AUSTIN (AP) - A new study finds that it would be costly to scrap the guaranteed pension benefit for Texas' future school employees and likely mean reduced benefits for retirees.
The Austin American-Statesman reported Friday that an analysis by the Teacher Retirement System of Texas says the $110 billion teacher fund can pay the benefits it owes through 2075. But it will need additional state or member contributions to erase a $24 billion long-term funding liability.
That liability would increase, though, to $36 billion if new employees were closed out of the pension and instead received a retirement benefit similar to a 401 (k)-style plan. The state then would need to find some way other than member contributions to pay off that liability, Brian Guthrie, the retirement system's executive director, told the Statesman.
The study was mandated by state lawmakers last year. Despite its results, those opposing public pensions say they will press for changing the pension system during next year's Texas Legislature session, which begins in January.
"There is a high likelihood that changes will be made," Talmadge Heflin of the Texas Public Policy Foundation , a conservative think tank based in Austin, told the newspaper.
Ted Melina Raab, legislative director of the Texas chapter of the American Federation of Teachers, told the Statesman the facts don't support abandoning the current retirement structure but that he still expects a major fight next year.
He said the Teacher Retirement System and its pension plan are efficient and deliver good benefits at low costs. He said any move away from it "is one that is based on ideology and politics."
While Texas' pension plan is in reasonably good shape, the high cost of maintaining other plans in places like California have Texas lawmakers examining ways to reduce state liabilities.
Eliminating the pension benefit would mean most future school retirees would have no guaranteed retirement income because very few Texas school districts participate in Social Security, the Statesman reporte
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