by Morgan Montalvo
1200 WOAI News
Retired Texas educators and school support personnel who rely upon monthly state pensions likely will not be getting a cost-of-living increase for the foreseeable future, and will have to dig deeper to cover out-of-pocket health care costs, News Radio 1200 WOAI reports.
Texas Teacher Retirement System trustees are scheduled to vote on Friday on the anticipated rate of return for the pension fund’s investments, and the board is expected to approve a decrease in profit-taking.
While that decision would not result in reduction of monthly pension amounts, decreased dividends collected from investments, coupled with inflation, will have the result as an income reduction, says Ron D’Amico, spokesman for the Texas branch of the American Federation of Teachers.
Texas AFT today is holding a retired teacher rally in Austin and calling on board members to vote for a rate of return that will preserve current retiree benefit levels adjusted for inflation, or for the lowest dividend reduction possible.
“What used to cost you a dollar ten years ago, now costs a dollar thirty-three today,” says D’Amico, ”and if you’re looking at an average teacher retirement of about twenty-two hundred bucks a month, you need about seven-hundred-plus dollars a month more in real dollars to stay afloat.
“So, while you say, ‘Well we’re not cutting anything specifically to their pension amounts,’ you know, time does that for them.”
D’Amico says the last time retired school employees collecting Teacher Retirement System of Texas payments received a cost-of-living increase was 13 years ago, and only a handful of retirees met eligibility requirements for the hike.
Texas AFT says if the trustees move forward with the lower return rate, the union will call on state lawmakers to authorize funding to make up the shortfall.
In Texas, most public school districts pay into the pension plan colloquially known as “TRS.” Private and church-run schools most often do not pay into the system, nor do most charter schools. Teachers who entered the profession before September 1, 2007 can qualify for retirement under the “Rule of 80,” a total composed of an employee’s age and years of qualifying service.
After September, 2007 first-time teachers working for districts or schools that contribute to TRS must qualify under a “Rule of 90” that defers retirement eligibility for five years.
TRS determines pension benefits according to a formula that includes the averaging of an enrollee's top five eligible earning years.
Most Texas school districts do not deduct Social Security tax, leaving retirees ineligible to qualify for Social Security benefits, and must opt for either healthcare plans offered through TRS or other policies until age 65, when they can sign up for Medicare.
Static TRS benefits, combined with ever-increasing health care costs, delivers a “double-whammy” to the retirees, D’Amico says.
And it’s not only retired classroom teachers who collect TRS pensions; so do retired school support personnel such as custodians, teacher aides, cafeteria workers, bus drivers and office staff who for years paid into TRS while earning far less than classroom educators or administrators.
“They’re very dependent upon the Teacher Retirement System," Tom Cummins, president of the Bexar County Federation of Teachers, says of retired school support personnel.
Cummins describes most TRS retirees’ ineligibility for Social Security as “a real drawback” that forces many beneficiaries to re-enter the workforce, often immediately. Health care premiums for school support workers who collect smaller TRS pensions, Cummins says, often see up to 40 percent of their monthly checks consumed by health insurance and non-covered related expenses.