Bills have been filed in both the House and the Senate to increase contributions to the TRS pension fund to make it actuarially sound. The fund is currently stable, but the Aug. 28, 2018, valuation of the fund determined that it would take more than 80 years to pay off the system’s liabilities (retiree benefits), given its anticipated income (contributions and investment returns). The target for the funding period is under 31 years, and the lower the number, the better. The legislature cannot pass a benefit increase (such as a cost-of-living adjustment) that would cause the funding period to rise above 31 years.

HB 9 was filed by Rep. Greg Bonnen earlier this week. It raises the state’s TRS contribution from 6.8 percent of total school payroll to 8.8 percent. It also provides for a 13th check for retirees – a one-time bonus in the amount of the retiree’s normal TRS payment, but capped at no more than $2,400.

SB 12 by Sen. State Affairs Chair Joan Huffman, also filed this week, would increase state, district and member contributions. The state’s contribution would rise from 6.8 percent to 8.25 percent; the district contribution from 1.5 percent to 2.0 percent, and the active member contribution from 7.7 percent to 8.25 percent. The increases would be phased in over several years. A 13th check is included but capped at $500.

Both bills aim for a near-immediate improvement of the fund’s actuarial funding period to under 31 years, but other factors (such as a teacher pay raise, lower-than-expected investment returns, etc.) can affect the funding period. An increase in the contributions is a stable approach to ensuring the long-term health of the TRS pension fund, and provides some hope for increases in retiree benefits – such as an ongoing COLA, rather than only a one-time bonus – in the near future.