Member Effort to Secure Additional Co-Sponsors Has Major Impact
The House Pensions Committee this week heard a bill by Representative Charles Perry (Lubbock). HB 99 is a bill that requires the state to tie their base-level contributions to the Teacher Retirement System of Texas (TRS) to no less than what the federal government requires in contributions for the Social Security program.
This legislation has tremendous actuarial value for the TRS fund. In 1995, the Texas Legislature dropped its funding to TRS from 7.31% of the aggregate active teacher payroll to the constitutional minimum of 6%. At that time, the decrease in funding for TRS was said to be temporary, meant to last for only one biennium.
It was not until 2007 that the Legislature raised their contribution to the TRS fund. If the Legislature had at least contributed the same amount that the federal government requires private employers to make on behalf of their employees to Social Security (6.2%), TRS would have over $1 billion more in the trust fund today. In other words, that 0.2% difference has cost your TRS fund over $1 billion.
Worse than that, if the state had maintained a 7.31% funding level, the pension trust fund would have over $8 billion more today!
TRTA has long held the position that the state’s underfunding of the TRS pension fund is one of the main reasons that retirees have not had a real cost-of-living increase in 12 years and the system is not actuarially sound today.
The market losses in 2001, 2008, and 2009 also played a significant role in the unfunded liability; but so does state funding policy. 95% of Texas school employees do not participate in Social Security, and the state and school districts have saved billions of dollars over the years by not making contributions to the federal program.
The TRS pension fund is a tremendous value for the state, school districts, and all school employees and Texans. We should do all we can to improve the condition of the fund, and make it the best funded and protected pension program in the country.
Representative Charles Perry has taken a very positive step with HB 99. Representative Perry proactively met with TRTA before the session began about his concept of creating a funding level that should not be less than what is required by Social Security. While the state can, and should, put in higher contributions (up to 10% of the aggregate active teacher payroll per the Texas Constitution), this proactive approach would assure TRS participants and retirees that the state could not contribute the bare minimum.
TRTA agrees with Representative Perry. We believe this bill should be advanced this session!
More Co-Sponsors on HB 1383
It has only been one week since the TRTA Day at the Capitol, and the impact is still being felt in the Texas Capitol. Many legislators continue to comment on our members’ organization, positive attitude, knowledge of the issues, and passion for protecting and improving benefits for TRS retirees.
Before last Wednesday, there were just over 30 co-sponsors on Representative Jim Keffer’s bill HB 1383. This legislation calls on the Texas Legislature to increase funding for the TRS pension fund to 6.9% in FY 2014 and 7.4% in FY 2015. This legislation now has over 70 co-sponsors!
TRTA knows that many others will join us in the cause. Please review the list below and see if your legislator has joined as a co-sponsor on HB 1383. If so, send them a note of gratitude or call their office to thank them. Feel free to use the toll-free TRTA Legislator Hotline(1.888.674.3788). Please encourage your legislators to keep their focus on helping TRS get on a path to actuarial soundness this session.
If your legislator has not signed on to HB 1383, please call and ask them to support this important legislation. TRTA has a goal of 100 co-sponsors! We know it can happen! It will take a few minutes of your time, but let’s work together to send a strong message to the House that we can and should do more to fund TRS!
Representatives Who Already Support HB 1383
Representatives Who Have Not Yet Co-Sponsored HB 1383! We Need Their Support!
Thank you for being a member of TRTA and a valuable asset to our statewide grassroots team! If you are not a member and would like to join, please call us at 1.800.880.1650.