TRS Board hears on status of pension fund amid pandemic, but details on retiree health plans still unknown

The TRS fund is in good health, despite the COVID-19 pandemic, and markets are showing signs of a faster rebound than in the last U.S. recession, the chief investment officer for TRS told the Board of Trustees this week.

There was hope that TRS would discuss details for the new retiree health plans. Unfortunately, little new information was made available during the board meeting. Plan guides should be available starting in September and TRS will begin hosting webinars for retirees on their plan options in October. Active and retired members should also be aware of changes in the plans that directly respond to COVID-19:

TRS-Care Medicare Advantage
• No medical co-pays for all diagnostic testing
• No cost sharing for: Telemedicine and COVID-19 related treatment
• Specialized support and telemedicine assistance
• Early refills for maintenance medications

TRS-Care Standard & TRS-ActiveCare
• No member cost sharing for: Telemedicine; all COVID-19 related diagnostic testing; COVID-19 related inpatient treatment
• Care packages those who contract COVID-19
• Early refills for maintenance medications
• Access to mental health and nurse hotlines and materials

The Board’s Budget Committee announced TRS is going forward with a voluntary 5% budget cut that is  aligned with what the state has mandated for other public. Technically, TRS is exempt from these cuts since the agency’s operations are funded exclusively by the Pension Trust Fund held outside the state treasury. But TRS Executive Director Brian Guthrie indicated he felt it was important to show that TRS is doing its part to be responsible and tighten its belt. The cuts will allow TRS to save $21.7million for 2021. Most savings would come from a salary freeze implemented for the rest of the year, as well as a reduction in incentive compensation. None of the cuts will have an impact on member benefits or the ability to respond to COVID-19, Guthrie said. Recommend budget reductions will be held in a contingency account for items vital to the agency’s mission or remain in the trust funds. Either way they will act as a safety cushion for the future.

Guthrie outlined seven areas of focus and three priorities for the fourth quarter including, serving as a resource and engaging with policymakers on pension and health care funding and plan design; developing and attracting highly competent staff as part of his effort to grow the fleet; and improving the customer service experience for members and employers, which will help TRS meet the recommendations of the Sunset Commission Review. TRS has yet to go before the Sunset Review Commission but could be scheduled for any one of the remaining meeting dates on the calendar this year.

Guthrie said the TRS Legislative Appropriations Request (LAR) will ask the state to honor its commitments from the last legislative session regarding the state’s contributions to the pension and active health-care funds. This would keep TRS on track with the estimated 3% annual growth of covered public education and higher education payroll. It assumes an increase in the state’s contribution from 7.5% to 7.7% in 2022, going up to 8% in 2023. TRS also will ask the state to approve funds for pension trust fund administrative operations that were appropriated by the Legislature and funded by the pension. Administrative operations make up less than 0.2% of the total pension trust fund balance but will help TRS continue building out its fleet and expand its services to a regional office that will likely open in El Paso.