Thursday, January 20, 2011

The Texas Legislature and Teacher Retirement: Hold That Line?

                     Hold that line. Most of us in the teaching profession have heard that old cheer, which basically means to keep your loss of yardage to a minimum. Given the current financial turmoil in the state budget, maybe “hold that line” should become our lead cheer. Let me explain.


                                 The Budget Shortfall

                 Most of you are aware that the state of Texas Gone to Texas: A History of the Lone Star State currently faces a looming budget deficit of between 20 and 27 billion dollars. State law forbids the state from running a budget deficit and, unlike the U.S. government ,Texas can’t just print money so  cuts across the state budget are almost inevitable. So how does that affect retired teachers?

               A recent update on the TRTA website http://www.trta.org/viewupdate quotes Carl Eiland as saying that the state will probably cut the state’s contribution to the TRS fund from to the minimum amount; 6 percent from the current 6.6 per cent. This would mean the TRS fund would be further away from being fully funded and reduce the chances of retirees getting a cost of living (COLA)  in the near future. So I believe our number one objective in the current state legislature  should be convincing the state legislature to keep their contribution to at least the current state contribution of 6.6 per cent. In other words “hold that line”.


            Another piece of bad news in the TRTA update linked above, is that the state may reduce the contribution to the TRS Care fund from 1 percent to .05 percent. This will almost certainly mean a premium increase for those who are either relying on TRS Care as their main  health insurance and those who , like myself, are on Medicare and have TRS Care as our supplemental insurance. A premium increase in combination with a continued absence of a COLA would be a double whammy. So my second priority would be to persuade the legislature to keep the state contribution to TRS Care to the current 1 percent. In other words “ hold that line”.



                                    Federal Priorities


             The need to “hold that line” on the state level might give us more of a chance to advance the ball on some Federal legislation that could be helpful to retired Texas teachers. One helpful step world be for the Congress to allow TRS Annuitants to be taxed on their income after health insurance premiums are withheld. Many of you probably remember that you were taxed only on the amount of your salary after medical insurance, TRS withdrawals and other exceptions, while working full time. Current Federal law does not allow the same advantages for TRS retirees. TRTA has long pushed for legislation that would allow this tax advantage for retirees. As an example of how this would be advantageous , if a retiree was drawing a monthly pension of $ 3000 and paying $450 for TRS Care , he/she is currently taxed on the entire $3000, but under the change mentioned above a retiree would be taxed only on the amount after TRS Care premiums are withdrawn, or, in other words, the $3000 minus the $450. The taxable income would now be $2550 rather than $3000; a modest but still helpful benefit.  


          Another change in Federal law that would be helpful for many TRS  retirees would be to r remove the “off set” provision on social security. This has been a long term fight but probably one still worth fighting, especially since advances at the state level will be most difficult.


                                              Summing Up


     1, The chances of getting  a COLA, given the states budget problems are probably slim and none and slim just left town. So should we completely give up on the COLA this session? No, we should continue to educate the legislature about the need for a permanent COLA, and make sure they are aware that retirees have received no cost of living adjustment since 2001 ;but we should lower our expectations and also realize that we can’t just always  only ask’ what can our state do for us” (  Hard to believe it’s been 50 years since JFK made that statement in his inaugural address)


    2. We should instead make our main goal this session to hold onto what we already have by convincing the Legislature to keep the state contribution to the TRS fund at 6.6 percent and the TRS Care contribution at I percent . Again “ Hold that line”.

   3. So what can we do? Support our major voice by joining TRTA if you haven’t already done so and keeping yourself and your legislators informed.




                                           YOUR TURN



Please leave your thoughts and comments by going to the  " post a comment"  page at the bottom of this blog, click and leave your thoughts. Without your contribution there is no purpose to this blog. Thanks for reading.                                                        
 

13 comments:

Anonymous said...

I totally agree with the "Hold that line" emphasis. I, too, would love to be taxed on income in retirement after health insurance was deducted. The WEP/GOP repeal would be an additional priority, and it is high time to have a permanent COLA in place. I have already postponed retirement by three years, and I really don't want to have to teach another seven. If you hear anything about retirees being "grandfathered" in if they retire by Sept. 1, 2011, please let me know.

rich said...

Anonymous,

Thanks for visiting. I hope in the future you'll leave me your name. Yes I think all we can do this year is " hold the line'. Your comments sound like you're a Texas teacher. Have you been to Austin to check with TRS about your retirement situation. I have found they are very helpful and that is the first step to a sound future retirement. Take care
Richard

Anonymous said...

