The recent appointment by Gov. Greg Abbott of Josh McGee as chair of the State Pension Review Board continues to raise red flags with TRS members. Mr. McGee was previously vice president of the Laura and John Arnold Foundation (LJAF), which has funded several state initiatives to reform public “defined benefits” pension programs.
Generally, in this context, pension “reform” means transforming these plans into “defined contribution” programs, in which financial risk is assumed by the individual rather than state or local government. Pension plans such as TRS depend upon participation by younger employees to finance a secure retirement for older members. In this sense, such plans resemble Social Security—also a common target for “privatization” in today’s political environment.
TRS is in very good financial shape compared with similar plans in some localities and in other states, thanks to recent legislation beefing up the fund’s revenue stream. However, it has not yet achieved the “actuarial soundness” threshold, required under present law to enhance current or prospective benefits.
The appointment of Mr. McGee will require Senate confirmation in January 2017, when the next Regular Session begins. If confirmed, he would not be able to change TRS substantively without Legislative approval. However, he would be positioned at a high level of visibility to advocate his position in the House and Senate.
Tim Lee, executive director of the Texas Retired Teachers Association, recently was quoted in the Austin American-Statesman:
“He’s the worst possible choice to be chairman of Pension Review Board. We look at this and say how in the world did he get on the radar of Gov. Abbott? Our members tend to like the governor. That’s what’s so surprising. The guy, in my view, is nothing but an advocate for eliminating the plans that our public workers have,” Lee said.
TRS members are urged to pay close attention to this issue in the coming months, and to raise any concerns with Senate candidates in the current election cycle.