The Teacher Retirement System (TRS) Board of Trustees met Sept. 19–20 in Austin while some TRS staff also covered a House Committee on Pensions, Investments & Financial Services (PIFS) hearing.

Committees and reports:

The Investment Management Committee provided an update on the real estate portfolio as well as reported strong one-year market returns led by equities. All in all, TRS investments are healthy, and U.S. markets have done incredibly well with strong earnings and tremendous returns. Despite political rhetoric, the U.S. growth outlook remains steady.

There was a conversation about whether TRS is being strategic enough in its investing, spurred by indications that some peer pensions are outperforming TRS.

The Policy Committee reported on making targeted modifications based on Investment Committee discussions and recommendations made by fiduciary counsel and advisors. The Policy Committee also purposed policy modifications that reflect changes to the organizational structure within benefit services, as well as updates to the annual policy review schedule.

The Benefits Committee introduced new TRS staff—three new senior directors in the benefit services division. Staff reported some growing pains within that department but said the hiring of new employees has made member services improve dramatically. Educator retirements are up 21% for the September 2023–July 2024 as compared with the previous year. TRS members and stakeholders should be on the lookout in October for their annual statements. The same information can also be found in your MyTRS account.

The committee discussed the fund balance projection for TRS-ActiveCare through 2027 and the agency’s appropriations request to the Legislative Budget Board. TRS will need supplemental funds from the state and has asked for approximately $450 million for the next biennium to keep premium increases down. With the $450 million, rate increases are projected to be 9% for next year and then 3% the following year. The goal is to keep premium increases under 10% each year.

Below are the dates of 22 TRS-Care health fairs across Texas where TRS plan participants can learn about their 2025 benefits.

The Strategic Planning Committee rolled out proposed revisions to its areas of focus. The committee plans allow for process improvement, a look at leadership and talent effectiveness to reduce the need to hire more employees, and an emphasis on operational effectiveness to ensure a positive customer service experience for TRS members. The committee hopes to identify opportunities for improved productivity, process efficiencies, and performance monitoring.

TRS is slowly beginning to use artificial intelligence (AI). The slower adoption is intended to allow for responsible use while maintaining data security. TRS is dedicated to expanding its ability to engage with members wherever they are, including the addition of content delivery using Threads and Instagram. The agency is working toward a new and improved website, and the move to a new headquarters campus will be complete in mid-2025. A hard move date has not yet been set. A 2025 priority is to roll out the TRS-Care Dental and Vision plans as well as offer a limited one-time enrollment for TRS-Care Medicare Advantage health plans.

The Compensation Committee voted to recommend the full board approve the incentive investment and TRICOT performance pay plans and continue the executive director’s pay plan. (TRICOT is the TRS subsidiary providing TRS investment services in the UK and European Union.)

Full Board of Trustees activities

The full Board of Trustees convened Sept. 19 to discuss meeting minutes, the proposed calendar year, 2025 board meeting dates, and committee recommendations. The executive director gave an update including on the extension of the EY contract (formerly Ernst & Young) and the construction at “Alpha” and “Bravo,” the new TRS headquarters buildings. Alpha is complete, but Bravo is not expected to be complete until spring 2025.

The board received a TRS executive compensation review for four positions that report directly to the Board of Trustees: ombuds, chief audit executive, chief investment officer, and executive director. Board members discussed the compensation plans in executive session. Once the full board convened, trustees discussed administrative items, heard reports from the executive director and ombuds, and discussed selecting a new securities lending agent as well as a request for proposal (RFP) for a board investment consultant. The selection process will take approximately six to eight months, followed by legal negotiations and onboarding over summer 2025. The contract is expected to begin Sept. 1, 2025.

On Sept. 20, the board heard an update regarding an internal audit underway in the Audit, Compliance & Ethics Committee that will be complete by October. The committee will hear a full report at its December committee/board meeting. After finishing reports, the board went into executive session before hearing public comment from two retired educators and a former TRS whistleblower, who all said the state and program are “neglecting retired teachers,” citing a lack of ongoing cost-of-living increases, leading to retired Texas educators living at poverty level. The public commenters also highlighted the fact that not every retired educator received a cost-of-living adjustment (COLA). After hearing these comments, TRS published the following Q&A:

Public comment was followed by committee reports and action items. The board voted to adopt resolutions regarding the executive director’s performance pay plan and proposed continuation and adoption of the Investment Management Division’s and TRICOT’s performance pay plan. Trustees also adopted revisions to the audit charter, performance objectives for FY 2025, and the audit plan for FY 2025. The board also received an update on a core values refresh and mission statement review, 2024 Historically Underutilized Businesses (HUB) goals and actuals, and proposed 2025 HUB goals. Trustees accepted and voted to adopt to adopt the 2025 HUB goals. The meeting ended with a presentation on contract oversight, data governance and information security, and the TRS AI governance process.

Click here to review the entire TRS Board meeting book for more information.