Tag Archives: retirement

ATPE weighs in as Congress hashes out differences on tax bill

Over the weekend, the U.S. Senate passed a $1.5 trillion tax bill designed by the upper chamber’s Republican leaders. The measure passed largely on a party line vote, with just one Republican joining Democrats in opposition, and it comes after the U.S. House passed its own version of a bill to reform the tax code last month. Now, the Senate and House must reconcile their respective differences and develop a bill that can pass both chambers before it heads to President Trump for his signature.

ATPE Governmental Relations Director Jennifer Canaday wrote members of the Texas Congressional delegation to weigh in on two provisions in the House and Senate bills that affect educators and their classrooms. The first pertains to the educator expense deduction, which currently allows educators to deduct up to $250 dollars from their tax bills when personal money is spent on classroom supplies and materials. The bill passed by the House eliminates the deduction altogether, while the Senate’s bill increases the deduction to up to $500.

ATPE Governmental Relations Director Jennifer Canaday

“While not the ideal approach to filling budget shortfalls or equalizing access to supplies and materials among students,” Canaday writes, “the deduction offers some form of reimbursement to educators who dip into their own pockets to purchase materials for students, classrooms, and schools that might otherwise go without.”

The second issue ATPE highlighted in its letter to Texas members of Congress involves the Teacher Retirement System of Texas (TRS). The House tax bill would apply a new tax, the Unrelated Business Income Tax (UBIT), to public pension investments, including the TRS trust fund.

“Weakening the financial soundness of the TRS trust fund by subjecting it to new additional tax liability on the front end, in addition to the taxes already paid by individual retirees, is a cost that neither the State of Texas nor the teachers who spent their working years serving our state can afford,” wrote Canaday.

In both instances, ATPE asks members of the Texas delegation to encourage House and Senate leaders and other members of Congress currently negotiating a final bill to retain the Senate approach: doubling the Educator Expense Deduction (or, at a minimum, maintaining the current $250 deduction) and forgoing the inclusion of language applying the UBIT to public pension investments.

Read the full letter here, and check back for more as the U.S. Congress continues its work to reform elements of current U.S. tax law.

Teach the Vote’s Week in Review: Dec. 1, 2017

The weekend is here, and it’s time for your wrap-up of education news from ATPE:


The U.S. House of Representatives Committee on Ways and Means Chairman Kevin Brady (R-TX) provided a guest post this week on the Windfall Elimination Provision (WEP). He calls the WEP “unfair to public servants in Texas and across the nation” and says it is time for a fix.

ATPE has worked for decades to repeal the WEP, an arbitrary formula that affects the retirement earnings of some public employees who are eligible for both Social Security and government pensions (such as TRS). More information from ATPE on the WEP as it currently exists can be found here. In recent years, ATPE has joined with a coalition of active and retired public employee groups from Texas and across the country to bolster our work specific to this issue, working closely with Chairman Brady and his staff in order to repeal the WEP and replace it with a fairer formula for affected active and retired public employees.

Chairman Brady’s guest post addresses his thoughts on the current WEP and his vision for a new approach.

 


The Permanent School Fund (PSF), an endowment used to help fund public education in Texas in a variety of ways, has hit a record value: $41.44 billion as of August 31. The Texas Education Agency and the State Board of Education (SBOE), which manages the majority of the fund, announced the milestone this week, adding that a projected $2.5 billion from the PSF is expected to be distributed to Texas schools during the 2018-2019 biennium. For more on the announcement, the fund’s purpose, and the a brief history of the fund, check out this post from ATPE Lobbyist Mark Wiggins.

 


Guest Post: It’s Time to Fix the WEP

U.S. Representative Kevin Brady (R-Texas)

By Kevin Brady, Chairman
U.S. House Ways and Means Committee

The Windfall Elimination Provision or “WEP” is unfair. It’s unfair to public servants in Texas and across the nation, including places like California, Massachusetts and Ohio.  I’ve been working to repeal and replace the WEP for a decade. This is something we must do for our teachers, firefighters, police, and other public servants.

