25 Feb 2021

House Appropriations Subcommittee on Article III Meets, TRTA Asks Appropriators to Support a Cost-of-Living Increase for TRS Retirees

Executive Summary

  • TRTA commends budget leaders for remaining steadfast to funding the TRS solvency plan passed last session. Today, the TRS pension fund is actuarially sound.
  • More than half of all current TRS retirees have never received a pension increase.
  • A TRS member who retired after September 1, 2004 has gone 17 years with no increase in their retirement benefits.
  • In 2020, TRS reported spending $1.2 billion on investment fees alone.
  • TRS retired and active school employees have worked diligently to get TRS into a financial position that can afford to provide retirees with a pension increase.
  • That option is now on the table for the Texas Legislature to consider this session and TRTA members ask that the Legislature pursue this goal!

It has been a productive week in the Texas Legislature and for the legislative team at the Texas Retired Teachers Association (TRTA). Earlier this week, the Senate Finance Committee and House Appropriations Committee met to discuss TRS funding. You can read TRTA’s updates on those meetings by clicking here (part 1) and here (part 2).

The House Appropriations Subcommittee on Article III, which includes funding for the Teacher Retirement System of Texas (TRS), met on February 25. The subcommittee is chaired by Rep. Terry Wilson (R – Georgetown).

Tim Lee Testifies on Behalf of TRTA Members

TRTA Executive Director Tim Lee provided public testimony during the hearing. Tim shared his appreciation to the members of the Legislature for fully funding SB 12, saying “we are on a path to ensuring we have the best funded teacher retirement system in the nation.”

He added that the funding for SB 12 was TRTA members’ highest priority for the 87th Legislative Session, and that members will defend this funding to keep it in the budget. He then pivoted, saying TRTA members are ready to talk about the possibility of providing a benefit enhancement for TRS retirees.

Lee said, “our system is actuarially sound,” adding that since the pandemic started, TRS has earned $30 billion.

TRTA members are reasonable and responsible advocates. We have fought the good fight and worked as trusted partners with our elected leaders. Our members have sacrificed much to ensure the trust fund is financially stable and fiscally strong.

More than half of all current TRS retirees have never received a cost-of-living adjustment. With the trust fund able to absorb the cost of a benefit increase, now is the time to resolve this situation!

Lee referenced testimony provided earlier in the week by TRS Executive Director Brian Guthrie that a COLA may cost an estimated $17 billion, amortized over a 20-to-30-year period, if absorbed by the fund. Lee then pointed out that TRS reported spending $1.2 billion on investment management costs in 2020. Based on this reality, TRTA projects that TRS will spend $36 billion on investment fees alone during that same period of time.

“A COLA is less than half the cost of the fees,” Lee added.

Lee thanked committee member Rep. Jarvis Johnson (D – Houston), who has filed a bill that would allow retirees to come back to TRS-Care. Johnson replied, “we all believe in teachers and we have to put our money where our mouth is . . . we have to let them know their future will be secure.”

He then asked Lee why retirees may have left TRS-Care. As our members know, the health insurance program underwent significant changes in 2017, creating confusion for some and prompting many plan participants to seek other options in the individual insurance market.

Particularly for retirees over age 65, there are numerous plans marketed to retirees during open enrollment periods, and those plans are not group plans like the one offered by TRS. A big driver for those who left the plan was also the increased costs to cover dependents. Earlier in the week, TRS Executive Director Brian Guthrie said about 30,000 people left the plan, which included thousands of dependents.

Rep. Geanie Morrison (R – Victoria) expressed concern about how retirees have been affected by the pandemic. Lee remarked that they are in high-risk groups that are susceptible to the virus due to age and health conditions, and that many could not return to work in school districts for supplemental income due to these risks.

Morrison also asked how retirees may have spent the supplemental check they received in 2019. Lee said many retirees had to pay for medical costs and other bills and were unable to save that additional income. Lee thanked the legislative members for their work on providing the supplemental payment last session.

Reps. Lynn Stucky (R – Denton) and Gary Van Deaver (R – New Boston) inquired about the Texas Retired Teachers Foundation (TRTF) Tutor Program, which was launched by TRTA’s charitable partner organization in 2020. TRTF is seeking additional tutors to participate in the program and is hoping to raise $10 million so that 250,000 tutoring hours can be donated to students all across Texas.

