They are thinking of switching to a 401k type system, putting our retirement funds at risk.
“The Teacher Retirement System (TRS) is well managed and well funded. According to its last audit, it is solvent through 2075 and is funded at 82.7 percent--a better funding ratio than most private plans. A funding ratio of 80 percent or above is considered a sign of a healthy pension system.
“There are several key points to consider as the attack on public pension funds ramps up:
--More than half of the money in the TRS funds has been contributed by the educational employees.
--In 1995, the state reduced its contribution from 7.31 percent to 6.0 percent, the minimum that is constitutionally guaranteed to educators, and left it there for 12 years. Employees contribute 6.4 percent…
--The TRS rate of return has exceeded the 8 percent rate targeted by TRS actuaries for decades. As a result, the taxpayer share of benefits paid is only 20 percent.
--Moving workers to 401(k) plans places all of the risk on the employees. If the market drops during their retirement, they have nothing to protect them from spending their old age in abject poverty.
--Most workers who have a 401(k) also have Social Security. Texas teachers do not. All they have is TRS.
“King understands that the law would prevent Texas from changing the retirement plans of current retirees and probably would bar changes for those close to retirement. But even if this only applied to those new to working in public education, the impact of having no new revenue coming in would cause the fund to ultimately fail to meet obligations to retirees that can currently be met.
“This is a dangerous attack on public employees. It differs from other attacks on educators that are driven by ideology. This one is far more dangerous in that it is driven by greed.
“The same people who destroyed the pensions of countless private sector workers now want to do the same for public employees. We cannot let this happen.”