The Teacher Retirement System of Texas released its annual valuation recently. The fund, the nation’s sixth largest, presently has $128.5 billion held in trust, for over 350,000 Texas public education retirees and 1,000,000 pre-retirees. This figure is down from $132.7 billion in August 2014. Additionally, TRS reported that the fund earned a return of -0.3% for FY 2015. Here is the TRS website.
Here are more specifics, as reported by the Texas Retired Teachers Association:
The period of time to amortize the fund’s unfunded liabilities has grown from 29.8 years in 2013 to 33.3 years. This means that at this moment in time, the pension fund is not actuarially sound by state law. In order to meet this threshold, the fund must be able to pay off all unfunded liabilities within a 31-year time period.
Most observers believe that two key factors are in operation affecting long term projections. First, the investment portfolio of the fund is not performing as robustly as before. Second, the report necessitated the adoption of a new mortality assumption, reflecting increased life expectancy of all TRS members, including current active school personnel.
In practical terms the fund is still in very good shape but cannot, under present law, permit new benefits enhancements to current or prospective retirees.
A national movement remains active to gradually eliminate "defined benefits" pensions and replace them with "defined contributions" plans (such as ORP). In Texas these efforts have met with little success in previous Regular Sessions, perhaps due to the massive combined membership of active and retired individuals in TRS.
Such pension plans rely upon younger participants to supply a secure income for present retirees.
Here are more pertinent details from TRTA:
The figures provided assume that the state will continue to provide the level of funding to the system as established with the passage of Senate Bill 1458 in 2013 during the 83rd Legislative Session. That means TRS expects the state contribution rate to be 6.8% of active educator payroll, the school district rate to be 1.5%, and the active employee rate to be 7.7%. TRS also assumes an overall annual investment return of 8%.