Texas ranks poorly for retirement benefits


Texas teachers’ retirement benefits are worse than any other state in the country except Louisiana, according to a study of public pension funds.

The lowest ranked states were Louisiana, Texas and Kentucky, while the highest ranked states were South Carolina, Tennessee and Oregon.

Last year, 458,000 retired teachers in Texas received pensions from the Teacher Retirement System of Texas (TRS). The system was established in 1937, has 1.4 million public education employees and currently has a fund balance of $201.8 billion.

Study details

Equable, a bipartisan nonprofit organization that provides public pension education, research and solutions, conducted the study by analyzing teacher pension plans in all 50 states and the District of Columbia. Each state’s plan structure was compared and ranked based on the quality of its services to retired teachers in three categories:

  • Ten years or less of service (short-term teachers)
  • Between 10 and 20 years of service (medium-term teachers)
  • Whole career in class (full career teachers)

TRS plans rank particularly poorly for teachers in the first two categories, 31.4% and 35.4%, respectively, out of 100%. Texas scored 67.8% in the third category for full-career teachers.

Most states, including Texas, have implemented a tiered plan to cut costs and shift some of the costs onto educators. By reducing benefit values ​​for prospective teachers, states are forcing individuals to find additional ways to save for retirement.

TRS and 13e checks

Traditional public and private pension funds have struggled to earn returns high enough to pay promised benefits to retirees. About 80% of the benefits are secured by dollars in the funds – the remaining 20% ​​is known as the unfunded liability. The TRS is around 76% funded, slightly below the national average for large pension schemes. TRS and other funds have seen explosive growth in 2021 due to the strength of the stock market and other investments, but that growth has not been replicated this year due to turbulent financial markets.

The lack of cost-of-living adjustments (COLAs) for retirees further lowered the Texas pension plan’s ranking, according to the study. Retired teachers in Texas have not received COLAs since 2004. Texas legislatures have provided a 13e monthly benefits check for retirees twice, in 2019 and 2021, as a bonus for retired teachers. These can be considered a COLA for the two years issued, but pensioners said it was not enough to combat high inflation.


The simplest solution to improving retirement benefits is to provide better compensation and stronger benefits to all teachers, regardless of years of service. Total rewards, including compensation, health insurance benefits, and retirement benefits are factors that individuals consider when deciding on a career and job.

Earlier this year, Texas Governor Greg Abbott created a task force to look at the teacher shortage. With this unprecedented shortage, now seems like the perfect opportunity to provide long-term solutions that provide a viable pension for current retirees, help retain current teachers and help recruit future teachers.

Cheryl Hoover is a human resources consultant at TASB HR Services. Email Cheryl at cheryl.hoover@tasb.org.

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Tagged: Benefits, Compensation, Retention, “Teachers Pension System”

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