Author Archives: Monty Exter

TRS board holds its fall meeting

Teacher Retirement System (TRS) of Texas Executive Director, Brian Guthrie, presented his comments to the TRS Board of Trustees virtually today, the final day of the board’s fall meeting.

Since the last board meeting, representatives form Texas’ largest public trust fund have participated in the National Council on Teacher Retirement (NCTR) annual trustee workshop and the National Association of State Retirement Administrators (NASRA) annual conference. Both events were held virtually. Later this fall TRS will attend the NCTR annual meeting.

Conferences are not the only thing at TRS that has transitioned to a virtual format. To ensure the safety of its staff, retirees, and active members nearing retirement (the last two cohorts both falling into higher risk age brackets), TRS has been closed to the public and its employees have been working on a largely remote basis. Guthrie anticipates more employees and contractors physically returning to work in October and the agency opening to the public in January 2021. Guthrie reported that TRS members have been largely complimentary or at least understanding of the service they were receiving in the virtual environment. Additionally, TRS has implemented policies, such as virtual huddles, to counter the sense of disconnection that extended exposure to a remote environment can cause.

After briefing the board on these more internal issues, Guthrie turned to updates on the agency’s recent and upcoming interactions with the legislature.

TRS staff has been submitting a number of interim documents in response to legislative committee requests for information, which has been the primary method used by committees to collect public and agency comments in lieu of holding public interim hearings this year. So far TRS has presented comments to the House Pensions, Investments, and Financial Services Committee, the House Appropriations Committee, and the House Insurance Committee, and TRS will be submitting comments soon to the Select Committee on Statewide Health Care Costs. TRS is going through the sunset review process currently, and the agency will also likely participate in a Sunset Advisory Commission hearing in October. The postponed sunset hearing had originally been scheduled for April of this year.

In addition to requests for information, TRS is preparing to submit its biannual legislative appropriations request (LAR) to the Governor’s office on September 25. In working with key legislative and gubernatorial staff, the agency was instructed to include in its base budget request the planned increase in state contribution rates passed as a part of Senate Bill 12 from 2019. This is very good news as it signals the legislature’s intent to fund the $544 million increase in state contributions into the retiree trust fund.

The LAR also covers the TRS administrative budget. At 7.8%, the increase to the agency’s administrative budget is the smallest requested increase in the past decade. Unlike most other state functions that pay for administrative budgets out of either agency fees or state general revenue (tax dollars), TRS administrative costs are covered by the pension trust fund and make up less than 0.2% of the total pension trust fund balance. TRS will seek one exceptional item, a funding request outside of the base budget. That item is to seek blanket authority to cover costs associated with implementing sunset recommendations and bills related to those recommendations next year. One of the sunset commission recommendations relates to improved customer service, and if approved, this rider could allow TRS to hire more staff to handle increased call volume and decrease its on-hold times.

Video of the full TRS meeting and related board materials can be found here. The final TRS board meeting of 2020 is scheduled for December 9-11, 2020.

So, you’re thinking about voting by mail?

It might feel like this election season, much like the coronavirus, began roughly 42 years ago, but traditionally the real beginning of the presidential election season is the first week of September—i.e., now. That means there are two things you need to do right away: Make sure you are registered to vote, and decide if you are going to vote by mail.

Because of COVID-19, unprecedented numbers of Americans are considering voting by mail. If you are reading this post, there’s a good chance you might be, too. If you wish to vote by mail in November 2020, you should print or request your application now, fill it out as soon as you have it, and mail it to your election clerk ASAP.

Who can vote by mail in Texas?

Let’s dig into the logistics of voting by mail. If you live in 44 of the other 49 states, or the District of Columbia, you have the unrestricted right to request an absentee ballot, and you may even be sent a mail-in ballot automatically if you are a registered voter. Here in Texas, however, you must jump through some additional hoops. Not everyone is qualified to vote by mail in Texas. To request an absentee ballot by mail, you must otherwise be eligible to vote and fall into at least one of the following categories:

  • 65 years of age or older;
  • disabled;
  • out of the country on election day and the early voting period; or
  • incarcerated but not convicted (as a presently incarcerated convict is not eligible to vote).

