On May 20, the ERS Board of trustees is voting to make a major change in the way it projects the long-term goals of our retirement plans. For more than 30 years, ERS has averaged an 8.3% return on the investments it has made with our retirement money. (The expected rate of return is an estimate of how much money the pension fund’s investments will earn in the future. This is a critical figure which helps ERS figure out how much money it will have to pay current and future state retirees.)
In 2017, TSEU members fought attempts to slash the assumed rate of return on investment down to 7%. Despite (or because of) TSEU opposition, the board only decreased the rate to 7.5%. Although the rate of return on investments has fallen in the last few years and due to the COVID19 health crisis, we are in some uncharted economic territory, the ERS fund has weathered many downturns. Yet despite these facts: On May 20, the ERS Board of trustees is again voting to make 7% the assumed rate of return!
We must push back and fight these changes.
The current ERS’ 7.5% projection is very important because it plays a big role in determining how financially healthy our pensions seem. A lower expected rate of return means that the ERS pensions will suddenly appear to be in much worse financial health.
[What does this mean] If ERS doesn’t appear to be healthy, it will be impossible for current retirees to receive a much-needed cost-of-living increase in our pensions. It also makes it easier for lawmakers to justify taking away our pensions and pushing state workers into risky 401(k)-style plans.
Next month, the ERS Board of Trustees will vote on whether to lower the assumed rate of return to 7% (or even lower). If they vote to lower it, the health and well-being of our pension will take a huge step backward, and the door will be open to losing our defined benefit pension plans completely.
E-mail the following message to the five members of the ERS Board of Trustees.
*Be sure to send your letter during a work break or off work hours. We urge all respondents to use their personal contact information and not a work email address or phone number.
I am an ERS member. In order to protect my pension and the pensions of thousands of men and women who proudly serve Texas; I am asking you to vote against lowering ERS’ expected rate of investment returns. ERS already lowered the rate of return just a few years ago, and that’s despite ERS averaging 8.3% over 30 years. Lowering the rate of return even further will only hurt current and future retirees by making it harder for us to secure funding for a COLA from the Legislature.
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The current members of the ERS Board are:
Ilesa Daniels, Chair – Elected 2015 (TSEU Sister!) – Ilesa.Daniels@ers.texas.gov
Craig Hester, Vice-chair – Appointed by Texas Supreme Court Chief Justice Nathan Hecht – Craig.Hester@ers.texas.gov
Brian Barth – Elected in 2019 – Brian.Barth@ers.texas.gov
James Kee, Ph.D. – Appointed by Texas House of Representatives Speaker Joe Straus – Jim.kee@ers.texas.gov
Catherine Melvin – Elected 2017 – Catherine.Melvin@ers.texas.gov