The Teacher Retirement System of Texas is one of the strongest public pension systems in the country and with the continued hard work of educators and prudent policy decisions, it will remain that way. But public pension systems in general remain under political attack, as we are reminded by a recent appointment that Gov. Greg Abbott made to the State Pension Review Board, which oversees state and local government retirement systems.
Abbott named Josh McGee, a vice president of the Houston-based Laura and John Arnold Foundation, to the board. This is the same John Arnold, a former Enron trader, who wants to replace defined-benefit pensions, such as TRS, with risky 401(k)-style plans. Instead of safeguarding an educator’s well-earned retirement benefits, he would have a teacher roll the dice on a 401(k) that could vanish shortly before retirement if the stock market took another plunge.
The Combined Law Enforcement Association of Texas (CLEAT) has asked Abbott to rescind McGee’s appointment because the group fears he will try to abolish police pensions. McGee’s anti-pension agenda, however, may be broader than that. He may not want to stop with the police.
Even though CLEAT backed Abbott for governor, there is no reason to expect Abbott to change his appointment. There is reason, though, to be wary of pension ideas coming from anyone affiliated with John Arnold.