Category Archives: TRS

Teach the Vote’s Week in Review: June 22, 2018

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


A full meeting of the Texas Pension Review Board (PRB) was held on Monday, and the body voted to adopt voluntary guidelines designed to work as best practices for how retirement plans are funded. While the Teacher Retirement System (TRS) meets many of the PRB’s voluntary standards, it fails to meet standards in two critical areas that can be crippling to TRS members. Read more about the guidelines in this post by ATPE Lobbyist Monty Exter.

 


Earlier this month the State Board of Education voted unanimously to adopt curriculum standards for  a high school elective course entitled “Ethnic Studies: Mexican American Studies”. This comes after months of back and forth between members of the board and stakeholders over content and curriculum standards for the course as well as what it should be named. In this commentary, SBOE Chair Donna Bahorich (R-Houston) reflects on how working together made this course a reality and how that gives her hope, both for the state of Texas and the nation.

 


School may be out, but the fight for Texas public schools is ongoing. ATPE Lobbyist Mark Wiggins breaks down the ways you can engage with the legislature and advocate for your profession during the summer in this blog post.

Texas Pension Review Board adopts principles of retirement plan design

A subcommittee of the Texas Pension Review Board (PRB) has been working over the last several months on a set of non-binding guidelines meant to impart what the board feels are best practices with respect to retirement plan design for use by the retirement plans that are required to report to the board.

Despite some concern expressed by smaller funds over how the board’s non-mandatory recommendation on vesting periods might be made into a legal mandate by the Texas Legislature, the full PRB unanimously adopted the proposed principles, which can be found here, at its most recent meeting.

The Texas Teachers Retirement System (TRS) pension fund is one of the many funds, and certainly the largest fund, required to report to the PRB. While the design of the TRS pension fund by and large already meets the voluntary standards enumerated in the PRB’s principles document, the two areas where it does not are notable. First, the principles document calls for “contributions to retirement plans [to] be consistent with the PRB Pension Funding Guidelines.” Those guidelines call for plans to be funded at a level that would allow the plans’ unfunded liability to be amortized over less than 30 years. Second, the PRB principles say that a plan’s “retirement benefits should be protected against the erosion of the benefit’s value due to inflation.” Essentially that means plans should include built in COLAs (Cost of Living Adjustments). In both instances, that the TRS pension plan does not comply with these best practices is a function of the Legislature choosing not to fund the plan adequately.

Perhaps the Legislature and the Governor should take a note from the PRB, a body the legislature created whose chairman the Governor appoints, and fund TRS adequately to comply with the PRB’s newly adopted principles.

 

 

Teach the Vote’s Week in Review: May 11, 2018

From Austin to the nation’s capital, here’s a look at how ATPE’s lobby team has been working hard for you this week:


Early voting starts Monday for Texas’s Republican and Democratic primary runoffs on May 22. This week ATPE continued to highlight races across the state where education has pushed to the forefront of political discourse heading into the runoffs. We encourage you to learn more about the races in your district by visiting the candidates section of TeachtheVote.org and by checking out our runoff spotlights for candidates in House Districts 4, 8, 54, 62, and 121.

Remember, if you voted in a party primary back in March, you may only vote in the same party’s runoff election this month. If you are registered but did not vote at all in March, you may choose to vote in either party’s runoff election. You can find more information on eligibility to participate in the runoffs and what you need to do here.

Early voting for the runoffs is May 14-18, 2018, and runoff election day is May 22,2018.

 


ATPE’s lobby team has been working to prevent a controversial private school voucher amendment from being added to a national defense bill that is on the move. The U.S. House Committee on Armed Services met this week to consider the National Defense Authorization Act. Our Austin- and Washington-based lobbyists have watched the development of this bill closely since learning that discussions of adding a voucher were underway in the House. As ATPE Lobbyist Kate Kuhlmann reports today, the potential voucher, in the form of an Education Savings Account (ESA), would funnel existing federal Impact Aid dollars to military families without accountability for how those funds are spent. While the ESA didn’t make it into the bill during committee, it now heads to the floor of the House for debate. There, it could still be added through the amendment process.

ATPE sent a letter this week to Chairman Pete Sessions (R-TX), who leads the committee that determines which amendments will be considered on the House floor, asking him not to allow the voucher amendment. The letter highlights that we join the Military Coalition, a group of 25 organizations representing more than 5.5 million active and former members of the U.S. Military, in opposing the voucher. “The $2,500 voucher program created by HR 5199,” ATPE Governmental Relations Director Jennifer Mitchell Canaday wrote, “would drain limited dollars from both the public school system in Texas as well the Federal Impact Aid Program, hurting the very military-connected students it purports to help.” Read the full letter here and check back for developments on this issue.

