The Teacher Retirement System of Texas (TRS) is holding its fall Board of Trustees meeting. During the meeting, TRS addressed its new building lease, which has drawn scrutiny from retirees this week.
As reported by the Austin-American Statesman, TRS is going to lease three floors, which is more than 100,000 square feet, starting in 2021 from a new building in downtown Austin, the Indeed Tower.
The new building will host the TRS investment division. The investment division is comprised of 174 employees. TRS isn’t releasing the amount of money it’s spending to lease the space.
TRS Executive Director Brian Guthrie addressed the new lease during the board meeting on Sept. 19. Guthrie said that the investment staff has outgrown its current space, and TRS is working on a generational change to find space that will fill its needs for years to come.
According to Guthrie, TRS was able to procure a good deal on the lease space, because it started early in the process. However, TRS isn’t going to release the details of the lease because of competitive concerns. He said the price is comparable to the location where the investment team is currently located. Guthrie said TRS would disclose the amount they are paying for the lease sometime in the future.
The Texas Retired Teachers Association’s (TRTA) Executive Director Tim Lee also discussed the new lease during his public testimony today. He thanked Guthrie for his perspective on the lease.
Lee said that members have concerns about TRS using the pension fund money on what appear to be extravagant purchases.
Lee said that many members are in desperate need of a cost-of-living increase and that it’s getting harder to pay for everyday expenses. He said that the perception of TRS purchasing a new space for its investment staff using the pension funds makes for a poor perception to members.
However, Lee emphasized that members also feel it is important that TRS has what it needs to operate. Lee implored the Board of Trustees to find ways to communicate with members about what is happening with the trust fund money to help them understand how it benefits the system and the members themselves. Retirees want to be sure the system is “acting prudently to invest the money and acting prudently to spend it and not in ways that may appear to be extravagant.”
It is important to note that TRS administrative costs per member are the lowest in the country by a very large margin. Because TRS performs most of its investing in-house instead of hiring financial investment firms which charge very high fees, TRS is able to divert funds to pay TRS investment staff and house the staff in professional office buildings, ultimately saving significant amounts of money over time.
Our members should also be aware that TRS, as a state agency, is subject to sunset review during the next legislative session. This review is required of all state agencies every twelve years and requires TRS to justify every dollar, policy and program. TRTA will be heavily involved in the study, working with the Sunset Commission (an agency that reports directly to the Legislature on every state agency) and testifying in public. Administrative expenditures, along with many other issues, will be subjects of that review.
This was a busy meeting for the TRS Board of Trustees. They discussed a wide range of issues such as the unfunded liability and TRS-Care. TRTA will be reporting on these issues in the coming weeks.
The Texas Retired Teachers Association exists to protect your TRS retirement and fights to make it better. Please consider becoming a member and joining the largest community of TRS retirees in the nation.