TRS Releases Investment Report for FY 2012
The Teacher Retirement System of Texas (TRS) released its FY 2012 Annual Investment Performance Report. The report states that TRS earned 7.58% on its investments for the fiscal year ending August 31. The fund grew by over $4 billion to reach $111.1 billion in assets.
The report confirms the success of the TRS Strategic Partner Network, which utilizes external partners in locating investment opportunities in private equity and real assets, for example. The TRS Strategic Partner Network program independently earned 11.4% during the fiscal year.
TRS Executive Director Brian Guthrie explains that the Emerging Manager program and the use of hedge funds aided TRS in its performance and helped the agency run its investment division more efficiently.
The report also includes information about expenses related to running the investment division, including salaries and building expenses.
TRTA members may recall that the fund’s value was at $95.7 billion in August of 2010 and quickly rose to $108 billion in February 2011. TRS continues to perform well through difficult market cycles, coming from a low of approximately $70 billion during the crash of 2008.
While the news we have received this week is good, TRS is not considered actuarially sound by Texas statute. In order for the TRS pension trust fund to be actuarially sound, it must be able to amortize its unfunded liability within 30 years. Right now, TRS has a funding period of “never.”
While TRS is financially healthy and your monthly annuity is not at risk of vanishing, retirees who have not received a pension increase in nearly 12 years are feeling the pinch. In order for the fund to achieve the level of success needed to provide you with a permanent cost-of-living increase, the Texas Legislature must consider making a higher contribution to TRS.
Presently, the state contribution is 6.4% for FY 2013. The retirement system was receiving the Texas Constitutional minimum for the benefit program of 6 percent in the previous biennium.
As you have read in recent issues of the Inside Line, the legislatively mandated study of the pension fund performed by TRS indicates that incremental increases in the state’s contribution can have a strong, long-term impact on the fund’s investment returns.
TRTA will continue to work with legislators now and during the 83rd legislative session to increase the state’s contribution to TRS while maintaining its defined benefit structure.
Medicare Advantage Update
TRTA continues to try and answer questions about the upcoming Medicare Advantage plan. Perhaps the most important questions TRTA has tried to answer over the last month are about medical providers in the plan. Many TRTA members emailed us their provider information to a special email account through email@example.com. There were a few challenges that developed out of using this email question and answer system. Surprisingly, they had nothing to do with technology issues, these problems really stemmed from rule limitations placed on Aetna and TRS from answering these emails directly, something we all believed was possible at the time, but turned out not to be the case (thank you federal rules governing Medicare Advantage plans).
Even still, TRS and Aetna worked diligently to help provide the necessary information so that TRTA could respond to these emails (well over 900 emails, and more than 3,000-plus actual provider questions). The bottom line is that TRTA has been responding to these questions as quickly as we receive new information about providers from Aetna.
We know this has been a frustrating transition, and we appreciate your patience and understanding as we have tried to help as much as possible. If you are still waiting to hear about the providers asked about in your email, we are working to get you than information as quickly as possible (TRTA has responded to about half of the emails we have received so far). For an immediate answer, you can always call Aetna and speak to a representative. Hold times on this toll-free call-in service are generally less than 1 minute. As you read in the TRTA Voice magazine, Aetna is the best and only source for information on your medical provider(s) acceptance of the new Medicare Advantage plan.
We know that specific provider information is critical to you knowing more about staying in or opting out of this new plan option. We are replying to emails as quickly as possible, but to restate, the best way to get an answer about your provider questions is to call Aetna. That number is 1.866.217.2409.
Thank you for being a TRTA member and supporting our efforts. Our member network exceeded 73,000 members last year. We hope that you will continue to support us as we fight to protect your retirement. If you are not a member and want more information about joining, please contact our office at 1.800.880.1650. TRTA membership costs $25 per year.