 


An article by the Texas Tribune this week explored how charter schools operate in a precarious gray space that makes them a government entity at some times and a private entity at others. ATPE Lobbyist Monty Exter is quoted in the full-length article by Emma Platoff, which is republished here on Teach the Vote.

 


In an effort to encourage parents, teachers, and school leaders to actively participate in the rulemaking process, TEA sent a letter to school administrators on Wednesday requesting that school districts and open-enrollment charter schools post upcoming rulemaking actions on their websites. Learn more about the request and ATPE’s involvement in rulemaking changes in this blog post by ATPE Lobbyist Mark Wiggins.

 


 

House Pensions Committee meeting May 10, 2018, in Dallas.

The Teacher Retirement System (TRS) of Texas was one of the many items discussed at Thursday’s meeting of the House Committee on Pensions held in Dallas, TX. The meeting, which focused on the committee’s interim charges, featured testimony from TRS Executive Director Brian Guthrie plus a number of active and retired educators. ATPE Lobbyist Mark Wiggins attended the hearing and provided full details in his blog post here.

 


House committee discusses teacher pensions, health care

The House Committee on Pensions met Thursday morning in Dallas to discuss items listed under the committee’s interim charges, including the Teacher Retirement System (TRS) of Texas.

The committee met in the chambers of the Dallas City Council, which oversees pensions for the city’s police and firefighters that have come under scrutiny as of late. Dallas Mayor Mike Rawlings was the first witness to testify, thanking the committee for legislation dealing with issues pertaining to Dallas police and firefighter pensions and updating members on changes the city has put in place since the legislation’s passage.

House Pensions Committee meeting May 10, 2018 in Dallas.

Executive Director Brian Guthrie testified for TRS, laying out the basics of the $152 billion trust fund that serves 1.5 million active and retired members. The fund earned a return of 12.6 percent for fiscal year (FY) 2017, under an assumed rate of return of 8 percent. The fund carries $35.5 billion of unfunded liability and is 80.5 percent funded with an amortization period of 32.2 years, which Guthrie noted will change if the assumed rate of return is lowered. TRS manages two major healthcare programs: TRS-ActiveCare for active teachers and TRS-Care for retirees. Guthrie testified that TRS undertook a study in 2013 looking at the fund’s defined benefit structure, and will be producing an updated study this fall.

Turning to health care, Guthrie described TRS-Care as a “pay as you go plan.” The state’s contribution to the plan is 1.25 percent of active employee payroll, while school districts contribute .75 of active employee payroll and active employees contribute .65 percent of their paycheck. Retirees contribute to the plan through premiums. The plan faced a $1 billion projected budget shortfall heading into the last legislative session, and lawmakers of the 85th Texas Legislature put $700 million into the system in order to keep the fund from folding. While the infusion was able to prevent retirees from losing their health care, it wasn’t enough to avoid increases in costs and reductions in benefits.

Even with the changes, which included increasing premiums, the fund faces a $400-600 shortfall heading into the next biennium and ongoing shortfalls moving forward. Guthrie attributed the increase to legislation accompanying the added funding that directed the agency to ease cost increases. Guthrie indicated the primary problem is with the fundamental design of the funding formula, noting that healthcare costs are increasing far more quickly than revenue received from active employee payroll, which is the basis for the funding formula.

The largest cost increases are associated with plans that include coverage for dependents, and TRS initially offered retirees the option of permanently leaving TRS-Care for an insurance plan on the private market. Chairman Dan Flynn (R-Canton), members of the committee and legislators representing the Dallas/Fort Worth Metroplex pressed Guthrie to find a way to protect benefits, in particular prescription drug costs. Guthrie testified that the agency is studying all possible avenues, but the fund design presents the largest challenge.

Finally, Guthrie explained TRS-ActiveCare as a group insurance program for small to midsize school districts that would be otherwise unable to provide their own insurance programs. The state provides $75 per member, per month through the school finance formulas, districts contribute a minimum of $150 per month, and individual members are responsible for the remainder. Minimum state and district contribution levels have not changed since the plan’s inception in 2002, and employees’ share of the premiums has increased to 60 percent from 30 percent over the last 14 years. Because of rising healthcare costs, TRS board members voted at their most recent meeting to raise premiums for individual members between five and nine percent, or seven percent on average.

