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04 Feb
0

House Appropriations Committee Meets, Receives Update From TRS

Executive Summary:

  • TRS provided testimony concerning the pension fund and TRS-Care.
  • Use #RAISETHEBASE when communicating with legislators on Facebook and Twitter.
  • The House Appropriations subcommittee has been formed.

The Teacher Retirement System of Texas (TRS) provided an update on the state of the pension fund and retiree health insurance plan, TRS-Care, to the House Appropriations Committee today, Monday, February 4.

TRS Executive Director Brian Guthrie reviewed the change to the rate of return assumption. He discussed how the TRS board felt that the investment market dictated that the rate of return assumption be lowered to 7.25 percent. Since changing the rate of return assumption, the outlook for TRS paying off its unfunded liabilities has moved back from 32 years to 87 years.

The state requires TRS to have a funding period of 31 years or less to provide a cost-of-living increase for retirees. Rep. Lynn Stucky (R – Denton) inquired about what it would take for retirees to receive a cost-of-living increase.

Guthrie said that the state would need to pass a bill that would increase funding into the TRS pension fund by $1.6 billion for the biennium. Guthrie mentioned there were three primary funding sources the Legislature could pull from: the state, school districts and active teachers.

Texas, as compared to other states with non-mandatory Social Security, ranks last in funding for its retiree pension plan.

The Texas Retired Teachers Association (TRTA) is encouraging the Legislature to raise the state contributions to the pension fund. By raising the base, the door would open for retirees to receive a cost-of-living increase or other benefit enhancement. Many retirees have never received a cost-of-living increase during their retirement.

You can help participate in encouraging legislators to help us by including the hashtag #RAISETHEBASE when communicating with your legislators on Facebook and Twitter.

Guthrie also covered the changes that occurred to TRS-Care last session. He said that the health care program continues to be plagued by funding shortfalls. TRS-Care’s funding is based on active teacher payroll, which is not linked to the rising cost of health care.

Guthrie said that TRS has worked diligently on controlling TRS-Care’s costs, but he described it as “a losing battle.” The TRS testimony didn’t mention that the projected shortfall for TRS-Care in the next legislative session would be more than $1.4 billion. TRTA believes TRS-Care funding must be addressed, as this projected shortfall is even larger than the 2017 shortfall.

TRTA applauds the Legislature for adding the supplemental dollars to help fund the projected shortfall, and we are ready to work with the Legislature to find long-term solutions. TRS-Care needs a better funding plan for the future to reduce retiree costs.

Additionally, Guthrie discussed how TRS-Care had lost more than 36,000 members after the plan changes in 2017. Guthrie did state that the population size of TRS-Care’s participants had stabilized since the massive departure. The shortfall for TRS-Care this session sits at $230 million.

Legislators will go more in depth on how to improve the pension and TRS-Care in the Appropriations subcommittee (Article III), which was formed today.

Today’s committee meeting included invited testimony by state agencies only. Stay tuned to the Inside Line and our Facebook page to find out when TRTA Executive Director Tim Lee will testify on behalf of public education retirees.

The current House Bill 1, which includes the funding for TRS, proposes to maintain all programs, including TRS-Care. As such, HB1 proposes to fill the TRS-Care shortfall by adding $230 million into the program. The additional funding from the state would allow retirees participating in the program to maintain the current benefits structure. It would not make way for financial relief for those who suffered increased out-of-pocket expenses as a result of the changes to TRS-Care from last session.

Rep. Philip Cortez (D – San Antonio) expressed concern that the HB1 budget didn’t include increased benefits or lower costs for TRS-Care participants who were negatively impacted by last year’s changes.

The current version of HB1 also doesn’t include an increase in the base rate of funding for the TRS pension fund. TRS has submitted a request for the Legislature to make a 1.82 percent increase, which equates to approximately $1.6 billion.

Rep. John Zerwas (R – Richmond) serves as the Chair of the House Appropriations Committee, and he said that there would be a “deep dive” discussion of raising the base funding for TRS in the Article III Appropriations Sub-committee.

Already, there has been a bill, SB 393, filed that would address the need to increase the base funding for TRS. The Texas Retired Teachers Association (TRTA) believes that raising the base funding for the TRS pension plan should be one of the top priorities for legislators this session.