Regarding eligibility due to disability, the Texas Supreme Court has said fear of catching a disease (i.e., COVID-19) does not qualify as a disability. The court has also stated that neither an election clerk nor the state is authorized to ask a voter citing disability on an absentee ballot application what that disability is; the election clerk must take the voter at their word when they mark disability on their absentee ballot application. In fact, writing in a specific disability might invalidate your request.

How can I receive a mail-in ballot in in Texas?

If you are eligible to vote by mail, follow these steps to receive your ballot.

  1. Print a ballot-by-mail application at texas.gov/elections/voter/reqabbm.shtml, or order an application online from the Texas Secretary of State or a third-party site such as vote.org.
  2. Complete the application. Again, do not write in a specific disability if that is your qualifying reason to receive an absentee ballot.
  3. Sign and date the application. Be sure to sign your absentee ballot application in the exact same way you will sign your actual absentee ballot. The most common reason absentee ballots are rejected is because the signature on the ballot and the signature on the ballot application do not match.
  4. After you complete your ballot application, affix postage to the application (if it is in postcard form), or place the application inside a stamped envelope.
  5. Mail the application to your county’s election administrator. You can find the mailing address for your county’s election official here. Do NOT mail your completed application back to the Secretary of State’s office. The Secretary of State’s office will throw it away.
  6. Finally, because your county election official is not required to inform you if your application is rejected, you should call your county election office about two weeks after you send in your application to verify you have been placed on the absentee ballot list, assuming you haven’t already received your ballot in the mail.

County election clerks must send mail-in-ballots to voters already on the absentee ballot list at least 30 days prior to the election. This means any eligible voter whose valid application has been received by September 19 (45 days prior to the election) will receive a mail-in ballot by October 4. You can still return an application for ballot by mail after September 19, but the election clerk is not required to send you a mail-in-ballot until seven days after your application has been received, processed, and found to be valid. The closer to the election you send in your application, the more likely you will not receive your absentee ballot before election day. That is especially true this year with expected increases in the number of applications and potential postal delays.

ATPE has created the following graphic you can use or share on social media to help folks easily understand who is eligible to vote by mail in Texas and how to apply for a ballot by mail.

2020 Ballot by Mail Flyer

TEA updates its COVID-19 resources to include case reporting instructions and educator wellness guidance

The Texas Education Agency (TEA) announced yesterday two new resources that educators and parents have been requesting: guidance on promoting educator well-being that actually emphasizes educator input and information about reporting on the number of COVID-19 cases in Texas public schools.

First, TEA has posted a guide promoting staff support and well-being in a COVID-19 environment, entitled “SY 20-21 Educator Wellness: Equipping Staff to Return to School.” The introductory paragraph of the new guide has this to say:

“Throughout this tool you will find practical guidance, suggestions, and key action steps for the topics addressed in the chart below to promote staff wellness, resiliency, and overall well-being. The first step in preparing for the reentry of staff is to plan. Campus leaders should convene a team of mental health and well-being champions. It is vital that this team is supported by the senior leadership team in a district, school, or open-enrollment charter school. This team should be charged with developing a multi-tiered system of support (MTSS) plan using reputable resources that are trauma-informed for school mental and behavioral health, starting with a focus on promoting staff wellness. Next, assessing the well-being of staff is an essential step for prescriptive planning. After initiating the assessment and evaluating the results from the adaptable assessment options sample below, it will be important to build a school culture that promotes wellness and resiliency throughout the school year. Finally, equipping staff with the most relevant professional development and training will lead to a strong and safe start for the 2020-2021 school year.”

Of course, this guidance would have been more helpful six to eight weeks ago when districts still had ample time for planning and convening new committees, and when organizations such as ATPE were imploring the agency and state leaders to pay attention to the largely-ignored concerns of our state’s educators. Thankfully, the new guidance is pro-educator and finally recognizes that supporting students requires first supporting those adults who teach them. On that basis, this thoughtful guidance can be filed under the category of better late than never.

