The framework for a much-needed infusion of state health-care funding this year for retired school employees, forestalling significant premium increases and benefit cuts, was set by interim House committee hearings in 2014. Hence it gets our attention when we see what House Speaker Joe Straus has asked the House Pensions Committee to study during the current interim leading up to the 2017 session of the Texas legislature. (Yesterday we also spotlighted a related new interim assignment, issued to the House Appropriations Committee, to gauge “the feasibility and costs associated with retired teachers not eligible for Medicare remaining on a school district’s health care plan until Medicare eligible.”)
Here are several of the more important tasks assigned by Speaker Straus to the Pensions Committee:
1. Study the impact that fluctuations in global financial markets have had on public pension funds. Analyze assumed rates of return on investments, structures among asset classes, long-term and shorter-term investment goals, and make appropriate recommendations to ensure the investment structure of public pension funds are meeting fiduciary responsibilities.
4. Examine the fiscal and policy impacts of structural reforms that would increase state public pension plans’ ability to achieve and maintain actuarial soundness. Evaluate the feasibility, costs, and benefits of utilizing one-time funding increases to reduce or eliminate unfunded liabilities.
5. Evaluate the investment performance benchmarks utilized by the state’s pension funds and the impact portfolio diversification and short- and long-term market assumptions have had on achieving expected investment returns. Analyze the fee structure and investment strategy for various investment classes to ensure the costs are reasonable and competitive versus other large public and private pension trust funds.
The Texas Senate gives jurisdiction over such pension issues to that chamber’s State Affairs Committee. Interim study assignments for senators come from the Senate’s presiding officer, Lt. Gov. Dan Patrick. Patrick’s directives to the Senate State Affairs Committee are anything but specific when it comes to pension matters. His interim charge to the panel says only that it must monitor “proposed reforms to the Teacher Retirement System of Texas.” It’s worth noting, though, that separately the Senate’s budget-writing Finance Committee has been assigned by Lt. Gov. Patrick to “review and make recommendations to reduce state debt liabilities, including state pension liability.”