Home ::
The Teacher Retirement System Board of Trustees met Thursday and Friday, June 12 and 13, 2008.
The TRS fund currently stands at $111.4 billion, which is down from a high of $118 billion in October 2007, due to a struggling economy and the subsequent effect on investments. However, that total is trending upward from a low of $107.9 billion earlier this year.
Chief Investment Officer Britt Harris maintained that the newly-diversified fund is around $2.5 billion better off than it would have been under the former investment strategy, which was tied more closely to public stocks.
Former TCTA State President Charlotte Clifton presided over the TRS Budget Committee at the committee’s first meeting of 2008. Clifton was appointed to the TRS Board in February and designated as the Budget Committee chair at the May board meeting.
The Budget Committee considered the operations budgets for the TRS pension fund, the retiree and active member health insurance plans, and the 403(b) certification program. The board approved significant increases in the pension operations budget, reflecting the payroll increases resulting from additional investment staff and the new compensation plan (no bonuses have yet been awarded).
Later this summer the committee will approve the legislative appropriations request (LAR), the formal budget request from TRS to the Legislative Budget Board (LBB). The LBB provides instructions to state agencies to guide these budget requests that will be used in the development of the state’s biennial budget, and TRS was instructed to request funding at a level representing a state contribution rate of 6.4%. This is lower than the 6.58% that the state is currently contributing in order to fund the 13th check for retirees, but is a higher amount than what has been requested or actually contributed in the last several years. (The LBB instructions prior to the 2007 legislative session required the system to ask for an amount that would have been less than the 6% constitutionally-required minimum, though this was generally considered to be a prioritization exercise.)
TRS Executive Director Ronnie Jung estimated that even under the current gloomy economic picture, unrecognized investment gains from previous years will be enough to allow the system to be within the acceptable funding period (and possibly allow for benefit increases) under the 6.4% contribution rate going into the 2009 legislative session.
Web posted: 06/20/08
