TRS Board Meets, TRS-Care Crisis Weighs Heavily on Hearts of Retirees

The Teacher Retirement System of Texas (TRS) Board of Trustees met on September 22 and 23 for their quarterly meeting. During the meeting, long-time TRTA member and E.L. Galyean award recipient Tom Rogers provided sincere public comment as he spoke about his concerns for the TRS-Care retiree health insurance program.

Asking if there was any hope for a sustainable health care plan, Mr. Rogers emphasized that the original purpose of the TRS-Care Sustainability Study that was created in the summer of 2012 at the request of the Texas Legislature was stability.

“The purpose was to provide the Legislature and the teachers with a nine-option choice of possibilities for permanently financed health insurance. Presumably this was set for a meeting of the minds of both retirees and the Legislature,” Rogers said.

Rogers commented that several options included plans for permanent or long-term funding, but that the emphasis in some other options was on saving money rather than anticipating future rising medical costs. During the next legislative session in 2013, none of the options presented in the study came to fruition, but TRS and the Legislature worked together to fund a temporary fix and focused on a long-term plan for the pension fund instead.

As our members may recall, the 83rd Legislative Session in 2013 marked the passage of Senate Bill 1458, which made the pension fund actuarially sound and allowed approximately 200,000 retirees to receive a cost-of-living increase.

By November 2014, expenses for TRS-Care were rising sharply and TRS updated their sustainability study. In the early spring of 2015, Representative John Otto, serving as Chairman of the Appropriations Committee, pledged that the Legislature would cover the TRS-Care shortfall of $768 million and included this supplemental funding in House Bill 2.

“TRS-Care was again saved for the biennium through fiscal year 2017,” Rogers said.

Our members also know that in 2015, the Legislature created an interim committee called the TRS-Care Study Group. The legislative members named to this group are: Senators Joan Huffman (R-Houston) – Co-Chair, Jane Nelson (R-Flower Mound), and Craig Estes (R-Wichita Falls); and Representatives Dan Flynn (R-Canton) – Co-Chair, Trent Ashby (R-Lufkin), and Justin Rodriguez (D-San Antonio).

In association meetings, TRS Board meetings, and meetings of the interim committee, we have heard that health care costs are increasing rapidly, “but very little emphasis was given to the long-term stability of the prefunded options,” said Rogers. “In more recent presentations, retirees hear that those propositions that require larger sums of state dollars are essentially non-starters, that there is really no money available for any stable plan.”

TRS-Care funding is based on active teacher payroll, which grows much more slowly than the cost of health care. Because funding and costs do not match, TRS-Care has faced continual multi-million dollar shortfalls.

“TRS must continually revamp their health care plan in order to keep any kind of health care coverage,” Rogers said.

Rogers stated that retirees are worried about how this crisis ultimately will be solved. They worry that they will lose choices and/or benefits, that there is no hope for continuing the plan as it exists today, and that there will be a continuing loss of benefits and increased costs.

Rogers feels that pre-funding options, those that are the most expensive to the Legislature but provide for a long-term plan to keep TRS-Care alive, must not be dismissed.

“The legislators should be told the details of all of the sustainable propositions without prejudice,” Rogers said.

Rogers hopes that the Legislature understands “that when it comes to retired teacher health care, you help now with a good health care plan or pay later with ER health costs.”

“I believe we should make it clear that although we’re only 27th in the nation for teacher salaries, we are first in taking care of our teacher retirees with one of the top retirement programs in the nation accompanied by a stable and reliable retirement health program!”

Since the end of the regular session in 2015, there has been one public meeting of the interim committee regarding the TRS-Care crisis. As of today, no recommendations have been made to address the projected $1.3 billion funding shortfall facing the program. A report is expected from the committee sometime this fall.

TRTA is your voice on TRS-Care sustainability. We will provide every detail of this situation as it develops and give our expert analysis of the TRS-Care Study Group report as soon as it is released.

TRTA members should be asking their legislators to make TRS-Care sustainability a priority when they return to Austin in January 2017. Without definitive action by the Texas Legislature, TRS-Care as we know it may no longer exist!

Thank You

Thank you for your membership to TRTA. We will continue to follow the progress on TRS-Care, as well as other critical issues such as reform of the Windfall Elimination Provision (or WEP). TRTA will provide you many more opportunities to get involved as we protect your hard earned retirement benefits!

If you are not yet a member, we need you to help us protect your retirement security. Please join TRTA today!

We hope our members will hear the call of Tom Rogers, rallying to the cause and working with legislators and each other to help improve our educators’ lives by providing them with affordable, quality health care!

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