New TRS proposal to be voted on in Senate as early as today

Date Posted: 5/03/2013 | Author: Jennifer Mitchell, CAE
Efforts to bring the Teacher Retirement System (TRS) to actuarial soundness cooled off last week after the bills to do so were met with protest from the education community, particularly over a proposal to require educators to be at least 62 years old in order to receive full retirement benefits. Now, Senate State Affairs Committee Chairman Sen. Robert Duncan (R-Lubbock) has presented a new proposal that the Senate may vote on as early as today. The new proposal changes the grandfather provision for the age 62 requirement so that it would only apply to educators with fewer than 5 years of TRS service credit and those hired after the date of enactment (Aug. 31, 2014). The original grandfather clause only covered educators who at the time of enactment were either 50 years old, had 25 years of service, or whose age plus years of service equaled at least 70. That provision would have covered only about half of active employees. The new provision covers everyone who is already vested in the system. To make up the additional funding needed to bring the system to soundness, the new proposal calls for raising active educators’ contribution rate to 7.7 percent beginning in 2015. The current contribution rate for active educators is 6.4 percent. The state contribution rate would be 6.8 percent, and, for the first time, school districts would also be required to kick in 1.5 percent. That would bring the total employer contribution rate to 8.3 percent, which is higher than the employee rate. If passed, TRS would become actuarially sound, which would halt attempts to convert the system from the current defined benefit plan (in which benefits are guaranteed) to a defined contribution plan in which benefits are subject to market fluctuations. (A defined contribution plan is like a private 401(k).) It would also mean that the Legislature could grant a cost-of-living adjustment (COLA) to retirees for the first time in 12 years. The current proposal calls for a 3 percent COLA, capped at $100 per month, for members who retired before 1999. These are two items specifically called for in ATPE’s member-created legislative program. ATPE is monitoring the progress of this bill closely. If it is approved by the Senate, it will face an uphill battle in the House. Stay tuned for updates.
CONVERSATION
RECOMMENDED FOR YOU

04/25/2025
Teach the Vote’s Week in Review: April 25, 2025
Contact your state senator to push for action on HB 2. Plus: Make a plan to vote in May 3 local elections, where school matters might be on your ballot. Early voting is underway.

04/25/2025
Texas Senate sends private school voucher bill to the governor as other education bills move through the process
This week in the Senate, committees heard bills dealing with student rights, Holocaust education, and educator misconduct, along with a vague electioneering bill.

04/25/2025
Texas lawmakers move vouchers near the finish line with school finance only halfway through the process
In the words of Davy Crockett, the “party handcuff” finally broke the public education blockade against vouchers in Texas.