Bipartisan House Plan Moves to Bolster State Pension Fund

AUSTIN (AP/Staff) – House leaders facing a $7.2 billion shortfall for state worker retirement pensions have unveiled a plan to increase what Texas pays but also upping employee contributions. The announcement came at a news conference that included Republican Dan Flynn of Van (at left in photo), chair of the House Pensions Committee.

At current funding levels, the Texas Employees Retirement System may be depleted by 2052. A bipartisan plan announced Tuesday increases the state’s contribution to pensions to 9.5 percent of an employee’s pay, up from the current 7.5 percent. It also maintains state agency contributions at 0.5 percent. And the proposal increases to 9.5 percent for 2016 and 2017 employee contributions that are currently set for 7.2 percent and 7.5 percent, respectively, those two years. To soften the blow, the plan includes a 2.5 percent pay raise for state employees taking effect next year.

“With this legislation, we are keeping our commitment to our hardworking state employees in their retirement years,” said Flynn. “This is a vital benefit to employees who earn an average salary of approximately $45,000 a year.” The pension system covers around 230,000 active state workers and retirees.