asked many questions about ways the Legislature and TRS may be able to structure an increase for retirees even in this difficult budget session. Even as some legislators may run away from the idea of helping retirees in these difficult budget times, Senator Deuell is to be commended for making this a major topic of discussion in yesterday’s hearing.

Tim Lee, TRTA Executive Director, testified before the committee on numerous issues impacting public education retirees and TRS funds.  Here are just a few of the points made during the testimony:

  • Texas public education retirees have not had an increase in 10 years and have lost approximately 30 percent of their buying power;
  • Retirees have been told that their pensions cannot be increased because of a state law that prohibits benefit increases when the pension fund is not actuarially sound;
  • That same law also suggests that the state may not be able to take other action during a legislative session that may “worsen” the condition of the fund;
  • An example of such action may include reducing the state contribution to the pension trust fund, as such action would further worsen the actuarial condition of the fund;
  • Many TRTA members believe the Legislature is not acting in good faith when denying a benefit increase to retirees because of how it may worsen the condition of the fund, while the Legislature is quick to think of lowering the state’s contribution even though it also will worsen the condition of the fund;
  • Lowering state funding to the pension fund further delays providing retirees with a real cost of living raise;
  • The Legislature must act quickly to shore up funding for TRS and provide retirees with a real cost of living increase;
  • TRTA requested the Senate State Affairs Committee and all the members of the Texas Senate fully fund the TRS appropriations request (Ronnie Jung, TRS Director, suggested that not funding the TRS-Care budget request may increase health care premiums this coming biennium);
  • TRTA asked that the Legislature keep TRS whole for its appropriations for the current biennium;
  • This refers to the budget suggestions made by some elected officials to not fully fund the 6.644 percent state contribution to TRS;
  • As you recall, the Legislature authorized a $500 supplemental payment that was denied by the Attorney General.  That money was supposed to be deposited into the pension fund, but some state officials do not want to pay the higher TRS contribution for the first four months of fiscal year 2011 (September through December 2010); and
  • TRTA requested that the Teacher Retirement System not be ordered to return over $20 million to the state due to this appropriations dispute.

After the meeting, TRTA took time to talk to the committee attendees about other critical components of the TRTA legislative agenda.  Items such as the TRS Executive Director search, TRS investment policy and procedure, adding another annuitant to the TRS Board, and more were all discussed.

TRTA is your voice in the Texas Legislature!  This will be a hard session, and TRTA is preparing for a strong defense of the pension and health care trust funds.  We are also ready to fight for you to get a much needed pension increase and for preventing your health care costs from increasing.  We must be vigilant; we must be active and make our issues known.  TRTA is not giving up on any idea to help retirees this session and we know that you will be ready to stand with us during these challenging times.

One former legislator has called TRTA the most active and organized lobby in Texas.  Let’s be ready to make sure everyone remembers why!  Thank you for your membership and continued support.

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04 Nov
0

Education is Key Now that Election Day is Over

TRTA Legislative Outreach Effort is Critical

With more than 20 new Texas House members elected yesterday, TRTA members need to work swiftly to educate them on our legislative agenda. This is especially true when many elected officials are hearing bad news about public pension plans. The Teacher Retirement System of Texas (TRS) is clearly in much better shape that most other public pension funds around the country, but getting the facts to new legislators before the start of the next legislative session is vital. In order to be successful, we must educate them on issues like funding the pension plan and protecting the TRS health insurance plan.

TRTA issues have little to do with partisan politics, but getting on the agenda this coming session requires intense grassroots coordination and pressure. The two major issues facing the state this session, budget and redistricting, present a very real obstacle to every issue in the Texas Legislature. TRTA members, though, are some of the most effective communicators and most persistent voices in the business. We need to harness all of our association’s strengths and resources to push our issues this session.

For TRTA members, the most pressing concern is when TRS annuitants will ever receive a much needed pension increase. Retired public education employees have not had an increase in nearly ten years, and legislators need to know the facts about this issue. Simply knowing the facts is not enough, as legislators will be asked what plans are being developed and implemented to provide relief for this decade of neglect.

Last session, the legislature authorized a supplemental payment to TRS retirees. The catch was, as you may remember, that the Attorney General needed to provide a positive legal opinion on the supplemental benefit. No such positive opinion was made, and the money that was set aside for retirees was supposed to be deposited into the TRS pension fund. Only 8 out of 12 payments were made during the fiscal year, and your TRS fund was shortchanged millions of dollars. The Legislature must respond to this situation and assure retirees that the money set aside for their benefit increase will be deposited in full.

Funding for the TRS pension fund and the TRS-Care program are primary TRTA legislative concerns. There is already early speculation that the state budget crisis will spell trouble for these two funds. The Texas Constitution requires the state to make no less than a 6 percent contribution to the fund, and state statute requires a one percent of the aggregate active teacher payroll contribution to the TRS-Care program. The state should meet the “annually required contribution,” or the amount that is necessary to bring the fund to actuarial soundness. Currently, the state contribution is 6.644 percent, an increase from the previous biennium contribution level of 6.58 percent. The increase last session came when retirees were denied the supplemental payment. This session, the TRS Board of Trustees has recommended the state increase its contribution by 0.5 percent each year of the coming biennium (making the TRS contribution 7.2 percent in the first year of the biennium and 7.7 percent in the second year). TRTA sees this as a reasonable first step, but a more aggressive plan is necessary to help public education retirees receive a benefit increase. While TRTA is promoting the need to increase TRS funding, budget writers may start from a much less advantageous position for the state’s contribution to the TRS trust fund.

Health care funding in any amount is not protected by the Texas Constitution like the pension trust fund. Texas statute requires a contribution to TRS-Care of one percent of the aggregate active teacher payroll. In a legislative session with a budget shortfall that some are projecting to be as high as $30 billion, TRTA members must be ready to fight to maintain the funding level. After a decade of neglect without pension increases, the last thing retirees need is the possibility of reduced health care benefits or increased premium costs.

These are just some of the many issues that TRTA will actively pursue this coming session. We have a great window of opportunity to reach out to all of the members of the Texas Legislature before session begins on January 11, 2011. While we need to make contact with every legislator, those TRTA members with a new House member should set an appointment to visit with them prior to their arrival in Austin for the start of session.

TRTA local unit leaders are encouraged to organize small teams to visit legislators between now and the start of session. A special TRTA Legislative Resource Guide will be available next week for local legislator visits. The guide includes important information on the TRTA legislative agenda, contact information for TRTA legislative staff, and important information on how TRS Texas is making a positive difference for all Texans. TRTA local leaders will be able to order guides for immediate delivery as you plan your legislator visits, and all TRTA members will be able to download the content off the TRTA website starting next week.

This will not be an easy session. We all know that there are real problems that Texas lawmakers will face, but we also know that TRTA issues are as important as any other issue coming up next session. Now is the time to stay committed, stand strong, and not back down in the face of adversity.

Thank you for your membership in TRTA! The significance of your continued support is so very important. I personally want to encourage all of you to talk to your friends and former colleagues and ask if they are on the TRTA team. Their help is needed, and I know they will not be disappointed in our efforts should they choose to join the fight and become a valued member.

Please consider this email as the first TRTA Call to Action for the 82nd Legislative Session. Now is the time to educate our elected officials so they will be prepared to take the action we desperately need to help all public education retirees. Again, thank you! The entire TRTA leadership and legislative team and I look forward to working with you and for you this coming session! If you have additional questions or comments, or if you have information that you would like to pass on to TRTA about a new legislator in your area, please contact me at tim@trta.org.

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