The Senate Finance Committee convened on February 10, 2025, to delve into Article III of Senate Bill 1, which pertains to the state's general appropriations. The meeting featured presentations from key stakeholders, including representatives from the Teacher Retirement System of Texas (TRS) and the Texas Retired Teachers Association (TRTA), highlighting the financial health and future plans of these organizations.
A significant portion of the discussion centered around the TRS Pension Trust Fund, a critical component of the state’s financial framework. According to Brian Guthrie, Executive Director of TRS, the system boasts over 2 million members, with more than 1.5 million active employees and 500,000 retirees. The fund disburses over $1 billion monthly in annuities, totaling an annual payout exceeding $15 billion. As of August 31, 2024, the trust fund had a market value of $210.5 billion, positioning it as the sixth largest pension fund in North America. Guthrie assured the committee that the fund remains actuarially sound, with a funding period extending 28 years. He also noted that the upcoming actuarial valuation as of February 28, 2025, is expected to maintain this positive outlook.
The TRS-Care retiree health insurance program was another focal point. The program has achieved a robust fund balance, leading to premium reductions for participants in the TRS-Care Medicare Advantage plan, effective January 1, 2025. These reductions will result in annual savings ranging from $720 to $4,884 for beneficiaries. Additionally, the Legislative Budget Board has allocated over $8 billion in general revenue for TRS-related programs for the fiscal years 2026-2027.
Brock Gregg, Associate Director of Strategic Partnerships and Member Outreach at TRTA, emphasized the importance of ongoing support for TRS retirees. He recalled the successful passage of Senate Bill 10, which provided a cost-of-living adjustment (COLA) to retirees who retired before August 2020. This adjustment was made possible by voter approval of Prop 9 during the November 2023 General Election. Gregg highlighted that Prop 9 received the highest number of votes among all propositions, underscoring Texans' deep appreciation for their educators.
Gregg also addressed recent federal changes that eliminated penalties affecting public service retirees, benefiting over 270,000 individuals in Texas. Despite these advancements, he stressed that inflation remains a significant challenge for retirees, who are still lagging behind cumulative inflation by approximately 30%. TRTA's legislative priorities for the 89th session include maintaining system solvency, reducing unfunded liabilities, and providing benefit enhancements to counteract inflation's adverse effects.
The commitment to sustaining the TRS pension fund was echoed by Senator Joan Huffman, Chair of the Senate Finance Committee, who reaffirmed the Legislature's dedication to ensuring the long-term stability of the system. The collaborative efforts between the committee, TRS, and TRTA underscore the shared goal of securing a prosperous and dignified retirement for Texas educators. Together, they aim to build a resilient financial foundation that supports current and future generations of dedicated professionals.