Hegar’s Support for Texas Retirees More Crucial Than Ever

When the legislative session began in January, Comptroller Glenn Hegar urged lawmakers to look “beyond our immediate two-year budget to the state’s long-term needs” — including shoring up the state’s pension plans.

The guidance made sense. Texas was emerging from the worst months of the pandemic; vaccine distribution was just starting; and it would have been tempting for lawmakers to focus solely on the crisis at hand and ignore their long-term obligations to retirees.

Two months later, it’s still hard for lawmakers to look beyond the crisis of the moment as the recovery from the February storm and power outages dominate the legislative agenda. So it’s even more important now that lawmakers take the comptroller’s words to heart and plan for the future.

Comptroller Hegar has long been a supporter of state retirees, a great ally, and an advocate for making the Employees Retirement System actuarily sound. ERS Executive Director Porter Wilson pointed this out in his recent monthly message. 

In the past, Hegar has proposed taking money from the economic stabilization (rainy day) fund to establish a legacy fund to pay down unfunded liabilities in ERS. And in January, he noted that credit rating agencies have highlighted “weak pension funding” as one of Texas greatest challenges, resulting in the 10th-highest pension burden among states.

ERS is now $14 billion short of meeting its future obligations and on pace to run out of money by 2061. ERS leadership has asked the Legislature for $949 million and a long-term strategy to keep the fund actuarially sound.

The comptroller understands that increasing funding in the next biennium and beyond will allow Texas to make good on its promise to retirees who dedicated their careers to making Texas safer, healthier and stronger. It will also help attract new public employees and reduce the burden on future generations of taxpayers.

“If we don’t address these challenges,” Hegar wrote in January, “the price we pay might be ailing pensions affecting both our state credit rating and the financial security of our teachers and state employees.”