Texas Pension Fund Reform

I was attending a candidate forum a couple of weeks ago and was surprised to hear that the Texas Pension System is in great shape by Texas House Representative Larry Taylor who is running for Senate District 11.  I have found that while pension systems in Texas are in better shape than most States, at the end of 2008 the State Pension Fund only had assets of 90.7% with a 13.8 Billion unfunded liability.  Furthermore, other State health care and retirement benefits had 28.6 Billion in obligations but only funded with approximately 700 Million secured revenue streams.

This means that without fundamental changes in the Texas Pension plans, we will soon be facing the same dilemma as California, Illinois, and New York with respect to allowing our obligations drive our legislative decisions.

If elected, I will support legislation to reform the Texas Pension system.  I will follow up on recommendations put forth by the Texas Public Policy Forum.  These recommendations are:

• Freeze the Defined Benefit (DB) plan for all new and unvested public employees.
• All new or unvested public employees are moved to a Defined Contribution (DC) plan.
• Implement an appropriate freeze on benefits for all current vested public employees.
• Ensure that current retirees retain their current benefits with changes to COLAs.

We can address the growing public sector pension problem without grinding down the Texas economy and keep promises already made to retirees and vested employees.