Written by Keegan Shepherd, Policy Coordinator for the Texas Pension Coalition
Millions of votes have been cast in the state of Texas, and we now have a pretty good sense of what our incoming class for the 87th Texas Legislature will look like. Whether freshmen or veterans, these lawmakers will have to tackle a tremendous set of challenges in only a few short weeks. Because the Texas Legislature only meets once every two years, the upcoming session would be intense even under the most tranquil circumstances. This means that our state representatives and senators have to set priorities and make commitments as early as possible.
One crucial issue that has to be addressed this upcoming term is our statewide pension systems’ health. The Employees Retirement System (ERS) is at a critical juncture––and if lawmakers refuse to take action in the spring, it could lead to a perilous future for the pension system’s economic well-being. Here are three things that lawmakers need to keep in mind with ERS as they prepare for the upcoming legislative session:
1) Strong pensions are a key part of economic recovery: To put it mildly, we don’t know how long it will take for our economy to have any sense of stability. More crucially, we don’t know how long it will be until working Texans feel any sense of stability. There may be no way to return to “before coronavirus” times, but there are ways to ensure that the people who make our communities run and who are providing essential services throughout this pandemic do not suffer as a result of this ongoing economic crisis. Further, strong pensions ensure that we are able to retain those essential workers so that they continue serving our communities––and that current retirees are able to continue boosting their own local economies.
2) Pension health must be seen as part of the pandemic response: The coronavirus pandemic has impacted every aspect of our lives, including the financial well-being of Texans. Our public employees did not receive hazard pay or additional benefits to compensate for the additional risk they were placed in to keep essential services running in the state. Typically, the public workers placed at greatest risk were the lowest paid. At a bare minimum, these workers deserve to know their retirement security isn’t in peril when they went above and beyond to keep Texas safe and running.
3) There is no “next session”: Lawmakers notably postponed addressing ERS’s financial issues during the last legislative session, citing that their focus was squarely on restoring the Teacher Retirement System (TRS) to full health. However, what’s worth stressing is that the legislature has kicked the can down the road repeatedly when it comes to reinforcing ERS. This has put ERS in the position of a rapidly-approaching depletion date. This means that young Texans who start careers as state employees now risk not having a stable pension waiting for them when they retire. Our two pension systems are massive, and they should not be seen as acting in competition with one another. Every one of our public employees deserves retirement security––and both of our statewide systems should be priorities every session.
We need our legislators to make a sincere commitment to restoring ERS to actuarial soundness before the session begins. The costs of fixing ERS now are a fraction of what they will be if we delay action any longer. We need genuine pension champions at the state capitol: who will join us?