The Teacher Retirement System of Texas (TRS) Board of Trustees met this week in Austin to discuss several issues, including the actuarial valuation of the pension fund.
There is a lot of good news about the TRS pension fund to share with our members. TRS reported the pension fund is at a healthy $130 billion. The rate of return on investments for the year was 16.8 percent, net of expenses. The return was large enough to eliminate deferred losses and is now in a position of deferred investment gains.
These developments are a direct result of so many people dedicated to making TRS Texas the best public pension plan in the nation. This includes the TRS administrative and investment teams, as well as the legislators who have supported the TRTA legislative agenda to protect the TRS defined benefit plan.
Above all, improving actuarial condition of our pension fund is thanks to the tremendous effort you, your fellow retirees and our friends in the active educator community made during the 83rd Legislative Session in 2013. As a result of our determination and cooperation, Senate Bill 1458 has had a huge impact on the health of TRS.
We have proven that when we work together and stay the course, it works! It is also important to note, however, that we cannot go backwards! TRTA members must remain vigilant in maintaining the provisions passed through SB 1458. These provisions are good for the pension fund and necessary. Any step backwards undermines our hard-earned success!
With TRS Fund in Better Shape, What Do I Need to Know about the Coming Legislative Session?
While this news is positive for all 1.3 million participants—retired and active—there were some concerns presented during the meeting as well. An independent actuary reported that while the system is sound, no room exists for benefit increases for the fund’s annuitants under the current contribution structure. This means that any benefit increases for annuitants must be funded with additional revenue.
Our TRS-Care retiree health insurance program is facing a huge shortfall that must be addressed in 2015. During the TRS Board of Trustees meetings, the TRS staff and independent actuaries released the final version of its TRS-Care Sustainability Study.
Next week, TRTA will release a complete review of the study through the Inside Line. An important part of the TRS report on health care is that the plan is still projecting to be underfunded by nearly $730 million. Without a fix to this immediate health care crisis in the coming session, our retirees could see their premiums more than double!
Our legislators must know that funding for our health care program and the pension fund are independent issues, and considerable TRTA effort will focus on resolving the TRS-Care shortfall and protecting the insurance plan for the future.
The resolution of the TRS-Care crisis cannot sacrifice the pension fund or the provisions earned through SB 1458! Retirees need a reliable, steady monthly income with the potential for increases but they also need affordable, accessible health care! TRTA will support equally the increased appropriations needed for TRS-Care and its protection and the preservation of the defined benefit pension plan.
We cannot allow the dollars won through SB 1458 to stabilize the pension fund to be shifted to TRS-Care in an attempt to resolve the coming health care crisis. This line of thinking is short-sighted and unreasonable.
TRTA is your advocate and we always will work to protect your retirement AND improve your benefits. TRTA’s core value is a sound retirement system, but helping retirees receive benefit increases is also a major part of our long-term legislative agenda. We successfully worked to improve the condition of the TRS fund and provide a cost-of-living increase to hundreds of thousands of TRS retirees last session, and we are going to work on these goals again in the 84th Legislative Session.
TRTA members know the solvency of TRS-Care is our top priority for the 84th Legislative Session beginning in January, but we will also seek ways to provide additional funding to the TRS pension fund so that the possibility of a cost-of-living increase for those who did not receive one in 2013 may be considered. As the health of the fund continues to improve, opportunities may be presented to make this a reality.
As you can see, we have a broad legislative agenda this coming session. Please look for next week’s update on the TRS-Care Sustainability Study as we take a deeper look at what TRS is reporting to the Legislature on this important topic.
Thank you for being a member of TRTA! It is your steadfast support that allows us to be the state’s lead advocate for protecting your retirement and health care benefits. It is also what allows us to work with Congress on bills such as the Equal Treatment of Public Servants Act, the bill working to give you back more of your hard earned Social Security benefits. Check our previous Inside Line to read more about this bill. And, yes, TRTA absolutely is working with our friends in Congress to address the Government Pension Offset issue as well!