This week, TRS published its annual report “Value Brochurehighlighting the value TRS has delivered to both its members and the Texas economy over the past fiscal year.
While TRS has had an increasingly positive impact on the Texas economy as a whole, TRS members who have retired since 2004 have never received a cost of living adjustment (COLA) for their TRS annuities. Many retirees are still receiving the same monthly pension now as they were more than a decade ago, with no adjustment for inflation. More than a decade of inflation has dramatically reduced the purchasing power of these retired educators. According to the Bureau of Labor Statistics, the US dollar is worth only about two-thirds of what it was worth in 2004 today.
TRS announced that TRS’s average monthly lifetime pension for fiscal year 2022 was $2,174, up less than $30 from last year’s average.
Since more recent retirees generally have higher monthly pensions than their counterparts who retired in previous years, the average monthly pension increases each year. However, an individual retiree’s monthly pension is fixed for life once he retires, unless the legislature takes action to enact a COLA, so the average increase in pension has no no effect on an individual retiree’s experience.
The numbers included in the brochure showed TRS to be a powerful force in driving the Texas economy. TRS estimates that 94% of all TRS pension payments were spent locally in Texas, a figure higher than most other states.
Combining the economic impact of pension payments and health care payments made by the system, TRS estimates that last year it was responsible for adding $23.9 billion to gross domestic product (GDP). ) state total, a figure commonly used to measure the health of economies. TRS estimates the system’s retirement and healthcare payments created 268,183 jobs in Texas last year, and the TRS investment fund holds $9.5 billion in assets invested in Texas-based companies .
Despite the economic benefits created by the TRS retirement system, the Texas legislature has not invested in TRS members. TRS serves more than 1.9 million members in total. According to US Census data, one in 20 Texans is a member of the TRS. The TRS figures suggest that if these retirees were given more purchasing power through routine adjustments to their pensions, the effect on the Texas economy would be staggering.