You probably know the history: When Social Security was created in 1935, state and local governments were excluded from participating due to Constitutional concerns.  Later, the law changed to allow state and local governments to offer Social Security to their employees.

As a result, many teachers, police, and firefighters still contribute to these longstanding retirement plans instead of Social Security since these substitute plans are often tailored to their chosen careers.  But many of these public servants also hold second (or third) jobs or have a second career where they’ve paid Social Security taxes. These folks rightfully expect to receive their earned Social Security benefits when they retire.  However, due to the WEP, their Social Security benefits end up being much lower than they were expecting.

Although the WEP may have been well intentioned in the start, today it’s simply unfair. Those affected by the WEP are subject to a different benefit formula than all other workers.  This arbitrary formula is based on a 1980’s one-size-fits-all Washington compromise and ignores a person’s actual work history.  The WEP also makes it harder to plan for retirement since the reduction doesn’t show up on a worker’s Social Security statement. When you are nearing retirement, surprises are never a good thing.

I think we can all agree that our teachers, police, and firefighters deserve better.

Working with my Democratic colleague from Massachusetts, Representative Richard Neal, and teacher, police, firefighter, and retiree groups, we’ve come together on a solution for addressing the WEP based on fairness, equal treatment and personal work histories.

Here’s how it would work.  The new proposal repeals the WEP as it exists today. Instead of only counting Social Security earnings as the current WEP does, we count all earnings of workers. This helps tailor benefits to your real-life work history.  This “proportional approach” calculates Social Security benefits using all earnings and then adjusts this amount based on the percentage of earnings that were subject to Social Security taxes.  This way, two workers with the same average earnings receive a Social Security benefit equal to the same percentage of their Social Security earnings.

Let’s look at an example for two teachers – one from Virginia who paid Social Security taxes on all of her earnings and another from Texas, who paid into a substitute retirement system like TRS but also tutored and paid Social Security taxes on these earnings.  Both teachers had average monthly earnings of $4,000.  The Virginia teacher had all of these earnings counted for Social Security purposes, while the Texas teacher only had $2,285 credited toward her Social Security benefits.

Under today’s law, the Virginia teacher would receive an initial monthly benefit of $1,776 if she claims at her full retirement age. That represents about 44 percent of her pre-retirement Social Security earnings.  On the other hand, because of the WEP the Texas teacher under today’s laws would only receive a monthly benefit of $800, which represents about 35 percent of pre-retirement Social Security earnings.

Under the new proposed “proportional approach”, the Virginia teacher would still receive a monthly benefit of $1,776.  But the Texas teacher would receive a monthly benefit of $1,015, which represents 44 percent of her pre-retirement Social Security earnings – or the same percentage as the Virginia teacher.

While the new proportional formula addresses the WEP for future retirees, we cannot leave current retirees behind. Our plan provides Social Security relief to current retirees affected by the WEP by providing special payments to these retirees. That’s only fair.

ATPE’s Monty Exter, Carl Garner, and Gary Godsey met with U.S. Rep. Kevin Brady in June 2017 to discuss fixing the WEP.

Over the years – with the help of groups like the Association of Texas Professional Educators, Texas Retired Teachers Association and Mass Retirees – we have taken important steps toward finally fixing the WEP.  With your help, we will finally ensure equal treatment for our teachers, firefighters, police, and other public servants.

This is a top priority for me, and we will not rest until we have a solution in law.

 

Teach the Vote’s Week in Review: Nov. 17, 2017

For many of you it’s the start of a holiday vacation. Take a look at this week’s education news highlights as you plan your Thanksgiving week festivities:


ATPE member Paula Franklin testifies before House Public Education Committee, Nov. 14, 2017.

Earlier this week, the House Public Education Committee heard from educators working in school districts burdened by Hurricane Harvey. ATPE member Paula Franklin, who lives in Pearland and teaches in Galveston ISD, was one of the invited witnesses who shared concerns about testing and accountability requirements for schools and students affected by the history-making storm.

Read more about Paula’s compelling testimony in this blog post from ATPE Lobbyist Mark Wiggins. Watch Paula’s testimony beginning at the 23:22 mark on the archived video file from the hearing available here.