The agency is still working out final details on the public reporting of lab-confirmed cases of COVID-19 among Texas public school students and staff. The new reporting requirement will be in addition to long-standing required reporting to local health agencies for infectious diseases. Through a joint effort between TEA and the state health agency, data will be reported out by the Department of State Health Services on at least a district-by-district basis. Districts are expected to start submitting data in early September, with a group of pilot districts beginning to submit data this week.

Other updates to TEA’s COVID-19 site since last Thursday include the following:

Wrapping up the July TRS board meeting

The Teacher Retirement System (TRS) of Texas Board of Trustees met virtually last week on Wednesday through Friday, July 15-17, for its regular board meeting. In addition to other items, the board discussed the current financial market, TRS-Care and ActiveCare, the fiscal year 2021 budget and highlights of the preliminary legislative appropriations request, and updated considerations on TRS office space.

The official numbers for the trust fund through March 31 were presented to the board, but it was noted that those numbers are at this point significantly out of date. Staff went on to report that the market (as gauged by the S&P 500) has rebounded to approximately January 2020 levels, and they indicated that the TRS fund has tracked the market similarly. The benefit of the quick recovery of fund assets is that only a relatively small amount of assets had to be sold while prices were down to cover the cost of pension benefits paid out over that time frame. Longer recovery periods are by comparison much more detrimental to the fund because the period in which assets have to be sold at a reduced price, effectively locking in losses, is much longer.

TRS Board Presentation: S&P 500 chart

While the stock market and the TRS pension fund are relatively unscathed by the coronavirus pandemic for the moment, the state budget that relies largely on sales tax receipts and oil and gas severance taxes is in much worse shape. Due to this reality, state leaders called on all state agencies to cut their fiscal year 2021 budgets. Although the retirement system’s operational expenses are paid out of the pension fund itself and not out of the state’s general revenue, TRS still undertook the budget trimming exercise.

TRS staff presented the board with a proposed operational budget of $211 million for fiscal year (FY) 2021. This represents a 9% decrease from the FY21 target budget and a 6% decrease from the FY20 operational budget, which was $225 million. As part of the cost saving measures, TRS has instituted a hiring freeze through 2020 and a salary freeze through FY21. The agency has also cut the majority of outsourced funding going to vendors previously working on the data systems project dubbed TEAMS. The project will continue with the current number of in-house employees. TRS is also abandoning the effort to set completion dates on TEAMS benchmarks, as those dates have proven to be unrealistic and problematic.

In addition to next year’s budget, TRS staff also updated the board on the draft legislative appropriations request (LAR) the agency will present to lawmakers during the next legislative session. The agency’s request will cover fiscal years 2022 and 2023. The request will ask for specific funding to cover the state’s share of healthcare and pension costs, in addition to approval of the agency’s projected operational budget. TRS plans to ask for funding in the agency’s LAR based on the increased state contributions to pensions and retiree healthcare that legislators ordered during the last session and considering standard payroll growth assumptions for teacher salaries.

The agency’s LAR will also include a request for funding for 25 additional employees, or what are referred to as “Full-Time Equivalents” (FTEs). TRS staff had internally requested an additional 167 FTEs: 57 for the Investment Management Division (IMD) and 110 for the Benefits division. The 25 new FTEs in the agency’s LAR will go to IMD as a part of a “growing the fleet” initiative. This initiative aims to save the pension fund money by reducing outsourced costs in a greater amount than the cost of the new salaries. The Benefits division will have no new FTEs included in the upcoming LAR.

Over the last 18 months, space planning has become a constant conversation at the TRS board level as issues over the short term plans to lease space for housing the IMD staff have transitioned into a broader conversation on longer-term space needs for all staff. TRS continues to move forward with the goal of having a solution for its long-term office space needs in place by 2025. A major priority of that push is to house all TRS employees in the same location and discontinue the practice of housing the IMD staff in separate leased space.

