ERS releases annual actuarial valuations; only 70.5% of benefits are funded

The Employees Retirement System has released its annual actuarial valuations for the three trust funds it administers, ERS, the Law Enforcement and Custodial Officers Supplemental Retirement Fund (LECOSRF), and the Judicial Retirement System of Texas Plan 2 (JRS 2), as of the end of the fiscal biennium on August 31, 2019. As the agency and TPEA has repeatedly warned the Legislature, all three funds are projected to run out of money: ERS in 2075, LECOSRF in 2043, and JRS 2 in 2076. “The current outlook for ERS is very poor,” GRS Consulting Actuaries reported. “It is important to understand that the currently scheduled contributions are not expected to accumulate sufficient assets in order to pay all of the currently scheduled benefits when due.” While the report paints a grim picture - only 70.5% of current benefits are funded in ERS - there is evidence that the Legislature is waking up to the severity of the problem. The House Appropriations Committee will conduct hearings next year on the situation and make recommendations to address funding shortfalls to the 2021 Legislature. We also believe that key members of the Senate Finance Committee understand the urgency of the issue. Rest assured that TPEA will work tirelessly next year to ensure that restoring actuarial soundness in these funds will be a top legislative priority in 2021. You can view a copy of the ERS handout summarizing the actuary’s findings below.

Full report | Summary