TRTA’s legislative committee is hard at work for you, as they are visiting elected officials. Reports are good that retirees are viewed as a high priority. Member involvement is critical early in session to set a positive tone and keep elected officials focused on our major priorities.

TRTA is encouraging its members to participate on social media with their legislators using the moniker #RAISETHEBASE. Let’s rally together to improve awareness of this issue! Many retirees have never received a cost-of-living increase during their retirement, and by raising the base funding for TRS, we can pave the way for a COLA or other benefit increase to occur!

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29 Jan
0

House Appropriations Committee Meets, Receives Legislative Budget Board Report

Executive Summary:

  • The Legislative Budget Board presented HB1 to the House Appropriations Committee.
  • HB1 includes funding to fill TRS-Care budget shortfall.
  • Use #RAISETHEBASE when communicating with your legislators on social media. 
  • If you haven’t yet, show your support by completing TRTA’s action alert!

The Texas House Appropriations Committee met today, Tuesday, January 29, and received reports from the Legislative Budget Board (LBB) on funding for state government agencies. The Teacher Retirement System of Texas (TRS) was among the agencies included in the reports. The full report is available here.

The current House Bill 1, which includes the funding for TRS, proposes to maintain all programs, including TRS-Care. As such, HB1 proposes to fill the TRS-Care shortfall by adding $230 million into the program. The additional funding from the state would allow retirees participating in the program to maintain the current benefits structure. It would not make way for financial relief for those who suffered increased out-of-pocket expenses as a result of the changes to TRS-Care from last session.

Rep. Philip Cortez (D – San Antonio) expressed concern that the HB1 budget didn’t include increased benefits or lower costs for TRS-Care participants who were negatively impacted by last year’s changes.

The current version of HB1 also doesn’t include an increase in the base rate of funding for the TRS pension fund. TRS has submitted a request for the Legislature to make a 1.82 percent increase, which equates to approximately $1.6 billion.

Rep. John Zerwas (R – Richmond) serves as the Chair of the House Appropriations Committee, and he said that there would be a “deep dive” discussion of raising the base funding for TRS in the Article III Appropriations Sub-committee.

Already, there has been a bill, SB 393, filed that would address the need to increase the base funding for TRS. The Texas Retired Teachers Association (TRTA) believes that raising the base funding for the TRS pension plan should be one of the top priorities for legislators this session. 

TRTA’s legislative committee is hard at work for you, as they are visiting elected officials. Reports are good that retirees are viewed as a high priority. Member involvement is critical early in session to set a positive tone and keep elected officials focused on our major priorities.

TRTA is encouraging its members to participate on social media with their legislators using the moniker #RAISETHEBASE. Let’s rally together to improve awareness of this issue! Many retirees have never received a cost-of-living increase during their retirement, and by raising the base funding for TRS, we can pave the way for a COLA or other benefit increase to occur!

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23 Jan
0

TRTA’s Message to Raise the Base Resonates in New Senate Bill

Executive Summary:

  • New Senate Bill offers plan to improve fund’s solvency
  • Show your support by completing TRTA’s action alert!
  • Full list of retiree-related bills posted.
  • Important for Legislature to increase base contributions to TRS pension fund.
  • Use #RAISETHEBASE when communicating with your legislators on social media.

The Texas Legislature has begun filing bills related to retiree issues. TRTA members need to know that many elected officials have come to Austin with you on their minds’. Bills are being filed to help TRS retirees and TRTA is tracking them all. 

 Of particular significance among the bills is Senate Bill (SB) 393. Sen. Joan Huffman (R – Houston) filed the bill. 

Huffman serves as the chair of the Senate State Affairs committee and is a long-time supporter and champion for improving the financial solvency of the TRS pension fund. 

SB 393 proposes to increase the state, district and member contributions to the TRS pension fund. An increase to the TRS pension fund is critical to the future health of TRS. 

In July 2018, TRS lowered its rate of return assumption to 7.25 percent. The lowered rate of return assumption makes it much more difficult for retirees to receive a cost-of-living increase (COLA). The long-term solvency of TRS for future retirees will be dramatically improved by the state implementing an improved funding plan. The bill potentially opens the door for a retiree COLA or some other form of benefit increase. 

One of TRTA’s major goals this session is to see the Texas Legislature vote to RAISE THE BASE. We want to see the base rate of contributions to TRS increased to a reasonable level that would provide TRS retirees and active members with an actuarially sound pension fund able to provide benefit increases to retirees in much need of a raise. 

