The Texas Sunset Commission released its report evaluating the Teacher Retirement System of Texas (TRS) earlier this month. The review focused on how effectively and efficiently TRS carries out its mission to ensure 1.6 million active and retired school employees can retire securely.
The report does not discuss the need for a permanent cost-of-living adjustment or greater state investment to offset health care premiums for active employees. Instead it took a deep look into operations and management strategies. The review found that TRS does a good job managing the $157 billion trust fund, but it does not always meet its obligation to provide the information and support its members need to be secure in their financial decisions. The report also found that as a large public investor, the agency could benefit from more independent oversight and transparency when it comes to its operations and investments. The Sunset review identified 4 main areas of concern and recommendations for improvement, these include:
- TRS needs to repair its relationship with its members by focusing on their needs
- TRS needs more effective contract management and oversight
- As one of the largest public pension funds in the U.S., TRS would benefit from additional oversight and greater transparency of its investment practices
- TRS statutes do not reflect some standard elements of Sunset Reviews
The report cited the agency’s notoriously long wait times for members to receive documents or get calls back, as well as inadequate staff training, and lack information or counseling opportunities available for retirement planning, as some of the reasons for its strained relationship with members. These finding align with what Texas AFT has been hearing from members for years. The report recommends TRS develop a community outreach plan for retirement planning as well as make greater efforts to return contributions to inactive members and adopt a member engagement policy to increase transparency. The report also found that the agency’s lack of centralized contract management has made it difficult to properly oversee the $2.5 billion in active contracts. The Sunset review recommends TRS fully centralize all contract functions and enhance its monitoring process. For a full list of recommendation made by the Sunset review click here.
The Sunset Commission’s hearing to deliberate on recommendations and review the agency’s response as well as hear public testimony is expected to take place sometime this summer. Originally it had been scheduled for the end of April but was postponed due to the COVID-19 pandemic.
TRS Executive Director Brian Guthrie has indicated that the agency will not object to any of the findings in the Sunset review and the agency will work on implementing the suggested recommendations. The Sunset review will be discussed further during the abbreviated TRS Board Meeting on Friday, April 17. During Friday’s board meeting they are also expected to give an update on the agency’s long-term facilities planning and consider selecting health plan administrators for TRS-ActiveCare plans, TRS-Care Standard, and Alternative plans. The board meeting will be held virtually for those who wish to watch the broadcast through the TRS website.