TEXAS AFT LEGISLATIVE HOTLINE--THURSDAY, JULY 23, 2009
(copyright 2009 Texas AFT)
 
Texas AFT Urges State Attorney General to Okay "13th Check" for TRS Retirees
 
Texas AFT has submitted a legal brief to the state attorney general urging approval of the recently enacted legislation granting Teacher Retirement System retirees a one-time $500 bonus payment. The legislature made the $500 per retiree contingent on a determination by the AG that the payment is allowed under the state constitution. If Attorney General Greg Abbott were to rule the payment unconstitutional, $120 million appropriated to pay for these checks would be deposited instead in the TRS pension fund.
 
The one-time payment of $500 was all that state lawmakers would agree to provide this session, even though TRS retirees have gone without any cost-of-living increase since 2001. (A previous one-time "13th check," capped at $2,400, was awarded in January 2008.) Investment losses in the pension fund made it impossible to provide any new benefit paid for directly from that fund, unless the legislature were willing to make a massive increase in pension contributions. Lawmakers were not willing to make that investment. Hence they settled on the plan to provide $500 per retiree from state general revenue, flowing entirely outside the pension fund.
 
Sen. Robert Duncan, Republican of Lubbock, then raised the concern that such an appropriation of general revenue to retirees might amount to an unconstitutional gift or unconstitutional "extra compensation" for retired education employees. Texas AFT's legal brief, filed July 17, contends that the proposed one-time payment does not violate these constitutional provisions but rather is simply an enhancement of benefits to which TRS retirees are entitled as a matter of routine. "Otherwise," the brief filed by Texas AFT general counsel Martha Owen states, "a retiree would never be entitled to receive any increase in benefit payments above and beyond the level at the time of his retirement."
 
The brief further noted: "The statute authorizing TRS has always contemplated, and members have always expected, that the System would provide post-retirement benefit increases....The receipt of this benefit cannot properly be considered a gratuity for services already performed, as participation in the retirement program on an ongoing basis was part of the compensation package provided to employees for services rendered."
 
The attorney general doesn't have a firm deadline for opining on this issue, but the hope is for fast action allowing TRS administrators to proceed promptly with distribution of the one-time payments to eligible retirees.