Today, the Teacher Retirement System (TRS) Board of Trustees held its first of two days of meetings. The meetings allow the opportunity for presentations and public comment to made to the TRS Board of Trustees.
The Board received presentations today on the investment environment, TRS’s team-building program, TEAM, and an update from its Executive Director, Brian Guthrie. Tomorrow, the board will receive presentations on the investment fund’s actuarial assumption and an update on the implementation of the changes to TRS-Care.
The meeting was the first since Jarvis V. Hollingsworth, James “Dick” Nance and Nanette Sissney were appointed by Govenor Greg Abbott to the board. Hollingsworth has been appointed as the chair of the board, replacing David Kelly in this position.
Public comment was made today from the Texas Retired Teachers Association’s (TRTA) Executive Director, Tim Lee. Lee commended Hollingsworth for his dedication to the board, and said that Hollingsworth had “big shoes to fill.”
Lee discussed the actuarial valuation that the TRS Board will receive tomorrow. The actuarial valuation is a critical component to running a pension fund. The valuation will review how well the pension fund is performing and make a recommendation on whether the actuarial assumption, the amount of money TRS expects to make each year in its investments, needs to change.
Lee said that while a change to the actuarial assumption is “warranted,” it would result in a need for increased legislative funding. Lee said if a reduction in the actuarial assumption was to occur, TRS would need “to be much more aggressive” in its legislative appropriation requests. He also recommended that before the board makes a change to its actuarial assumption, they should receive stakeholder involvement.
Lee discussed the ongoing changes to TRS-Care, the retiree health insurance program provided by TRS, and the communication surrounding these changes. Lee noted that TRTA has “spoken to hundreds, if not thousands, of retirees” about the changes to TRS-Care. Many retirees are unsure about the status of their health insurance. He recommended that TRS increase its communication about how retirees will be charged for their December premiums in January. This issue is of particular importance for those retirees leaving the plan.
During a review of the TEAM program, Ken Welch, the TRS Deputy Director, noted that TRS has struggled to keep up with the communication about changes to TRS-Care. In particular, Welch noted the confusion surrounding whether or not a retiree had opted in to TRS-Care. TRTA encourages all retirees who have questions regarding their insurance to contact TRS at 1-888-237-6762.
Lee also drew attention to TRS return-to-work rules, and the enforcement of these rules on retires. TRTA members with minor violations of return-to-work rules face steep penalties, such as losing an entire month’s pension. These penalties can even occur when the violations are not intentional or very minor.
In addition, some members who signed documents 30 years ago related to teaching in college or community college positions where the Optional Retirement Program was in place are now facing very steep penalties many years after the fact.
Some retirees who signed the Optional Retirement Program documents didn’t fully understand the rules, and are now being penalized decades later. TRS has been reviewing these decades old cases and informing members that because of these documents, they must forfeit their pensions. TRTA does not dispute that rules must be enforced to run an efficient system, but also believes that there are some cases where discretion must be applied based on individual circumstances. TRTA has asked the TRS Board to study these issues and work with stakeholders.
Tomorrow, December 15, will contain a number of very important presentations for the TRS Board. You can view the board’s agenda here. The meeting will have a live webcast, which is available here. TRTA will have a full recap on the actuarial valuation presentation and the health care presentation. You can read the actuary’s report in the board documents here.
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