Be Alerted to Updates to This Page

Enter your email address:

Subscribe to the Inside Line

99% of these updates are originally sent to Inside Line subscribers. If you aren't receiving the Inside Line and would like to, please click here.

Legislative Updates

Legislative Update No. 37, Session 79
By Tim Lee, Executive DirectorPrinter Friendly ||| Print as PDF

July 29, 2005

The debate over school finance reform has tested the nerves of many legislators who seem to have lost the desire to address any other pension issues this session.  This, of course, does not include passing a pay raise for judges that automatically increases legislators' retirement benefits that was done earlier this week (July 25, 2005); however, any similar increases to education retirees' pension seems unlikely during this session.

 

Legislature Committed to Paying For Longevity Pay Without Harming TRS

 

Many TRTA members made their voices heard and called in about longevity pay for active employees last week when the issue found its way into the vehicle bill for school reform.  Several legislators contacted the association and expressed their uncertainty as to why TRTA opposed this measure.  The central issue about longevity pay is that it costs the state about $34 (plus) million dollars in general revenue funds.  This new money could have just as easily been applied to the fund for investment purposes and may have had a greater actuarial gain for the system than being used for longevity pay. 

 

Some believe that longevity pay may have a minor positive actuarial impact; however, whether the actuarial gain is realized from a $34 million contribution increase to the pension fund or through the effects of longevity pay it will do very little to help the fund's solvency at this time. 

 

TRTA does not oppose benefit increases for active educators, but the legislature must consider the impact of those increases on the retirement system and pay for any benefit increase with a dedicated revenue source that does not negatively impact the pension trust fund. 

 

It appears that longevity pay may be in whatever final education bill passes and, for now, TRTA will modify its position from opposition to being neutral on longevity pay.  The association's opposition did raise legislator awareness on the issue and asserted TRTA's role as a pension watchdog for education retirees.  It is clear that many legislators listen to and respect their retired educator constituents. 

 

One comment in some TRTA member correspondence last week was the idea that the $34 million being used to pay for longevity pay may have been enough money to pay for a 13^th check for education retirees.  This idea is not true and TRTA members should know that many more steps to lower the pension fund unfunded liability will have to be taken before any pension increase is possible. 

 

Please contact TRTA at 1.800.880.1650 or email to trta@trta.org with any of your additional questions or comments.

 

Return to Legislative Updates