Our Advocacy Never Stops: Updates on Your Right to a Secure Retirement 

Texas AFT continues to be busy at the Texas Capitol and before our state agencies advocating on a variety of issues. Continuing our coverage from last week’s Hotline, today we will focus on the Teacher Retirement System of Texas (TRS) joint budget hearing, interim House Pensions, Investments, & Financial Services Committee hearing, and TRS board meeting that happened last week. 

First, the Teacher Retirement System of Texas (TRS) held its joint budget hearing on Wednesday, Sept. 18. State agencies are required to participate in these joint budget hearings under state law, which provide them with an opportunity to present their Legislative Appropriations Requests (LARs) in a public setting. LARs outline an agency’s funding needs, priorities, and goals for the next two fiscal years, and they play a central role in the state budget drafting process. These hearings are led by staff from the Office of the Governor’s Budget and Policy Division, Legislative Budget Board (LBB), and the Texas House and Senate. 

In TRS’s LAR for the 2026-2027 biennium, there are a few requests that directly affect retired educators and active school employees that are not required under state law, such as the state’s retirement contribution rate of 8.25%, as mandated under current law. 

The LAR includes a request for $107.4 million to help TRS manage TRS-Care premiums, the health insurance program for retired educators. TRS-Care Medicare Advantage premiums were recently reduced by an average of 45% for most Medicare-eligible TRS retirees, and these premium decreases will be maintained. Further, the LAR projects that TRS-Care Standard premiums – the health insurance program for TRS retirees who are not eligible for Medicare – will remain at the same level they have been at since 2018 with this additional funding. 

TRS also administers a health insurance program for active school employees called TRS-ActiveCare. The LAR includes a request for an additional $450 million to keep TRS-ActiveCare premiums below 10% in each year of the 2026-2027 biennium in keeping with TRS’s long-term objectives. However, TRS warned that this additional funding may not be enough to manage TRS-ActiveCare premium increases if some of the school districts that have chosen to opt-out of TRS-ActiveCare seek to return and thus increase enrollment in the plan. 

Texas AFT submitted testimony for the TRS joint budget hearing urging the state:  

• to pass legislation establishing an automatic cost-of-living adjustment (COLA) tied to inflation, as outlined in our Educator’s Bill of Rights  

• to provide the supplemental appropriations necessary for TRS to manage TRS-ActiveCare premium increases 

• to monitor the possible return of school districts to TRS-ActiveCare and prepare to provide additional supplemental funding if necessary to keep annual premium increases below 10% 

Texas AFT Retiree Plus member Pamela Duck-Davis testified about the need for an automatic COLA for retired Texas educators at the House Committee on Pensions, Investments, & Financial Services meeting. Afterward, she spoke with two staunch allies of educators’ right to a secure retirement: Rep. Salman Bhojani (D-Euless) and Rep. Mihaela Plesa (D-Dallas). 

Next, the House Committee on Pensions, Investments, & Financial Services (PIFS) held an interim committee hearing on Thursday, Sept. 19. The committee heard testimony on two issues that bear directly on educators’ right to a dignified, secure retirement: implementation of the 2023 cost-of-living adjustment (COLA) legislation and the impact of environmental, social, governance (ESG) policies (banks and financial firms considering ESG factors when making investment decisions). 

Senate Bill 10 and House Joint Resolution 2 were the major bills that defined the recent COLA and put it before voters for approval in November 2023. SB 10 also provided a one-time stipend to retired educators based on their age. TRS has found the following in its analysis of the COLA provided under SB 10/HJR 2: 

• Over 285,000 stipends have been issued with $1.6 billion provided by HB 1. 

• More than 400,000 eligible annuitants had their payments adjusted with $3.4 billion provided by HB 1 (the biennial budget for 2024-2025). 

• 205,000 retirees did not receive a stipend due to ineligibility. 

• 111,000 retirees did not receive the COLA due to ineligibility. 

• 86,589 retirees did not receive either the stipend or the COLA. 

While our members have expressed gratitude for the modest and long-overdue COLA (2% to 6% COLA depending on length of retirement) and they worked hard to win voters’ approval of it in 2023, it is not enough considering the significant inflation that has accelerated the erosion of their benefits in recent years. Texas AFT continues to advocate for the establishment of an automatic cost-of-living adjustment (COLA) tied to inflation. This would ensure that retirees’ benefits keep pace with rising costs and maintain their purchasing power over time.        