Because TRS-ActiveCare is funded through the school finance formulas, Guthrie suggested that any changes to TRS-ActiveCare would best be addressed as part of lawmakers’ broader efforts to reform the school finance system.

House Public Education Committee Chairman Dan Huberty (R-Houston) sharply questioned Guthrie over the board’s anticipated July vote to lower the fund’s assumed rate of return to 7.5 percent from 8.0 percent, despite returning 12.6 percent for FY 2017. This would cost an additional $1.2 billion on top of the $400-600 extra needed for TRS-Care, for a total ask of $1.6 billion on top of the $3 billion in base funding already designated for TRS. Guthrie testified that the agency’s fiduciary responsibility requires staff to provide an accurate estimate of what the fund is anticipated to produce.

A representative from Arlington ISD asked the board to consider allowing school districts with more than 1,000 employees to opt out of TRS-ActiveCare and provide their own insurance programs, pointing out that family healthcare costs under the TRS-ActiveCare high-deductible plan could account for more than a third of a first-year teacher’s annual salary. Chairman Huberty noted that such an arrangement could adversely impact TRS funding by reducing the broader pool of active TRS members.

Texas Retired Teachers Association (TRTA) Executive Director Tim Lee thanked the Texas Legislature for making the minimum changes necessary to keep TRS-Care from failing entirely. Lee suggested that 14 years may have been too long to go without increasing premiums, and pointed to the Employee Retirement System (ERS) as an appropriate benchmark for TRS. Going forward, Lee testified the only long-term solution is pre-funding the program, which would be even more costly than migrating TRS members to ERS. Lee indicated that retirees will be unable to countenance further cost increases, and noted that 36,400 people have decided to leave TRS-Care for the individual market.

Staff from the Pension Review Board (PRB) testified regarding the agency’s efforts to improve defined benefit programs. The board has ordered staff to develop an online dashboard of Texas public pension data, to study potential legislative recommendations regarding how systems whose funding is set by legislative statute can respond to changes in market systems, to study how systems of scale could be utilized to improve groups of smaller plans, and to conduct intensive actuarial reviews of systems with risk that threaten their long-term stability. PRB staff noted that ERS has already lowered its estimated rate of return to 7.5 percent from 8 percent, which TRS is currently contemplating.

The committee then opened the table to public testimony, and dozens of retired teachers voiced their concerns regarding healthcare and the defined benefit structure of the TRS pension program. Many shared heartbreaking stories of seeing fixed incomes virtually consumed by skyrocketing premiums even before paying the increased costs for services and medication. Retirees also expressed concerns regarding changes to the assumed rate of return.

 

Runoff Spotlight – Get to know the candidates in House District 4

When it comes to public education, the Texas Legislature has incredible power to decide how our students are educated, how our schools are funded, and how our educators are treated. From per-pupil funding to student testing to teacher pay and benefits, these issues and more will be at the forefront of the 2019 legislative session, making the 2018 election cycle extremely critical. Most of the legislators who will make up the ranks of the 86th legislature next January were decided on March 6 when Texas held its primary elections, and the bulk of the rest are looking toward competitive races in November. For the residents of a few key districts, however, the decision on who will represent them next session will be made on May 22, 2018, which is the date of the primary runoff election.

ATPE is taking a closer look at some of the runoffs that will be decided in May, where the candidates squaring off against each other have identified public education as a key campaign issue. Today, we’re analyzing the Republican primary runoff for House District (HD) 4. To learn more about the candidates vying for this seat, click on the candidate’s name and you will be taken to that candidate’s full profile on Teach the Vote.

The Candidates: Keith Bell (R) vs Stuart Spitzer (R)

HD 4 covers all of Kaufman and most of Henderson counties. The incumbent Rep. Lance Gooden (R) is running for a U.S. congressional seat, creating an open seat.

Candidate Keith Bell is a business owner and rancher who has served on the Forney ISD school board for 20 years. Responding to the ATPE Candidate Survey, Bell has said enhancing school funding is his biggest priority, should he get elected. He has been endorsed by the pro-public education groups Texas Parent PAC and Texans for Public Education.