As with everything, the current coronavirus has impacted the discussion around TRS space planning. With declining real estate prices and new potential spaces opening up in downtown Austin, the agency has paused its negotiations to renew its lease at 816 Congress so as to assess if there are better options available. Unfortunately, while the current market may present an opportunity for savings as a tenant, it is creating a more challenging environment in which to sublet the TRS space in Austin’s new Indeed Tower. The COVID-19 pandemic also has forced the agency to utilize remote working for a significant number of its staff for an extended time frame. Due to this change, TRS has revised its assumptions going forward on the percentage of staff who can work from home on a daily basis from 5% up to 25%. This change decreases TRS’s overall space requirements but also highlights a need for more collaborative space for staff who may usually work outside the office to come in and use. This also opens up the possibility that, with significant renovations, the agency’s current Red River location could house all TRS employees on a longer-term basis. Such renovations might not be any less expensive than simply relocating the agency to a new location outside of downtown Austin.

Finally, nominations for an active member seat on the TRS board of trustees are currently underway. The nomination period began June 15 and will continue through January 25, 2021. Assuming there are more than three successful nominees, an election will be held from March 15 to May 5, 2021. The top three vote-earners from that election will be reported to the governor, who will appoint the new board member from among those three candidates. ATPE members interested in running for this TRS board position can contact the ATPE Government Relations team for more information.

Access board documents and archived video of the July meeting here on the TRS website. The next TRS board meeting will be held in September.

Setting the record straight on the myth of “temporary” teacher retirement

After representatives affiliated with a national teachers’ union held a conference call with Texas reporters last week, at least one news story sparked confusion and a flurry of inquiries by reporting that it would be possible for teachers to retire “temporarily” during the coronavirus pandemic and later return to their previous jobs.

“Many teachers are capable of temporarily retiring,” the media report stated, erroneously adding that Texas teachers could “sit out a year or two, still get paid, and come out of retirement after COVID is under control.” The staff of the Teacher Retirement System of Texas (TRS) asked ATPE and other stakeholders to help them clear up the confusion. The simple fact is that “temporary retirement” is not an option for educators under Texas law!

TRS had this to say in a statement responding to the June 24 news story:

“There are no provisions in the law that allow a teacher to ‘temporarily retire.’ A news article published on June 24 by a north Texas media outlet stating as much is mistaken. While the law allows a retired teacher to return to employment without restriction after a 12-month break in service, the teacher’s retirement annuity amount would be fixed as of the retirement date. Any employment after retirement does not increase the annuity amount.”

Exactly what is the law, and what considerations should educators be aware of as they are making retirement decisions in the wake of COVID-19? The first step is considering whether or not an educator is eligible to retire.

Educators who began teaching prior to 2007 and have not had a break in employment since then may be eligible to retire and receive a regular pension if they are at least 65 years of age with five or more years of employment, or they meet the “Rule of 80.”  The Rule of 80 is met when an educator’s age plus their years of service credit equal 80 or more. (For example: 50 years of age plus 30 years of service credit equals 80.)  Those educators who have not worked continuously since 2007 must meet the rule of 80 and be at least 60 years of age to retire, or they may retire at 62 years of age if the educator had not earned five years of service credit prior to 2014 or has not worked continuously since 2014.

Educators who are not eligible for full retirement may still be eligible for early retirement, but they are subject to early retirement penalties. To be eligible for early retirement, an educator must either be  55 years old with five years of service credit or have at least 30 years of service credit without having met the Rule of 80. The penalty for early retirement can be as much as a 53% reduction of your standard annuity if you are between ages 55 and 64 and have between five and 19 years of service credit, but do not meet the Rule of 80.

Additional factors to consider include the fact that the amount of your pension is greatly impacted by your pre-retirement years of service, TRS’s lack of an automatic cost-of-living adjustment (COLA), and the impact of the retire-rehire surcharge.

The amount of an educator’s annual annuity is determined by taking the average of their highest three to five years of salary and multiplying that figure by a percentage, which for those receiving a regular retirement, is determined by multiplying their years of service by 2.3. For example, a teacher with 20 years of service credit would have 46% applied to their salary figure; if their highest average salary amount is $60,000, the educator would be eligible to receive an annuity of approximately $27,600 per year. A teacher whose highest average salary was also $60,000 but had 30 years of service credit would be eligible to receive approximately $41,400 annually.