 


The Texas Education Agency released final accountability ratings this week for Texas public school districts, campuses, and charter schools. As ATPE Lobbyist Mark Wiggins writes in this blog post from Wednesday, these are the last “met standard/improvement required” ratings that school districts will receive before the state’s new “A-through-F” rating system is implemented, as mandated by the Texas legislature.

Did you know that members of the public can share input with TEA about the new A-through-F rating system? In a recent legislative update for members of the Texas Association of Community Schools, our friend Laura Yeager wrote about her experience serving on a parents’ stakeholder committee to advise TEA on the development of the new accountability system. She expressed concern that the agency hasn’t conducted open meetings or adequately solicited feedback from the public about how the adoption of an A-through-F rating system will affect schools, students, educators, and communities. We encourage anyone who would like to share their thoughts on A-through-F to send an email to TEA at feedbackAF@tea.texas.gov.


This week a number of key gubernatorial appointments were announced for education-related boards and committees.

First, Gov. Greg Abbott announced his picks to serve on the new Texas Commission on Public School Finance. The commission was created as a result of legislation passed during this summer’s special legislative session, after the House and Senate were unable to agree on a comprehensive fix to overhaul the state’s troubled school finance system. Abbott’s appointments to the high-profile commission include ATPE member Melissa Martin. Martin is a career and technology teacher in Galena Park ISD. She joins Abbott’s other appointees, attorney Scott Brister; former state representative Elvira Reyna; and Todd Williams, an education adviser to Dallas Mayor Mike Rawlings. Gov. Abbott has tapped Brister to chair the new commission. Other members of the commission include those selected by Lt. Gov. Dan Patrick: Doug Killian, who serves as superintendent of Pflugerville ISD, and Senators Paul Bettencourt, Larry Taylor, and Royce West.

Also this week, Gov. Abbott revealed his appointments to fill three vacancies on the Teacher Retirement System (TRS) Board of Trustees. The new board members are Missouri City attorney Jarvis Hollingsworth; James “Dick” Nance, a retired coach who worked in Pasadena ISD; and Nanette Sissney, a school counselor in Whitesboro ISD. Hollingsworth will also chair the TRS board.

 


Have you noticed some updates to our Teach the Vote website this week? We are officially in candidate mode now, ready to highlight profiles not only for current officeholders, but also candidates running for office in 2018. In the next few days, we’ll be uploading 2017 voting records for current legislators, and we are also inviting candidates to participate in our online candidate survey. These resources are designed to help you learn where candidates stand on public education issues. We’re also excited to announce the addition of candidate profiles for the statewide offices of Texas Governor and Lieutenant Governor. Find candidates on our search page here, and check back frequently as we continue to add more information as we receive it. The candidate filing period for the 2018 elections is now open and will continue through Dec. 11, so you can expect to see some additional names added to our site and survey responses published as we receive them.

Learn more about how you can help shape the future of Texas in the pivotal 2018 elections by visiting our coalition partner website at TexasEducatorsVote.com.

 


 

Election Update: Analyzing Nov. 2017 results around the state

Yesterday, Nov. 7, 2017, Texans went to the polls, wrapping up a little more than two weeks of voting by passing all seven of the state constitutional amendments on the ballot.

In addition to yesterday’s constitutional election, Texans from 58 districts scattered all across the state also voted on ISD bond proposals totaling approximately $7.7 billion. Of those 58 districts, 19 of them asked their voters to approve bond packages greater than $100 million, accounting for roughly $7 billion of the $7.7 billion total. Seventeen of those 19 bond proposals, totaling $6.6 billion, passed, most by a significant margin, while only two, Ector County ISD and Victoria ISD, failed.

While it is only one metric, the overwhelming passage rate of ISD bond proposals is a good indicator that Texans overwhelming support their local public schools and are willing to voluntarily dedicate their tax dollars to see them prosper to the benefit of local students. Texans by and large are a fiscally conservative bunch and are not prone to approving what they view to be wasteful or excessive spending. We at ATPE hope that state lawmakers will take this strong show of support by local taxpaying voters that the state’s citizenry supports public schools and public school funding as encouragement to make similar decisions on school funding at the state level.