Candidate Stuart Spitzer represented HD 4 during the 84th legislative session before losing his seat to Gooden. While he did not respond to this year’s ATPE Candidate Survey, Dr. Spitzer stated in response to the 2014 ATPE candidate survey that he believes TRS is a part of the “nanny” state and called 401(k) style investment of teacher retirement dollars a “liberty issue,” adopting language  commonly used by  those who support dismantling the TRS defined benefit pension system. Spitzer has been endorsed by the Texas Home School Coalition, a pro-voucher organization, and by Empower Texans/Texans For Fiscal Responsibility, which supports limiting state spending on public education; eliminating educators’ right to use dues deduction; private school vouchers; and privatizing the management of existing public schools.

For additional information on this race or the primary runoff elections in general, contact ATPE Government Relations at government@atpe.org.

Showdown at TRS quarterly board meeting

The TRS board met for its quarterly meeting in in Austin this week. Per the board’s new schedule all subcommittee meetings were held on Thursday, April 19, with the full board meeting today, Friday, April 20.

Thursday’s subcommittee meetings included the Benefits Committee; the Budget Committee; the Strategic Planning Committee; the Policy Committee; the Audit, Compliance and Ethics Committee; and the Investment Management Committee. Committee agendas are attached in the links above.

Perhaps most significant among the committee discussion was the recommendation of new rates and policy design for TRS-ActiveCare for the 2019/20 school year. ActiveCare is a pass-through program, meaning the amount of money coming in from the state is fixed and any additional expense to run the plan is passed through directly to ActiveCare participants. In addition to some level of recommended increase for each of the ActiveCare plans, the staff recommended that enrollment for ActiveCare-2, the traditional PPO plan, be capped to existing participants. The Benefits Committee moved to recommend the staff recommendations to the full board, which adopted those recommendations during their Friday meeting. More detail about each of the ActiveCare plans including costs can be found in tab 3 of the attached Benefits Committee Board book.

Other committee highlights included a discussion of the need for increased authorization to hire additional full time employees (FTEs). The additional FTEs would primarily be utilized to increase staffing (and decrease wait times) in the TRS call center, as well as to continue providing for the midrange staffing needs associated with TRS’s efforts to update its technology infrastructure, known as project TEAM. The new Strategic Planning Committee also held a lengthy conversation with TRS’s new director of communications. In laying out her vision, she emphasized being more proactive and less reactive in the agency’s communications.

The full board began its meeting today by taking public testimony. A number of active and retired educators were present to testify, as well as governmental relations professionals from three of the four statewide teacher groups (including ATPE) and Tim Lee, the executive director of the Texas Retired Teachers Association. By and large the testimony was focused on the board’s upcoming decision to change the expected rate of return on the pension fund later on today’s agenda, as well as personal stories of the real world consequences of changes made to the TRS-Care health insurance program. The TRS members expressed compelling arguments that the expected rate of return should not be lowered at all from the current 8 percent mark. Organizational testifiers were in agreement that lowering the rate from 8 percent to 7.25 percent was overly aggressive, and all supported a much more gradual approach to lower the rate, starting with dropping it first to 7.75 percent.

After public testimony concluded, the rate of return discussion was the first item taken up by the board. TRS executive director Brain Guthrie presented the staff position, which heavily favored a rate of 7.25 percent. At the end of that discussion, one of the board members appointed to represent TRS members moved to set the rate at 7.5 percent. The motion failed on a vote of four to four. Then one of the board members appointed from the financial sector moved to set the rate at 7.25 percent. That motion also failed on a vote of four to four. At that point the board postponed further action on the item until its July board meeting, and the board moved on to consideration of the rest of its Friday agenda.

You can watch an archive of the full Thursday committee meeting here and the full Friday board meeting, including public testimony, here.

Senate State Affairs Committee discusses future of TRS pension fund

The Senate State Affairs Committee met in Austin this week to discuss interim charges about the health of various state and municipal pension systems, including the Teacher Retirement System (TRS) of Texas. The committee heard invited testimony from the staff and members of the Texas Pension Review Board (PRB), as well as the heads of several pension systems, including TRS Executive Director Brian Guthrie.

Some of the more general discussion included senators, including Sen. Charles Schwertner in particular, making the case that defined benefit pension systems are somehow inherently flawed and should be scrapped and replaced with 401(k)-style defined contribution systems. This now tired pitch, whose real aim is to line the pockets of private money managers, has been soundly refuted on many fronts, particularly as it applies to TRS. First 401(k)s have proven to be not so wonderful retirement vehicles. For the average American population which relies on them for the bulk of their retirement planning, these investment vehicles have proven to be a tool that generally leads to a woefully underfunded retirement account that is highly sensitive to market volatility and has left many in bad positions with regard to their retirement security. Second, 401(k)s were never meant to stand alone. They were really meant to be a supplement to a more traditional pension system, but even as that has gone by the wayside for many, they are still intended to be on top of Social Security benefits. However, most Texas educators will not receive full Social Security benefits because neither the educator nor the state is paying into Social Security on their behalf. This leads to the final falsehood promulgated by retirement privatizers, that defined benefit pension plans simply cost too much. The truth is Texas has been getting by on the cheap for decades.

