Retirement security assured for retired teachers

During the 83rd Legislative Session, the Texas Retired Teachers Association (TRTA) and active teacher groups worked together with legislators to pass Senate Bill 1458. The “TRS Actuarial Soundness Bill,” as it has been termed, makes the Teacher Retirement System (TRS) pension fund actuarially sound for the first time in many years.
The TRS pension fund has a value of $117 billion and provides retirement security for over 300,000 Texas public education retirees and nearly 1,000,000 active school personnel. The fund must meet the state requirement of “actuarial soundness” in order for current retirees to receive a permanent cost-of-living raise, which hasn’t occurred since 2001.
With the passing of SB 1458, the TRS fund is now financially sound and is able to provide a 3 percent ad-hoc COLA to over 200,000 current retirees.  The raise will go into effect in the fall of 2013.
SB 1458 protects the TRS pension fund by improving its revenue streams and even adding a new one. The state contribution will increase from its current rate of 6.4 percent to 6.8 percent in both years of the coming biennium. The active teacher contribution will increase gradually over time, rising from 6.4 percent in 2014 to 6.7 percent in 2015, then 7.2 percent in 2016 and finally capping at 7.7 percent in 2017. School districts that do not pay into Social Security (about 95 percent of Texas school districts) will begin contributing 1.5 percent towards their employees’ retirement fund beginning in 2015.
 

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