Texas is not immune to the problems that trouble pension systems across the country. In Texas, state and local governments employ about 16% of workers. Most of them have a defined-benefit pension plan that promises a regular payment to retirees based on guaranteed formulas and irrespective of investment returns. Underperforming investments and generational accounting issues are exhausting these plans leaving them with mounting, unsustainable liabilities. In fact the Texas Pension Review Board (PRB) noted in its 2019 report to the Legislature that “despite a nearly 10-year bull market follow- ing the 2008 market downturn, the unfunded liabilities of many public retirement systems both across the country and in Texas continue to rise.”
An insider’s insight on today’s economy: Texas
Since the severe spring 2020 shutdown recession, Texas has been a leader in economic recovery. This includes reaching new record highs in total nonfarm employment for 7 straight months, leading exports of technology products for 20 consecutive years, and being home to 54 of the Fortune 500 companies. Fortunately, the 87th Texas Legislature supported the...