Tag Archives: pension review board

Teach the Vote’s Week in Review: June 28, 2019

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


On Tuesday, the Texas Education Agency (TEA) launched a new website that will serve as a resource portal for implementation of House Bill 3. In an introductory video, Commissioner of Education Mike Morath explained that TEA will release a series of videos covering different parts of the school finance reform bill. Read more about the new TEA resource in this blog post by ATPE Lobbyist Mark Wiggins. To learn more about House Bill 3 and other legislation that passed this year, check out the ATPE lobbyists’ in-depth analysis on Teach the Vote here and here.


In their first meeting since the 86th legislative session adjourned, members of the Pension Review Board (PRB) discussed the implementation of various pieces of pension-related legislation that passed this year. The discussion included a look at bills pertaining to the Teacher Retirement System (TRS) pension fund. There was also a passing of the torch as outgoing Chair Josh McGee ended his term and incoming Chair Stephanie Liebe began hers overseeing the PRB. Read a more detailed review of the PRB meeting in this blog post from ATPE Lobbyist Mark Wiggins.

 


Pension review board discusses recent legislation

The Texas Pension Review Board (PRB) met Thursday, June 27, 2019, in Austin with a focus on reviewing pension-related legislation passed by the 86th Texas Legislature.

Members began by recognizing outgoing Chair Josh McGee, who passes the gavel to new Chair Stephanie Leibe. The PRB governmental relations team then walked the board through a handful of items resulting from the most recent legislative session. The bills include:

  • Senate Bill (SB) 2224 by Sen. Joan Huffman (R-Houston) requires every public retirement system to adopt a written funding policy that details the system’s plan for achieving a funding ratio equal to or greater than 100 percent. Each plan must be submitted to the system’s sponsor and the PRB.
  • SB 322 by Sen. Huffman relates to the evaluation and reporting of investment practices and the performance of certain public retirement systems. Public retirement systems must now include in their annual financial report information about how much investment managers are being paid, as well as hire an independent firm to evaluate the system’s investment practices.
  • SB 12 by Sen. Huffman relates to contributions into and benefits under the Teacher
    Retirement System of Texas (TRS). This bill increases the annual base employer contribution, supplemental employer contribution, and member contribution rates over a five-year period. Certain retired members will also receive a 13th check this year capped at the lesser of the amount of their monthly TRS annuity check check or $2,000.
  • House Bill (HB) 2763 by Rep. Dan Flynn (R-Canton) relates to the police pension fund in certain municipalities.

The agenda book for the current PRB meeting included additional bills related to pensions, such as HB 3. While the school finance bill does not directly address TRS, PRB staff suggest that a significant increase in the salaries of some educators could affect the financial position of TRS over the short term. You can read the full agenda book for today’s meeting here.

PRB Executive Director Anumeha Kumar also explained the agency’s legislatively approved budget, as well as the revised rule review plan for the board. This plan will lay out the process by which the board will review rules for adoption, revision, or repeal.

Staff indicated that as a result of legislation passed this session, the TRS pension’s amortization period is projected to drop from 87 years to under 30 years. This would meet the minimum requirements for being considered actuarially sound and therefore eligible to provide members a cost of living adjustment (COLA). The plan’s amortization period jumped to 87 from 32 last year as a result of the TRS board’s decision to change actuarial assumptions to reflect more conservative economic forecasts.

TRS is by far the largest active plan under the purview of the PRB, with more than $154 billion in assets. The next largest plan, the Texas County & District Retirement System, is worth $30 billion. The PRB briefly mentioned a new resource that is available for members of the public to see a snapshot of the health of the state’s various public pension plans. The Texas Public Pension Data Center can be found here.