Open Season on Defined Benefit Plans in Austin
It's important for the people at Texas' local pensions to keep their elected officials informed about the health of their system and what they are doing to continually improve it.When the 84th Texas legislature convened early in January, it triggered a starting gun for some political groups to begin calling for the end of defined benefit plans. This year the Texas Public Policy Foundation is leading the charge. In late January, TPPF published and promoted a report titled, "Reforming Texas' State and Local Pension Systems for the 21st Century," a 28- page document which, when it actually talks about Texas, admits that the state and its local pensions aren't in bad shape. The goal of the report seems mostly to try to compare Texas to New York, California, and Illinois, and then to scare Texans and our elected officials into making wholesale changes that aren't necessary. A quick look at the data they use for analysis comes from 2008 and 2009, some of the worst years ever in the recent stock market history. Cherry-picking select data to bolster a position doesn't make for a convincing argument. But the report continues with that approach in its focus on troubles at the Texas Teachers Retirement System. It's widely known that the state shortchanged its contributions to TRS over the years, and that those contribution shortfalls are causing TRS problems today. Without naming or exploring the issues around a single local Texas pension that might be experiencing trouble, the report cites its view of nationwide trends as evidence that Texas' local pensions will experience similar trouble. Of course the danger with such a report is that its assertions might become more widely believed, even though its data is built on house of cards. In this type of environment, it's important for the people at Texas' local pensions to keep their elected officials informed about the health of their system and what they are doing to continually improve it.