Texas' teacher pension fund plummets in financial
November 17, 2008
The Teacher Retirement System of Texas has seen about a $25 billion market value drop since Sept. 1 in the nation's widening financial meltdown, making additional benefits next year for retirees appear unlikely.
Written by , The Associated Press
AUSTIN — The Teacher Retirement System of Texas has seen about a $25 billion market value drop since Sept. 1 in the nation's widening financial meltdown, making additional benefits next year for retirees appear unlikely.
Bill Harris, the system's chief investment officer, said however that 275,000 retired teachers and beneficiaries covered by the fund shouldn't fear a change in current benefits.
"These are short-term conditions. We are a long-term fund," Harris said.
But the financial crisis does darken the prospects of cutting an additional check for retirees, which the Legislature sometimes authorizes whenever the system has investment gains.
Last year, retirees in the system received an extra one-time check for $2,400. That was based on a 14 percent investment return for the fund, and a $664 million appropriation from the Legislature to cover payroll increases for active teachers.
The system ended its 2008 fiscal year on Aug. 31 with a market value of $104.9 billion. Harris said the fund likely will end October with a value of between $80 billion and $85 billion once audited returns are complete, the San Antonio Express-News reported.
State law does not allow the TRS or the Employees Retirement System of Texas to give out a 13th check unless the pension is 100 percent funded.
Ronnie Jung, the system's executive director, told fund governing board members that gains and losses were fluctuating by as much as $1 billion a day in the volatile market.
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