After the hearing, Lee said that “TRTA members are spending more on their health care costs, groceries, and many new expenses as a result of the pandemic. If the Legislature sees an opportunity to provide retirees a cost-of-living adjustment this session, our members are far more interested in that happening than expanding TRS administrative overhead. TRTA members are passionate supporters of TRS but are at a crisis point and need an increase in their pension checks.”

Other News from Today’s Hearing

Rachel Stegall of the Legislative Budget Board (LBB) provided brief testimony about funding recommendations for TRS, which includes an increase of $333.7 million over the previous biennium primarily due to the passage of Senate Bill 12 in 2019. SB 12 was the landmark legislation that increased contributions from the state, school districts, and active employees using a stairstep approach and made the pension fund actuarially sound.

Tamara Aronstein, a Policy Analyst with the Texas Sunset Commission, discussed the sunset review of TRS that has taken place over the past year and a half. Overall, the Sunset Staff Report makes recommendations that do not require appropriations from the state budget, but do suggest that TRS make changes to improve its relationship with its members.

For example, the Sunset Commission recommends that TRS appoint an ombudsman to assist members, investigate member complaints, and report directly to the TRS Board of Trustees. TRTA fully supports this recommendation.

Another Sunset Commission recommendation is that TRS modify employment after retirement penalties so that retirees do not lose a full monthly annuity if they work more than their allotted hours for a school district. Instead, the report suggests that retirees could pay back to the system only the amount by which they exceeded their hours.

Rep. Gene Wu (D – Houston) asked how many retired teachers are working in school districts on a monthly basis and how many end up violating the work hours limit.

TRS Executive Director Brian Guthrie later addressed this question, answering that between June 2019 and today, TRS sent letters to approximately 63,000 retirees who were contemplating or were returning to work in a school district. During that same period, 1,205 notifications sent to members who had violations. Guthrie reiterated testimony from earlier in the week that violations are not discovered until after school districts send in monthly reports.

Director Guthrie’s testimony expounded upon an exceptional item not covered in previous legislative hearings earlier in the week. TRS is asking for $3 million to open a pilot regional office in the El Paso area. Guthrie stated that one reason for the pilot office is that it is “harder for members to get to Austin from outlying areas.”

Though TRS offers technology to those members who cannot travel to Austin and has been using it heavily since the COVID-19 pandemic began, many members still prefer face-to-face meetings when discussing their impending retirements.

Guthrie said that the pilot office El Paso will help the agency determine how successful regional offices in other areas may be in serving TRS members. El Paso was selected specifically because of the city’s distance from Austin and the large number of members in the area who need TRS services.

Wu also asked Guthrie about the number of teachers who may be leaving the profession due to the pandemic. Wu said many friends in the profession believed there would be a mass exodus of teachers “who didn’t want to . . . risk their lives.”

Guthrie responded that the “number of actual retirements is down slightly.” Requests for information about retiring have increased but have not yet resulted in increased retirements.

Thank you!

Thank you for being a member of TRTA! Be sure to download the TRTA app to receive all of the latest legislative updates.

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25 Feb 2021

TRTF Asks for Donations to Disaster Relief Program Due to Winter Storm Uri

The Texas Retired Teachers Foundation (TRTF) would like to remind everyone that there is a foundation program designated specifically to help those Teacher Retirement System of Texas (TRS) members who have been affected by natural disasters in our state.

Last week, millions of Texans suffered record-breaking low temperatures and suffered without electricity, heat, and running water due to winter storm Uri. Many homes were destroyed due to flooding from broken pipes, resulting in thousands of dollars in damage.

Many TRS retirees do not have substantial savings to help them endure and recover from these types of unpredictable disasters.

Our Foundation supports educators of the past, present, and future, and has provided more than $204,800 to retirees and active teachers during natural disasters such as hurricanes, flooding, and winter storms.

Now, TRTF desperately needs your help once more! We already have received requests for assistance from more than 110 retirees, and our Disaster Relief Fund cannot meet the needs of everyone who has asked for help at this time.

