This week, TRS released its annual “Value Brochure,” highlighting the value that TRS has brought to both its members and to the Texas economy over the past fiscal year.
While TRS has had an increasingly positive impact on the Texas economy as a whole, TRS members who have retired since 2004 have never received a cost-of-living adjustment (COLA) to their TRS annuities. Many retirees still receive the same monthly annuity now that they did over a decade ago, with no adjustment for inflation. More than a decade of inflation has severely shrunk the purchasing power of those retired educators. According to the Bureau of Labor Statistics, the U.S. dollar today is worth only about two-thirds of what it was worth in 2004.
TRS announced that average TRS monthly life annuity for FY 2022 was $2,174, up less than $30 from last year’s average.
Because more recent retirees generally have higher monthly annuities than their counterparts who retired in previous years, the average monthly annuity goes up each year. However, an individual retiree’s monthly annuity is set for life once they retire unless the Legislature takes action to pass a COLA, so the average increase in annuity has no effect on an individual retiree’s experience.
Figures included in the brochure showed that TRS was a powerful force in stimulating the Texas economy. TRS estimates that 94% of all TRS pension payments were spent locally in Texas, a higher figure than most other states.
When combining the economic impact of pension payments and health care payments made by the system, TRS estimates that last year, it was responsible for adding $23.9 billion to the state’s total gross domestic product (GDP), a figure commonly used to measure the health of economies. TRS estimates that the system’s pension and health care payments created 268,183 jobs in Texas last year, and the TRS investment fund has $9.5 billion worth of holdings invested in Texas-based businesses.
Despite the economic benefits that the TRS pension system creates, the Texas Legislature has not invested in TRS members. TRS serves over 1.9 million total members. According to data from the U.S. Census, one out of every 20 Texans is a TRS member. TRS’ numbers suggest that if these retirees were to be given more buying power through routine adjustments to their pensions, the effect on the Texas economy would be staggering.