Some TCTA members have expressed concern about a note on the most recent annual statement from the Texas Teacher Retirement System, mailed in early January 2014.
A footnote to the “Interest Credited this Year” line reads:

“Five percent interested credited on average balance. Interest will change from five percent to two percent annually, prospectively for interest credited on or after September 1, 2014. Tax deferred until withdrawn.”

Although this may seem alarming, it will not affect the amount of your monthly check if you retire. It will affect employees who leave school employment without retiring and simply withdraw their accumulated contributions. The amount withdrawn will reflect a 5 percent interest rate earned on contributions through August 2014, and 2 percent on subsequent contributions.
This reduction to an interest rate that more closely correlates to current economic conditions was made in the major TRS bill that passed the Legislature in 2013.