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Legislative Updates

Legislative Update No. 20, Session 80
By Tim Lee, Executive DirectorPrinter Friendly ||| Print as PDF

March 1, 2007

House Appropriations Committee to Hear Budget Recommendations

 

TRTA to Testify is Support of Higher Appropriations; Will Urge Implementation of a True Cost of Living Raise

 

The full House Appropriations Committee is meeting this morning (March 1, 2007) to discuss budget recommendations on the Teacher Retirement System (TRS).  At the core of those budget recommendations is the higher overall appropriation for the TRS pension trust fund that may trigger, at minimum, a 13th month check for annuitants this year.

 

The Legislature started this session with a new baseline budget recommendation for TRS of 6.4 percent. TRTA saw this as a very positive step forward for the pension fund and for the State Legislature, as it was the first time new money was recommended in a baseline budget in over 11 years.  The higher appropriation meant significant new money slated for TRS and the recovering pension trust fund.

 

The House Appropriations Subcommittee on Education further studied this issue and developed a new recommendation to increase the State contribution to 6.7 percent.  This recommendation could mean that TRS would receive enough State appropriation to now amortize their unfunded liability within a 31-year period.  That allows the fund to provide benefit increases for retirees; the first time this has been possible since 2001.

 

The benefit increase being considered is a 13th month check, or one additional pension check for retirees in the year.  The plan that is being presented today is not a capitated 13th check, or an amount limited to a certain amount.  This proposal would provide a full amount 13th month pension check for all TRS annuitants.  This is about $450 million being paid out to retired educators in the coming fiscal year.

 

So much of this information is very good news for the TRS pension trust fund and TRTA members who have not had a pension increase in six years. TRTA will, though, champion the idea that the best way to provide benefit increases for TRS annuitants is to pass a one-time cost of living adjustment (also called an ad hoc raise) this session.  The cost of living adjustment (COLA) is a permanent increase that increases the base pension of TRS annuitants over their entire retirement. 

 

TRTA will report back on the outcome of today’s hearing.

 

House Pensions and Investments Will Meet Today

 

The House Pensions and Investments Committee will also meet sometime today.  Though many (if not all) TRTA issues will move through this committee at some point, relatively little TRS issues will be considered today.  One issue, an adjustment to rules allowing certain employees to return to work without penalty to positions in community colleges, is on the list of bills being considered.  TRTA will watch this bill as it is laid out for the committee’s consideration and will testify, as needed, to ensure the integrity of the pension trust fund.

TRTA will report back on this committee’s actions, as well.

 

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