You can view all ISD bonds on the November 2017 ballot at the Texas Comptroller’s website.

Dallas County and City of Houston voters weighed in on a couple of significant measures not related to ISD bonds.

Dallas County voted to close down a countywide taxing entity known as Dallas County Schools, which was separate from the traditional ISDs that educate area students. Over the years Dallas County Schools, an intermediate educational agency, had largely become the provider of school bus services to local districts including Dallas ISD. Once Dallas County Schools fully closes down, area districts will need to either pull those services, including bus transportation, in-house or contract them out to private providers.

The City of Houston passed a $1 billion pension revenue bond package by a wide margin. While these bonds will NOT impact educators or the Teacher Retirement System of Texas (TRS), it is a good sign that the state’s largest city is overwhelmingly supportive of maintaining a healthy defined-benefit pension system for its local public employees who are not covered under state plans.

Teach the Vote’s Week in Review: Oct. 27, 2017

Here’s this week’s round-up of education news from the ATPE lobby team:


ATPE state officers met with Speaker Joe Straus in March 2017.

ATPE state officers with Speaker Joe Straus in March 2017

Texas political circles were shaken up this week by a pair of election announcements from top leaders in the Texas House of Representatives.

First came a surprise announcement on Wednesday that House Speaker Joe Straus (R-San Antonio) will not seek reelection in 2018. The news of the departure of the popular house speaker was a disappointment to many in the public education community who appreciated his rational approach to leading the Texas House and willingness to prioritize school needs over divisive ideological battles.

ATPE state officers met with Rep. Byron Cook in Feb. 2017.

ATPE state officers with Rep. Byron Cook in Feb. 2017

Straus’s announcement was followed by a similar one from Rep. Byron Cook (R-Corsicana) on the same day. Cook, who has chaired the powerful House State Affairs Committee and the newly created House Select Committee on Economic Competitiveness, similarly announced that he will step down at the end of his current term.

For more on Wednesday’s big announcements, check out this blog post from ATPE Lobbyist Mark Wiggins.

 


ATPE Lobbyist Kate Kuhlmann was in Dallas yesterday for a stakeholder meeting regarding data collection for educator preparation in Texas. The Texas Education Agency (TEA) partnered with Educate Texas and other entities to solicit input and recommendations on data the agency collects to assess and improve educator preparation programs (EPPS) across Texas. A bill passed earlier this year during the 85th regular legislative session, Senate Bill (SB) 1839, added new requirements to data collection for EPPs. The work to solicit input will help guide the agency and the State Board for Educator Certification (SBEC) as they work to implement the new law.

As Kuhlmann reports, teachers, school districts, EPP representatives, and other engaged stakeholders convened in Dallas this week to consider and identify data that would would offer transparency for candidates considering future programs, provide diagnostic value to programs, and improve upon current data used to hold programs accountable. All agreed that a focus should be placed on presenting the data in a more easily accessible manner, such as a user-friendly online dashboard. Participants also agreed that the presentation of such data should include differentiated interfacing specific to consumers (future EPP candidates and the general public), school districts, and EPPs.

Yesterday’s meeting was the second of four scheduled stakeholder meetings. Two more will be held next week in Lubbock and Austin. The TEA, under the direction of the State Board for Educator Certification (SBEC), will also convene a formal stakeholder committee to make recommendations on the matter and is reaching out to various standing committees for input. The agency expects to begin discussion on next steps for implementing recommendations at SBEC’s March 2018 meeting, once the initial stakeholder input has been collected. Stay tuned to Teach the Vote for updates.

 


TRS logoToday, the Teacher Retirement System (TRS) Board of Trustees is meeting in Austin, where ATPE Lobbyist Monty Exter is attending and has contributed the following report on the meeting:

The TRS Board of Directors convened today for a short meeting. After taking brief public testimony, they received an update from TRS Executive Director Brian Guthrie, which focused primarily on administrative housekeeping with regard to the agendas of future meetings. Guthrie did drop one bomb during his update, informing the board that there has been some discussion in Washington of reclassifying the contributions to retirement systems like TRS such that they would no longer be tax-deferred. Such a move would be a monumental policy shift dramatically impacting both educators and the pension fund itself.

