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TCTA recently submitted a legal brief to the Texas Attorney General's office regarding the $500 13th check for school retirees approved in the 2009 legislative session. HB 3347 authorized the one-time supplemental payment, capped at $500, to certain retirees contingent upon receipt of an Attorney General's opinion concluding that the one-time payment is constitutionally and statutorily permissible.
If the Attorney General determines that the payment is unconstitutional, the funds will instead go toward increasing the state contribution rate to TRS from 6.4% to 6.644%. (Note: the state contributed 6.58% in the last biennium in order to fund the previous 13th check; the rate was lowered to 6.4% in the 2009 session.)
Some policymakers believe that the supplemental check could be unconstitutional for a number of possible reasons: that it is an illegal gift of public funds; that it represents an increase in benefits paid while the TRS fund is not actuarially sound; or that the check falls into the category of "extra compensation" for state officers or contractors, which is not allowed.
TCTA’s legal brief addressed all of these issues and urged the Attorney General to conclude that the payment is constitutional and serves an important public purpose.
Retired school employees live on a fixed income, while the costs of health care and other necessities have continued to rise. Approximately 80% of retired teachers do not receive Social Security, and the TRS annuity is often a school retiree's only source of income.
With the Legislature unwilling to appropriate the billions of dollars it would take to make the fund actuarially sound, which is a pre-condition to increasing benefits for annuitants, this supplemental payment is vital to providing retirees some economic relief.
The Attorney General must issue an opinion no later than November; TCTA will keep members apprised of the situation.
Posted: 07/31/09
