TRS bill is in the Senate today
Date Posted: 5/08/2013 | Author: Jennifer Mitchell, CAE
Senate Bill (SB) 1458 by Sen. Robert Duncan (R–Lubbock) will be debated today in the Texas Senate. The bill is designed to make the Teacher Retirement System (TRS) secure and meet statutory requirements for actuarial soundness as well as provide a badly needed cost of living increase to retirees. ATPE and the Texas Retired Teacher Association have been negotiating with the Senate for weeks to accomplish these goals and lessen the impact on active teachers’ contributions without requiring current educators to reach age 62 in order to be eligible for full retirement. Currently, the bill would not require any vested member of the system to reach age 62 for full retirement. Only members with less than five years of service will see the current age 60 requirement increase to age 62. These members are already subject to age 60 because they were hired after 2007. The bill changes eligibility for full TRS-Care insurance benefits from the current requirement to reach age 60 and have the rule of 80, to age 62 with the rule of 80, but grandfathers members with 25 years of service or who have reached the rule of 70. Amendments will be offered to lessen the impact on active members’ payroll contribution levels, which will increase over time from 6.4 percent up to 7.7 percent. (In 2015, the member contribution will increase to 6.7 percent; in 2016, to 7.2 percent; and 2017, to 7.7 percent.) The bill also calls for school districts to begin contributing 1.5 percent of payroll for the first time, making the system a three way partnership. The state contribution will increase to 6.8 percent for a total state and district employer payroll contribution of 8.3 percent in 2015, making for an employer contribution that is higher than the employee contribution. The result of these changes will provide retirees who retired before 1999 with a cost of living increase now and leave the TRS system in good shape to help all retirees achieve a COLA in future years. Reaching actuarial soundness this session is critical for our future defense of the defined benefit system against those who want to privatize the system and turn it into a defined contribution/401(k) system. ATPE would like to thank Senator Duncan for his commitment to make the system strong so we can keep the defined benefit pension available for Texas educators, for listening to the concerns of active and retired educators and making changes to the bill to accomplish our goals and lessen the impact on members of the system.
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