Sunset Commission adopts recs for TRS changes

The Sunset Advisory Commission made final decisions on the agencies in its current review cycle, including the Teacher Retirement System. The recommendations will be included in a TRS Sunset bill to be filed soon. No recommendations were made that would affect member benefits.

The Commission’s staff report identified concerns about transparency and member relations, as well as some technical issues regarding contract management and reporting requirements. The staff recommendations below were adopted, along with changes made in today’s meeting that are noted in italics. For more details, see the Commission’s decision materials here.

Repair Relationship With Members

• Require TRS to develop a communication and outreach plan to better help members and employers plan for retirement.
  • Require TRS to respond to appeals at all levels of staff review within the same amount of time that members have to appeal agency decisions. (proposed by Chair Cyrier)
  • Require TRS to create a process for members with healthcare coverage appeals denied by third-party health plan administrators to appeal directly to the agency. (proposed by Rep. Canales)
• Require TRS to make improved efforts to return contributions to inactive members before funds are forfeit.
  • Direct TRS to develop a process to submit inactive member information to the comptroller’s office upon request by the comptroller’s office. (proposed by Chair Cyrier)
• Direct TRS to adopt a member engagement policy to increase transparency on key decisions.
  • Require the TRS Board of Trustees to appoint an ombudsman to monitor the agency’s interactions with members and recommend changes to agency operations that would benefit members. (proposed by Sen. Lucio)
  • Direct TRS to review the TRS-Care Retirees Advisory Committee and make any changes needed to more effectively receive feedback from retirees on TRS-Care. (proposed by Sen. Lucio)

More Effective Contract Management and Oversight

• Direct TRS to fully centralize contracting functions and clarify roles and responsibilities between central contracts department staff and division staff managing contracts.
• Direct TRS to enhance its contract monitoring process.
• Direct TRS to include standard remedies in contracts and consistently apply enforcement tools.
• Direct TRS to require staff who procure or manage contracts to complete the comptroller’s contract training.

Additional Oversight and Greater Transparency of Investment Practices

• Direct TRS to perform a cost-benefit analysis of implementing an enhanced investment accounting system to provide increased oversight of the custodian bank’s accounting data.
• Direct TRS to have its Internal Investment Committee review internal investments and strategies.
• Direct TRS to include clear, easily understandable information about alternative investments in its Comprehensive Annual Financial Report.

Standard Elements of Sunset Reviews

• Update the standard across-the-board requirement related to board member training.
• Abolish three, modify two, and consolidate two of TRS’ reporting requirements.
  • Direct TRS to provide more comprehensive information on TRS-Care healthcare costs to the Legislature and the Texas Department of Insurance in the consolidated TRS-Care report, including out-of-pocket costs for retirees such as co-payments, deductibles, and non-covered services. (proposed by Sen. Lucio)
  • Direct TRS to provide information on incentive payments to TRS investment staff in its Comprehensive Annual Financial Report, including the method of calculating incentive pay and the amounts paid. (proposed by Rep. Canales)
• Update TRS’ statute to reflect the requirements of the person-first respectful language initiative.
• Direct TRS to develop and maintain a system for receiving and responding to complaints.

New Issue

• Specify that TRS members who retire after January 1, 2011, and exceed employment after retirement limitations are subject to either a dollar-for-dollar reduction in their monthly annuity or forfeiture of their full monthly annuity, whichever is less. The dollar-for-dollar reduction does not apply if a disability retiree exceeds the 90-day limit for a school year, unless other existing exceptions for disability retirees apply. (proposed by Sen. Paxton)