May 6, 2022: TRS says all good for a retiree COLA next session, but there’s more to be done; Abbott’s cruel idea to leave kids without an education; Vote tomorrow!
Publish Date: May 7, 2022 11:51 am Author: Texas AFT
Texas AFT Retiree Plus member Lydia Carrillo-Valdez testifies at the Capitol for a cost-of-living increase for TRS pensions.
TRS officials tell legislators: The fund is healthy and can support a cost-of-living increase for retirees
But you’ll still need to fight for something that makes a difference for your retirement
This past week, the Teacher’s Retirement System of Texas (TRS) considered some massive changes that could have a significant impact on the health of the pension fund and the agency’s ability to offer retirees a cost-of-living adjustment (COLA) to their annuity. These changes were considered at the TRS Board meeting last Friday and at the Senate Finance Committee hearing this week. The good news: The state can afford a COLA. The bad news: Recent proposals for how much fall way short.
TRS Executive Director Brian Guthrie announced that the agency had been considering reducing its investment return assumption (IRA) from 7.25% to 7%. TRS calculates its budgets for future years based on how much they assume to gain from its investments. Lowering the IRA reflects a more conservative attitude toward investments, i.e., assuming TRS’s investments will yield less gains. TRS can set its own IRA, but the Legislature sets contribution rates and annuity payments.
From the IRA, TRS calculates the funding period, the number of years it would take for the unfunded liability to be completely eliminated and for the pension to be fully funded. Under the 7.25% IRA, the funding period is 23 years, but under the more conservative proposed 7% IRA, the funding period is 26 years. A pension fund is considered actuarially sound if the funding period is less than 31 years.
TRS last lowered its IRA in 2019 from 8% to 7.25%. At that time, there was worry that such a significant drop would strain the agency’s ability to make pension payments, but thanks in part to legislative increases to state, teacher, and school district contribution rates to TRS, the pension ended up in a much healthier place than it was before the changes. Of the top ten pension funds across the nation, TRS is the only fund with an IRA above 7%.
The TRS board of trustees will not vote on any IRA changes until September.
At a Senate Finance Committee Wednesday, TRS Executive Director Brian Guthrie testified that the fund is healthy and can afford a COLA. He laid out proposals from the last legislative session that would have provided retirees with a 6% COLA, capped at $100 per month.
Texas AFT knows that a skimpy COLA will fall short of providing retirees the support they desperately need with a rising cost of living. In the following months, we’ll be asking you to step up, demand that legislators keep their promise to educators, and fight for plans that assure ongoing COLA increases—instead of waiting up to 18 years again for the next little bump to your monthly payment.
Texas AFT Retiree Plus member Lydia Carrillo-Valdez spent hours at the Senate hearing waiting to testify in support of a COLA. She prepared remarks on a series of notecards, but once it came time for her to testify in front of the committee, she decided to extemporaneously speak from the heart.
“I’m telling you, I want to keep my home. I want to stay in my home,” she said. “That’s all I can say. Things are tough. It’s tough for everyone.”
The committee also discussed the importance of the U.S. Congress repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP and GPO unfairly reduce security benefits for people who work jobs that did not pay into social security and receive a government pension. As of today, 15 of the 36 members of Congress from Texas have signed on to the Social Security Fairness Act to repeal those offsets. Neither Senator Ted Cruz nor Senator John Cornyn has signed on to the U.S. Senate version of the bill.
Abbott’s foolish pursuit of inflicting harm on immigrant children would lead to the targeting of kids and danger to our state’s economy
On Wednesday, Gov. Greg Abbott told a radio talk-show host that he’s considering challenging a Supreme Court decision—Plyler v. Doe—from four decades ago that requires states to offer public education enrollment to any child living in their state, regardless of their legal status to be in the United States. Condemnation for the governor’s comments was quick, including a statement from Texas AFT President Zeph Capo, who decried the harm it would do to children and our state economy.
“The governor is showing us that the cruelty in his heart knows no depths,” Capo said. “We’ve never before seen such division and callousness in Texas politics. Children shouldn’t be punished for the political ambitions of adults. Nor should they be judged for the decisions of their parents, who oftentimes are trying to provide a life for their children that’s free from violence.”
Capo noted that Texas has embraced the common-sense notion that it’s more productive to educate children than cast them aside because of their immigration status. “Just a few years ago, we were proud to stand with Gov. Rick Perry as our state passed the Texas Dream Act showing Texas had both compassion for children and the smarts to understand the positive outcomes doing so would have on our economy. The Supreme Court wisely saw the benefits of providing education for immigrant children—kids who will be educated and productive members of society. Educating children isn’t a partisan decision. It’s a good economic one. It’s the type of decision that has given our state and our country a competitive advantage over others that we can’t afford to lose.
Capo said Abbott’s pursuit runs against educators’ deep-seated belief that once a student walks through their classroom door, it is the teacher’s responsibility to welcome them and educate them. Abbott’s proposal would increase the possibility of spiteful activists targeting students and questioning their status. “Students would face speculation over the color of their skin or their accent, even if they are legal residents,” he said.
Capo added that Abbott’s comments show the importance of removing him from office. “This November, we have an opportunity to get back to the big and bold thinking Texas is known for or continue the cruel, small-minded thinking of a governor destined to isolate our state and erode our standing as a powerhouse across the world. Texas, it’s time for change.”
The Tuesday Text Mixera to help our endorsed candidates win the May 24 runoffs continue each week! They will run every Tuesday, from 6 – 7:30 PM.
The mixers will run every Tuesday, from 6 p.m. to 7:30 p.m. Just bring your favorite drink and a charged phone or laptop and join us on Zoom.
Click here to sign up. Whoever sends the most texts by May 24 will receive a $100 gift card!
Deadline is today for chance to win Teacher Appreciation gift cards
As a way to say thank you to educators, long-time corporate supporter, Horace Mann, is giving away $2,500 in gift cards in ourTeacher Appreciation Week Sweepstakes. Today, May 6, is the deadline for a chance to win a $100 gift card to your choice of Target, Starbucks, Lowe’s or Home Depot.
See link for official rules.No purchase necessary to enter or win. Void where prohibited. This Promotion is open to individuals who are at least 18 years of age at the time of entry and who are legal residents of the United States and/or the District of Columbia, excluding those living in or who are legal residents of Hawaii, Kentucky, Maine, Mississippi, New Jersey, New York, Puerto Rico, West Virginia, U.S. Territories and Possessions and where otherwise prohibited by law.
Get out and vote tomorrow—May 7—for local and state amendment elections
Many communities across Texas will hold local elections—including for school boards—tomorrow, May 7. Be sure you’re ready to support school board candidates whose focus is on our kids and not on partisan political carnivals. But all registered Texans will have a choice to vote on two proposed amendments to the Texas Constitution that address school property tax reductions and exemptions.