Once you retire, you cannot earn additional service credit and your annuity cannot be recalculated, even if you go back to work after sitting out a year.

In addition to lost credit for service worked after retirement, the unpredictability of a COLA is another factor that can make early retirement less attractive. A fixed annuity with no regular COLA built in, and the possibility of only infrequent one-time COLAs, tends to lose its purchasing power over time due to inflation. Locking in the amount of your annuity much earlier than you might have otherwise planned to retire may magnify this effective decrease in your annuity’s value over time, on top of the other reductions discussed above.

Finally, although you can retire and then return to work after sitting out for 12 months, those retired educators who do return to work on more than a half-time basis will be subject to retire-rehire surcharges. The amount of the pension surcharge is equal to the amount of both member and state contributions on the compensation paid, which is currently 15.2%.  A health benefit surcharge is also due for TRS-Care, which is currently $535. While the educator’s employer can choose to cover these surcharges, they often pass them on to the retiree.

As you can see, an educator’s decision to retire early, with the intention of making it a “temporary” retirement in which the educator would sit out a year or two before returning to the classroom, comes with many significant financial consequences. ATPE urges educators to carefully consider these factors before they take an action that could permanently and negatively impact their future standard of living and their ability to truly and fully retire at a later date.

Note: There are a number of variables that affect an educator’s annuity, including start date, breaks in service, total years of service, retirement age, and other individual benefit decisions. Figures cited in this blog post are used for illustrative purposes only. Texas educators should contact TRS directly for assistance calculating the individual pension benefits they are eligible to receive.

Texas election roundup: Another court decision on mail-in voting

For weeks there has been a back-and-forth battle being waged over Texas voting laws, but that fight may be drawing closer to an end. Today, June 4, the U.S. Fifth Circuit Court of Appeals became the latest in a litany of federal and state courts to weigh in on a debate at the intersection of elections and the coronavirus pandemic: whether to expand eligibility for mail-in voting.

As previously reported here on Teach the Vote, the Texas Supreme Court and a federal district court were the last to weigh in on this issue prior to today’s ruling. A federal district judge previously issued an order to allow all registered voters in Texas to apply for mail-in ballots, based on finding our state’s current restrictions to be unconstitutional. The federal appellate court ruling issued today blocks that district court’s order from taking effect.

While the Fifth Circuit’s ruling today is merely a stay of the lower court’s order, the language used by two members of the three-judge panel demonstrates the appellate court’s dubious view on the merits of using litigation to expand mail-in voting eligibility. We will have to wait to hear a more final word from the appeals court, but it does not appear likely that more people will be permitted to avoid visiting the polls in person while still exercising their right to vote.

Regardless of the final outcome at the Fifth Circuit, the losing side is likely to appeal to the U.S. Supreme Court, which may or may not choose to hear the case. Most cases appealed to the highest court in the nation do not get heard, which means a ruling by the circuit court often becomes the last word on federal judicial matters. Stay tuned to Teach the Vote for updates.

ATPE weighs in on proposed Teacher Incentive Allotment rules

House Bill (HB) 3, the landmark school finance bill passed by Texas lawmakers in 2019, included funding for a new Teacher Incentive Allotment (TIA). Despite almost certain budget cuts in the upcoming legislative session that call into question the state’s ability to fund the ambitious and somewhat controversial performance pay program, Texas Commissioner of Education Mike Morath has forged ahead with implementation of the program. Administrative rulemaking to implement the new TIA law is currently underway, which affords the public an opportunity to provide input on the program. ATPE submitted formal comments on the proposed commissioner’s rules this week.

The Texas Education Agency (TEA) began putting out information on the TIA through its HB 3 in 30 video series back in the fall of 2019. Earlier this year, the agency asked school districts interested in participating in the program to submit a letter of intent and also released guidance on timelines for funding and implementation. Additionally, TEA staff briefed the ATPE Board of Directors on the plans for TIA implementation in February.

On April 24, after more than six months of sharing guidance with the field, TEA published proposed commissioner’s rules on the TIA’s Local optional teacher designation systems. Local optional teacher designation systems are the school district-developed and TEA-approved rubrics by which a district can designate individual teachers for merit recognition under the TIA, giving the district access to TIA merit pay funding from the state.

