Texas Captiol

AUSTIN — Lawmakers this week heard public testimony on various ways the state could address stagnant pensions for retired teachers.

The Texas Senate Finance Committee and House Pension, Investments and Financial Services Committee separately discussed bills that target teacher pensions, an item that has been named a priority in both chambers this session.

On Wednesday, members of the Senate committee discussed Senate Bill 10, which would provide a cost-of-living adjustment to all eligible retirees through the Teachers Retirement System, or TRS.

Specifically, the bill would offer a 4% cost-of-living adjustment for those who retired prior to Sept. 1, 2013, and a 2% cost-of-living adjustment for those who retired between Sept. 1, 2013, and Jan. 1, 2022.

It also would provide a $7,500 stipend for eligible retirees who are 75 and older.

State Sen. Joan Huffman, a Houston Republican and author of the bill, said the total cost would be $4.717 billion. Of that amount, $1.394 billion would go toward stipends and $3.3 billion would go toward cost-of-living adjustments.

“I know this was a significant financial commitment from the state, but many TRS retirees have been struggling financially for far too long,” Huffman said. 

Huffman added that on average, TRS annuitants earn $2,174 a month, with around 29.7% of retirees receiving less than $1,000 per month. Approximately 96% of public education employees are not covered by Social Security, and TRS is the sole source of their retirement income.

“It’s important to understand these are not lavish retirement benefits, but they are critical to hundreds of thousands of Texans and their family,” she said. 

Although advocates said they are thankful that lawmakers are discussing retired teacher pensions this session, they fear that the proposed cost-of-living adjustments won’t be enough to make a significant difference.

Eli Melendrez, with the Texas American Federation of Teachers, said inflation has reduced buying power by 13%. 

Portia Bosse, with the Texas State Teachers Association, said a poll taken by the association found that most members prefer a permanent cost-of-living adjustment rather than a one-time 13th check, a position favored by Lt. Gov. Dan Patrick.

“We're extremely appreciative for considering a TRS COLA, and on behalf of our members, we just want to advocate for the best plan for our retired educators,” Melendrez said.

The House version to address teacher pensions — House Bill 600 — would offer a one-time 13th check to retired teachers over the age of 70 of $5,000.

It also would adjust cost-of-living increases according to a step system based on years served and retirement date. 

But where the House version differs from the Senate bill is the installation of a gainsharing option.

Beginning in fiscal year 2028, retirees would see their pensions grow on a regular basis based on how well the fund does.

For example, in a booming economic period, pensions could see a 2% gain year over year. In economic downturns, it would see a guaranteed 1% gain, per the bill.

Greg Bonnen, a Friendswood Republican and author of the bill, said this would provide teachers with a guaranteed annual inflationary adjustment without having to wait for lawmakers to act.

“The goal here is to do those two things, which is to get out of this loop where the retirees are stuck at a fixed monthly check until (lawmakers) take action and have a long-term plan to actually make this permanently sound,” Bonnen said.

Monty Exter, with the Association of Texas Professional Educators, said because the House bill includes an ongoing measure for retired teachers through gainsharing, the organization favors the House bill over the Senate bill. 

“The fact that this has an ongoing COLA (based on) years retired, in addition to the fact that the bill makes a promise by the Legislature to keep the fund actuarially sound at state expense, those things are huge,” Exter said.

Senate Bill 10 will go before the full Senate for a vote. House Bill 600 was left pending in committee.

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