TRS changes investment rate of return assumption
Senate Republican lawmakers are working with the Governor’s office and their legislative colleagues on options, in response to the recent decision by the non-elected Teacher’s Retirement System Board that will cost taxpayers additional millions in future pension payments.
The board voted 10-0 on Aug. 26 to reduce the rate of return assumption on its investments from 7.5 percent to 7 percent. The change may seem small, but that half a percent will add an estimated millions of dollars to the state’s budget obligations—a significant blow to the state’s already shaky finances. Though Senate GOP legislators had urged the TRS Board to refrain from acting until the public was given an opportunity to weigh in, the board chose to move forward.
Senate Republicans say it is imperative lawmakers explore options in response to the recent TRS board decision, which forces the state to direct scarce resources to cover the obligation. This will direct precious state dollars away from education and social service providers, many of whom were hit hard during the budget crisis.