$9.7 Million for Investment Staff
The Teacher Retirement System of Texas (TRS) announced today that its investment performance exceeded benchmark expectations to the extent necessary for investment staff to receive their contractual bonus pay. This includes bonus payouts for fiscal years 2009 and 2010.
The TRS pension fund earned 12.57 percent for the Plan Year 2010 (September 30). TRS reports that it placed first among all public pension funds with an asset value of $10 billion or more.
The report also states that for FY 2008-2010, the TRS investment team added $2.3 billion in value to the fund over the incentive index. The results are excellent, especially considering the market conditions. TRS is doing a very professional job with your pension trust fund investments.
This is good news for TRS members (retired and active) as continued growth in TRS investment earnings has the most significant impact on making the system actuarially sound. According to Texas statute, only when the system is actuarially sound can the Texas Legislature authorize a permanent increase in pension benefits for Texas public education retirees.
The pension system does not need to be actuarially sound, though, for TRS investment employees to receive their bonus pay. Bonus pay is based on TRS policy and employment contracts. These policies were modified a few years ago to increase bonus pay, while at the same time increasing the performance standards necessary to qualify for the payout.
TRS has not made a bonus payment to any of their investment staff for 2007 and 2008 as the Board of Trustees prolonged paying bonuses until the system’s performance improved.
TRTA members have had mixed reactions about bonus pay for TRS employees. The idea of using bonus pay as an incentive to hire and retain the best people possible to manage the pension fund’s $100-plus billion portfolio has been praised and criticized. TRS is not the only public pension fund in Texas or the nation to use incentive-based pay to recruit and retain investment staff. For example, the University of Texas Investment Management Company (UTIMCO) manages $12 billion in assets and paid incentive compensation to 29 employees totaling $5 million. Certainly in the private sector, incentive-based pay is widely used in the investment industry.
That being said, TRS retirees who have not had an increase in their pensions in nearly 10 years may not receive this news with much enthusiasm. While TRS correctly points out that bonuses are based on performance and the TRS investment team made the TRS pension fund one of the top performers in the country, this great performance is not by itself going to make a pension increase possible for retirees this coming session.
If retirees are to receive an increase in their pensions this coming session, legislators MUST take action. Pension fund earnings by themselves will not solve the “no cost of living increase” crisis, but TRS is doing what it can by making good investment decisions. These decisions have brought the fund back from a low of $67 billion in 2009 to today’s estimate of $103 billion.
More information on the TRS bonus pay is available by clicking here.
TRTA Legislative Handouts
TRTA has created a legislative packet for our members to use for the 82nd Legislative Session. Many of you will be scheduling visits with your legislator(s) prior to or during the legislative session. You have asked us for information that you can provide to your legislator or his or her staff members that explains TRTA’s priorities, positions on issues pertaining to retirees, and the TRS pension and healthcare funds. Available below are PDF documents that you may download and present during your scheduled visits.
Click here to download the first set of documents: State Priorities, Retirees in Need, Don’t Short-change the Future and Keeping it Healthy.
Click here to download the second set of documents: TRS Fact Sheet, Pensionomicsand Value to the Texas Economy.
These legislative handouts are provided to you in PDF format so that you can freely download and distribute them. These handouts can also be found on the TRTA web site under the “Legislation” tab.
As you have an opportunity to meet with your elected officials, please be sure to send an email or call TRTA with an update about your meeting. This is especially useful to us as we plan our follow-up meetings with legislators in the coming weeks.
“Thank You” TRTA Members
I hope you know how much your participation in TRTA is appreciated. I want to extend a personal “thank you” to all of those members who have already responded to the Texas Retired Teachers Foundation (TRTF) fundraiser mailing.
So far, the response has been amazing! $45,000 has been given through the TRTF direct-mail campaign. $9,000 was given through local unit and district donations during November for Foundation Month.
As you know, TRTF does not employ an outside fundraising agency to conduct this donation request. It is generated in-house, meaning your money is not paying for a third party to process the mailing. Your dollars are going directly to help retirees in need, to assist classroom teachers, and to provide scholarships for future educators.
Many of you have asked about the TRTF “A Helping Hand” program. This is a great outreach opportunity and TRTF has helped many of your fellow retirees dealing with difficult situations. Just recently, TRTF was able to help a TRTA member pay some overdue utility bills and provide space heaters to keep her warm this winter. This is just one example of how your dollars are being used to meet the needs of your fellow education retirees.
If you have not had a chance to send in a donation, we would really appreciate any amount that you can give. We are hoping that 1,000 TRTA members are able to send a $20 donation. Combined with the support of those who have already given, this outpouring of member generosity would push TRTF fundraising over the $70,000 threshold and would provide more funds for “A Helping Hand” assistance, as well as other Foundation outreach programs.
Keep in mind, all TRTF donations ARE TAX DEDUCTIBLE! We know times are tough and we are so grateful for what you do to help.
Perhaps you are curious about receiving some assistance through the TRTF “A Helping Hand” program for yourself or for someone you know. If so, please email us at help@trtf.org. Your email is confidential and you will be contacted quickly about receiving any assistance TRTF may be able to provide.
Concluding Comments
The TRS Board of Trustees is continuing its meeting today and tomorrow. TRTA will provide an update on their actions.
If you need information to use when meeting with your elected officials, please visit the TRTA web site at www.trta.org and look under the “Legislation” tab.
A final thought…we do have a tough road ahead and we will need to remain strong as this coming session will test us all; but we will never give up on working to achieve our goals of improving your pension benefits and protecting all that you have earned through your public education career. Thank you for your hard work, support and dedication to TRTA.