Rep. Salman Bhojani (D-Euless) advocated for TRS retirees in the hearing, asking an invited witness about what it would look like for Texas to establish an automatic COLA. This question sparked a robust discussion of work led by retiree advocates together with Chairman Greg Bonnen (R-Friendswood) last legislative session, which resulted in House Bill 600, his companion bill to SB 10. HB 600 included an automatic COLA tied to the performance of the fund and some safeguards to ensure its sustainability and health. There is still much work to do, but it is encouraging that bipartisan conversations about the need for an automatic COLA are already underway. 

The House PIFS Committee also heard extensive testimony about the state’s anti-ESG laws and the relationship between ESG policies and fiduciary duty. Texas passed legislation in 2021 prohibiting state agencies and local subdivisions from doing business with banks and financial firms that “boycott” firearms manufacturers (SB 19) or oil and gas companies (SB 13). SB 13 is currently being challenged in court for violating the first amendment right to freedom of speech. 

SB 13 has also been found to have negatively impacted workers and taxpayers. According to a study earlier this year from the Texas Association of Business Chambers of Commerce Foundation, the state’s blacklist cost Texans $668.7 million in lost economic activity, more than 3,000 jobs, and $37.1 million in state and local tax revenue. While engaging with the invited witnesses, Rep. Mihaela Plesa (D-Dallas), Rep. John Bryant (D-Dallas), and Bhojani asked critical questions highlighting the harmful impact of this anti-ESG legislation on our state’s retirees, workers, and taxpayers. 

Texas AFT Retiree Plus was well-represented last week. Pamela Davis-Duck, a 30-year retired educator from Houston, visited the Texas Capitol to testify in the PIFS committee hearing. Pamela explained how she did not receive the 2023 COLA because she retired after the cut-off date. She also shared with committee members that TRS retirees are grateful for the modest and long-overdue COLA, but it is not enough, tying benefit erosion to the very personal implications that retired educators have experienced in their own lives – losing their homes, reentering the workforce, struggling to meet bills, and making other sacrifices just to survive. Advocating for the right to a dignified, secure retirement, Davis-Duck called on the Texas Legislature to establish an automatic COLA tied to inflation. She also urged the members of the committee to keep politics out of TRS’s investment decisions and allow TRS to fulfill its fiduciary duty to TRS retirees. 

Finally, the TRS board of trustees held its meeting on Thursday, Sept. 19, and Friday, Sept. 20. Davis-Duck was joined by fellow Texas AFT Retiree Plus members Rita Runnels and Phyllis Ruffin at the TRS board meeting.  

Ruffin received the third-most votes in the May 2024 election in which educators voted to nominate three retired member candidates to serve on the TRS board of trustees. The top three names were then sent to Gov. Greg Abbott, who must choose one TRS retiree from the list to appoint. Despite this election happening several months ago and Abbott’s selection expected to occur in June, the governor has yet to select a retiree for appointment. Phyllis once again testified at this meeting about educators’ right to democratic representation and urged the board to fulfill its obligations in a timely manner. 

At the TRS board meeting, TRS shared that it projects an end-of-year return of 12.7%, far exceeding the 7% benchmark. The funded horizon of the TRS Pension Trust Fund is an estimated 29 years, lower than the 31-year threshold that is used to determine actuarial soundness. 

With the TRS Pension Trust Fund achieving a 12.7% return (exceeding the 7% investment return benchmark) and reaching a market value of $203.7 billion as of June 2024, and given the fund’s actuarial soundness, the fund is well-positioned to support an automatic COLA without jeopardizing its long-term stability. It is time for Texas to join the significant majority of states that provide their retired educators and school employees with automatic COLAs. 

One of the recurring themes in the conversations held on retired educators’ pensions last week was the impact of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) on restricting their access to Social Security. 

AFT members across the country have led the effort to urge Congress to repeal these harmful provisions. In some good news, the bipartisan coalition pushing the Social Security Fairness Act secured enough votes last week to force a vote on the bill in the House. 

Reps. Abigail Spanberger (D-VA) and Garret Graves (R-LA) are leading a bipartisan effort in the U.S. House of Representatives to eliminate the WEP and GPO. They are using a discharge petition, which requires signatures from a majority (218) of the 435 House members to force a vote, bypassing normal procedures. Spanberger and Graves reached 218 signatures last Thursday. Unfortunately, the vote may not be held until after Congress returns from recess in mid-November.