August 2020
Reporting the impacts of COVID-19 on Texas pension funds
A Texas Legislative committee that writes law for public pension funds in the state wants to know how COVID-19 has impacted systems.

The Texas House of Representatives’ Pensions, Investments and Financial Services Committee on Aug. 4 requested regulated entities within its jurisdiction to submit written reports about the effects of COVID-19 on their operations and industry. The committee also asked whether pension funds experienced any statutory and regulatory barriers to responding to COVID-19. Public pension systems have until 5 p.m. CT on Friday, Aug. 28, to provide written responses.
Public Employees Go Above and Beyond to
Help Their Communities
Each month, TEXPERS searches the internet for stories of Texas public employees going the extra mile to help their communities.

Check out what we found this month.
Membership Magazine
Due to pandemic social distancing recommendations, TEXPERS' membership magazine was not printed and mailed this quarter. However, an expanded and digital-only edition of TEXPERS Pension Observer was created for our members. If you missed our newest edition in your email box, here it is.

Click here or on the magazine cover at left to access your digital flipbook.

Watch your email for the next quarterly edition, Vol 3., which publishes digitally later this month.
Mark Your Calendar
TEXPERS building online learning series to help pension system trustees and administrators earn credit for training hours
The outbreak of the novel coronavirus, the respiratory illness that causes COVID-19, has adversely impacted TEXPERS' ability to host its Annual Conference and Educational Forum this year. However, the association's staff is lining up online events offering members the ability to develop their professional skills and earn credit for their state-mandated training hours.
Additional Events

National Conference on Public Employee Retirement Systems 2020 Public Pension Funding Forum
Monday, Aug. 24 & Tuesday, Aug. 25, 2020

National Conference on Teacher Retirement
Prioritizing for Success in the Age of COVID-19
2-3 p.m. CST, Wednesday, Aug. 26, 2020

Texas Public Pension News & Opinion
Governor appoints three to state emergency services retirement system board of trustees
BLOG POST - There are three new members on the board of trustees for the Texas Emergency Services Retirement System, a state agency that administers a pension system for volunteer fire and emergency departments throughout the Lone Star State.
Texas Teachers Ponies up $470 Million for Alternative Investments
ARTICLE - Texas Teacher Retirement System, Austin, committed a total of $470 million to three alternative investment strategies in July, a transaction report from the $148.1 billion system showed.
A subscription may be required to access article.
Fort Worth Employees Hires CIO
ARTICLE - Derrick C. Dagnan was named chief investment officer at the Fort Worth (Texas) Employees' Retirement Fund, confirmed Benita Harper, executive director.

He replaces Joelle Mevi, who served as executive director and CIO until she left in December 2018.
A subscription may be required to access article.
UPDATE: Pension Boards Can Continue
Hosting Public Meetings Remotely
BLOG POST - Texas Gov. Greg Abbott on Aug. 8 issued a proclamation extending the state's Disaster Declaration in response to the COVID-19 pandemic. The declaration includes all Texas counties and includes a provision that allows governmental bodies such as state and local pension boards to continue hosting remote meetings.
Education, Research, and Studies
New Report Sheds Light on Retirement Security and Financial Decision Making
REPORT - The Consumer Financial Protection Bureau issued a new report, Retirement Security and Financial Decision Making, that finds a growing number of retirees are not experiencing the expected gradual reduction in spending after they retire.
2020 Retirement and Disability Research Consortium Annual Meeting Held Virtually
RECAP - The 2020 Retirement and Disability Research Consortium Annual Meeting was held virtually on Aug. 6. Those who missed the event may head online to access an agenda, panel summaries, and presentation slides.
The Status of Local Government Pension Plans in the Midst of COVID-19
BRIEF - Even though financial markets have mostly recovered from the initial downturn sparked by the COVID-19 pandemic, public pension plans will have closed fiscal year (FY) 2020 with virtually no change in their average funded ratio, according to a new brief from the Center for Retirement Research at Boston College. And, looking forward, the strains on state and local government revenue due to COVID-19 will likely hamper governments’ ability in the near term to make their required pension contributions. 

The brief's key findings are:

  • Despite the recent market recovery, during fiscal year 2020, local government pension plans will see virtually no change in their average funded ratio.
  • And, going forward, the strains on government finances due to the recession could make it harder for localities to pay their required pension contributions.
  • But projections show that local plans are quite sustainable on a cash-flow basis. Most can pay benefits indefinitely at their current contribution levels.
  • The only exceptions are the very worst-funded plans, which face the real risk of exhausting their assets.
Study Examines Pension Forfeiture and
Police Misconduct
STUDY - A new study applies the theory of efficiency wages to public sector pension-covered workers from whom employee misconduct is most troublesome, namely state and local police. The paper examines how the rules regarding police pension forfeiture for misconduct vary across states and whether stricter forfeiture might help avoid fiscal crisis.
U.S. Public Pensions
Actuarial Standards Board Adopts Revisions to Standards Regarding Selection of Economic and Demographic Assumptions
BLOG POST - The ASB of the American Academy of Actuaries recently adopted revisions of ASOP Nos. 27, Selection of Economic Assumptions for Measuring Pension Obligations, and 35, Selection of Demographic and Other Non-economic Assumptions for Measuring Pension Obligations. 