Retirement experts will tell you that you should be putting away around 25 percent of your pre-retirement income for use in retirement. Half of that amount, 12.5 percent, is normally covered by contributions to Social Security. Any reasonably good private employer will put up a match of 4 percent, or better, toward an employee’s individual retirement account, in addition to paying the required 6.25 percent employer’s share of Social Security. This means that these private employers are on the hook for a little more than a 10 percent toward their employee’s retirement. Likewise, their employees must also put the required 6.25 percent into Social Security and typically an additional 4 percent or more into their own retirement accounts to access the employer’s match. For years the state of Texas only contributed 6 percent, the constitutional minimum, into the TRS pension system. Thanks in large part to the work of ATPE the state bumped that contribution up to 6.8 percent a few sessions ago. However, at only 0.55 percent above what the state would otherwise have to pay into Social Security, Texas still contributes less than half of what the next lowest state not paying into Social Security pays towards it educators’ retirements. Most Texas teachers are themselves contributing 7.7 percent, or just 1.45 percent above what they would otherwise be paying toward Social Security, into their pension system. When you add in the 1.5 percent districts are contributing into the TRS pension plan, the total contribution comes to 16 percent. At 16 percent, contributions into TRS are substantially less than what even average employers and employees are contributing toward retirement, and despite being many educators only source of retirement income, that is only 64 percent of what experts recommend putting away. So far from being “too expensive” as some lawmakers insist, the TRS pension system has been an exceedingly good deal for the state of Texas.

This discussion is of particular importance at this moment because while TRS has been reasonably healthy for a long time and has been on track to be actuarially sound (very healthy) within the next five years, those statistics have been based on TRS’s current assumed rate of return of 8 percent. Based on the advice of the external actuarial firm with which TRS contracts, the TRS board is considering lowering that assumed rate of return. In order to maintain the positive trajectory of the fund, legislators will need to increase the contribution rate going into the fund. Per the discussion above, these increased contributions are long overdue, and had lawmakers increased them previously, the fund would be in a much better place today. Additionally, many retirees wouldn’t have gone more than a decade without a cost of living adjustment. If TRS lowers its assumed rate of return, however, the decision to increase contributions will no longer be a luxury; it will be an imperative. ATPE is advocating for this process to take place gradually over a number of years so that the increased contributions, corresponding to a gradually decreased assumed rate of return on investments, won’t be a shock the system for either the state or educators who will both share the burden of increased contributions.

Whether a gradual approach is taken or a more “one and done” approach is used, as is being advocated by TRS, the important thing is that educators stay fully engaged with their legislators, and in choosing their legislators this election year, so that the health of the pension fund is secured.

Why March 6 Matters: Retirement

Early voting is underway NOW for the March 6 Texas primary elections, so we’re taking a look at some of the reasons why it’s so important that educators vote in this election! Today, we’re taking a closer look at your retirement.


Everyone who decides to become an educator enters into a special agreement with the State of Texas. It goes something like this: If you devote your life to preparing our children for the future, Texas promises to be there for you when you retire at the end of a long career of service.

Only that promise is constantly under attack.

Let’s start with some basics. Your retirement is administered by the Teacher Retirement System of Texas (TRS), which oversees the pension trust fund. The state and individual educators each contribute to the fund, and a team of professional staff supervise a diverse investment portfolio that makes up the body of the fund. These full-time agency employees ensure the fund’s health and safety. After paying for the cost of administration and benefits, the money from those investments is plowed right back into the fund.

TRS is structured as a “defined benefit” retirement plan, which means that an individual who pays into the plan is guaranteed a set amount of money each month in retirement that will last for the rest of his or her life. The more common type of retirement plan is a “defined contribution” plan, such as a 401(k). Unlike the promise of a stable monthly pension check upon retirement offered by a defined benefit plan, a defined contribution plan promises merely a set contribution into an employee’s retirement account while the individual is actively working. Investment returns on that account are subject to the whims of the market. The level of retirement that can be provided by those funds at the end of an educator’s career is not guaranteed. Under a defined contribution scenario, there is a real threat that a retired educator may outlive the retirement funds accumulated during his or her career, and end up with nowhere to turn for help — not even Social Security.

