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May 17, 2005     (512) 463-0300

SENATE TENTATIVELY APPROVES TEACHER RETIREMENT SYSTEM OMNIBUS BILL
Senator Duncan
Sen. Duncan of Lubbock

Cost of living increases for retired teachers in Texas will end, unless the Texas Teacher Retirement System (TRS) makes immediate changes. That's what Lubbock Senator Robert Duncan told the Texas Senate during today's session. Teachers in Texas receive retirement benefits and health insurance through TRS where current teachers pay into a fund that is drawn on to pay for pensions and health care for retired teachers. Duncan also said that while the system can cover today's expenses, there might not be enough money to cover future retirees. Citing these and other problems, Duncan brought a bill before the Senate that makes a number of changes to TRS in an effort to correct this accounting problem.

Duncan said that there are several reasons for the current presence of actuarial unsoundness in TRS. Last year, there was an unexpected increase in retirees after the federal government made changes to spousal social security benefits which encouraged many teachers to retire to avoid losing social security benefits. Duncan also cited the practice of districts encouraging experienced, high-paid teachers to retire early in an effort to cut payroll. The recent economic downturn has hit many retirement funds, including TRS, and the state contribution to the system was lowered to 6 percent in 1996. Finally, benefits for retired teachers were increased in the late 1990s. All of these reasons, said Duncan, have contributed to the actuarial unsoundness in TRS. None of these factors have put TRS in a critical bind, but if something is not done soon, said Duncan, it may be too late to fix the problem without drastic action. "If we don't take the steps today to bring the fund into actuarial soundness, then we may never catch up," said Duncan. "The cost will be too great."

Senator West
Sen. West of Dallas

Duncan's Senate Bill 1691 attempts to address most of the factors contributing to the deficiencies in TRS. The bill would change the Final Average Salary, that is used to calculate yearly retirement benefits, from the last three years to the last five years of a teacher's career. It would seek to reduce early retirement by increasing the deduction from yearly benefits. Teachers who are 50 years old, have 25 years of service, or whose age plus years of service are greater than 70 are exempt from these changes.

The bill would also raise the retirement age from 55 to 60 for all teachers hired after September 1, 2006, and would require the school, rather than the state, to pay for membership to TRS during the first 90 days after hire. The rate of member contribution to the fund would be increased from 0.5 percent to 0.65 percent of yearly income. The bill also makes a number of technical changes intended to streamline TRS operation.

The Senate passed the bill to third reading today, and a final vote on SB 1691 will likely come Wednesday.

The Senate also tentatively approved a measure that would require members of the Board of Pardons and Paroles to meet in person when ruling on a capital murder case. Senator Rodney Ellis of Houston said that when taking up the matter of clemency in a capital case, members of this board often receive briefings about the case by mail, and call or fax in their vote. "No matter where you stand on capital punishment, I think we all agree that we shouldn't be able to fax in a decision about somebody's life," said Ellis.

SB 548, by Ellis, would require members of the Board of Pardons and Paroles to meet as a body in a public meeting when considering clemency matters related to capital cases. The bill would also require that the members' votes be publicized, along with any reasons for the vote. A final vote on this bill will likely come up Wednesday.

The Senate will reconvene Wednesday, May 18, at 11 a.m.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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