After exploring the idea and stirring worries and warnings from retired teachers and elected officials, the Teacher Retirement System of Texas opted Friday not to raise monthly health care premiums for a group of nearly 68,000 retired teachers.
Earlier this year there were fears that the 32-year-old health care system that covers hundreds of thousands of retired teachers was approaching a death spiral. The Teacher’s Retirement System’s TRS-Care was expected to experience a shortfall in excess of $1 billion.
Lawmakers came to the rescue with an infusion of cash – a temporary patch intended to shrink the system’s deficit to $700 million. But now, the Austin American-Statesman reports on another threat to the program – retired teachers are leaving it in droves.
Members of the House and Senate are scrambling to plug a $212 million hole in the teacher retirement system, which provides health benefit for retired educators. Changes made to the TRS-Care system during the regular legislative session could cause some retirees' health care costs to increase tenfold.
For years, Texas lawmakers have been trying to stem the bleeding of the state's health care plan for retired teachers. The plan has been at risk of going unfunded for nearly two decades because of demographic and economic changes, including more retirees and rising health care costs. During this year's legislative session, lawmakers took steps to make up for the plan's $1 billion shortfall .
Last fall, with little fanfare, the Texas Teachers Retirement System, or TRS, set up an office in London. That means that Britain’s recent vote to leave the European Union could be felt a little closer to home for the state’s 1.4 million public education employees and retirees.
The Teacher Retirement System of Texas Trust Fund earned 12.6 percent this year. TRS says it ranks first among its pension fund peers across the nation. The fund's total value is more than $100 billion, up about $9 billion from September 2009. The return meant a big pay out for the TRS' investment team. They were awarded $9.7 million in performance bonuses.