The TRS Board of Trustees is meeting virtually this week. While only a few action items were considered – primarily a member-friendly revision to how certain divorce orders are calculated – the Board discussed several issues of interest.

Facilities planning

Executive Director Brian Guthrie briefed trustees on the agency’s research into office space planning. Guthrie’s goal is to move the Investment Management Division – currently leasing office space in downtown Austin – and the rest of the agency under one roof by 2025. The most cost efficient option appears to be the building of a new facility outside of the downtown area, though staff researched the possibility of renovating the current office building. Trustees hope to make a final decision at their December meeting. 

Budget issues

The TRS Legislative Appropriations Request is due next week. This is the document that the agency submits to budget writers outlining needs and wants as the 2021-22 budget is developed. In the base budget – which is akin to the agency’s “need” list, to continue current levels of service – TRS has assumed that the legislature will continue the scheduled increases to contribution rates for the pension fund. These increases were approved in 2019 and are crucial to the continued health of the fund. Although the legislature will be searching for cost savings and revenue generation in the difficult session ahead, TRS leaders do not anticipate that pension fund contributions will be a target.

The base budget also includes funding for a new regional office in El Paso.

Fund status/investment returns

Despite concerns about the economy and global markets, the pension fund’s investments finished the fiscal year with a projected return of about 6% for the fiscal year (which ended Aug. 31). The current market value of the fund is $164.8 billion, compared to $157 billion in August 2019. The 6% return, while not meeting the benchmark rate of 7.25%, may be high enough to ensure that the fund remains actuarially sound heading into the 2021 legislative session.

Retirement rates

The Benefits Committee was briefed on retirement rates. The figures are somewhat confusing, in part because of disparities between the number of retirement estimates prepared (potential retirees often request multiple estimates) and the length of time between beginning the paperwork and actually retiring (a member can be in “pending” status for up to 12 months). The most recent figures available show that retirement rates were significantly down for the 2019-20 year, which was a surprise to many who anticipated that teachers would leave in larger numbers due to COVID-19 concerns. However, activity has increased in the past few weeks, and we will report on any new information throughout the fall.

Benefits counseling concerns

The increase in workload comes at a difficult time for the benefits counseling call center, which is critically understaffed. TRS has found it difficult to maintain a full staff in this department, but continues to work on hiring new employees. The average time a member must wait to be connected with a counselor is more than 30 minutes; that figure includes time waiting for a call back, if the member chose that option.

Health insurance enrollment

Staff briefed the Board on member response to the new types of health insurance coverage included in TRS ActiveCare (Primary and Primary+). About 40% of participants enrolled in one of the new plans, and there is a slight decrease in enrollment in the high deductible plan, which has in recent years been the most popular plan due to its lower premium costs.