TRTA Week in Review
Public Pension Funds Still Under Attack
“Texas Pension funds are in better shape than anywhere else….” This is a recurring sentiment that we are hearing about your TRS pension trust fund as the legislative process revs up. What is also revving up is the attitude that a defined benefit traditional pension plan (like TRS retirees currently have), as well as the health insurance program that TRS retirees need, is too much of a fiscal burden on the state and now is the time to eliminate these programs.
TRTA members need to know that there are interest groups that are promoting the demise of the defined benefit program. On Thursday, a public pension fund briefing was conducted by Senator Robert Duncan (R-Lubbock) and Representative Vicki Truitt (R-Southlake). During that briefing, Talmadge Heflin, Director of the Texas Public Policy Foundation’s Center for Fiscal Policy, called on the Texas Legislature to adopt a proposal that moves all current and future public employees (including education employees) into a defined contribution plan. He also advocated for the termination of health insurance programs for public pension retirees and the creation of high-deductible health insurance programs.
For school district employees, the Texas Public Policy Foundation recommendations are even more radical. About 95 percent of all Texas school district employees do not pay into Social Security. Mr. Heflin and the Texas Public Policy Foundation suggest that the best alternative for current and future educators is to keep them out of TRS, to keep them out of the Social Security program, and provide a floor-level of retirement benefits based in government bonds.
No employee in the American workforce today is as ill equipped for retirement as what the TPPF is suggesting for our Texas public education employees. The fact is that the combination of TRS management efficiencies, low taxpayer cost, low employee cost, and high level of retirement benefit is a winning formula that has worked in Texas for over 70 years.
Legislators Need to Know
Texas legislators are talking about your pension trust fund and are asking the question if now isthe right time to transition the fund to a defined contribution plan. While the proponents of a defined contribution plan will try and reassure retirees that it will not impact their benefit, TRTA members know better. Moving the current and future working population away from the current defined benefit pension plan eliminates the much needed pension fund contributions that are invested to the betterment of the entire trust and all beneficiaries. It is the investment earnings that have driven cost of living increases and benefit enhancements for past and present pensioners, and eliminating contributions does nothing for the system except create a definite end date for the plan.
Now is the time to shore up pension fund contributions and to do all that is required to preserve and grow this healthy retirement system.
Legislators need to know the facts:
- Less than 2% of the Texas budget goes to pay for pension benefits;
- Texas taxpayer contributions to TRS total $2.3 billion;
- TRS pays out $6.6 billion in pension benefits per year;
- TRS retirees spent those dollars in Texas and in their local communities generating $900 million in state and local taxes;
- This economic engine generates about 91,500 Texas jobs;
- The true net cost to Texas taxpayers is $1.4 billion;
- If Texas educators participated in Social Security as opposed to TRS, the cost to the taxpayer would be $1.5 billion;
- The TRS pension trust fund enjoys a funded ratio of 82.9 percent with more than $105 billion in total pension fund assets;
- There are over 1,000,000 active and retired members in the TRS system. This means that one out of every 20 Texans is a member of the TRS pension trust fund!
TRTA is committed to protecting your pension and health care benefits. There are numerous Texas legislators that are considering the idea of transitioning away from the TRS defined benefit pension plan. While this does not mean that current retirees would lose their defined benefit plan, it does mean that current and future active employees would be disadvantaged significantly when it comes to their retirement security. If Texas legislators are serious about helping retirees receive a pension increase, recruiting and retaining the best educators possible, and keeping Texas pension dollars and the jobs those dollars create here instead of exporting these valuable resources to Washington, they must spend more time creating ways to preserve the TRS defined benefit plan instead of killing it off.
Senate Finance Committee Members Named
Lieutenant Governor David Dewhurst has named the following Senators to the Senate Finance Committee:
- Steve Ogden (R-Bryan), Chairman;
- Juan “Chuy” Hinojosa (D-McAllen), Vice Chairman;
- Bob Deuell, (R-Greenville);
- Robert Duncan, (R-Lubbock);
- Kevin Eltife, (R-Tyler);
- Craig Estes, (R-Wichita Falls);
- Eddie Lucio Jr., (D-Brownsville);
- Jane Nelson, (R-Flower Mound);
- Dan Patrick, (R-Houston);
- Kel Seliger, (R-Amarillo);
- Florence Shapiro, (R-Plano);
- Royce West, (D-Dallas);
- John Whitmire, (D-Houston);
- Tommy Williams, (R-The Woodlands); and
- Judith Zaffirini, (D-Laredo).
Senate Finance Committee meetings begin on Monday, January 31. TRS will appear before the committee on February 16.
TRTA members are doing a great job communicating with their elected officials. In less than a week, over 9,000 emails have been sent to Texas legislators. In addition, every Texas legislator has received contact from TRTA members! Your advocacy efforts are making a significant impact. I have received many great reports about legislators engaging directly with their constituents as a part of this email advocacy campaign. Your work is making legislators aware of our issues and the need to make TRS retirees a priority this session.
It is not too late to get involved. If you have not sent an email to your legislators, now is the time to take action. Click here to send an email to your legislators.
The budgeting process is just now getting underway. Our active participation can and will make a difference for all TRS retirees! We appreciate your support and your membership with TRTA.