Take action now! Sign our e-letter urging legislators to vote NO on HB 3!
This coming Tuesday, the House Public Education Committee will hear testimony on House Bill 3 (HB 3), and much of the focus has been on how school vouchers would drain funding from public schools. But there’s another major consequence flying under the radar: the impact on the Teacher Retirement System of Texas (TRS).
TRS is the backbone of retirement security for Texas educators, ensuring that after years of service, our public school employees can retire with dignity. The system relies on active public school employees contributing to the fund, but HB 3’s push to shift students (and funding since in Texas the funding already follows the student) away from public schools could weaken TRS, putting future pensions at risk.
So, what does this mean for Texas educators? Let’s break it down.
How does TRS stay financially stable?
TRS is a pension system funded by contributions from public school and higher education employees and the state. Because Texas law requires all full-time public school employees to participate, the system maintains a steady stream of funding. As long as enough school personnel are paying in, TRS remains stable.
So, if more teachers and support staff are laid off in public schools because state money is funneled into private school vouchers, TRS takes a hit. Fewer active contributors mean less funding for the system, increasing the risk of long-term financial instability.
How would HB 3 shrink the TRS funding base?
HB 3 proposes using public tax dollars to fund private school tuition. As more students leave public schools and districts lose funding, districts could be forced to cut teaching positions and school support positions, shrinking the pool of employees paying into TRS. Fewer school employees contributing to the retirement system could lead to the fund becoming actuarially unsound. Even a one percent change in the active school personnel population could negatively affect the system.
What’s happening in the Texas Legislature right now regarding TRS and vouchers?
The House Committee on Pensions, Investments & Financial Services (PIFS) is currently examining how voucher programs could impact TRS funding. While proponents of HB 3 argue that the financial effects will be minimal, public school advocates and pension experts warn that a drop in school employees could threaten the entire fund. Some legislators have proposed additional funding to offset potential losses, but no concrete solutions have been introduced to fully protect TRS. This makes it even more important for educators to speak out now.
Could this lead to higher costs for active employees or benefit cuts for retirees?
Potentially, yes. TRS depends on contributions from active public school and higher education employees and state funding to pay out benefits. If fewer people are paying in, the system’s solvency is at risk. This could force the state to:
- Increase contribution rates for current teachers (reducing take-home pay).
- Reduce pension benefits for retirees.
- Seek a taxpayer-funded bailout down the line.
Does HB 3 offer any protection for TRS?
No. The bill does not include any provisions to offset lost TRS contributions. There’s no requirement for private school employees to contribute, nor is there a funding mechanism to replace what public schools would lose.
Have other states run into pension issues because of vouchers?
Yes. States like Arizona and Wisconsin, which aggressively expanded voucher programs, saw public pension shortfalls as fewer teachers contributed to their retirement systems. If Texas follows the same path, TRS could face similar financial instability.
What can educators do to protect TRS?
Lawmakers need to hear from all school and higher education employees and retirees who depend on TRS because HB 3 isn’t just bad for public schools—it’s bad for their futures.
🔗 Take action now! Sign our e-letter urging legislators to vote NO on HB 3!
By standing together, we can fight back against harmful policies that threaten our schools, our students, and our retirement security.