Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. You need to know this news in the fight for a secure retirement.
NPPC News:
Texas Teacher Retirement System’s Voucher Problem.
In Texas, Senate Bill 2, which would divert education funds to private and homeschooled students, is raising significant concerns for educators across the state. This voucher bill is similar to others in state legislatures across the country as the debate about school choice becomes more fractured.
A particularly concerning aspect of the bill regarding public education workers is its impact on the Teacher Retirement System (TRS). An actuarial report finds that even a tiny decrease in payroll growth—which could happen as more students leave the public system—could render TRS “no longer actuarially sound.”
The secondary effect of this could be increased contribution rates for teachers and other taxpayers.
The stakes couldn’t be higher for Dr. Levatta Levels, a retired Texas educator and a current TRS member. “It’s right there in the small print—they’re predicting our fund could be dismantled,” she warned. “The system is not prepared to handle the increased retirees that could enter while fewer people pay into the fund. The fund can’t sustain itself.”
Are Teacher Pensions to Blame for Poor Student Performance? Probably Not.
Education in Oregon is also the subject of a major debate, and PERS is caught in the middle. Due to some underperforming investments by Oregeon’s Public Employment Retirement System, the deficit has increased within the system, leading to underfunding.
While this situation does place the retirement security of thousands of Oregonians at risk, it does not contribute to poor student performance, as suggested by some pundits’ opinions. Oregon’s spending on students has increased by 80% since 2013, however, there has not been significant improvement amongst students. Some critics suggest that perhaps not all of the money reaches the students and might be misappropriated by PERS.
John Tapogna, a senior policy adviser atECOnorthwest specializing in education economics, states that PERS didn’t stop money from reaching schools over the past decade and it doesn’t do much to explain declining student outcomes. “PERS hasn’t gotten a whole lot worse in the last five to seven years,” he says, “so it doesn’t explain why the test scores did.”
Labor Voices: Deliver pension reform bills to the governor’s desk
The battle over nine bills in the Michigan legislature continues. For nearly two months, the House has not sent bills passed in the lame-duck session to Governor Whitmer, holding them for legal review. This has prompted a lawsuit from the Senate to compel the House to send the bills.
Included in the bill package are House Bills 4665, 4666, and 4667, which would put corrections officers in the Michigan State Police Pension Plus Retirement System.
Michigan has been plagued with hiring deficits for years, and supporters of the bill say this would be a significant step in helping recruit more corrections officers and make the position much safer for their workers.
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.