You may have noticed that most businesses in the private sector have gone the defined contribution route. The reason is largely because 401(k) plans are cheaper and don’t require dedicated staff to administer. Most are run for a profit by large Wall Street corporations, and advisers often have a financial stake in the investments they recommend. This leaves plenty of opportunities for others to make money, but little guarantee of stable retirement income for the retiree. The defined benefit plan administered by TRS is, by contrast, of great value to retirees, who can rest easier knowing that they will receive a guaranteed income for as long as they are alive.

As with most big pots of public money, the TRS pension fund has unfortunately become the focus of those looking to brag about shrinking government while making a few bucks for their friends.

In 2017, the Texas Senate confirmed Josh McGee as chairman of the Texas Pension Review Board (PRB), which oversees state pension systems including TRS. Prior to being appointed to that position by Gov. Greg Abbott, McGee worked as a professional advocate for converting public pensions to defined contribution plans that would reduce the money guaranteed to retirees, and his position at the helm of PRB naturally raised alarm bells.

Adding to the concern, lawmakers have filed a number of bills in 2017 and in prior legislative sessions that would likewise weaken TRS. State Sen. Paul Bettencourt (R-Houston) – who made headlines recently with his objections to efforts to improve voter turnout among educators – filed a pair of bills last year aimed at converting TRS from a defined benefit plan to a defined contribution plan or a hybrid of the two. Both bills died without a hearing, fortunately, but Lt. Gov. Dan Patrick is keeping the idea alive as part of his interim charges for the Texas Senate to study before the legislature reconvenes in 2019.

Most troubling is recent news from the TRS Board of Trustees that it intends to vote to lower the assumed rate of return for the $147 billion pension fund from 8.0 percent down to 7.25 percent. The decision was based on observations of current market forces, and while fiscally prudent, it radically changes the plan’s outlook on paper. Like all pension plans, the TRS fund must be considered solvent before the legislature or board can consider any potential increases in benefits. With the lower assumed rate of return, TRS will head into the 2019 legislative session needing an additional $1.5 billion for future solvency, and they’ll be asking for that money from lawmakers who frequently are looking to cut spending, not increase it.

Politicians like Sen. Bettencourt frame their attacks on educators’ pensions by claiming the defined benefit structure is too expensive for the state to maintain into the future. In fact, the state’s share of an educator’s pension (at 6.8 percent) is less than half the teacher retirement contribution rate set by the next lowest state that is not paying into Social Security. The truth is that a more conservative assumed rate of return, coupled with a proper contribution rate, will guarantee TRS stays healthy well into the future.

The bottom line: Like public education as a whole, Texas gets a phenomenal bargain for what it spends, but more funding is necessary to fully realize the implicit promise made to educators.

Lawmakers will face tremendous pressure in 2019 from investors and politicians who want to gamble with teachers’ retirement. Unless Texans elect more pro-public education lawmakers and statewide elected officials, the legislature may very well look to your pension as an area to further cut corners. Texas will only keep its promise to educators if lawmakers respect educators’ voices at the polls in this pivotal election year.


Go to the CANDIDATES section of our Teach the Vote website to find out where officeholders and candidates in your area stand on educators’ retirement and other public education issues. Because voting districts in Texas are politically gerrymandered, most elections are decided in the party primary instead of the November general election. That’s why it is so important to vote in the primary election taking place now. Registered voters can cast their ballot in either the Republican or Democratic primary, regardless of how you voted last time.

Early voting in the 2018 primaries runs Tuesday, Feb. 20, through Friday, March 2. Election day is March 6, but there’s no reason to wait. Get out there and use your educator voice by casting your vote TODAY!

Teach the Vote’s Week in Review: Feb. 16, 2018

Here’s ATPE’s wrap-up of education news developments this week:


ELECTION UPDATE: Tuesday, Feb. 20, marks the start of early voting for the March 6 primary elections. ATPE is urging all educators and registered voters in Texas to participate in the primaries, where most of Texas’s elected offices are filled. For more tips on when and where to vote, check out this blog post from ATPE Political Involvement Coordinator Edwin Ortiz.