After Guthrie’s comments, the board received its first update on the TRS Enterprise Application Modernization or (TEAM) program since the go live date on which we’ve previously reported. The transition has not been without the “hiccups” that accompany any such major technology transition, but the new system is stable and operational and the transition has been mostly smooth.

Next, the board worked its way through a series of administrative items before taking up proposed rules on 403(b) vendor rates. There has been significant back and forth between the board and a large segment of the 403(b) vendor community with regard to these rule changes. Many vendors acknowledge that the rules have been significantly improved, from their perspective, throughout the process. That said, most vendors still do not favor the new rules. Despite the board’s adoption of the rules, many expect this issue to remain a topic of discussion for the 86th legislature in 2019.

Finally, the board received its first overview presentation on the TRS experience study the board will undertake early next year. The experience study will help the board set many of the assumptions that are used to determine the actuarial health of the pension fund. The actuarial picture of a fund can help lawmakers makers determine contribution rates and is often used by anti-pension advocates to push for abandonment of defined-benefit pension plans based on their unfunded liabilities. Additionally, in the case of TRS, the actuarial soundness as defined by a funding horizon of less than 31 years is what allows TRS to give a COLA to retirees.

The last TRS board meeting of 2017 will be in December, and the first board meeting of 2018 will be a board retreat scheduled to commence on Valentine’s Day, February 14th.

 


Interim charges have now been released for both House and Senate committees to study in preparation for the 2019 legislative session. The charges issued by House Speaker Joe Straus and Lt. Gov. Dan Patrick direct standing committees in the House and Senate, respectively, to convene hearings and gather feedback from stakeholders on hot topics expected to be debated by the 86th legislature.

Rebuilding efforts following Hurricane Harvey are among the numerous charges for multiple committees, but there are also several directives that focus specifically on public education. The Senate Education Committee, for instance, will study such issues as teacher compensation, virtual learning, student discipline, dual credit, and school choice. The House Public Education  Committee is tasked with studying teacher retention, educating students with disabilities, charter school laws, and ways to assess student performance other than using standardized test scores. Other committees will examine public pension systems and the TRS healthcare programs for educators.

Read more about the House interim charges here and Senate interim charges here. ATPE’s lobbyists will be covering all of the education-related interim hearings and providing updates here on our Teach the Vote blog and on Twitter.

 


DNA_4w2U8AARK-pOne week of early voting remains for the Nov. 7 constitutional amendment election. As part of our work with the Texas Educators Vote coalition to create a culture of voting in the education community, ATPE urges our members and all other registered voters to participate in this and all elections. Early voting runs through Friday, Nov. 3. The Texas Secretary of State also declared today, Oct. 27, as #StudentVotingDay, encouraging eligible high school students who registered to vote to get out and cast their ballots today. Learn more about what’s on the Nov. 7 ballot and how to be an engaged voter in this ATPE Blog post.

 


 

Speaker’s exit puts public education on edge

Texas Speaker Joe Straus (R-San Antonio) announced yesterday that he will not be running for re-election to the Texas House of Representatives, and therefore will not return to lead the Texas House of Representatives when the 86th Texas Legislature convenes in January 2019. In addition, state Rep. Byron Cook (R-Corsicana), who chairs the House State Affairs Committee, announced the same day that he will not run for re-election in 2018.

The significance of yesterday’s announcements can’t be overstated. Speaker Straus and Chairman Cook each have played a tremendous role in protecting public school students and teachers, and their leadership during the 2017 legislative session prevented the worst anti-public education and anti-teacher legislation from becoming law.

ATPE presented House Speaker Joe Straus with an honorary resolution passed in July 2017, recognizing his support for public education.

ATPE presented House Speaker Joe Straus with an honorary resolution passed in July 2017, recognizing his support for public education.

