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Editorial: Fellow Texans, don’t be fooled, TRS is not in crisis!
Fellow Texans — Did You Know?September 26, 2012 | 1,091 views | Post a comment
Did you know that the Teacher Retirement System of Texas (TRS) had its beginnings during one of the worst time periods of our country, the Great Depression? It was 1937, and our country still faced great sacrifices with World War II only four years on the horizon. And yet, our great Republic of Texas deemed it necessary to pass a constitutional amendment on July 1, 1937, creating TRS, Texas’s first statewide teacher pension fund. TRS members, 38,000 of them, started contributing to the plan on Sept. 1, 1937.
Presently, due to economic stresses and market declines this past four years, approximately 31 states are facing teacher retirement funds that are underfunded, causing some to drop below rates considered solvent, according to an analysis report of the National Council on Teacher Quality. In contrast, Texas is one of 18 states with a teacher pension plan that is funded at least 80 percent or better.
It is because of this climate of crisis in other states that special interest groups here in Texas want to lump the Texas TRS into the same category, when the fact is TRS is well-funded at 83 percent with an estimated $690 million generated in state revenues and $280 million in local government revenues in 2011. TRS is one of the most professionally managed pension funds in the world (fifth-largest retirement fund in the nation and 23rd-largest in the world), earning 15.5 percent for the past fiscal year. TRS has earned $45 million in the past three years with a current value of $110 billion. TRS is the best-funded pension plan in this country with 61.4 percent revenue from investments.
Fellow Texans, TRS is not in crisis! This is a fabrication to capitalize on anti-government sentiment and an effort to enrich the private sector and business investment services that do not have our best interest in mind, that is, the 1.3 million members of TRS as well as all taxpayers in our great state.
TRS recently completed two legislatively mandated studies, one on the impacts of potential changes to the current defined benefit plan, and the other on addressing the solvency issues with the TRS-Care health insurance plan. The complete studies can be found at the TRS website. The key finding, according to the Texas Retired Teachers Association, is that, first of all, TRS is able to pay currently projected benefits through the year 2075, even without making any changes to the system. Overall, the study shows the current TRS defined benefit plan is a “combination of the best buy for employees and for the taxpayers.” It operates at a low cost, less than 2 percent of the entire state budget. Since 95 percent of the 302,595 annuitants live in Texas, these benefit payments of over $6.7 billion stay in Texas and go into the state economy every year. TRS is also a great value to all Texans by providing 98,900 permanent jobs across Texas.
The security enjoyed by many TRS retirees allows them the opportunity to provide many volunteer services to others, and thus, they are invaluable to their communities. For more information, visit www.trs.state.tx.us and www.trta.org.
Pris Kincaid is a retired Texas educator who lives in Wilson County.
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