Texas school and university employees face a trade-off to shore up their pension fund: work longer or contribute more.
Members of the Teacher Retirement System of Texas objected strongly last week to a legislative proposal that would have required about half of current employees to work until age 62 to receive full retirement benefits. They now have no minimum retirement age but must achieve the “Rule of 80,” in which their years of service and age equal 80.
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Teacher pension proposal
Proposed changes to the Teacher Retirement System of Texas would put the fund in a financial position that would allow a 3 percent pension increase for some retirees for the first time since 2001.
- Minimum retirement age of 62 for new hires and current school employees with fewer than five years of service.
- Retirement eligibility remains the same for all vested members: ‘Rule of 80’ — age and years of service equal 80 — with no minimum age.
- Members: 7.7 percent, up from 6.4 percent
- State: 6.8 percent, up from 6.4 percent
- School Districts: 1.5 percent (new contribution)
Retiree Health Plan:
Members who retire before age 62 wouldn’t be eligible for the comprehensive health insurance plan until turning 62. Members would be grandfathered with the ‘Rule of 70’ or 25 years of service.