Under Speaker Straus, the Texas House made public education its top priority. As part of House Bill (HB) 21 during the regular session, the House proposed $1.9 billion in increased funding for all Texas students. This legislation was opposed by the Texas Senate under Lt. Gov. Dan Patrick, who has repeatedly made private school vouchers a top legislative priority. The Texas House blocked Senate voucher legislation during both the regular and special sessions, as well as legislation that would have taken away the rights of teachers who choose to advocate for their children as members of professional associations like ATPE.

It is unclear who will step into the void created by the absence of Speaker Straus and Chairman Cook. What we do know is that anti-education forces are already celebrating victory, and those hoping to privatize public education and revoke the rights of students and educators will only be emboldened by this week’s announcements.

It is therefore all the more important that we use our teacher voices in both the March primary and November general elections in 2018 to put public education supporters in office.

Rep. Byron Cook joined Corsicana ATPE members at a pro-public education rally in July 2017.

Rep. Byron Cook joined Corsicana ATPE members at a pro-public education rally in July 2017.

It is likely that there will be more news in the coming days related to leadership in the Texas Legislature, and we will continue to provide you with updates here at TeachTheVote.org. You can also check back soon at TeachTheVote.org to find out how your individual representatives voted during the 2017 legislative sessions.

The next Texas House speaker will have some mighty boots to fill. In the meantime, please join us on Twitter and Facebook as we say #thankyoujoestraus for all he’s done for public education.

Teach the Vote’s Week in Review: Oct. 6, 2017

Here’s the latest education news from Texas and Washington, DC, supplied by your ATPE lobby team:

 


SBECThe State Board for Educator Certification (SBEC) is meeting in Austin today, Oct. 6,. ATPE Lobbyist Monty Exter is attending the meeting and has provided this update.

The board is adopting a number of updates to the Texas Administrative Code (containing SBEC rules) both as part of the board’s regular rule review cycle and as the board pursues its role in active oversight of educator preparation programs and educator certification and assignment.

In addition to adopting rule changes, the board also considered today several items outside of their administrative rule review, including updating the Classroom Teacher Advisory Committee; approving modified principal and teacher surveys associated with the Accountability System for Educator Preparation (ASEP); and discussing updates to the board’s mission statement and statement of core principles for better alignment. At the conclusion of the discussion of rule items posted for action, the board heard presentations from Texas Education Agency (TEA) staff on 50 cases of pending or considered litigation.

Finally, the board is considering today four agenda items that were posted for discussion only:

  • A proposed amendment to rules in 19 TAC Chapter 227, implementing statutory requirements of SB 1839 and HBs 2039 and 1508 from the last regular legislative session, dealing with educator preparation candidates;
  • Proposed amendments to rules in Chapter 228, implementing SBs 7 and 1839 as well as HBs 2039, 3349, and 1963 with regard to requirements for educator preparation programs;
  • Proposed amendments to Chapter 233 rules regarding categories of classroom teaching certificates; and
  • Implementation of SB 1839 with regard to requirements to provide data to educator preparation programs to help those programs assess their impact and improve program design and effectiveness.

For additional information on the topics above, view the full board agenda and its related materials here.

 


ThinkstockPhotos-177533853Are you curious about efforts to reform Social Security laws that have had a negative impact on some educators when they retire? Read the latest update on our blog from David Pore, one of ATPE’s lobbyists representing our members on Social Security and other federal issues in Washington, DC.

 


Hurricane Harvey remains the focus of interim legislative hearings. On Monday, the House Appropriations Committee met in Houston to discuss the state’s response to the massive storm. The committee heard from Commissioner of Education Mike Morath and other state officials about Harvey’s impact and the recovery efforts. For more on that hearing, check out this blog post from ATPE Lobbyist Mark Wiggins. Next Thursday, Oct. 12, the House Public Education Committee will meet to investigate the hurricane’s financial impact on schools and their facilities. Stay tuned to Teach the Vote for updates.

