The Austin American-Statesman published an article on February 10 attacking the defined benefit plans of retired Texas public educators.
James Quintero of the Texas Public Policy Foundation (TPPF) wrote the attack article. In the article, Quintero questions the funding stability of public pension plans.
Quintero’s primary focus is on the pension plans run by the Teacher Retirement System of Texas (TRS). Quintero’s article is not only poorly timed, but also highly misguided.
Despite the TRS pension fund’s actuarially sound structure, Quintero describes the fund as “fiscally unsustainable.”
“Pension plans are effectively entitlement programs that run contrary to the criteria of sound budgeting principles,” Quintero asserts.
TRS was first established in 1937, and since the agency’s launch, TRS has never missed a pension payment to retirees.
In 2013, the Texas Legislature, with the guidance of retired educators, passed Senate Bill 1458. SB 1458 provided 200,000 retired educators a cost-of-living increase and the ensured the long-term solvency of the TRS fund.
Brian Guthrie, the Executive Director of TRS, reported to the Texas Senate Finance Committee earlier this week. During his report, Guthrie attributed the fund’s robust health to the investment expertise of the TRS staff, and since Guthrie’s instatement as TRS Deputy Director in 2008, the fund has grown each year.
The TRS fund currently stands at $132 billion, and saw investment returns of 16.9 percent in 2014, twice the projected growth rate.
Quintero states that the TRS fund is in trouble due to its rising unfunded liabilities.
“In just the past year alone, there’s been a $4.4 billion increase in the overall gap between benefits earned and plans’ assets,” Quintero writes.
However, Quintero fails mention that the slight rise in unfunded liabilities is actually planned for. TRS is projected to have all unfunded liabilities paid off by 2044. The motto of TRS is to be in “the forever business.” The agency’s deft expertise, financial planning and leadership are among the best in the nation.
TRTA has ensured the financial stability of the TRS fund through passionate grassroots advocacy. We owe much of the success of this effort to YOU. Our members worked hard throughout session to communicate with their Senators and Representatives and to support the decisions they made to help the fund become solvent. Your hard work was not in vain! TRTA will continue to protect your retirement fund and advocate for you and future retirees!
While these attacks may never go away, neither will TRTA! Our members’ resolve to stand up against those who would like to harm their retirement security will not waver! Together, we are stronger than any group walking the halls of the Texas Capitol today!
Letter From TRTA President
Click here to view the response letter the President of TRTA, Fran Plemmons, is sending to our legislators.
Please be sure to stay tuned into the Inside Line throughout the 84th Legislative Session, as we will be bringing you all the latest updates on our broad legislative agenda, including any bills concerning TRS-Care, the continued funding of the TRS pension trust fund, pension increases for all TRS retirees, and also congressional issues such as the WEP and GPO.
Thank you for your membership in the Texas Retired Teachers Association (TRTA). If you are not a member of TRTA and want more information about joining, please contact us at 1.800.880.1650. Follow us on Facebook! Visit our YouTube channel for regular video updates.