Weekly Roundup: Pensions, Investments & Market Trends

Staying ahead of economic shifts, policy changes, and market movements is crucial for public pension funds, institutional investors, and retirement professionals. This week’s developments highlight a mix of economic optimism, policy initiatives, and investment challenges. Below, we break down key stories shaping the landscape, providing The Story and Why It Matters to help you navigate these changes.

Proposed Raises and Cost-of-Living Adjustments for Texas State Employees and Retirees

The Story

Texas lawmakers have introduced House Bill 343 and its Senate companion bill, proposing significant raises for state employees and a 7% cost-of-living adjustment (COLA) for retirees. This marks the first COLA for Texas state retirees in 25 years, addressing inflation’s impact on fixed incomes. Lawmakers argue that stagnant wages and rising living costs have left public employees and retirees struggling financially.

Why It Matters

For Texas pension funds, this proposal represents a long-overdue effort to keep up with inflation and provide financial security for retired state employees. If passed, the increase in retirement benefits could improve the financial well-being of thousands of pensioners, while higher salaries for state employees may improve retention and recruitment in the public sector. However, the legislation’s funding mechanism will be a key factor to monitor, as increased pension benefits often require additional financial planning or adjustments to pension fund contributions.

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Senator Cruz Introduces MEDAL Act to Decrease Financial Burden on Medal of Honor Recipients

The Story

U.S. Senator Ted Cruz (R-Texas) has introduced the Medal of Honor Educational Assistance Act of 2025 (MEDAL Act) to ease the financial burdens of Medal of Honor recipients. The legislation would provide full tuition coverage, housing stipends, and book allowances for recipients and their families. Cruz emphasized that these heroes should not face financial struggles after their service and sacrifices.

Why It Matters

For pension funds and veterans' benefits programs, this initiative highlights an evolving commitment to military personnel and their families. Expanding educational benefits can lead to increased veteran enrollment in higher education institutions, affecting funding allocations and tuition revenue streams. Additionally, the bill signals growing federal support for military families, which could influence future policy shifts related to veterans' pensions and retirement benefits.

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NCPERS Names Public Pension Communicator of the Year Award Winners

The Story

The National Conference on Public Employee Retirement Systems (NCPERS) recognized public pension professionals for their outstanding communication efforts. Among the honorees was Mehrin Rahman, Communications Director of the City of Austin Employees’ Retirement System (COAERS) in Texas. Rahman was awarded for leading financial wellness initiatives, rebranding efforts, and website redesign projects to improve member engagement.

Why It Matters

For Texas pension systems, effective communication plays a crucial role in building trust with members, ensuring transparency, and promoting financial literacy. The recognition of COAERS highlights the growing importance of proactive pension fund communication strategies. Other pension funds can learn from Rahman’s efforts to enhance outreach and engagement.

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Pension Funds Advocate for Greater Transparency in Private Equity Fees and Returns

The Story

A coalition of U.S. pension funds and institutional investors is pushing for greater transparency in private equity (PE) fee structures and investment returns. The Institutional Limited Partners Association (ILPA) has proposed new guidelines to standardize financial reporting, addressing concerns over inconsistent disclosures and complex fee arrangements. Larger institutions like the Texas Teachers' Retirement System have successfully negotiated for detailed information, but many smaller pension funds struggle with limited access to transparent data from private equity firms.

Why It Matters

For public pension funds, greater transparency in private equity is critical to ensuring responsible fund management and optimizing investment decisions. Standardized disclosures can help trustees and asset managers evaluate investment performance more effectively, leading to better financial outcomes for retirees. Additionally, more transparency fosters trust between pension funds and private equity firms, ensuring fairer, more sustainable partnerships in the long run.

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Connecticut's Disconnected Youth and Pension Subsidies

The Story

A recent Equable Institute report examines how Connecticut’s teacher pension subsidies relate to the number of disconnected youth—individuals aged 16 to 24 who are neither in school nor employed. The analysis found that towns with higher rates of disconnected youth receive lower per-pupil pension subsidies from the state, highlighting a potential disparity in how pension funding is distributed.

Why It Matters

For policymakers and education stakeholders, this finding highlights a critical link between pension funding and youth engagement. Ensuring equitable pension subsidies may help address challenges faced by disconnected youth, leading to better education and employment outcomes. Pension allocations should align with community needs, ensuring that all students, regardless of location, have equitable access to resources.

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Social Security Fairness Act Benefit Increases Could Take a Year

The Story

The Social Security Administration (SSA) has warned that benefit increases from the Social Security Fairness Act, signed into law in January 2025, may take over a year to process. The law repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which previously reduced benefits for public sector workers and their spouses. However, due to budget constraints and administrative challenges, the SSA says the rollout will be slow.

Why It Matters

This delay could affect millions of retired public employees, particularly teachers, police officers, and firefighters who were subject to WEP and GPO reductions. For pension funds, it means retirees may need financial planning assistance to navigate this transitional period. While the repeal is a victory for many, the slow implementation timeline raises concerns about how government agencies manage large-scale benefit adjustments.

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Final Thoughts

This week’s headlines reflect major shifts in pension management, benefits policies, and investment trends. Texas pension reforms, transparency in private equity, and social security adjustments all underscore the evolving financial landscape. Public pension funds and institutional investors should remain agile in adapting to new regulations, workforce compensation shifts, and emerging economic trends.

Stay tuned for more insights and updates in next week’s TEXPERS Weekly Roundup!

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