Tuesday, June 25, 2013

Retired Teachers and the 2013 Texas Legislature

                Hide all the women and children, the Texas legislature  is in session. O.K.,so this is an old and maybe not so funny, and besides the session is now over; so did  the Texas legislature  help or hurt  Texas retired teachers this session? It all depends on the viewpoint.                      

                               Just The Facts Mam,

  1. So if I may paraphrase Sgt Joe Friday, the protagonist of one of my favorite shows of the fifties, " Lets just look at the facts" from the recent legislature. The Legislature through Senate Bill 1458 , now signed into law by Governor Perry, gave a three percent cola to teachers who retired before 2004 .  This is, as most of us know, the first cost of living adjustment for any retirees since 2001. The adjustment is limited to a maximum of $100 per month. 

   2. The state contribution was raised from the minimum of 6 per cent  in 2012 and 2013 to 6.9 per cent in 2014 and 7.4 percent in 2015. 

    3. Active teachers contribution was increased. The contribution was increased to 6.4 percent in 2014, 6.7 percent in 2015, 7.2 in 2016 and 7.7 per cent in 2017.

    4. Active teachers who are not vested, five years or less of service, will need to wait until 62 to receive their full annuity. They will receive a 5 per cent reduction for each year they retire before 62. The rule of 80 remains in effect for those with five or more years in TRS.

                           The Good The Bad And The Ugly          

      OK, so there's no bad and even no ugly since I didn't post my photo, but there  are some parts of these changes that could have been much better , in the humble opinion  of this blogger.

     The Good: The cost of living increase for the teachers who retired before 2004 is certainly good. Many of these retirees have been struggling for quite some time as their spending power has decreased by one third since 2001 due to inflation. A second  good result of the recent changes is the increased contribution from the state will move the fund toward being "actually sound". More about this "actuarily sound"  in a moment.      

    The maybe not so good :  Though I see much good in this legislation as mentioned above I don't have as sanguine an opinion as my favorite organization , the Retired Teachers Association www.trta.org.  Some of my questions follow. Was the choice to base the cost of living on a year, such as 2004, the fairest choice. For example a superintendent who retired before 2004 and is receiving a six figure annuity will receive a cost of living adjustment while a secretary who retired in 2005 and makes $ 15,000 will not get an increase. Could not a more fair system have been found such as  a 2 percent increase for those who retired before 2004 and one per cent for those who retired after 2005. That way everyone would at least get some increase. Another maybe not so good is the increased contribution from the state. I agree that the increased state contribution is a good thing but what is preventing the state from returning to the minimum contribution in the next biennium as they have done before. And, by the way, we are told this will move the TRS fund toward being "actually sound". So I'm puzzled about this term " actuarily sound" since the TRS website www.trs.state.tx.us
says that the fund has sufficient funds to last until 2068. If that's not" actuarily sound "then what is ?

                                              Your Turn 

OK you've heard enough from me. I would love to hear your comments, agreements, disagreements and corrections Just scroll down below and click on comments and leave your thoughts. Thanks in advance.

  Just for fun trivia: Who sang the 1950's hit song" How Much is That Dogie in the Window" . If you answer correctly, I unfortunately can't give you a prize, but you'll know you're smarter than a fifth grader.