ASOP Nos. 27 and 35 are effective for actuarial reports issued on or after Aug. 1, 2021, and when the measurement date in the actuarial report is on or after Aug. 1, 2021.
Beleaguered Public Pension Funds Make
Record Gains in Second Quarter
ARTICLE - Public pension funds set a 22-year performance record in the second quarter, recovering some but not all of their losses from the first quarter.

Double-digit stock gains pushed pension returns to a median 11.1% for the second quarter, according to Wilshire Trust Universe Comparison Service.
Subscription may be required to access article.
California Supreme Court Forbids Pension Spiking, but Upholds Other Retirement Protections
ARTICLE - The California Supreme Court on July 30 ruled against public employee unions that were trying to beat back part of former Gov. Jerry Brown’s pension overhaul law.

The court’s ruling prohibits so-called pension spiking, a strategy in which county public workers took extra shifts, worked odd hours at higher pay or cashed out accumulated leave at the end of their careers to inflate their pensions in retirement.
New Jersey Considers Tapping New Fed Borrowing Program to Meet Pension Contributions
BLOG POST - New Jersey lawmakers face an estimated $10 billion gap in the state budget for fiscal years 2020 and 2021, attributable largely to sharp tax revenue declines linked to the COVID-19 pandemic. They are considering whether to tap into a new federal borrowing program to help close the shortfall and keep pace with required contributions to the state’s underfunded pension systemincluding scheduled payments of $4.7 billion in the fiscal year that started July 1.
Economics & Investments
Texas Economy's Rebound Stalls in July After Gains in May and June
BLOG POST - The resurgence of COVID-19 in July appears to have reversed economic gains in Texas that emerged when the virus’ frequency abated in May and June. Employment and other activity had increased strongly from April lows during initial pandemic disruptions in the state.
Gov. Greg Abbott, Other Texas Leaders Want to Freeze Property Tax Revenues for Cities that
Cut Police Budgets
ARTICLE - Gov. Greg Abbott announced that he and top Texas leaders will push for legislation next year that would freeze property tax revenues for cities that cut police budgets on Aug. 18, just days after the Austin City Council approved a budget that will cut police funding by one-third and reinvest money in social services.
US States Mid-year Sector View: States Will Continue to be Tested in Unprecedented Ways
REPORT - Stronger second quarter results pushed pension fund results into positive territory, but most plans will fall short of assumed rates of return, according to report published in July by S&P Global.

Subsequent increases in actuarially recommended contributions will likely be modest over the next fiscal year but still add to budget pressures, according to the report. The bigger credit risk may arise if legislatures cut pension contributions to close budget gaps, as many states did during the Great Recession.
Canadian Defined Benefit Pension Plans Enjoy Best Quarter Ever
BLOG POST - Canadian defined benefit pension plans experienced a pronounced upsurge in the second quarter, posting a median return of 9.6 per cent, according to the RBC Investor & Treasury Services All Plan Universe. 

This marked the highest single quarter return in the universe’s history, reversing the steep first quarter losses and raising the median plan’s return to 1.4 percent on a year-to-date basis. The gains followed a series of aggressive fiscal and monetary support measures introduced in March to address the impact of the virtual shut down of the global economy due to COVID-19.
Aging & Retirement
Retirement Living: Here's What it Costs to
Retire Comfortably in Every State
ARTICLE - One of the reasons that many Americans get up and go to work every day is to put some money away for retirement. While Social Security payments can be a helpful financial foundation in retirement, it is often not enough to cover anything but the most basic expenditures, especially in the uncertain financial times wrought by the coronavirus pandemic.
Colorado is the Latest State to
Adopt an Auto-IRA Program
ARTICLE - A bill signed in July by Colorado Gov. Jared Polis will require employers that have at least five employees but don’t offer a retirement plan to provide a retirement savings opportunity through the state.
About Us 
The Texas Association of Public Employee Retirement Systems (TEXPERS) is a statewide voluntary nonprofit association that provides education and legislative advisory services to the trustees, administrators, professional service providers and employee groups that manage the retirement money of police, firefighters, municipal and district employees in cities across Texas.