April 1, 2019
The Teacher Retirement System Board of Trustees held its bimonthly meeting on March 27, 2019.
Financial Statements
The TRS net position in January 2018 was $78,259,571,776.
The TRS net position in January 2019 was $74,335,956,227.
The TRS net position in February 2018 was $75,721,082,341.
 The TRS net position in December 2018 was $75,766,678,659.
Membership Status
In February, there were 274,197 members in active status with 233,458 actively contributing.
 
In March, 115,562 service retirees received an average monthly benefit of $3,332.
Legislative Update
2019 is the first year of the legislative biennium. Any bill having a fiscal impact on TRS must be heard in the House or Senate Retirement committees, forwarded for actuarial study, and can then be voted on in the second legislative session of the biennium. The following bills have been determined to have a fiscal impact and have been forwarded for actuarial study:

HB 292 , bv Rep. Tommy Benton (R-Jefferson), would eliminate a remittance required of the University System of Georgia (USG) to TRS for USG employees who choose to participate in TRS. Read more about the non-payment of the currently-required remittance HERE . When presenting the bill during a recent committee hearing, Chairman Benton clarified that HB 292 is intended to trigger an actuarial study “to find out what the true numbers are and find out if any money is owed.” During the hearing, PAGE testified in support of an analysis of the USG non-payment and its fiscal impact on TRS.

HB 336 , by Rep. Shaw Blackmon (R-Bonaire), would allow retired educators to return to work full time. These educators would continue to draw their current retirement benefits while also receiving a full-time salary. The school district or educator would be responsible for paying the employee’s share of retirement contributions for the full-time position. However, the employee would not receive an increased TRS benefit for return to work.

HB 320 , by Rep. Dave Belton (R-Buckhead), contains the same policy change as HB 336, except limiting districts to hiring retired educators full-time in science, technology, engineering, arts, and math (STEAM) positions.

HB 390 , by Rep. Benton, would allow educators with international teaching service at an accredited school to purchase up to 24 months of TRS credit at full actuarial value.
 
The following are non-fiscal TRS bills introduced in 2019:
 
HB 109 , by Rep. Benton, HB 109 proposes the following for incoming educators who become TRS members after July 1, 2019:

  • Changing the calculation in determining “average final compensation” to the five highest consecutive years of an educator’s salary. For current members, the calculation is based on the two highest years of salary.

  • Lowers the maximum earnable compensation that can be used in the determination of retirement benefits to $200,000 with an escalator for inflation. The limit for current TRS members is $280,000.

  • Set a new range of 5-8.5 percent for mandatory employee contributions to TRS. The percentage would be determined annually by the TRS board and would reflect “needs of the fiscal state of the retirement system.” The employee contribution range for current members is 5-6 percent.

  • Implements a "rule of 85," meaning that years of experience and age must total 85 years in order to retire.

  • Eliminate the opportunity for educators to use unused sick leave toward retirement credit.

  • Eliminate the right for teachers to retire in advance of the start of the school year when they achieve their 30 years of service by Dec. 31 of that school year.

  • Limit the salary increases used to determine TRS benefits from the highest five years of compensation to the highest two years of compensation.

HB 109 passed out of the House Retirement Committee, but was held in the House Rules Committee and did not cross over. The bill remains eligible to move forward in 2020.

HB 196 , by Rep. Benton, would require new and existing trustees on the boards of TRS and other public employee benefit plans to undergo regular fiduciary and governance training. The bill passed both the House and Senate and awaits the signature of Gov. Brian Kemp.

SB 117, by Sen. Ellis Black (R-Valdosta), would require that any future law that allows individuals to obtain credit in a public retirement system pass along the full actuarial costs of obtaining the credit to the participant in the plan. The bill passed the House and Senate and awaits Gov. Kemp's signature.

SB 129 , by Sen. Chuck Hufstetler (R-Rome), would allow University System of Georgia (USG) employees who elect to participate in the Regents Retirement Plan in lieu of TRS to revoke this decision at will. The bill was not heard by the Senate Retirement committee in 2019.

SB 175 , by Sen. Black, would require school districts employing retirees at 49 percent to pay into TRS both the employee and employer contributions. During the committee process, RESAs and substitute teacher positions were removed from the bill. The bill passed the Senate and is currently in the House Retirement committee.
Review of Georgia Department of Audits TRS Performance Audit
The board discussed the audit conducted by the Georgia Department of Audits linked here . In its report, the Department of Audits notes O.C.G.A § 47-21-5 requires the TRS board to submit a bill to the USG to cover the unfunded accrued liability resulting from the creation of the Optional Retirement Plan (ORP) available to USG employees. The audit noted that TRS has not submitted a bill since 2008. The board convened a subcommitee to determine the amount the TRS board needs to request from ORP. The subcommittee will hold open meetings and will present its recommendation at the May board meeting. PAGE will attend the subcommittee meetings and provide recaps in the Capitol Report.


Sean DeVetter
Staff Attorney