Blog

26 Feb
0

Early Voting Continues Through March 2: VOTE TODAY!

Many Texas Retired Teachers Association (TRTA) members are going to the polls to participate in early voting in the Primary Election.

Remember that in Texas, you can make your vote count the most by voting in the Primary of your choice! Most elections in Texas are decided during the Primary Election, not during the General Election in November!

Please visit this link to help you pick a primary based on where your vote has the most power.

Early voting continues this week and ends on Friday, March 2. TRTA strongly encourages retired educators to vote early, avoid long lines and to take your friends and family with you. GET OUT AND VOTE TODAY!

Why You Should Vote in the Primary Election

  • The Texas Legislature makes all critical decisions about your retirement security and health care benefits.
  • More than 90 percent of state legislators are elected during the Primary Election because of the way districts are drawn to favor a political party. The General Election is non-competitive in all but a handful of districts.
  • Early voting allows you to go to a central location in your county and skip the wait at your precinct location on Election Day.
  • Find your polling place in your local newspaper, or your county website, visit www.votetexas.gov, or visit the Secretary of State website.
  • Most importantly, you can brag about doing your civic duty and encourage others to follow your lead. You can even go on the TRTA Facebook page, Twitter account or another social media site of your choice and post your picture showing your “I voted early!” sticker so that other educators can see it and get the message that voting is vital!

Need Help Choosing a Candidate? Here Are Some Resources That May Help You!

  • Talk to your TRTA local leaders and legislative chairs and find out how your colleagues are voting based on TRTA issues.
  • Get on social media and search for education pages, such as TRTA’s Facebook page, to see what educators are saying about this election.
  • Visit www.vote411.org, the League of Women Voters website that provides a sample ballot based on your address.
  • Visit www.texastribune.org for great articles about every possible political issue in the state of Texas.
  • Visit www.Txparentpac.com, a pro-public education group that endorses candidates based on their views on public education.
  • Visit www.teachthevote.org, a non-endorsing website that researches candidates based on public education issues.

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15 Feb
0

TRS Board Meets, Discusses Customer Services Issues, Rate of Return

Executive Summary:

  • TRS Board of Trustees to vote on changing rate of return assumption in April.
  • TRTA members and leadership provided testimony about the future of the pension fund.
  • TRS provided presentations on the customer service issues, including increased phone call volume.
  • TRS received presentations on changing the rate of return assumption.

The Teacher Retirement System of Texas (TRS) Board of Trustees met Wednesday, February 14 in Edinburg, Texas. One of the meeting’s primary objectives was to discuss recommendations from an experience study performed on the pension trust fund by an actuary.

The experience study reviewed the performance of the pension fund over the past five years and considers projections about the economy and investment returns over the next five years. This study, which considers how assumptions compare to actual fund performance, is mandated by law. The board was scheduled to take a vote on whether to reduce the rate of return assumption. However, the board voted to postpone voting on this issue until April.

TRS Board Chairman Jarvis Hollingsworth announced that this meeting, a board retreat that occurs once every two years, is meant to give the trustees time to review significant policy issues. Unlike most TRS Board of Trustees meetings, this retreat is usually done outside of the state capital of Austin where TRS houses its headquarters. The retreat is being held at the University of Texas Rio Grande Valley this week.

Several individuals provided public testimony during the meeting. Dora Luz Cackley, TRTA member and member of the local unit Brownsville Area RSEA, talked about how the new health care changes with TRS-Care are impacting retired educators, especially those under the age of 65 who are not supplemented by Medicare. “Our health care premiums went up, so our pensions went down…we’re scared.” She expressed that many retirees are angry and frustrated. “We feel abandoned.”

Bill Barnes, Texas Retired Teachers Association (TRTA) State Legislative Committee Chair and Coordinator, and Vice-Chair of Retiree Advisory Committee at TRS, gave testimony from a retiree’s perspective. “TRS is our safety net, and retirees have had tremendous confidence in TRS but there are serious concerns from retirees about their pensions and their health care costs.” Barnes stated many retirees ask him if they will ever get any kind of cost-of-living increase and ask him if the rate of return assumption is lowered, “Does that mean there’s no help for retirees?” Barnes stressed that “retirees hope somebody out there is listening to them.”

TRTA Executive Director Tim Lee testified about how changing the rate of return assumption would impact future benefits for retirees. “Contributions plus investment returns equals benefits,” Lee said. He also discussed the pressure being placed on TRS to make changes to the assumption. “Any change in the rate of return assumption means we’re going to have to make up money somewhere.” He urged the trustees to consider how this decision will affect long-term solvency.

“We don’t know how other players in this process are going to move forward,” Lee said.

“If the Legislature cannot meet its contribution requirements… then it becomes a benefits discussion.” Lee continued, “We urge you to be aggressive with the Legislature in saying they must live up to higher contribution responsibilities.”

Lee said that changing the rate of return assumption to 7.25 percent would be too low. The current rate of return assumption is 8 percent. The difference in funding those two numbers could require billions of dollars from the state of Texas, or about $786 million per year!

Later during the meeting, during a presentation from Gabriel, Roeder, Smith & Co., it was shown that if TRS accepts the recommendation of 7.25 for the new rate of return assumption, TRS would need to request an increase of 1.82 percent from the state of Texas in contributions to make up the difference resulting from investment return losses.

The TRS Board of Trustees, as a fiduciary body responsible for making prudent decisions to ensure the financial stability of the fund, must address the rate of return assumption issue. When this decision is made, it will then be incumbent upon the Texas Legislature to adopt a higher funding policy for the pension fund to protect the promised benefits for our retired and active educators.

