As Texas prepares for its 89th Legislative Session, state agencies submit their Legislative Appropriations Requests (LARs), shaping the state's budget for the next biennium. These requests will be discussed during upcoming Legislative Budget Board (LBB) budget hearings, providing a crucial opportunity to assess how public resources will be allocated. These hearings are essential for leaders of public employee retirement systems, particularly as they pertain to financial management, state workforce needs, and pensions.

Here's an overview of the key upcoming LBB budget hearings that might interest TEXPERS system members and other public employee retirement system leaders.

Wednesday, Sept. 25, 2024

• State Office of Risk Management (11 – 11:30 a.m.) The management of risk in state agencies is a key factor in determining the state's financial obligations. Changes in how risks are handled could affect state employee health benefits and workers' compensation, which in turn may influence contributions to retirement funds.

• Texas Military Department (11:30 a.m. – Noon) Funding for the Texas Military Department is significant, especially for public pension systems serving veterans or state employees. The department's activities often involve state and federal financial interactions, which could impact funding models.

• Texas Veterans Commission (1 – 1:45 p.m.) Veterans’ benefits and services are key focus areas for pension systems supporting military personnel. The Texas Veterans Commission's budget directly ties to the resources available for veterans, which may affect retirement fund disbursements and healthcare benefits.

• Texas Education Agency (2 – 3 p.m.) The Texas Education Agency oversees public education in Texas, directly influencing the state's largest workforce. Retirement systems serving educators should monitor how the agency’s budget impacts salaries, staffing levels, and potential future pension liabilities.

• Permanent School Fund Corporation (3 – 4 p.m.) The management of the Permanent School Fund is crucial to the financial health of Texas' education system, including retirement systems. This fund supports Texas public schools and is often intertwined with public investment strategies, which could provide insights for pension fund managers.

Thursday, Sept. 26, 2024

• Department of Family and Protective Services (1 – 3 p.m.) As a major employer in Texas, the Department of Family and Protective Services (DFPS) directly impacts public retirement systems. Changes in DFPS funding could lead to workforce adjustments, which may affect the number of employees contributing to retirement systems.

Friday, Sep. 27, 2024

• Employees Retirement System (1 – 3 p.m.) This is one of the most critical hearings for public employee retirement system leaders. The budget discussions for the Employees Retirement System (ERS) will focus on the financial sustainability of pensions, benefits, and the fund's health. Leaders should be attentive to any proposed changes to funding formulas or contribution rates.

• Pension Review Board (1 – 3 p.m.) The Pension Review Board oversees the health of public retirement systems in Texas. This hearing will likely delve into PRB's budget, pension fund performance, potential reforms, and strategies to ensure long-term solvency. Any significant discussions here could shape future pension legislation.

• Texas Emergency Services Retirement System (1 – 3 p.m.) This system supports first responders, and changes in its budget can impact the benefits offered to fire and emergency personnel. Public pension leaders should note any shifts in funding, as this could set precedents for other retirement systems.

Monday, Sept. 30, 2024

• Health and Human Services Commission (10 a.m. – 2 p.m.) The Health and Human Services Commission is a major employer, and its budget often influences healthcare-related benefits for public employees. Retirement system leaders should keep track of healthcare appropriations, as they directly affect retiree health benefits.

Tuesday, Oct. 1, 2024

• Office of the Attorney General (1 – 2 p.m.) The budget for the Attorney General's office is important for public pension systems that rely on the state's legal resources. Changes to its appropriations could impact the ability to enforce pension-related legislation or pursue fraud claims.

Friday, Oct. 4, 2024

• Texas Water Development Board (10 – 11:30 a.m.) Investments in water infrastructure may provide potential avenues for public pension fund investments. Pension fund managers interested in infrastructure as part of their portfolio should follow these hearings closely.

Key Takeaways for Public Employee Retirement System Leaders

• Budget Hearings on Pensions: The Employees Retirement System, Pension Review Board, and Texas Emergency Services Retirement System hearings are particularly critical for public pension system leaders. They will provide insight into the financial health of these funds and potential legislative changes that could impact benefits and contributions.
• Impact on Public Employees: State agencies like the Texas Education Agency, Department of Family and Protective Services, and Texas Veterans Commission are large public employers. Their budgets directly influence the employment landscape, affecting pension contributions and the stability of the funds.
• Potential Investment Opportunities: Hearings related to infrastructure development, such as the Texas Water Development Board, may reveal new investment opportunities for public pension funds looking to diversify their portfolios.

Stay Informed

You can view the complete schedule and updates to the hearing times and dates here. Be sure to regularly check for changes as the Legislature prepares for the 89th Session.

By staying current on these key hearings, public employee retirement system leaders can better prepare for potential changes in funding and investment strategies, ensuring the long-term sustainability of their retirement funds.

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