Message from the Executive Director: Restoring the ERS Trust Fund to health
The 87th Texas Legislature kicked off in January with a few encouraging moments: First, the budget picture presented in the state comptroller’s Fiscal Year 2022-23 Biennial Revenue Estimate was a little better than expected, despite revenue pressures caused by the pandemic. Meanwhile, in a Dallas Morning News editorial and during a January 11 virtual media conference, Comptroller Glenn Hegar highlighted the critical need for lawmakers to address issues with the Employees Retirement System (ERS) Retirement Trust Fund, the main fund that pays annuities for most State of Texas retirees.
Stabilizing the ERS Trust Fund is our number one goal for this legislative session— as it has been for the last several sessions. As I’ve noted before, the Fund is out of balance and, without action by the Legislature, is set to run out of money in just a few decades. Remember, this doesn’t mean your annuity is at risk; the Fund is not in immediate danger, and there is time to make changes to avoid depletion. But it is so important to address the problems now, to protect the retirement benefits of current state employees, who now pay 9.5% of each paycheck into the Fund.
Not to mention, a healthy retirement fund is important to all of us. If the Trust Fund depletes and can’t generate investment earnings (currently about 60% of your annuity payment), the state will have to pay annuities out of general revenue. This will be at least four times as expensive as the current cost to the state.
Although ERS cannot advocate for any specific solution to the problem, we can and do keep lawmakers informed about the status of the Fund and the steps they could take to restore it to health. We’ll continue this work even after the session ends, recognizing that the problem will only worsen if the funding issue is not addressed.
Keeping you informed
We’ll update you on any steps the Legislature takes in the June issue of Your ERS Connection. The ERS website also has several documents and presentations with details and background about the Trust Fund. On the ERS homepage, click “Reports and Studies” in upper right corner to view Actuarial Valuation Reports and other studies. See an overview of ERS benefit plan performance and membership in Fiscal Year 2020 ERS at a Glance.
We hope many of you have been able to get a COVID-19 vaccination. We understand the frustration you may have felt as the country ramped up vaccine supply. If you haven’t been vaccinated, please continue to check with your health care providers or the Texas Department of State Health Services. All ERS health plans cover COVID-19 vaccination at 100%, and everyone, whether or not they have health insurance, should be able to get the vaccine at no cost when it is available to them.
It’s been a challenging year for all of us, and I hope we’ll soon be able to return to the day-to-day routines we may have once taken for granted. In the meantime, I am grateful for the health insurance provided by the state through the Texas Employees Group Benefits Program, and for the retirees who have reached out to us to express the same. We value you and want you to stay healthy. Please continue to follow guidelines to prevent COVID-19 spread, take advantage of the wellness programs your health plan offers and connect with us online or by phone when you need us.Porter Wilson