Teacher Retirement System of Texas' unfunded liability was $7.95 billion in the fiscal year ended Aug. 31, up from $5.2 billion in the previous year, according to a valuation report by Gabriel, Roeder, Smith, the $85 billion system's actuary. The report says the shortfall will increase unless investment returns improve or lawmakers raise the state's contribution, which has been at 6% of employee pay, for nearly 10 years.
The system has sufficient funds to pay benefits for current and new retirees "well into the future," Howard Goldman, spokesman, wrote in an e-mail. Yet without significant investment gains, long-term changes to funding structure and possibly benefit design are warranted, he added. The system's investments have returned an annualized 9.5% over the last 10 years. Mr. Goldman said system officials will be working with state legislators to identify and evaluate all options; the next session of the Texas Legislature convenes in January.
