At its quarterly Board of Trustees meeting, the Teacher Retirement System of Texas (TRS) released a Pension Benefit Design Study for 2018 and an Executive Summary of the study. This new study updates findings from an original study completed in 2012. The study provides an overview of TRS’ defined benefit plan, a comparative analysis of different types of plans, and highlights potential costs relating to implementation of a new plan structure. TRS highlighted several key findings from the study, including:
- A total of 96 percent of public school employees do not participate in Social Security. For many TRS members, the only source of lifetime income in retirement is their TRS benefit.
- A majority of TRS members would end up more financially at-risk by investing on their own in a plan with a defined-contribution component.
- The TRS benefit, as currently designed, replaces roughly 69 percent of a career employee’s pre-retirement income when that person initially retires.
- Alternate plans would be 30 to 124 percent more expensive than the current defined benefit plan to provide the same benefit level upon an employee’s retirement.
For more details, please see the 2018 Pension Benefit Design Study, the Executive Summary, and the press release announcing the release of the study.