I am retired and my Medicare and teacher retirement insurance allows my husband to have quality care for his Parkinson.Like federal employees who were not concerned about national insurance until they discovered their own insurance was involved, voting teachers of Texas are the largaest block of people in the state and need to be "holding that line" for quality of life for all retirees. HOW did these folks get to Austin without knowing about us? Email each and every representative in the state to let them know how we feel. We must hold the line or be moved one more notch down the ladder of professionals in Texas. Without us the "government" would be illertate, so let them know we want them to represent us not special interest.

rich said...

Anonymous,

Thanks for reading and commenting. I hope both you and your husband are doing well. I fear we are about to take a real large premium increase in our insurance. Lets keep the pressure on our legislators.


Richard

Jamie said...

Our US State Rep., comment to a group in Cameron, Tex, that he didn't see the WEP/GOP being repealed anytime soon. Only teachers in 13 state are involved. With the climate in Washington today, it's an expense that for some legislators sadly doesn't matter. The climate in in the House of Rep's in Austin is criminal. The word is that if our TRS care is not funded at 1% this biennium, it will run out of funds by 2017. I suspect it would run out before then with number of teachers that will retire in the next 2 years. In our county we have teachers waiting in lines at 2 different food banks to get food. Teacher salaries in this county are some of the lowest in the State so you can imagine what their retirement is like. We have many retirees here too that are in their 80's and 90's. Rep. Dr. Charles Schwertner (Ortopedic surgeon) looked me in the eye and said he could not be an advocate of teachers and the elderly until the budget was cut. The 30+ retired teachers in the room with me were shocked. The moral heart of government is fading away as is our society. It is hard to stay optimistic. But, we must.

Melissa said...

As a fairly "young" teacher, I have not paid much attention to my retirement until recent months with the budget cuts. I am a principal and have 16 years of experience in education in Texas. I am 38 years old. I have been reading that legislators may be changing TRS-- but would that affect ME if I am already in the system? How can changes keep being made to the system that I bought into 16 years ago and keep reducing my benefits or extending the number of years I have to work? How is that legal? And, if the system changes only apply to new hires, how can we possibly attract new teachers to a system that is so completely broken?

Melissa said...

Are legislators really looking to reduce the amount of state support for TRS? (from 6.6% to 6.0%) And would this affect all teachers or only new hires? I am young enough that I have not given retirement much thought, but am concerned. I have already seen the formula change once in my 16 years as a Texas educator and am concerned that my retirement is dwindling away before my very eyes! How can we attract new teachers to a system that is so broken?

rich said...

Melissa,
Thanks for visiting the blog.I'm glad to hear you're paying attention to the debates about retirement for, though retirement may be far off for you, as you've observed, decisions made now will affect your future retirement situation. The Texas legislature has the power to change the future retirement situation at any time. They are even now considering changing the teacher retirement system from a defined benefits plan where your benefits are guaranteed to a defined contribution plan where you will be responsible for investing your money. The best action you can take is to keep yourself informed,urge your colleagues to also stay informed, and let your state representative and senator know your opinions. Again thanks for visiting the blog and I hope you'll drop by again.

Anonymous said...

I have never seen better than this site.

JKeelan said...

I have been teaching for six years in Texas, and I have wondered about teacher retirement myself. I have several friends debating on retirement or working until their 70. After reading this blog, I have learned so much more than I had known about the system. If I ever say anything about retirement I hear you are so lucky, because social security is unpredictable. Although learning that 2017 if the contributions were 1% than there would be no money as well. How do we educate young staff members, and teachers who are unsure about the retire system?

J.Keelan said...

Jamie,
I have learned alot about how 1% can cause teachers to fear that their hard work and retirement could be gone! This is greatly important for young teachers to create a community to share expetise of these topics. Please share more information? Do you know what we will do about teacher retiring at age 55? J.Keelan

J.Keelan said...

Jamie,
I have learned alot about how 1% can cause teachers to fear that their hard work and retirement could be gone! This is greatly important for young teachers to create a community to share expetise of these topics. Please share more information? Do you know what we will do about teacher retiring at age 55? J.Keelan

J.Keelan said...

Jamie,
I have learned alot about how 1% can cause teachers to fear that their hard work and retirement could be gone! This is greatly important for young teachers to create a community to share expetise of these topics. Please share more information? Do you know what we will do about teacher retiring at age 55? J.Keelan