The Texas Senate announced in a press release that, according to testimony offered before the Senate Finance Committee on Tuesday, the state employee pension fund is on track to run out of money by 2061. The Employee Retirement System currently has unfunded liabilities of $14.7 billion and agency director Porter Wilson told senators that without legislative action, the liability is projected to grow more than a billion dollars each biennial budget cycle.
Comptroller Glenn Hegar encouraged senators to address this issue this year and set the fund on a path toward solvency, as lawmakers did with the much larger Teacher Retirement System last session. Some senators took issue with the fund’s return on investment. Senator Charles Schwertner noted he wants to ensure that the fund’s managing board understands that in the current low-interest investment market, they need to re-evaluate investment strategies.
The median salary for a state employee currently sits at around $36,000. “That’s a pretty low wage if you’re living in Austin, Texas for sure,” said Senator Charles Perry. He cautioned against resolving the unfunded liability in a way that hurts beneficiaries. Committee Chair Senator Jane Nelson said that despite the uncertainty surrounding economic issues this session, ERS reform will be a priority issue for Senate budget writers. Senator Joan Huffman, who led TRS reform efforts in 2019, will also be carrying ERS reform on behalf of the Senate this session.