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April 13, 2018      5:45 PM

Pension funds on track to add substantial weight to Texas debt next session

With up to $13 billion in debt possible in two funds, lawmakers may be more receptive to Comptroller Hegar’s proposal to aggressively invest ESF dollars to generate revenue to cover unfunded liabilities

Texas lawmakers appear likely to face an increase in long-term shortfalls to the state’s two major pension funds – up to $13 billion – if boards at the Employee Retirement System and Teacher Retirement System complete votes to decrease rates of return on investments.

Such decreases would be a huge blow and a tremendous increase in cost to current Texas pension fund models.

At the same time, they might be actuarially sound choices, as required by the state constitution. ERS has voted to roll back its investment decision. TRS is expected to take a more conservative course of action at its meeting in April.

Such choices make revenue-generating proposals, like Comptroller Glenn Hegar’s Texas Legacy Fund, even more critical to the numbers in next session’s budget.

By Kimberly Reeves

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