We’ve known for a long time that educators have power to use their numbers to influence the outcomes of these pivotal primaries. Now it’s becoming clear that some politicians and special interest groups are very worried about the potential for high voter turnout within the education community. With enthusiasm growing among grassroots groups like Texans for Public Education, which is promoting a #blockvote campaign to elect pro-public education lawmakers in the Republican primary, some elected officials facing primary challengers are taking to the airwaves in a last-ditch effort to tout their own records on education. For example, the Texas Tribune reports that Lt. Gov. Dan Patrick spent $5.1 million in January for television ads, amounting to roughly one-third of his campaign war chest. Several of the lieutenant governor’s ads, both on tv and radio, feature claims about support for public education and efforts to raise teachers’ salaries by $10,000, but many are questioning the veracity of the ads in light of failed leadership-backed bills last session that called for much lower pay increases, which school districts would have been forced to fund without new or additional money from the state.

Another group aiming to influence these elections is the Texas Educators Vote coalition, of which ATPE is proud to be a member. We are continuing our efforts to get out the vote, despite disturbing attempts by some in power to intimidate school leaders and shut down our nonpartisan initiatives. This week, Attorney General Ken Paxton issued cease and desist letters to three school districts, alleging that their leaders had used school district resources for “unlawful electioneering.” The basis for the threatening letters from the AG’s office appears to be a handful of Twitter posts and retweets, which likely involved no expenditure of school district funds, and some districts’ adoption of our coalition’s nonpartisan resolution promoting a “culture of voting,” which obviously does not advocate in any way for specific candidates or ballot measures.

ATPE is dismayed that school board members and administrators are being unfairly targeted for efforts to encourage educators to vote, and that support for public education in general is now being characterized by some elected officials as a “partisan” endeavor. ATPE is not alone in objecting to the witch hunt; Sen. Jose Menendez (D-San Antonio) this week wrote back to AG Paxton asking him to withdraw the cease and desist letters. In his letter, Sen. Menendez wrote, “As elected officials,… our role includes urging people to vote, not intimidating them from participating in this highly regarded democratic process.” Menendez further suggested that intervention by the federal Department of Justice might become necessary.

We at ATPE have worked along with other members of the Texas Educators Vote coalition to help educators understand the restrictions on using school district resources for political advertising, and we believe that most, if not all, school officials have complied with the law. It is not illegal for individual educators to endorse candidates, and there is nothing partisan or illegal about encouraging school employees to vote and to support the cause of public education. We hope that Texas voters will not be deterred by the efforts of a few politicians and dark money groups to keep educators from exercising their constitutional right, and we encourage the school community to  continue spreading the word about the importance of the 2018 elections. Most importantly, get out and vote early next week!

 


The Teacher Retirement System (TRS) board of trustees has been meeting in Edinburg, Texas this week. ATPE Lobbyist Monty Exter reports that the board has been discussing a change to the retirement fund’s assumed rate of return, which will have a significant impact on the future of the fund and budget discussions when the legislature returns in January 2019.

For more on the implications of these changes, read Exter’s blog post this week about the additional funding that TRS will be needing and why the upcoming primary elections will have so much impact on active and retired teachers’ pensions and healthcare.


On Friday, the Texas Education Agency (TEA) announced that it will be extending to Tuesday, February 20, the deadline for members of the public to participate in a survey regarding its corrective action plan for special education.

In January, TEA released the initial draft of a plan to make good on the state’s legal obligation to serve all students with special needs. The U.S. Department of Education ordered the state to take corrective action after an investigation by the Houston Chronicle revealed that the state had wrongfully denied special education services to thousands of Texas children through the enforcement of a de facto cap on the number of students allowed to participate.

Members of the public are encouraged to review the four-point plan and submit feedback by taking an online survey available on the TEA website. The survey was originally scheduled to close Sunday, February 18, but the agency announced Friday that survey responses will be accepted through Tuesday, February 20. According to the TEA, the survey takes roughly 15 to 20 minutes to complete.

Once public comments have been received, a revised draft plan will be posted and open to additional feedback in March.


President Trump released his 2019 federal budget proposal this week, which highlight’s the president’s priorities before lawmakers begin work on the actual budget in Congress.

Much like last year’s budget request, Trump’s 2019 budget proposal requests a big chunk of funding for public and private school choice, maintains funding levels for Title I and special education, and seeks large cuts to hand-chosen K-12 programs within the Department of Education (ED). Read more about the president’s proposal in this post by ATPE Lobbyist Kate Kuhlmann.