During the last legislative session, the ATPE lobby team worked hard to ensure the laws creating the TIA program would include certain provisions protecting the confidentially of the teacher evaluation process. We also fought to ensure districts would not be required to use students’ STAAR test scores to rank educators, and that it would be at least mathematically possible under each district’s plan for all teachers to earn a designation if they met the eligibility requirements. In the comments we submitted this week, ATPE requested changes to improve upon the implementation plans and ensure that the fruits of those hard-fought legislative battles would be reflected in the TIA rules. Read more about how the legislature designed the TIA law in this Teach the Vote blog post.

TEA is now tasked with organizing and responding to all comments the agency has received from various stakeholders and potentially modifying the proposed rules accordingly. The commissioner’s rules on the TIA are scheduled to go into effect July 30, 2020.

Sunset report recommends TRS improve its member relations

Every state agency in Texas is subject to a period review by the Texas Sunset Advisory Commission. When the state creates a new agency, it usually sets a “sunset” date. This is the date when the agency will cease to exist unless the commission decides it should continue. Even agencies that are created by the Texas Constitution and cannot be abolished, such as the Teacher Retirement System (TRS) of Texas, undergo cyclical review by the Sunset Advisory Commission to determine ways they can improve and operate more efficiently.

The TRS Sunset Report was released last week, as we reported last Friday here on Teach the Vote. While much of the report addresses standard sunset fare such as integrating best practices and improving transparency and oversight, one issue identified in the report seems likely to resonate with TRS members above the rest: “TRS Needs to Repair Its Relationship With Its Members by Focusing on Their Needs.”

Excerpt from the 2020-21 Sunset Staff Report on TRS

Sunset commission staff points out in the report, “While TRS has a critical fiduciary duty to manage the $157 billion trust fund in the best interest of its members, the agency also has an important responsibility to ensure its members have the support and information needed to be secure in retirement.”

The report goes on to state that in the Sunset Advisory Commission staff’s estimation:

“TRS’ benefit counseling options do not meet members’ needs… TRS has not provided the information and support its members need to be secure in retirement, with overly complex explanations, insufficient retirement information, and inadequate counseling options… TRS also does not provide enough member-friendly financial planning information to ensure members understand what they need to prepare for retirement, such as the importance of additional savings beyond their TRS pension benefits.”

Sunset staff identify core issues and findings, as well as recommendations to address them. In considering sunset recommendations and weighing their merit, it is important to consider that implementing new programs and initiatives comes at a cost, mostly in additional manpower. For TRS, those costs are paid directly out of the same trust fund that provides member benefits.

The sunset staff’s first finding related to the issue of repairing TRS’ relationship with its members is that the agency “has not provided the information and support members need to adequately ensure they are secure in retirement.” With 1.6 million members, most of whom have limited or no access to Social Security benefits and little other retirement savings outside of their TRS pension, simply managing the TRS trust assets and administering pension payments is not good enough without taking a more holistic role in helping TRS members prepare for a secure retirement.

This is particularly true when considering that Texas is last in the country in the percentage of payroll our state puts toward teacher retirement. The state does not provide mandatory cost-of-living adjustments (COLAs) on a regular basis and rarely provides funding for even one-time COLAs. Together, these legislatively driven policies mean that a TRS pension alone often will not provide a comfortable — or potentially even adequate — retirement over the duration of an average educator’s retired years.

This makes it even more important for Texas educators to understand the importance of having a supplemental retirement plan and to begin funding that plan early in their careers. Sunset staff point out that other state retirement systems, including the Employees Retirement System (ERS) for Texas state employees, “emphasize retirement planning is a shared responsibility between members and the system.” On the other hand, the report observes that TRS “puts the burden of navigating the complex retirement system primarily on its members.”

