84R2449 BK-D

By: Keffer H.R. No. 281

R E S O L U T I O N

WHEREAS, Established through an amendment to the Texas Constitution in 1936, the Teacher Retirement System of Texas provides for the well-being of retired employees of public education institutions in the state; and

WHEREAS, TRS delivers lifetime retirement benefits to retired school personnel in the form of a defined benefit plan; through this plan, a participant's monthly pension is calculated based on the person's age at retirement, years of service, and highest average salary, rather than the balance in the individual's account; funds are managed by investment professionals to protect against market fluctuations; and

WHEREAS, An alternative that has been offered--a defined contribution plan--would require TRS participants to make payments into a retirement account, with possible contributions from their school districts, and to take responsibility for investment decisions while assuming the risks that investing entails; this places an added burden on participants that can lead to greater uncertainty, as their pension funds are vulnerable to unfavorable market conditions; moreover, instituting a defined contribution plan would eliminate the protection that TRS currently grants, since benefits would cease if a retiree's account balance were depleted; and

WHEREAS, The proposed defined contribution model does not allow for any beneficiary coverage and might not allow any insurance plans; of the 330,000 retirement recipients served by TRS, only a small percentage worked in a school system that paid into social security at any time in their careers, and the choice of school districts to forgo social security benefits was made with the expectation that the state would safeguard employees' retirement assets; and

WHEREAS, Most retired teachers did not earn large sums of money during their working careers, but rather worked for the love of teaching; for a great majority of these men and women, the monthly annuity from TRS is the only source of funds; were these retirees to outlive their benefits under a defined contribution plan, they would be left with no means of replacing the lost income; and

WHEREAS, Recognizing the significance of this issue to the interests of older Texans, the 15th Texas Silver Haired Legislature has adopted a resolution endorsing the continuation of the TRS defined benefit plan; and

WHEREAS, Teachers play a proud and vital role in nurturing the leaders of tomorrow, and after many years of service, they deserve all the security and peace of mind that the State of Texas can offer them; the defined benefit plan administered by the Teacher Retirement System remains the most reasonable option to provide this assurance to the educators of Texas, and it is imperative that it receive the state's full support; now, therefore, be it

RESOLVED, That the House of Representatives of the 84th Texas Legislature hereby affirm its support for the defined benefit plan for retired participants of the Teacher Retirement System of Texas; and, be it further

RESOLVED, That the chief clerk of the house forward official copies of this resolution to the executive director and the board of trustees of the Teacher Retirement System of Texas.