Comptroller Hegar: 4 Long Term Fiscal Obligations

Comptroller highlights 4 long term fiscal obligations facing the state:

• state employee pension funding;
• health care coverage for public school teachers and employees (TRS-Care);
• the Texas Guaranteed Tuition Fund, a state-sponsored tuition savings plan; and
• deferred maintenance for state buildings.

What warning flares has the Comptroller sent?

• In December he mentioned the 4 long term fiscal obligations in a letter to lawmakers
• In March he detailed the long term fiscal obligations in his Fiscal Notes publication

What specific Issues are facing ERS?

• unrealistic assumptions about investment returns
• inadequate contributions 
• longer life expectacy
• fewer contributors to the system
• 30% of ERS is law enforcmeent, which tends to retire earlier

Policy options to fix ERS:

• raising member and/or state contributions
• one time lump sum payment to ERS- either GR or Economic Stabilization Fund
• Pension obligation bonds
• Reducing benefits to future or future and current members
• Switching to a Hybrid plan ro Defined Contribution