To make matters worse, TRS appears to have serious deficiencies communicating in the areas where it does currently engage with its members on retirement issues. Regarding the agency’s written materials, sunset staff found that TRS commonly uses legalistic language and overly complex explanations. While call times have come down significantly, TRS has not yet met its internal goal of answering 80% of calls within three minutes. More troubling, when agency staff do answer a call, internal policy prevents most TRS phone counselors from relaying basic information such as a member’s account balance or estimated retirement benefits — not to mention explanations of how systems such as TRS and Social Security are supposed to interact, which often leaves TRS members confused and frustrated.

To receive more complete information on their TRS benefits, a member must make an appointment — often months in advance — and then travel to Austin for an in-person consultation. Thankfully, TRS is looking into opening a limited number of field offices to do in-person consultations in the future so that some members will not have to make the trek to Austin. Why the agency is only now contemplating this option is somewhat baffling. (TRS has been offering member consultations via video conferencing during the current shutdown period that has been caused by the coronavirus pandemic.)

In order to address these issues, sunset commission staff recommend that the legislature require TRS to develop a communications and outreach plan to help members prepare for retirement. Sunset staff also recommend, with regard to other issues identified in the report, that TRS engage stakeholders and adopt a member engagement policy. Also, the legislature should consider incorporating  recommendations for required stakeholder engagement into the development of TRS’ communications plan.

Continuing on the issue of repairing its relationship with its members by focusing on their needs, the sunset report also recommends that TRS improve its communications with employers, improve  efforts to return contributions to inactive members, and adopt a member engagement policy to increase transparency on key decisions.

The commission staff found that many, if not most, employers of TRS members report that the system TRS uses to collect payroll and other information from them is cumbersome and “plagued with problems,” even three years after its launch. TRS should attempt to resolve the problems with its reporting system and do a better job of providing troubleshooting for employers that are trying to work around such problems until they are resolved.

Sunset staff also suggest that TRS provide employers and education service centers (ESCs) with training so that school districts and ESCs can help educate TRS members (school employees) on retirement and healthcare issues. While this sounds good in theory, as districts certainly have more access to their own employees than TRS ever will, I am skeptical of most districts’ desire to take on this additional responsibility. Prior to pursuing this recommendation, TRS should communicate with school district leaders to determine if districts would actually utilize any such training or tools TRS might create for them. Policymakers should also consider whether such a communications strategy might be duplicative or confusing for TRS members.

The sunset staff further recommend that TRS be more proactive in returning contributions to inactive members. However, additional effort on the agency’s part has an administrative and staffing cost. Therefore, in considering this sunset recommendation, TRS and the legislature should work to balance the needs of members leaving the retirement system with those who will remain in it.

Certainly, educators have a right to redeem the contributions they have put into the system if they leave it; however, they also bear some responsibility for being aware of their own money. TRS currently sends a refund application to members who have not requested a refund on their own when their membership automatically terminates after seven years of inactivity under Texas law.The report’s description of contributions being “forfeited” after seven years of inactivity could lead some to believe that former members lose the ability to redeem their contributions at some point. In fact, former TRS members remain eligible to withdraw their funds at any time, before or after the seven year mark.

As the sunset staff noted, federal law prohibits TRS from automatically returning funds to an inactive member. Should active and retired members bear the cost of additional staff, the use of credit reporting agencies, or sending out thousands of pieces of certified mail to track down long-time inactive members who have failed to claim their own money?

Finally, the sunset report recommends that TRS “adopt a member engagement policy to increase transparency on key decisions.” Generally speaking, this is an excellent idea. A policy that incorporates increased use of expanded stakeholder groups and a better methodology for clear and timely two-way communication could go along way toward improving TRS functions and educators’  perceptions of the agency. However, it is important that any legislative action around this recommendation stay focused on the broader context of improving overall communications between TRS and its members.

Unfortunately, legislators might end up focusing only on issues surrounding TRS’ abandoned decision to lease a particular property to house its investment division. If this happens, discussions could easily become mired in attempts to assign blame around this single, high-profile issue. Rather, the legislature should consider a more positive approach of trying to holistically improve TRS’ communications and engagement with and trust among its members.