The Legislature cannot take a “wait and see” approach to this matter. The longer the Legislature waits to address this issue, the more the unfunded liabilities will rise and the more expensive the problem will become. This impacts the beneficiaries of the fund: current retirees AND future retirees! Contributions plus investment returns equals benefits! If contributions do not make up the difference when investment returns are low, that means benefits get cut!

These are benefits that are promised to people TODAY. A decision by the Legislature on funding policy needs to be made during the 2019 legislative session, not later!

Caasi Lamb, Director of Special Projects at TRS, provided a review of the Pension Benefit Design Study that took place in 2012 ahead of the 2013 legislative session. TRS is planning to update the study ahead of the 2019 session to provide the Legislature with facts and figures about the defined benefit plan and how it compares to other types of retirement plans such as defined contribution style plans (such as 401ks) and cash balance plans. In 2012, the study revealed that the defined benefit was the most beneficial for Texas public education retirees, as well as the most cost-efficient plan for the state.

TRS-Care and Customer Service Issues

TRS Executive Director Brian Guthrie reviewed customer service experiences and goals with TRS staff and trustees, discussing increases in call wait times for TRS members and a large influx in call volume resulting from the changes that occurred recently with the TRS-Care retiree health insurance plan. He expressed disappointment in the wait times and agreed that hiring additional benefits counselors is an immediate necessity that will be addressed. Thirty-one positions will be filled to meet this need by the summer of 2018, along with 13 other positions in the health benefit services department.

TRS Chief Health Care Officer Katrina Daniel provided details on the changes to the TRS-Care program’s membership. Of the 270,000 plan participants, 28,450 left TRS-Care between Sept. 1, 2017 and Jan. 1, 2018. According to Daniel, approximately 90 percent of plan participants were successfully transitioned into the new plans.

For participants who left the plan and may be interested in returning, a temporary enrollment period is open through the end of February 2018.

Capital Market Assumptions

The TRS Board of Trustees heard a presentation on Capital Market Assumptions by Steve Voss and Mike McCormick of Aon Hewitt, providing analyses about past market returns and volatility, expected inflation, and what TRS can expect from the market over the next 10 to 30 years.

Experience Study Findings and Recommendations

The experience study took place over several months. The results of the study were reviewed with trustees individually, as well as with legislators and stakeholder groups, including TRTA and active teacher groups.

The presentation was made by Joe Newton and Dan Siblik of Gabriel, Roeder, Smith & Co, an actuary and benefits consulting firm.

Newton emphasized the importance of changing the rate of return assumption to the TRS board. “This is the most important decision you could make as a trustee,” he said.

The current rate of return assumption is 8 percent. Newton’s company is recommending that TRS change that rate of return assumption to 7.25 percent. A change of this magnitude would require the state of Texas to dramatically increase its funding for TRS. Without additional funding under a lowered rate of return assumption, the TRS pension plan would no longer be on a path to becoming actuarially sound, which is a requirement for providing cost-of-living-adjustments to retirees.

Currently, TRS receives a 6.8 percent contribution rate from the state of Texas, which is about half as much as the next highest state among its peers.

After Newton’s presentation, the TRS board decided to post-pone making a decision on whether to change the rate of return assumption until April.

“To ask us to make a decision on this today, is a very difficult ask,” said Nanette Sissney, a board member. “If we could table this until our next meeting… that would be time that I would need.”

Tim Lee’s Interview with Chris Ardis of the Rio Grande Guardian

After the TRS Board meeting, Tim Lee was interviewed on Facebook Live. Lee spoke about what today’s discussion means for retired and active educators, as well as the status of funding the TRS pension fund and TRS-Care plan.

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13 Feb
0

TRS Board of Trustees Meeting Starts Tomorrow (February 14)! Watch Online!

As the Texas Retired Teachers Association (TRTA) reported last week, the Teacher Retirement System of Texas (TRS) Board of Trustees will be meeting in Edinburg on Wednesday, February 14 through Friday, February 16.

How to Watch the Meeting Online!

We urge all members of TRTA in the area to attend in person (UT Rio Grande Valley, Ballroom Building, 1201 W. University Drive, Edinburg, TX 78539). The meeting is also available online, as important decisions regarding the pension fund are being discussed. It is especially important that members watch on Wednesday, February 14. Click for the TRS Board meeting agenda and board meeting book.

Links TRS Board of Trustees Web​casts (Please Note, the Link Will Not Be Live Until the Meeting Begins)

Board Webcast Feb 14 Board Meeting  10:00 a.m. start time
Board Webcast Feb 15 Board Meeting  8:30 a.m. start time
Board Webcast Feb 16 Board Meeting  8:00 a.m. start time

Why Is This Meeting So Important?

The TRS Board of Trustees is considering a proposal to lower the fund’s investment return assumption from the current 8 percent rate to a lower rate. The justification for this change stems from the experience study of the fund over the past five years, and projections about the economy and investment returns over the next five years. This study, which considers how assumptions compare to actual fund performance, is mandated by law.

The majority of state pension systems across the nation that have performed experience studies have lowered their assumptions. If TRS lowers the rate of return assumption, a significant increase in the pension fund’s unfunded liabilities will occur. The Texas Legislature will then be asked to increase their contribution rate to help the fund return to a funding period of 31 years or less to meet the statutory definition of actuarial soundness. TRTA will report on the effects of this decision following the meeting.

TRTA’s state officers and Executive Director, Tim Lee, will be present at the meeting and will address the board regarding the implications and possible policy and funding issues associated with this change. Several members of TRTA are also expected to attend and provide public testimony. TRTA will keep its members updated on any changes that are approved by the TRS Board of Trustees.

Thank You

The Inside Line is a free service of TRTA, provided to you to keep you informed on current issues and events that impact your life. If you value this service, please consider becoming a member of TRTA by clicking here. If you are already a member, thank you!

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