How You Can Help

Please help us provide emergency funds to retirees in need by making a donation to the TRTF Disaster Relief Program today! Your donation, no matter the amount, will help TRTF respond to requests for emergency assistance immediately and provide much-needed support to retirees.

Let us know if you know of a retiree who needs help! Many may have limited access to communications services, and you may be a lifeline between TRTF and someone in need. Contact us at 1.800.880.1650 (ask for Sarah) or send an email to

Thank You!

Thank you for giving hope during this time of uncertainty and every day for retirees in need. Your support helps TRTF to be ready at a moment’s notice when sudden and unavoidable disasters occur.

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23 Feb 2021

House Appropriations Committee Discusses TRS Funding

Executive Summary

  • This is the second update in a two-part series covering Senate and House budget plans for TRS this session.
  • TRS reported to the House Appropriations Committee
  • The TRS pension fund is actuarially sound, which opens the door for a COLA
  • TRTA believes TRS members can and should receive a COLA
  • TRS has been unable to sublease the Indeed Tower space

On February 23, 2021, the Texas House of Representatives Appropriations Committee met to discuss funding for several state agencies, including the Teacher Retirement System of Texas (TRS). The meeting was led by Chair Rep. Greg Bonnen (R – League City).

Pension Fund

TRS Executive Director Brian Guthrie reiterated the good news he shared about the pension trust fund with the Senate Finance Committee on February 22. He reported that the pension fund is actuarially sound.

Guthrie thanked the committee members for their commitment to helping make the fund sound last session through the passage of Senate Bill 12. SB 12 increased contributions using a stairstep from the state, school districts, and active employees. Eventually, state and active member contributions will match each other, starting in FY 2024.

Guthrie reported that the funding period, which is 27 years, is the lowest the system has been at since 2008. He also said that the 13th check received last session “was gratefully received by our members.” The supplemental payment was paid for through the Economic Stabilization Fund, also known as the Rainy Day Fund.

Guthrie reminded the committee members that the system lowered its investment return assumption last session from 8 percent to 7.25 percent based upon an experience study that is performed every four years, which led to the plan established by SB 12 to shore up the fund.

The fund reached a low point of $145 billion when the COVID-19 pandemic began. However, Guthrie said that the plan has “recovered quite nicely since then.”

Rep. Alex Dominguez prompted Guthrie about cost-of-living increases for retirees. “Could we get that done this session?”

According to Guthrie two criteria must first be met for a COLA.

  1. TRS must be actuarially sound (TRS currently meets that criteria).
  2. Any benefit enhancement would need to be authorized by the Texas Legislature.

Guthrie then reiterated his testimony from February 22, indicating that the two ways to pay for benefit increases are through upfront cash layouts or financed through the fund itself.

The Texas Retired Teachers Association (TRTA) not only believes that a COLA is possible this session, but also that the Texas Legislature should provide a COLA to retirees! We will provide more insight on a potential COLA in an upcoming Inside Line!


When discussing the TRS-Care retiree health insurance plan, Director Guthrie stated that it was the first biennium since he had become the system’s director “that we have not asked for supplemental funding for this program.”

He repeated his testimony from the Senate Finance Committee that the alterations made to the plan in 2017 had been successful in controlling overall costs and that the procurement of a new insurer will save $700 million over time. “Finally,” Guthrie added, “one of the impacts is we lost membership, primarily dependents.” Some TRS members left with them.

Though the fund has a positive balance now, costs will again outstrip revenues in the future. “But we don’t anticipate needing extra money this biennium or the next,” Guthrie stated. Premiums will stay the same for TRS-Care participants for the coming biennium.

Rep. Steve Toth said he still hears from retirees in his district who “say benefits have decreased with their healthcare plan” and the cost of premiums “eats into their annuity check.”

Other committee members expressed similar concerns, particularly about the 30,000 people who left after changes were made in 2017 to overhaul the plan. Many inquired about whether or not those who leave the plan can come back.

TRS Chief Health Care Officer Katrina Daniel responded that if they left before the age of 65, they may return to enroll in the Medicare Advantage (MA) plan when they turn 65 or through a special enrollment event such as loss of coverage.

