Texas House votes to advance bill to shore up teacher pension fund
The chambers will have to negotiate exactly who will pay to shore up the pension fund and how big the one-time additional check will be for retirees.
The Texas House voted Wednesday to advance legislation that would make the Teacher Retirement System pension fund financially healthy and give one-time checks to retired teachers.
By a voice vote, House members gave preliminary approval to Senate Bill 12, endorsing a more costly revised version of the teacher pension fixes that was originally proposed in the lower chamber. The House's version of SB 12, sponsored by state Rep. Greg Bonnen, R-Friendswood, would increase the amount the state contributes to the pension fund by 2% over the next five years and give every retiree a one-time check of up to $2,400 by September 2020, in addition to retirees' monthly checks of that amount.
"TRS cannot issue a badly needed cost-of-living increase or supplemental payment because the fund is not actuarily sound," Bonnen said, explaining the bill Wednesday. The bill still needs a final vote in the House — usually just a formality — before the chambers can form a conference committee and negotiate the differences.
(Update: SB 12 finally passed the House on Thursday 145-1, with state Rep. Jonathan Stickland, R-Bedford, casting the lone no vote. "I refuse to act like it’s more than a one time fix. Retired teachers deserve a permanent fix to their retirement, not another Band Aid. They aren’t political pawns," he said, explaining his vote on Twitter later.)
The Senate's version of the bill, passed unanimously in March, would increase the amount the state, school districts and current school employees pay into the pension fund over the next six years in order to make it financially healthy. It would give retirees a smaller "13th check" of up to $500.
The House has proposed spending $684 million in general revenue to increase the state contribution and $658 million from the state savings account for the one-time payment. The Senate has proposed spending $542 million from the state savings account for a smaller increase in the state contribution and a smaller one-time payment.
Bonnen, the brother of House Speaker Dennis Bonnen, acknowledged the House's more costly approach.
"The approach is nonetheless more responsible than infusing one-time payments of cash intermittently," he said.
According to a 2018 TRS study, the average person who receives TRS pension benefits is 71 years old and receives about $2,078 each month. Teachers pay 7.7% of their salaries into the pension fund, and school districts pay 1.5% of teacher payroll — a combined number that is dead last in the country among teacher plans.
Both House and Senate versions of the bill would make the pension fund actuarily sound, or financially healthy, meaning lawmakers would be able to improve a cost-of-living increase for pension payments under state law. But SB 12 would not provide automatic increases in monthly payments for retirees.
Quality journalism doesn't come free
Perhaps it goes without saying — but producing quality journalism isn't cheap. At a time when newsroom resources and revenue across the country are declining, The Texas Tribune remains committed to sustaining our mission: creating a more engaged and informed Texas with every story we cover, every event we convene and every newsletter we send. As a nonprofit newsroom, we rely on members to help keep our stories free and our events open to the public. Do you value our journalism? Show us with your support.Yes, I'll donate today