Protect Texas education, protect the TRS
Most Texans know that public education is essential to creating and maintaining individual opportunity, equality, democracy and stability in our society. Yet there always seems to be those, among them special interest groups, chipping away at the foundations of Texas public education. Unfortunately, special interest forces have recently been trying to tamper with the Teacher Retirement System of Texas.
TRS was created in 1937 as a way to make teaching in Texas a desirable career. TRS now has more than 400,000 retirees and more than 1.37 million enrolled employees, and maintains one of the largest and healthiest pension funds in the nation. This fund consistently outperforms expected rates of return and serves as a backbone of attracting quality people into the education profession in the Lone Star State.
At present, the TRS pension fund contains approximately $153 billion. It is a tempting target for outside “investors” eager to divert that public money into private profit for themselves. These investor types want to change the system from one that is a “defined benefit” compensation into what they call a “defined contribution” compensation. This latter management approach would change the public pension fund into separate, measly 401(k)s that would not sustain someone in retirement.
By a 5-4 decision at its July meeting, the TRS board of trustees voted to lower the fund’s assumed rate of interest return from its present 8 percent to 7.25 percent. The five trustees based their vote on a recommendation from a TRS “experience study” by an outside consulting firm. Many educators and employee groups found this study to be highly questionable.
A large number of us educators attended that meeting and gave testimony against lowering the rate. We believed the board’s vote — split between the five members associated with money management and/or the private sector versus the four members who worked in public education — has ominous ramifications for TRS.
Such a lowering tends to show that TRS is not as robust as it actually is and in need of more state funding than recent tightfisted legislators would likely appropriate. At such a lower interest rate, the revenue for pensioners, present and future, would be less. The board’s decision again indefinitely postponed long-needed cost-of-living increases for present retirees.
I personally felt it might even provide an excuse for some Texas legislators to attempt to reduce current pensions. Educators in the audience also feared that this board action could ultimately abet privatizing TRS and replacing it with those inadequate 401(k)s.
The convening of the Legislature in January presents an important opportunity for public educators and others who want to protect TRS. TRS supporters, by shaping a 2019-20 legislative agenda, have more than a fighting chance to ensure proper TRS funding by the state. The midterm elections reduced the influence of anti-TRS legislators, especially in the Texas House of Representatives.
Concerned citizens, public educators and the organizations that represent our educators must advocate for full state funding of TRS for the good of Texas. Folks should let the Legislature know that tampering with the structure of TRS might ultimately deprive Texas educators, chronically underpaid, of essential compensation in the form of the lifetime pensions the system currently provides.
People should remind legislators that hurting TRS will undermine the teaching profession and will lower the quality of education for Texas students of all backgrounds.
Public educators — retired and current — and all who value our schools must take the initiative in defending TRS during the upcoming legislative session.