State aims to boost educator retirement plans with Senate Bill 1

State aims to boost educator retirement plans with Senate Bill 12

Posted:
LUBBOCK, Texas -

 

With the recent signing of Senate Bill 12, retirement security is promised for current and retired teachers. 

The new legislation increases state contributions to the Teacher Retirement System for the next five years.

Once out of their classrooms, former teachers are supposed to rely on their pensions.

"When they're supposed to be enjoying retirement for all their years of service, they are struggling to do basic things like take care of their health and pay their mortgages," Lauren Smith, president of the Lubbock Educators Association, said.

The current state of the Teacher Retirement System is not enough to support educators, she said.

"A lot of them have actually gone back to do second jobs or go back to teaching, just cause it's not sustainable," Smith said.

Last year, the retirement fund was $46.7 billion in debt. Lawmakers have not paid enough into it to cover the payouts.


"A lot of teachers in a lot of districts in the state of Texas don't put into social security," Jeff Nicholas, financial professional and owner of Nicholas Financial in Lubbock, said. "So most educators in the state depend on TRS retirement."

The law mandates the state, districts and current teachers pay more into the fund. The percentages will start going up in 2022.

First, Texas will dump more than a billion dollar directly into the system, from the "rainy day" fund.

 "When they started to look at the debt, this was necessary to increase what teachers are putting back, to help offset what could take about 30 years to get out of this debt position," Nicholas said.

Texas will also give currently retired teachers a "13th check," a $2,000 bonus, before the end of the year. 

Smith said this bill is a good step to assuring retirement security for active and former educators.

"It's actually making it actuarially sound now," she said. "So, as long as they continue to protect it, I hope that when it comes my turn to retire that this thing is still in place, so that it does protect me and my fellow colleagues."

To prepare for retirement, Nicholas advises teachers to learn the Teacher Retirement system and understand the critical changes in the new law. 

Lawmakers can approve an increase in retired teacher monthly payments. With this new law, they can start working on that immediately.

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