The last time TRS retirees received a cost-of-living increase was in 2013—five years ago. It was a three percent cost-of-living increase, capped at $100 per month, and it only went to TRS retirees who retired before September 1st, 2004. If you retired after that date, 14 years ago, you’ve never seen a cost-of-living increase during your retirement.
To say that a lot has changed since 2004 would be a massive understatement. The most commonly asked question I receive is “what is the likelihood that retirees will receive a COLA this year?” Retirees are in desperate need, and when the previous COLA was done in 2013, we were told that the Legislature would come back to finish the job and help the retirees who didn’t receive it.
One of the issues that has plagued the chances of a COLA has been the state requirement of the TRS fund being ‘actuarially sound.’ The state defines actuarial soundness as the TRS fund being within 31 years of paying off its unfunded liabilities.
So, what does this mean for the chances of retirees hoping for a COLA or other benefit adjustment in 2019?
A COLA will never materialize unless the elected officials can agree on increasing funding for TRS. Retirees have been told that since TRS has lowered its rate of return assumption, a benefit increase will not occur for the next 50 to 100 years. TRTA believes that this is unacceptable. The Legislature should increase state funding for TRS by approximately 1.83 percent, which equates to $768 million per year. This increase, paired with strong investment returns, could open the door for a COLA.
The only way this type of increase can occur is if both active and retired educators get out the vote in the November election. The election will determine whether the Legislature will be filled with legislators friendly to retirees’ needs. Texas early voting continues through Nov. 2! TRTA is encouraging its members to VOTE EARLY!
We are asking all TRTA members to reach out to their legislators and candidates running for political office. Ask them to set policy that will provide adequate funding for the TRS pension fund so that retirees can receive a much-needed benefit adjustment to keep up with increasing health care costs and modern-day expenses.
Everyone running for office in Texas should know, understand, and agree that TRS retirees deserve retirement security including a pension increase. TRS Retirees Deserve Better!