 


ThinkstockPhotos-128960266_voteTexans have only a few days left to register to vote in the next election. Next Tuesday, Oct. 10, is the last day to register to vote for the upcoming election on Nov. 7, 2017. In that election, voters will be asked to weigh in on proposed constitutional amendments, as well as several local ballot measures. Below are some tips from ATPE Lobbyist Monty Exter on what you can do to prepare for upcoming elections.

While the big election isn’t until March 2018, now is the best time to begin, or continue, developing a culture of voting within the education community. Voting is more than just a right that has been handed down to us through the spilled blood of our forefathers and –mothers, it is also a responsibility of good citizenship, and like all positive behaviors, voting is learned by your students and colleagues through modeling and discussing good habits.

The best way to ensure that your voter registration is complete and up to date is to get into the habit of annually checking your voter status with the Secretary of State. Thankfully, this is as easy as going to the Am I Registered web page, entering one of three simple sets of information, and hitting submit. The site will then pull up your voter registration data and let you confirm that your “voter status” is active and that your name and address information are up to date.

If you have moved within the same county, you can update your address by simply clicking the “change your address” link. If you have moved to a new county, or if your voter status is not listed as active, then you will need to complete and submit a voter registration form. You can complete your voter registration on the Secretary of State’s voter registration page. After you fill out the web form, you will need to print it and drop it in the mail.

ATPE members with questions about voter registration are always encouraged to contact the ATPE Government Relations team at government@atpe.org. Happy voting!

 

Federal Update: Efforts to protect educators’ Social Security benefits

An Update from David Pore, ATPE’s Washington, DC-based lobbyist

David Pore

David Pore

For many years, your ATPE Governmental Relations team has worked to fix two provisions in federal law that unfairly reduce the Social Security benefits of some retired educators and other public employees. The Government Pension Offset (GPO) reduces the spousal benefits of some educators based on their eligibility for a government pension, and the Windfall Elimination Provision (WEP) reduces the individual benefits of public retirees who have worked in jobs covered by Social Security in addition to their non-covered teaching careers. The WEP hits Texas educators particularly hard because the vast majority of our school districts in Texas do not pay into the Social Security system.

Every Congress, legislation is introduced to fully repeal both the WEP and the GPO. So, what’s the problem you ask? Why won’t the Congress repeal these unfair offsets and bring much-needed relief to retired public educators, cops, and firefighters living on fixed incomes? In short, it’s about the money, the politics, and the policy. Full repeal of the GPO and WEP would cost the Social Security trust fund tens of billions of dollars and create new inequities in the benefits formula, which in turn would create new winners and losers.

While ATPE has supported federal legislation to fully repeal these offsets, we have done so with the knowledge that passage of a full repeal bill is extremely unlikely in the current fiscal and political climate in DC. Therefore, consistent with our ATPE values, we have been working on bipartisan legislation that will take a huge first step in the right direction by repealing the arbitrary WEP and replacing it with a much fairer formula that will base your Social Security benefits on your service and contributions, just like everyone else. In the last Congress, Rep. Kevin Brady (R-TX)  and Rep.  Neal (D-MA) introduced HR711, the Equal Treatment for Public Servants Act.  Working through a coalition of other associations, including the Texas Retired Teachers Association (TRTA), ATPE had significant input on this important bipartisan legislation that would have also provided a modest annual rebate check to current retirees who have had their benefits reduced by the WEP. We were able to get 29 of Texas’s 36 U.S. House members to cosponsor HR711, and in July of last year, it was scheduled for consideration by the House Ways and Means Committee, which Congressman Brady chairs.  Unfortunately, the bill stalled when one organization in the coalition demanded changes that would have upset the careful funding balance necessary to repeal the WEP going forward and provide current retirees some relief as well.

ATPE's Monty Exter, Carl Garner, and Gary Godsey meet with U.S. Rep. Kevin Brady in June 2017.

ATPE’s Monty Exter, Carl Garner, and Gary Godsey meet with U.S. Rep. Kevin Brady in June 2017.

