‘s bill would increase the state’s contribution to the fund to 6.4% of pay, up from 6% percent now, which is the minimum under the state constitution, according to reports from the Austin American Statesmen. The senator said the plan does not call for immediate raises, but is meant to hike pension checks in 2009 if the fund continues to meet its investment targets.
‘s proposal would put an extra $100 million into the fund for the fiscal year starting September 1. The state’s decreasing contribution, in percentage terms, is a big reason the fund has less money than it needs to pay promised benefits, according the American Statesmen article.
The teacher fund provides health insurance, pension checks and other benefits to 1.1 million active and retired teachers. The system paid out $5.4 billion in benefits last year, but recorded a $13.2 billion shortfall as of August 31.
The paper reported that the state Senate Finance Committee on Monday considered the matter but made no decision. The pension fund isn’t on the list of subjects Governor Rick Perry has allowed lawmakers to consider in the special session focusing on public school funding.
Other lawmakers have also proposed more generous legislation that would boost the state’s teacher retirement fund. Representative Craig Eiland has introduced legislation calling for a 7% contribution, which would cost the state $300 million in the next fiscal year.
In July of last year, the Texas governor signed a bill that would slightly reduce the pensions for the youngest two-thirds of state retirement system members and increase the retirement age would rise from 55 to 60 for teachers hired after September 1, 2007 (See Texas Governor Signs Pension Changes into Law ).