TRS board discusses future shortfalls as critical primary election looms

I was listening to a retired educator testify before the TRS board at their annual board retreat this morning. She expressed that retirees are scared about increasing healthcare premiums and upcoming changes that will greatly impact the actuarial picture of the pension fund. She also asked for TRS to advocate on behalf of retirees in dealing with the legislature. It was moving testimony. However, I wish she and all educators, active and retired, would shift their mentality from scared to angry and look not to TRS to take care of them next session, but instead look to themselves to be their own best advocates, at the polls where these decisions are really made.

The reality is TRS is an administrative agency, and while the TRS staff does a phenomenal job, their job is to implement the legislature’s will, NOT to lobby the legislature on behalf of TRS members. In fact, all state agency staff, TRS staff included, are prohibited by state law from engaging in lobbying efforts.

TRS has hard days ahead. If the defined benefit pension system or TRS-provided retiree healthcare are going to continue to exist, active teachers and retired teachers alike will have to use their voices not only at the capitol but also at the polls.

What are the factors that underpin this bleak reality?

First, TRS is set to drop its assumed rate of return from 8 percent to 7.25 percent. This one action, at least on paper, will make the fund go from healthy to anything but. There is already extreme pressure from Wall Street money managers and the politicians willing to work on their behalf to convert TRS to a 401(k) style system off of which they could make huge profits. Without other changes offsetting the drop to 7.25, this pressure will likely increase exponentially as the pension fund will look considerably more vulnerable going forward.

Second, despite the draconian changes to TRS-Care coming out of the last legislature, the retiree health insurance system, as it stands today, still is not financial sustainable. And the issues with retiree health care don’t even take into account the significant health insurance burden on active teachers, which is forcing many of them out of the education profession.

Sometimes there are smart policy initiatives that can solve statewide challenges with little or only indirect additional costs. The challenges facing TRS are NOT those kinds of challenges. The truth is that the state has for years gotten by knowingly underfunding both the pension trust fund and the retiree healthcare trust fund. On the pension side, in fact, the state’s share of an educator’s pension (at 6.8 percent) is less than half the teacher retirement system contribution rate set by the next lowest state not paying into Social Security.

Texas has now reached a point where getting by on barebones funding can no longer happen – not  if we want to continue providing teachers with a pension or retiree health insurance. What has changed?

As stated above, in response to long term market trends and despite best-in-class fund management by TRS staff, the agency is expected to reduce the assumed rate of return on the fund to 7.25 percent, down from 8 percent. This change will increase the pension’s unfunded liability by $10 billion and raise its funding period from just over 30 years to a whopping 86 years. (Anything under a 30-year funding period is considered actuarially sound, and for TRS the 30-year period has been linked to providing cost of living increases (COLAs) for retirees.) At 8 percent there was an expectation that the fund would be in a position to offer a COLA within the next few years, at 7.25 percent the fund would not be considered healthy enough to offer retirees a COLA for at least the next 56 years.
In order to offset the adjustment to the assumed rate of return, the TRS pension fund’s contribution rate will need to be increased enough to generate an additional $1.4 to 1.6 billion per biennium.

TRS must be honest and stay above political bias or pressure in setting its estimated rate of return. In truth, a lower assumed rate of return, as long as it is coupled with a proper contribution rate, will produce a healthier pension system in the long run. However, because it is up to the legislature and not TRS to adjust the contribution rate, it is vital that the agency be diligent and expedient in communicating to its members the realities and potential consequences of a decision to adjust the fund’s assumed rate of return.

In addition to needing $1.5 billion or more in new pension contributions, TRS will also need substantial additional dollars just to sustain TRS-Care at the new 2018 levels. In all, TRS estimates that it will be asking the legislature to appropriate between 2 and 2.5 billion additional dollars next biennium. Lobbyists for each of the four statewide educators groups (including ATPE), the retired educators group, and a group representing school districts, when given the opportunity to comment, expressed their belief that such an ask would be a complete non-starter with the current group of legislators, particularly the Governor, Lt Governor, and the majority of Texas Senate.

Without substantial additional funds; TRS-Care will quickly go bankrupt and cease to exist. Active teachers’ health insurance costs will continue to rise unchecked pushing more and more good teachers out of the profession, and the TRS pension fund will be on a certain path toward being abolished. That is the very likely future, unless retired and active educators alike decide to make their voices heard at the polls this election year. Early voting starts Tuesday, Feb 20, and runs through Friday, March 2. Election day is Tuesday, March 6. With over one million active and retired education professionals in the state of Texas, the question is not whether you can save your retirement, fix your health insurance, and improve public education policy for 5.4 million students in this state. No, the only question is – will you?