TRS Pension Fund Shows Big Gains, But Benefit Improvements Still Lag

The Texas Teacher Retirement System’s pension fund has made big gains over the past year. As of September 30, the fund had recorded a gain of more than 12 percent—well above the annual target of 8 percent called for by TRS actuarial consultants, and better than the rate of return on any other major public pension fund in the nation.

These robust investment gains have brought the fund back above $100 billion in the market value of its assets, recovering much of the ground lost during the severe market downturn of 2007-2009. In response, the TRS board of trustees approved nearly $10 million in performance bonuses to TRS investment managers today.

There will be no such immediate reward for TRS retirees, who have not received any cost-of-living increase since 2001, even though the inflation-adjusted value of their pensions has declined more than 20 percent and their share of retiree health-care costs has gone up. State law forbids any benefit increase that would put the pension fund’s liabilities above a certain level set in statute; hence a benefit increase cannot be provided unless the fund continues to record healthy gains for some time, receives increased contributions, or both.

Texas AFT will be working to address this problem on several fronts in the coming session. One crucial step is for the state to increase its contributions to your pension fund. Another is to ensure that TRS trustees and investment managers follow sound investment practices, with single-minded concentration on their fiduciary duty to TRS members. In addition, Texas AFT will push for immediate financial relief for retirees when it comes to their health-care costs.