House Pensions, Investments & Financial Services Committee holds first meeting

The House Pensions, Investments & Financial Services Committee (PIFS) met in an organizational meeting March 3 to hear testimony from state agencies on their retirement funds. The Teacher Retirement System of Texas gave an overview of the fund and laid out how it works in broad terms for new members of the House committee.

TRS Executive Director Brian Guthrie said that the pension fund sits at around $210 billion, paying out around $15 billion per year to annuitants. Regarding health care, Guthrie said TRS-Care is in a solid state, financially, and that the Texas Legislature might consider lowering premiums for retirees. As for ActiveCare, he reminded committee members that premiums are mostly paid by members and that the amount the state contributes to premiums ($75) hasn't changed since 2003.

Rep. Mihaela Plesa (D-Plano) asked Guthrie about potential risk to TRS if school voucher legislation passes this session. Specifically, there is concern that a widespread school voucher might drop the number of public school teachers significantly, and thus decrease funds entering TRS. She cited that Arizona saw a 3.23% drop in public school teachers a year after it passed a school voucher program, but Guthrie said that analysis of potential effects in Texas indicate a negligible impact. 

Rep. John Bryant (D-Dallas) later asked how many teachers it would take to make the fund actuarially unsound, and Guthrie replied that it would take seven years of 1% of teachers leaving the classroom to do that.

Guthrie expressed some surprise that Congress passed a bill repealing the Windfall Elimination Provision and Government Pension Offset (WEP/GPO) and indicated that TRS will work to provide information to applicable retirees. He said updated Social Security payments to those eligible after the WEP/GPO repeal should begin in April. He urged retirees to make sure their Social Security information is up-to-date to prevent any delays.

Finally, Rep. Stan Lambert (R-Abilene) asked about the impacts of the 13th check and cost-of-living increases from last session. Guthrie said that retirees are still behind based on inflation, but that the two measures helped them catch up. He also said it would likely cost another $2 billion to $3 billion to close the inflation gap for retirees.

TCTA will continue to monitor the PIFS committee and provide updates on TRS.