The Teacher Retirement System of Texas Board on Friday approved a plan to build a new agency headquarters north of downtown Austin, a move that officials said would save TRS money and not impact the soundness of the retiree pension fund or plans for cost-of-living increases.
TRS plans to consolidate its staff—currently working in two different buildings—into one location at the Mueller development in north Austin, the former Austin airport location that now serves as a mixed-use neighborhood of homes, offices, retail, and restaurants. The plans are to sell the current 12th street headquarters and end the lease at another downtown building.
TRS officials said the sale of the current building, along with savings on maintenance of the old site, and owning rather than leasing the additional building, will almost offset the $250 million to $300 million cost of a new campus and eventually will save TRS $15 million a year.
TRS deemed the move necessary because more staff will be needed to serve TRS’s growing membership, which is expected to more than double from 1.7 million to up to 3.7 million in the next 30 years.
A key to the plan’s approval was an assessment from the TRS actuary that showed agency operations expenses at only .14% of the revenue from employee payrolls, well below the national average of .4%. And savings from the deal would not increase the funding period for actuarial soundness (a measurement needed to provide cost-of-living increases for retirees in the near future). The actuary also looked at a scenario if TRS were to bear the full brunt of the relocation costs at $350 million, which also would not affect the funding period.
TRS officials also touted the agency’s efficiency in delivering member services. In a review of seven similar pension funds, TRS was 57% lower than the average number of service employees per pension-fund member.