Rural schools get a temporary reprieve on loss of federal funds

U.S. Secretary of Education Betsy DeVos has backed down, at least temporarily, on her department’s plan to cut federal resources currently flowing to more than 800 low-income rural schools. The move comes after a bipartisan group of U.S. senators sent a letter in opposition to the plan this week. The announcement also follows the secretary’s appearance at a tense congressional hearing on Feb. 27 to defend the Trump Administration’s education budget proposal.

Education Secretary Betsy DeVos testified before a U.S. House Committee on Appropriations subcommittee hearing on Feb. 27, 2020.

The proposed cut in federal funding was due to the department’s decision to change its internal rules on the type of poverty data it would accept to determine eligibility for the Rural Low-Income Schools Program (RLIS). The program is one of two sub-grants under the Rural Education Achievement Program (REAP), which senators who who wrote the letter to DeVos describe as “the only dedicated federal funding stream to help rural schools overcome the increased expenses caused by geographic isolation.”

Under REAP, which was enacted in 2002, school districts seeking RLIS grant funding would prove their eligibility based on census poverty data. However, upon recognizing in 2003 that adequate census data often was not available to the districts the act was meant to help, the U.S. Department of Education (ED) changed its course. By rule, ED began to allow school districts to substitute census data with the same internal data on the percentage of their students eligible for free and reduced lunch, which is used to determine Title I eligibility. The department has allowed the use of this substitute data ever since.

After receiving significant legislative push-back to the proposed change, ED has shied away from making the change for now. As reported by Bloomberg Government, a spokesperson for the department explained the rationale for the change as follows:

“We have heard from States the adjustment time is simply too short, and the Secretary has always sought to provide needed flexibility to States’ [sic] during transitions. This protects States and their students from financial harm for which they had not planned.” The spokesperson added, “[D]ue to the States’ reliance on the Department’s calculations for the past seventeen years, the secretary has concluded the Department can use its authority to allow alternative poverty data to be used for an additional year.”

Clearly, ED is still positioning itself to be able to make this change in the future, which would negatively affect hundreds of rural schools short of some additional action by Congress or the administration. Stay tuned to Teach the Vote for future updates from ATPE’s federal lobby team.

Healthcare and office space discussions dominate February 2020 TRS meeting

The Teacher Retirement System of Texas (TRS) Board of Trustees held its first meeting of 2020 in Austin this week. In addition to receiving typical reports on market trends and internal processes, such as the agency’s new diversity program, the board took action on two major issues regarding TRS space planning and healthcare for both the active and retired educator population.

TRS office space plans

The first day of the board’s two-day meeting was dominated by a discussion of TRS’s space planning needs, including issues surrounding the immediate future location of the TRS Investment Division, which has been in the news as of late. After a lengthy discussion of the history of the agency’s housing over the last two-plus decades, TRS staff recommended the Investment Management Division renew its current lease at 816 Congress Avenue in Austin (an option that was not previously available due to insufficiency of available space in the building). This would be a seven-year lease with a one-time right to terminate the lease if a new headquarters is found to house all of TRS. The recommendation also calls for TRS to sublet space it recently contracted to lease at the new Indeed Tower in downtown Austin. After the board’s vote to accept the recommendation, TRS Board Chairman Jarvis Hollingsworth released the following statement:

“Today, the board considered additional options that recently became available and approved a solution that meets the space needs of our growing investment division, while also demonstrating sensitivity to member concerns.”

The agency will also move forward with consideration of building a new main campus outside of downtown Austin to house at least the staff currently located at the current main campus on Red River Street, potentially bringing all TRS staff back under the same roof.

Healthcare

During Friday’s meeting, TRS staff presented a recommendation, which the board approved, on the network providers for all of the major heath insurance funds managed by the board. TRS released the following press release about the changes, which they say could save the combined health insurance programs of TRS as much as $754 million  over the next three to five years.

Staff also updated the board on the TRS-ActiveCare listening tour that is designed to get feedback from the field on the healthcare program for active educators. TRS will use the information it receives to focus their efforts on what are determined to be priority improvements to the system. These discussions include consideration of creating more regional options in addition to the statewide plan.

ATPE will continue to monitor TRS developments and actively engage with the TRS staff and board on the policies impacting active and retired teachers in Texas.