Chair Huffman’s SB 393 is a major step forward in this ongoing discussion. While TRTA has promoted increasing the state share to TRS, the bill addresses all the revenue sources for TRS. It also is working to ensure there may be funding necessary to cover this cost for the active member contributors.

SB 393 was just filed on Friday, January 18th, and we are still analyzing the bill language. We are encouraged to see a bill that addresses the biggest issue facing our TRS pension fund—its long-term contribution policy.

On the health insurance side, TRTA is also encouraging elected officials to raise the base funding level for TRS-Care. The House uses Rainy Day Funds for Care and the Senate uses General Revenue.

While TRTA is grateful to see both the Texas Senate and the Texas House working to add more dollars to TRS-Care, these dollars may ensure retirees see no increased costs in the coming biennium, but another shortfall is on the horizon just two years into the future. Raising the base level contribution for TRS-Care will help ensure this program’s shortfall is not unmanageable in the future. 

How TRTA Members Can Help!

TRTA is encouraging its members to communicate with their fellow retirees that good things can happen and a positive outcome is possible! Legislators are working for you! TRTA members have been actively communicating with elected officials. Now, the legislators are in session, and many of them are thinking about the retirees and want to help. Let’s get behind these efforts in a positive way! Let’s work with a belief that good things are possible and will happen for TRS retirees. 

TRTA is encouraging its members to contact legislators on social media with the hashtag #RAISETHEBASE. You can find your legislators on Facebook and Twitter by doing a search for their first and last name. Not sure who your state legislators are? Click here to do a search by address. You can also search for the legislators via the Texas Tribune’s directory, which contains links to their social media pages. Let them know how excited you are about the opportunity to increase the state funding for the TRS pension fund and be sure to use the #RAISETHEBASE hashtag!

Finally, you can click here and send an email to your elected officials encouraging them this session and asking them to support the TRTA agenda to #RAISETHEBASE for TRS programs and find a way to help improve TRS retiree benefits. 

Below are some of the bills already filed to help TRS retirees:

SubjectCaptionBill #PartyAuthor
COLARelating to a cost-of-living increase applicable to benefits paid by the Teacher Retirement System of Texas.HB 0056DMartinez, Mando
TRS Pension Fund EnhancementRelating to a pension revenue enhancement plan for the Teacher Retirement System of Texas.HB 0183RStephenson
COLARelating to a cost-of-living increase applicable to benefits paid by the Teacher Retirement System of TexasHB 0398DHernandez, Ana
COLARelating to benefits paid by the Teacher Retirement System of Texas.HB 0426DAllen, Alma
TRS-Care & COLARelating to the computation of the standard service retirement annuity for members of the Teacher Retirement System of Texas enrolled in the Texas Public School Employees Group Insurance Program.HB 0593DMunoz, Sergio
TRS-CareRelating to availability of certain health benefit plan options for certain participants in the Texas Public School Employees Group Insurance Program.HB 0594DMunoz, Sergio
COLARelating to a cost-of-living increase applicable to benefits paid by the Teacher Retirement System of Texas.HB 0597DMunoz, Sergio
ESF InvestmentRelating to the authority of the comptroller regarding the management of the general revenue fund and the economic stabilization fund.SB 0069RNelson, Jane
13th CheckRelating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.SB 0092DMenendez, Jose
COLARelating to a cost-of-living increase applicable to benefits paid by the Teacher Retirement System of Texas.SB 0093DMenendez, Jose
TRS Pension FundRelating to the state contribution to theTeacher Retirement System of Texas.SB 0094DMenendez, Jose
Health InsuranceRelating to health benefit plan coverage in this state.SB 0145DRodriguez, Justin
COLARelating to a cost-of-living increase applicable to benefits paid by the Teacher Retirement System of Texas.SB 0252DFallon, Pat
GPO and WEPUrging Congress to repeal the Government Pension Offset ad the Windfall Elimination Provision of the Social Security Act.SCR 0005RHuffman, Joan
TRS PensionProposing a constitutional amendment to increase the minimum amount that the state may contribute to the Employees Retirement System of Texas and the TeacherRetirement System of Texas.SJR 0004DMenendez, Jose
TRS PensionRelating to the contributions to the Teacher Retirement System of Texas.SB 393RHuffman, Joan

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