Daniel said, however, that once someone leaves the TRS-Care system, TRS has no way to track if they received health care coverage elsewhere.

The cost of healthcare nationally has been increasing, and the primary cost driver in TRS-Care is the population that is not Medicare eligible. About 67,000 plan participants are under age 65, while 160,000 are in the MA plan. Guthrie indicated that the average retirement age of a TRS member is 61, which is up from 59 in 2008.

Rep. Julie Johnson asked why it is so difficult for people to return to the plan once they leave. Daniel and Guthrie answered that it is hard to predict how participants returning will impact the financial position of TRS-Care, as it depends on a balance of healthier lives versus less healthy lives using the benefits. Anecdotally, Daniel indicated that there is a tendency for healthier people to leave insurance plans and to return to plans with richer benefits when their health declines.

Other committee members pointed out that the exodus of people from TRS-Care after the changes in 2017 had a lot to do with confusing and difficult decisions that members had to make in a very short period of time.

TRTA supports the idea of an open enrollment under controlled circumstances that would address these real-world scenarios.

Indeed Tower Discussion

Rep. Steve Toth asked Director Guthrie to expound upon TRS’s decision to lease space in the luxurious downtown Austin Indeed Tower.

Guthrie said that the decision was “based upon the fact that we have a significant ownership stake in the building and were already paying rent in another building downtown that we did not own.”

“Obviously, that was a poor decision,” Guthrie added. “We were not able to communicate the fact that we owned the building” with members of TRS. He said that the inability to disclose the ownership stake was included in a written opinion received from the Attorney General.

“My goal is to get all of our employees in a building that we own, in the same space,” Guthrie added. The system hopes to eventually have no lease space at all.

TRS receives an investment return on the Indeed Tower and that occupying the space builds investment value. However, if TRS is unable to lease the space, it will carry the bill for the space.

Rep. Terry Wilson asked if TRS members would have benefitted from this business decision.

Guthrie said the building was meant to be part of the system’s real estate portfolio, long before a decision was made to lease space for the Investment Management Division (IMD) employees. The IMD is presently housed in another building at 816 Congress, where the monthly rent is $350,000.

With the Indeed Tower, Guthrie said that TRS would have been “paying some portion of that rent back to ourselves.” The rent at Indeed Tower will be $400,000 per month, a fee the system must begin paying by November 2021 if the space cannot be sub-leased by that time.

TRS is actively working to find a tenant, though snags were encountered when the pandemic began. Guthrie feels confident that the space can be leased, as the “real estate market starting to wake up,” but confirmed that TRS will not move into the building even if is not subleased by November.

Retire, Rehire

Rep. Cecil Bell asked Guthrie about retire/rehire policies. Under current statute, TRS members can lose an entire monthly annuity even if they only worked one or two hours over their allotment. Guthrie said TRS was “trying to come up with a solution that does not have a negative actuarial impact on the fund.”

Rep. Gene Wu, who tried to get a bill through last session to help rehired retirees who may have exceeded their work hours inadvertently, said “the cure is so punitive … it’s heartbreaking.”

Wu said the issue of retirees going back to work has come up a lot during pandemic because school districts need extra help. He asked if TRS can give them a warning before penalizing them. Guthrie said no solution had been created yet and that TRS receives monthly reports from the school districts, but by that time a retiree may have already exceeded their hours.

“We don’t know until after a violation has occurred,” he added. Guthrie said he does not have the flexibility based on current law to remove penalties and that statutory change is required.

Thank You

The Texas Legislative session is really heating up. We are covering the issues that matter to you from all angles. Please let your fellow TRS retirees know that TRTA staff and volunteers are working on their behalf and ask them to join the organization if they are not already a member!

The next major item this week will be a House Appropriations Subcommittee meeting on TRS set for Thursday, February 25, 2021. TRTA will be ready to testify for our members at that hearing. The meeting will begin at 9:00 a.m. and live link to the meeting webcast will be available from this link a few minutes before it convenes.

Thank YOU for being a member of TRTA! Be sure to download the TRTA app to receive all of the latest legislative updates.

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