Educators riled by proposals to cut TRS pension/health-care benefits
School employees across Texas are riled up over proposed cuts in Teacher Retirement System of Texas (TRS) pensions called for by bills that would raise the minimum age for retirement with full benefits to 62, while also reducing health-care benefits to retirees.
“A lot of teachers haven’t had raises in years, they’re being forced to teach more kids crammed into their classrooms after budget cuts, they’re dealing with a mind-numbing grind of meeting the demands of overtesting, and now they hear that some legislators are out to reduce their retirement benefits,” said Linda Bridges, president of Texas AFT, the Texas chapter of the American Federation of Teachers. “This unfair attack on their retirement benefits has truly rankled Texas teachers.”
The bills—SB 1458 in the Senate by Sen. Robert Duncan (R-Lubbock), and its companion in the House, HB 1884 by Rep. Bill Callegari (R-Katy)—were presented as substitutes to original bills in committee meetings Monday in the Texas House and Senate. Both would raise to 62 the minimum age for retirement with full benefits and decent health coverage. Pensions would be cut 5 percent for each year prior to age 62, even for employees who meet the rule of 80, and only catastrophic health coverage would be provided. (The current minimum age for retirement with full benefits is 60, with an exception for those hired before September 2007; retirement with full benefits also requires the employee to meet a rule of 80, meaning years of age and years of service must add up to at least 80.)
“These bills are headed in the wrong direction on several fronts,” Bridges said. “First, the bills would take already-earned benefits from educators who have been working under a promise of defined retirement rules, and second, they make it even harder to attract new people to a career that offers less pay than similar professions. After-the-fact pension cutbacks like this also are illegal in the private sector, and they are not acceptable for school employees in Texas.”
A grandfather clause in the bills (exempting employees who as of August 31, 2014, are age 50 or above, or have 25 years of service, or meet a rule of 70), would spare some but leave hundreds of thousands of dedicated school employees exposed to this take-away of earned benefits, Bridges said.
She said more than 4,000 school employees have already sent letters to their legislators objecting to the proposals within 24 hours after Texas AFT announced details of the bills.
Texas AFT proposes a different path for ensuring the pension fund remains secure and provides cost-of-living increases for retirees, who haven’t seen an increase in benefits since 2001:
• SB 1458/HB 1884 would cut benefits at a time when the real need of the pension fund is for a substantial increase in the state’s pension contribution. The state contribution was held to the constitutional minimum for many years since 1995, including the 12-year stretch from 1995 to 2007, while employees paid in to the pension fund at a higher rate. School employees should not now be asked to match a higher state contribution rate until the state maintains its own higher contribution for at least two years. A new contribution requirement for local school districts, as proposed in SB 1458/HB 1884, should only be considered after full education funding has been restored.
• These bills mention a theoretical, contingent cost-of-living increase for retirees at some indefinite time in the future. But no cost-of-living increase is assured. This hypothetical benefit “enhancement” cannot be used to justify cutting fully earned benefits here and now. You do not improve the health of the TRS pension fund by cutting pension benefits for those who have earned them.
• The legislature instead should provide immediate relief for retirees by making a substantial reduction in TRS-Care (health-care coverage) premiums. Unlike the contingent cost-of-living measure proposed in SB 1458/HB 1884, a reduced TRS-Care premium would increase the net amount of retirees’ annuity checks right away. The state should take any number of steps to generate additional revenue to allow the recommended premium reduction. For example, the state could eliminate or reduce the outdated “high-cost natural gas” exemption that costs the state treasury approximately $1 billion per year.
Learn more and take action at www.texasaft.org (click on “Take Action).