TCTA’s Ann Fickel (in center above) testified before the Senate State Affairs Committee on April 4, 2018, to urge continued support for the TRS defined benefit plan and increased funding for retirement benefits, TRS-Care, and active employee health insurance. The committee was charged with reviewing the structure and benefits of the Teacher Retirement System and monitoring the implementation of last session’s legislation that drastically revised insurance costs and benefits for retirees.
TCTA noted that the vast majority of school employees do not receive Social Security benefits, and that for them, TRS is a necessity and often the only source of retirement income. Although some lawmakers would like to see TRS restructured as a 401(k)-style plan, without Social Security the current defined benefit structure represents the only stable income for many retirees.
With regard to TRS-Care, TCTA asked for not only increased funding, but a revised funding structure that could keep up with the rising costs of medical care. TCTA also took the opportunity to ask the committee not to forget the great need for funding assistance for active employee health insurance.
The committee discussed those issues as well as a major issue under consideration by the TRS Board of Trustees: whether to revise the actuarial assumption regarding investment interest returns. Committee members opined that the Board should consider a decision similar to that made by the Employees Retirement System last year. ERS lowered its assumption rate to 7.5 percent (less than the recommended 7.25 percent) but promised to reevaluate the assumption in two years.