Employee Benefits »

Teacher Retirement System (TRS):  The legislature funded the state contribution rate at 6.58 percent.  This results in increased funding of $636 million in All Funds to reflect the increase in the state contribution rate from 6.00 percent to 6.58 percent and to reflect assumed payroll growth of seven percent in fiscal year 2007 and five percent in fiscal years 2008 and 2009 in public education and five percent annually in higher education.  Additionally, there is a contingency rider based on the enactment of Senate Bill 1846 that authorizes the TRS to 1) provide a one-time 13th check to retirees, and 2) set the active member retirement contribution rate at 6.58 percent dependent upon the actuarial soundness of the fund.   TRS has stated that the rate will remain at 6.4 percent until January when they will assess if the increase is needed to pay a 13th check to retirees. 

Optional Retirement Program (ORP):  The legislature funded the state contribution rate at 6.58 percent.  Increased funding of $47 million in All Funds reflects assumed growth in covered payroll of 4 percent annually and increase in state contribution rate from 6.00 percent to 6.58 percent

Higher Education Employees Group Insurance:   The legislature provided funding for Higher Education Group Insurance of $1,005 million in General Revenue, which is an increase of $68.8 million or 7.3 percent over the 2006-07 spending level.  The funding level also provides an additional $0.3 million in State Highway Fund 006 for the Texas Transportation Institute.  For the Texas A&M Health Insurance Program, the appropriation totaled $157.9 million, an increase of $7.5 million, or five percent.

The funding increase narrowed the gap in funding between higher education employees and other state employees.  For 2006-07, higher education employees’ group  insurance was funded at 87.5 percent of the state contribution rate for regular state employees.  For 2008-09, higher education employees that are covered under the Employees Retirement System group health insurance plan are funded at 97.5 percent of the state premium contribution of regular state employees.  Higher education employees in the A&M System’s and UT System’s group  insurance programs are each funded at 95 percent of the state premium contribution rate for regular state employees.  Finally, community college employees were funded at 90 percent of the regular state employee rate.  However, the Governor vetoed the FY2009 appropriations for the community colleges health insurance, resulting in a decrease of group insurance appropriations of $154 million to the community colleges.

The 2008-09 biennial funding level is also intended to provide a 0.76 percent rate increase in fiscal year 2008.

This appropriation provides funding for the General Revenue health insurance contributions from the state for the three higher education health insurance providers in higher education: The Texas A&M University System, The University of Texas System and the Employees Retirement System.  The ERS administers the health insurance program for all of higher education, including the community colleges, other than the A&M and UT Systems.  The funding increases among these three programs vary depending on the actual snapshot enrollment of the employees and retirees in each system as of December 1, 2006.  In addition, for the general academic institutions, the proportionality between General Revenue and Other Educational and General Income was based on a proportionality calculation submitted to the LBB during the session that used the Accounting Policy Statement 011 format, but excluded indirect cost recovery from the calculations.

State Employee Pay Raise:  As mentioned above, the A&M System agencies are included in the state employee pay raise of 2 percent (or a $50/month minimum) in each year of the 2008-09 biennium.  The estimated General Revenue share for the agencies is $7.3 million.