Our Issues

TRTA Legislative Agenda 2019: Rationale for Recommendations

1. Increase the state contribution for the pension fund from 6.8% to 8.6%.

• The state contribution rate was 8.5% in the 1983, but the Legislature has funded significantly less since then.
• The actual state contribution in 2018 was only 3.93%.
• Even at 8.6%, the contribution rate is one of the lowest in the nation for non-Social Security covered employees.
• 95% of the public school employees in Texas are not covered by Social Security. Taxpayers save $1.6 billion a year by not paying the 6.2%. Employees also save $1.6 billion each year.
• Factoring in Social Security and pensions, the private sector on average pays 10.1% of payroll. Educators deserve, at minimum, the average of what the private sector pays.
• Funding $840 million a year saves billions in future costs, as assets are invested and earnings replace future tax dollars.
• The TRS Pension Benefit Design Study verifies that the current defined benefit plan is the most efficient and effective way to provide retirement benefits for educators.

2. Require participating Social Security employers to pay the 1.5% employer contribution to the pension fund.
   • Currently TRS is getting 10% less in contributions from employees employed by Social Security districts while the benefits for these employees are the same as those employed by non-Social Security districts.
     • Social Security Districts = 6.8% + 7.7% = 14.5%
     • Non-Social Security Districts= 1.5% + 6.8% +7.7% = 16.0%
   • Alternatively, if employers do not want to pay the 1.5% because they pay Social Security, their employees’ benefits should be reduced by lowering the multiplier from 2.3 to 2.1 for every year working in a district that did not contribute the 1.5% since 2013.

3. Provide a benefit increase for all retirees who retired before 9/1/2018.

• Since 2001, only one partial 3% cost-of-living adjustment was provided. It was capped at $100 per month and was only for members who retired before 9/1/2004.
• Only one 13^thcheck has been provided since 2001 (paid in January 2008), and it was capped at $2,400.
• 30% of TRS retirees (130,000) receive $1,000 per month or less.
• Social Security recipients have received cost-of-living adjustments in most years over the past 18 years.
• The average TRS life annuity is $2,078 per month and is the main source of income for most retirees, as 95% of public school employees are not covered by Social Security.

4. Increase the state TRS-Care contribution from 1.25% to 2.25% of payroll.

• The base funding needs to be increased to make the program sustainable. In 2017, base funding was increased by .45%; but an additional 1% is needed to make the program affordable for several years.
• In 2018, retirees paid almost $500 million in premiums and several hundred million in out-of-pocket expenses.
• Funding per retired educator is significantly less than funding per retired state employee.
• Retired educator premiums are significantly higher that than the zero premiums paid for retired state employees.
• In 2018, the average total cost per retired participant paid by TRS was $1,300 less than what ERS paid on average for its retired participants.

5. Allow Medicare-eligible retirees who opted out of TRS-Care a one-time opportunity to rejoin TRS-Care.

• This would provide a safety net for retirees who were confused by their options when the TRS-Care program drastically changed without adequate explanation of choices and their consequences.

6. In the event that no cost-of-living increase is provided for retirees, reinstate the rider to prevent TRS-Care premiums from increasing.

• As previously noted, retirees have had almost no pension increases over the past 18 years.Due to the premium increases in 2017, most retirees are struggling to make ends need.

7. Provide affordable healthcare benefits for all active education employees by increasing state and local funding.

• The current state funding amount of $75 per month was established in 2001 and has not been increased since.
• The required minimum funding at the district level is still only $150 per month.
• The current combined requirement of $225 per month was set in 2001, based on the average amount paid in 1999. In many districts, employees have adsorbed all of the cost increases for their health care over the past 18 years.

8. Allow all members who retired before 9/1/2018 to return to work without penalty.

• Given the significant shifts in costs for retiree healthcare, more retirees will need to return to work to survive. This action will give them more options to be able to pay for their higher healthcare costs.

9. Amend the statutes to allow TRS discretion in dealing with minor return-to-work violations.

• The current laws and rules are very complicated and difficult to navigate. Repayment of a full month’s annuity for a minor violation does not seem appropriate.

10. Amend the statutes to require TRS to respond to appeals with the same time constraints as members have.

• Retired educators deserve timely responses in dealing with appeals that impact their future.

11. Require TRS to hire an independent ombudsman to report at least quarterly to the Board of Trustees any member issues that have not been addressed adequately.

• Retiree and active members are facing changes to their healthcare and pensions. It would be helpful for the Board to get an independent picture of members’ concerns.