While the final valuation of the TRS pension fund for fiscal year 2014 won’t be available until November, TRS Executive Director Brian Guthrie informed the TRS Board of Trustees at the board's September meeting that the fund should continue to be actuarially sound for the upcoming year.

This is important, and apparently something of a surprise to Guthrie, who had been concerned that despite recent legislative changes and the generally improving health of the economy, past investment losses would continue to plague the fund’s financial well-being. But investment returns of more than 16 percent for the year (double the fund’s 8 percent benchmark/goal) more than made up for the losses of prior years. The fund totaled more than $130 billion as of Aug. 31, 2014.; for perspective, the annual budget for the entire state of Texas is approximately $100 billion.

The continued actuarial soundness of the TRS pension fund will be crucial going in to the 2015 legislative session, as it will help to disarm any potential attempts to restructure the system.

Instead, as TCTA has noted in previous reports, legislators are expected to turn their attention to the health insurance programs for retired and active public school employees. TRS-Care (retiree health insurance) is projected to be insolvent by the end of the 2014-15 fiscal year if legislators do not take action this session, while premiums for active employees (both those in TRS-ActiveCare and those in district-sponsored plans) are increasingly unaffordable.

TRS has worked on analyses and recommendations regarding the insurance programs throughout the last several months and will dedicate the board’s October 2014 meeting to a discussion of the studies. TCTA will have an opportunity to review the studies and provide feedback to the board and staff reflecting our members’ concerns.