As the 84th Legislative Session presses forward, the Texas Retired Teachers Association (TRTA) and the Teacher Retirement System of Texas (TRS) remain focused. TRS has testified before both the Senate Finance and House Appropriations (Article III) committees about the health of the pension fund and the burgeoning TRS-Care retiree health insurance crisis.
Today, TRS spoke to those same issues before the House Pensions Committee. Although TRTA has represented our retirees’ voices in the aforementioned committee meetings, today’s event was invited testimony only.
Speaking on behalf of TRS, Executive Director Brian Guthrie provided preliminary comments to the committee members about the state of both the TRS pension trust fund and the TRS-Care retiree health insurance program. He reiterated last week’s testimony that the pension fund is in good shape, but TRS-Care’s financial stability remains in peril.
With nearly a quarter of a million participants in TRS-Care, addressing the $768 million shortfall facing the program is vital and must be done this session. If nothing is done by the Legislature to resolve this funding issue, retirees could face exorbitant premium increases—potentially double—by September 2015.
The average monthly income of a TRS retiree is just under $2000. Most TRS retirees also do not receive Social Security benefits and rely upon TRS as their sole source of retirement security. Retirees also pay premiums, deductibles and co-pays, and are not receiving a free ride for their access to TRS-care. TRTA is fighting this session to prevent the burden of the shortfall falling onto the backs of our retirees.
TRS has requested an exceptional budget item for this biennium to cover the $768 million shortfall. A similar crisis occurred in 2003, which resulted in multiple changes to both contributions and benefits to shore up the fund. As the session continues, all options are once again on the table.
The funding structure for TRS-Care is not based upon medical expenses, but on active teacher payroll, which at times over the past 12 years has been flat. The state’s use of active teacher payroll to fund TRS-Care is the primary reason for the fund’s shortfall. TRS-Care will become insolvent within the next calendar year if systemic changes are not made.
Pensions Committee Chairman Dan Flynn commented that this issue is one he and the committee members are well aware of and are very interested in addressing. Much of the reason for this interest and concern is thanks to our hard-working members, who contacted their legislators diligently throughout the interim and continue to call and write to their Senators and Representatives now.
“There is no member on the House floor that doesn’t want to take care of this problem,” Flynn said.
Representative Roberto Alonzo, Vice Chairman of the House Pensions Committee, echoed this sentiment saying that the House was extremely focused on TRS-Care as a major priority this session.
Elected officials have the will to address TRS-Care, even if many possess different approaches. It is our job at TRTA, and yours, to continue expressing the desire of our retirees to have access to quality, AFFORDABLE health care.
As the legislative session continues, any bills that are filed addressing the pension fund or TRS-Care will be heard before the Pensions Committee. We will keep you informed about any bills that affect your retirement benefits or security and let you know when those hearings will occur. The Appropriations Committee, which you will read more about below, is responsible for determining if funding is available for any bills passed by the full body of the Texas House.
House Appropriations to Hear More Testimony Tomorrow!
Tomorrow, February 24, TRS will expound upon the TRS-Care Sustainability Study options before the House Appropriations Sub-Committee on Article III. If you would like to view a live webcast of the testimony, please visit this link tomorrow at about 7:30 a.m. TRS is among several agencies testifying, so the exact time of their comments is not known.
If you have not read the TRS-Care Sustainability Study, you can download it here. In 2014, TRTA conducted a full review of all of the study options, which you can read by clicking here. Please bear in mind that the study addresses all possible options, some of which are more favorable than others. As the Legislature considers how to address the TRS-Care funding shortfall and the long-term solvency of the program, we will know more about which options are being seriously considered as viable solutions.
TRTA will continue to voice your concerns to the Legislature during one-on-one meetings with legislators and numerous public committee hearings as session continues. We will work hard to ensure that the cost of this shortfall does not fall squarely onto the backs of retirees on fixed incomes!
We know that many of our members are ready to start sending emails on this important topic. As the session rolls along, we will create more communication opportunities.
Many of you sent a personal letter to your legislators from our last quarterly publication. We are still receiving letters at the TRTA office, and we have delivered thousands of them directly into the hands of our elected officials. Legislators have told us that these letters are meaningful, heartfelt, impactful, and are making a real difference in framing this situation for the legislative members. Thank you for your efforts!
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.