Texas pension bill improved after union mobilizations; more work to be done

Late Thursday night, the Texas House of representatives postponed action on a bill that would have cut pension benefits for future state employees and raised employee and state contributions to the Texas Employees Retirement System (ERS) pension fund.

The original version of the bill, CSHB 1882, would have cut pension benefits that had already been earned for almost two-thirds of the state employees whose pension is administered by ERS.

CSHB 1882 passed out of the House Pension Committee on April 22, but the day before the bill was taken up by the full House, the bill’s sponsor, Rep. Bill Callegari, told the Austin American Statesman that he had accepted changes that would exempt current employees from the pension cuts and apply them only to new hires.

Originally, the till would have reduced pension benefits for most current employees by

  • increasing the number of years used to calculate final average salary to  five, effectively reducing most employees’ pension benefit;
  • eliminating the use of unused annual leave for calculating  pension benefits’;
  • disallowing the use of unused annual leave to calculate years of service for retirement eligibility; and
  • raising the age at which an employee could retire with full pension benefits.

Rep. Callegari said that he agreed to the changes because so many state employees had voiced their opposition to the bill.

After CSHB 1882 passed out of committee, members of the Texas State Employees Union CWA Local 6186 (TSEU) staged a mass call-in to their lawmakers to protest the cuts.

To bolster the call-in, rank-and-file members on May 1 held a Pension Defenders Lobbying Blitz. “TSEU members visited the offices of 30 House Republican members who we felt could be persuaded on this issue,” said Derrick Osobase, TSEU’s political director. “Eight Republican House members agreed with TSEU and committed to oppose the bill in its current form. Some others were uncommitted but expressed their willingness to look at the issues more closely.”

Osobase said that the amended bill is better than the original, but the new version does create yet another tier of unequal pension benefits.

TSEU members on May 8 held another Pension Defenders Lobbying Blitz.

“We broke into four groups to talk to Democrats this time,” said Vicki Clark-Bradley, a retired social worker who worked at the Austin State Assisted Living Center. “The Democrats were solid in opposing the original bill but were slipping a bit with the amendment. We really hate to pit new against older employees.”

If the new version of CSHB 1882 passes, it will be the second time in four years that lawmakers changed pension eligibility rules, which create unequal tiers of pension benefits depending on when an employee started to work for the state. In some cases, employees will be receiving unequal pension benefits even though the are doing the same job.

TSEU is concerned about the effect that creating these unequal benefits will have on state services.

“Cutting the retirement benefits of future employees will increase turnover among these workers and hurt the state’s ability to deliver needed services to Texans,” said Osobase. “High turnover rates are bad for our agencies and universities, and bad for the ERS and TRS (teacher and public higher education pension) funds. When current workers are retired, we need stable and strong pension funds that can provide annuity increases for retirees. This will be less likely with a future workforce that has to work years longer for fewer benefits.”

TSEU is also working with the Texas Federation of Teachers and the Texas State Teachers Association to improve another pension bill that originally called for pension benefit cuts for public school and public higher education employees.

That bill, SB 1458, passed out of the Senate on May 8 and now heads to the House. Like CSHB 1882, the original version of SB 1458 cut pension benefits that had already been earned for hundreds of thousands of public school and public higher education employees. The teachers’ unions mobilized thousands of members to protest the cuts.

The new version significantly reduces the number of employees affected by the cuts; however, those with fewer than five years of service will still see their pension benefits cut.

TFT in a message to members said that when the bill goes to the House for consideration, the union will try to eliminate the cuts that affect those with fewer than fiver years of service and try to win a cost of living raise for all retirees.

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