Battle Brewing Over Texas Public Pensions
Texas could be gearing up for its own Wisconsin-style grudge match over public employee benefits.
A group of high-powered Houston business leaders is starting a statewide campaign to overhaul retirement for future teachers, firefighters, police officers, judges and other state and local government workers.
"I think the state needs to get the hell out of this (pension) business completely," said lawyer Bill King , who is forming Texans for Public Pension Reform with others from the Greater Houston Partnership, an über-chamber of commerce with business members representing $1.5 trillion in assets...
"They don't have to destroy a system that works," said Keith Brainard, research director of the National Association of State Retirement Administrators.
He said government pensions provide retirement security for millions of Texans in a cost-effective manner for taxpayers. Research by the Center for Retirement Research at Boston College shows that professionally managed pension funds produce better investment returns than 401(k)s and cost less to administer.
Read the entire article here: http://www.statesman.com/news/news/state-regional-govt-politics/battle-brewing-over-texas-public-pensions/nRdyY/
Don't mess with Texas pension funds - Austin American Statesman - 9/19/2012
Funding crises have hit public pensions in other states, and prompted structural changes. But here in Texas, the retirement funds for teachers and state workers are in good shape. Changing public worker benefits is all the rage, but there is no reason to change Texas' state pension funds.
That's the clear takeaway from two reports issued this month and discussed last week by the Texas House Committee on Pensions, Investments and Financial Services. As the American-Statesman's Kate Alexander reported, several members of the committee, including key Republicans such as state Rep. Rob Orr of Burleson, who has hopes of chairing the panel during next year's legislative session, see little reason to change the state's public pensions.
Standing ready to fight for change are other Republican lawmakers who look upon anything modified by the word "public" with disdain. Driven by conservative groups such as the Texas Public Policy Foundation, they want to do away with guaranteed monthly retirement checks for public employees and push them into a 401(k)-style plan.
The two funds at issue here are the Teacher Retirement System and the Employees Retirement System. The Legislature in 2011 ordered each fund to report on its long-term health ahead of next year's legislative session.
The Teacher Retirement System released its report Sept. 1. The $110 billion fund said it is healthy enough to cover its benefit obligations through 2075. The fund does face a long-term liability of $24 billion, but it says that a switch to a 401(k)-style plan would increase that liability to $35.7 billion.
Further, TRS says, 92 percent of retirees would receive less money from a defined-contribution, 401(k)-type plan than they receive from their defined-benefits plan...
The Employees Retirement System, with 137,000 members, has enough to pay its promised benefits for the next 70 years, according to its report, issued Sept. 4. Its findings were similar to those reported by TRS: a defined-contribution plan would cost much more and would not erase ERS's unfunded liabilities, which can be met by modestly adjusting the current plan.
The findings in these reports are not surprising. Pooled investments such as pension plans generally have been shown to operate more efficiently than individual-based, 401(k)-type plans. Not only are costs lower, but also the promise of a defined pension contributes to a more stable workforce, and stability saves money...
Still, expect attempts to change the retirement plans for teachers and state workers during next year's session. "There is a high likelihood that changes will be made," Talmadge Heflin told Alexander in August. Heflin, who served in the Texas House from 1983 to 2005, is director of the Texas Public Policy Foundation's Center for Fiscal Policy...
Any legislative battle to change the Teacher Retirement System and the Employees Retirement System will be an unnecessary one. Neither faces a crisis. Legislators should leave them alone.
Read the entire article here: http://www.statesman.com/news/news/opinion/dont-mess-with-texas-pension-funds/nSLXC/
That's the clear takeaway from two reports issued this month and discussed last week by the Texas House Committee on Pensions, Investments and Financial Services. As the American-Statesman's Kate Alexander reported, several members of the committee, including key Republicans such as state Rep. Rob Orr of Burleson, who has hopes of chairing the panel during next year's legislative session, see little reason to change the state's public pensions.
Standing ready to fight for change are other Republican lawmakers who look upon anything modified by the word "public" with disdain. Driven by conservative groups such as the Texas Public Policy Foundation, they want to do away with guaranteed monthly retirement checks for public employees and push them into a 401(k)-style plan.
The two funds at issue here are the Teacher Retirement System and the Employees Retirement System. The Legislature in 2011 ordered each fund to report on its long-term health ahead of next year's legislative session.
The Teacher Retirement System released its report Sept. 1. The $110 billion fund said it is healthy enough to cover its benefit obligations through 2075. The fund does face a long-term liability of $24 billion, but it says that a switch to a 401(k)-style plan would increase that liability to $35.7 billion.
Further, TRS says, 92 percent of retirees would receive less money from a defined-contribution, 401(k)-type plan than they receive from their defined-benefits plan...
The Employees Retirement System, with 137,000 members, has enough to pay its promised benefits for the next 70 years, according to its report, issued Sept. 4. Its findings were similar to those reported by TRS: a defined-contribution plan would cost much more and would not erase ERS's unfunded liabilities, which can be met by modestly adjusting the current plan.
The findings in these reports are not surprising. Pooled investments such as pension plans generally have been shown to operate more efficiently than individual-based, 401(k)-type plans. Not only are costs lower, but also the promise of a defined pension contributes to a more stable workforce, and stability saves money...
Still, expect attempts to change the retirement plans for teachers and state workers during next year's session. "There is a high likelihood that changes will be made," Talmadge Heflin told Alexander in August. Heflin, who served in the Texas House from 1983 to 2005, is director of the Texas Public Policy Foundation's Center for Fiscal Policy...
Any legislative battle to change the Teacher Retirement System and the Employees Retirement System will be an unnecessary one. Neither faces a crisis. Legislators should leave them alone.
Read the entire article here: http://www.statesman.com/news/news/opinion/dont-mess-with-texas-pension-funds/nSLXC/
Don't Tread on US you sorry *&^holes...not after my 41 years of toil!!!
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