Teacher Retirement System Beneficiaries Brace for No Cost-of-Living Hike

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. 

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