TRS Board review of its Sunset Report
Every legislative session, state agencies—on a rotating basis—go through an evaluation by the Texas Sunset Advisory Commission to technically determine whether the agency should continue to exist, but more often to create a rigorous assessment of the agency and recommendations for changes in its operations. The Teacher Retirement System of Texas is set for Sunset review next session and now has a report from the commission to review.
TRS Executive Director Brian Guthrie went through the Sunset recommendations with the TRS Board outlining ways TRS has already or will begin addressing issues outlined in the report. Guthrie acknowledged TRS could be doing more to improve customer service and reaching out to inactive members. He pointed to plans to beef up member engagement and communication efforts moving forward and providing more options for members to access information on retirement planning beyond the videos currently posted online.
The Sunset Report also recommended additional contract oversight and more centralized management of the agency’s $2.5 billion in contracts, something Guthrie told the Board they were on track to have done by the end of the year.
With regard to the report’s recommendation that TRS would benefit from additional oversight and greater transparency in its investment practices, Guthrie responded that TRS is in the process of reviewing “parallel investment accounting system” options along with costs to implement and maintain these systems. Work on this initiative actually began in October 2019 with the goal to improve the controls around investment accounting data and financial reporting. TRS will also propose a policy change by the end of calendar year 2020 to have its Internal Investment Committee review internal investments and strategies and will add an easy to understand graphical representation of alternative investments to the fiscal year 2020 Comprehensive Annual Fiscal Report to make the information easier to understand.
Guthrie said that TRS is willing to make most of the changes recommended by the report, such as formalizing its training for board members, abolishing outdated reports, and updating statutory language. TRS is in the process of further enhancing its current complaint tracking process by developing and maintaining a centralized system for the various sources of complaints, which will bring its complaint process into more alignment with what the Sunset Report advised. In addition to the findings identified in the Sunset Report, Mr. Guthrie brought up four major policy issues that require changes. TRS will share these policy issues with the Sunset Commission and will incorporate them into its strategic plan and Legislative Appropriations Request. These include: Employment After Retirement, Disability Retirement Requirements, Enhance Investment Flexibility, Real Estate Provisions, and TRS-Care and TRS-ActiveCare Affordability and Viability. TRS has until April 30 to submit its official response to the Sunset Advisory Commission. It is still waiting for a legislative Sunset hearing to be scheduled, with July 8-9 being the earliest possible dates.