This year, we have been working with Chairman Brady, his committee staff, and the coalition to reach a consensus that will allow the bill to be reintroduced in the near future and hopefully attached to larger package of “must-pass” legislation. ATPE’s lobbyists have been in frequent contact with the Chairman and his committee staff and have been assured as recently as yesterday that reintroduction and passage of this bill is Chairman Brady’s top Social Security priority as Ways and Means Chair and will happen during this Congress. Meanwhile, the Congress continues to grapple with enormously challenging reform of our healthcare and tax systems, which has delayed consideration of other federal legislation.

What can you do? Continue to stay active and informed on the policy issues that affect your profession as well as the retirement benefits you have earned. When the bill is reintroduced, we will need ATPE members to mobilize and contact your Members of Congress and urge co-sponsorship and support to get this legislation to the President’s desk for signature. Stay tuned to Teach the Vote for more updates on this important topic.

Summary of third-quarter TRS board meeting

TRS logoThe Teacher Retirement System (TRS) of Texas held its quarterly board meeting this week in Austin on Thursday, Sept. 21, and Friday, Sept. 22, 2017. You can watch video of the board meeting here, as well as review the board agenda and board book.

The TRS board received its final update on the TEAM project prior to the upcoming go live date. As we have reported previously on our blog, TEAM is the agency’s ongoing project to update its computer infrastructure and data systems. TRS Executive Director Brian Guthrie reported that everything continues to be a go for the transition to the new system, which is scheduled to go live on Oct. 2. At the next meeting, the board will receive a report on the transition from the legacy system to the new system and the transition from working on phase one of the TEAM project to working on phase two.

In a subsequent agenda item, Guthrie laid out several of his policy goals for the upcoming year. Included in those Guthrie would like to look into significantly streamlining the retire/rehire rules for educators. There are always pros and cons to any changes made to the retire/rehire rules, and advocacy groups including ATPE will stay closely involved during the process to ensure that the rules produce the best results possible for individual educators while also ensuring the overall health of the retirement fund. Additionally, TRS is set to undertake the process of completing an updated experience study, a process utilizing a third-party vendor to analyze the assumptions TRS uses to determine its actuarial numbers. TRS staff expects to complete the study by February and present findings to the TRS board for discussion at the February board retreat.

ThinkstockPhotos-465016790_moneyConducting an experience study and reconsidering the TRS assumptions, including the assumed rate of return, is a significant action for the TRS board and agency. The assumptions combined with the actual assets on hand are what TRS uses to determine the funding window and overall actuarial soundness of the pension fund. Lowering the assumed rate of return without increasing the contribution rate will significantly increase the funding window, or number of years required to fully cover pension liabilities. Under law the fund cannot be considered actuarially sound if the window is greater than 30 years. Currently the fund is just over the 30 year mark but is trending in the right direction. Lowering the assumed rate of return even slightly will add years, as many as five to 10, to the funding window. TRS’s current assumed rate of return is 8 percent. Despite the fact that TRS has a one-year rate of return at 12.9 percent, a five-year rate of return at 8.9 percent, and a 26-year rate of return at 8.7 percent, there is significant pressure, including political and peer pressure, to lower the investment return assumption. ERS recently underwent a similar process that resulted in that fund’s rate of return being lowered from 8 percent down to 7.5 percent.

Any degradation of TRS’s actuarial soundness will undoubtedly result in new calls from some advocates and state lawmakers who oppose government-funded pensions for TRS to be converted from a defined-benefit pension system into a defined-contribution 401(k)-style plan.

In addition to the meeting of the full TRS board, various sub-committees also met this week. Of particular note, the TRS policy committee made changes to a number of TRS rules, many in response to legislative changes from the 85th legislative session that just went into effect on Sept. 1, 2017. You can review the list of rules affected on the Policy Committee Agenda or take a closer look at the rules in the Policy Committee Book.

Other committees that met this week included the following with links to their materials:

  • TRS Investment Management Committee – Agenda and Book;
  • TRS Risk Management Committee – Agenda and Book;
  • TRS Compensation Committee – Agenda and Book; and
  • TRS Audit Committee – Agenda and Book

The next TRS board meeting will be a one-day meeting on October 27, 2017. Stay tuned to Teach the Vote for updates.