That bill will:
- restructure benefit calculations for many educators,
- change the retirement age for future teachers and
- bar school districts from offering early retirement.
According to the Associated Press, the new plan means slightly reduced pensions for the youngest two thirds of Teacher Retirement System of Texas (TRS) members. Early retirement incentives could not be offered by school districts, and the retirement age would rise from 55 to 60 for educators hired after September 1, 2007.
Perry had backed a previous proposal by Former US Senator Phil Gramm to purchase life insurance policies and annuities on retired teachers, with the money going into the pension fund once the policies were cashed in. This proposal came under fire, though, with opponents feeling it was wrong for the pension fund to gain from teachers’ deaths.
There is a nearly $11 billion shortfall in the TRS of Texas pension fund. According to the AP, the changes included in the new legislation could save the state about $455 million in the next two years.
– Rebecca Moore