The Cost and Adequacy of Teacher Pensions in Texas

Research Report

The Cost and Adequacy of Teacher Pensions in Texas

September 13, 2019

Abstract

To improve the finances of the Teacher Retirement System of Texas, which serves almost 1.5 million workers and retirees, Texas Governor Greg Abbott signed legislation in spring 2019 that gradually raises plan contributions by the state, school districts, and employees. Additional contribution hikes may be necessary to close the plan’s funding gap, however, if optimistic actuarial and investment assumptions about the future fail to materialize. Revising the plan’s benefit structure, which now favors long-tenured teachers, could also improve retirement security for teachers who spend less than a full career in the pension system, especially because most Texas teachers are not covered by Social Security.

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