Texas Teacher Pension Board Reviews Funding Policy After Payoff Period Jumps to 35 Years

The board that runs the $226 billion Texas teacher pension fund opens a two-day meeting Sept. 17 with changes to the policy meant to keep the fund on course set for the second day — two months after staff told trustees that policy had been tripped.

The fund covers about 2.1 million working and retired school employees, roughly 976,000 still on a payroll. Its last actuarial valuation, as of Aug. 31, 2025, put it at 77.5 percent funded, with a $64.9 billion shortfall, up from $60.6 billion a year earlier. The number that matters most is how long the shortfall would take to clear at current contribution rates: 35 years, against 28 the year before. The actuary wrote that the 35-year period “will neither satisfy the statutory requirements nor the Board’s Funding Policy.” The driver was a change in assumptions reflecting the school pay raises lawmakers passed in 2025.

That is what “tripped” means. The funding policy obliges the system to ask for higher contributions when a valuation shows the debt will not start shrinking within five years. In July, staff put a preliminary range on what it would take just to get the debt shrinking again: an extra 1 to 1.5 percent of payroll, or $693 million to $1.04 billion a year, beginning in fiscal 2028, subject to the valuation due in December. Either way it is a request to lawmakers, who next convene in January. No amendment text has been published, so what the board will actually be asked to change is not yet public.

The board has again posted “succession planning” for both its executive director and its chief investment officer, as it last did in 2022. Brian Guthrie has run the system since 2011; Jase Auby has been investment chief since 2019. Neither has announced a departure and the system has published nothing about a search. The board has reserved the right to take the item up privately under the personnel exception, so the posting establishes only that the subject is on the record.

The health plans get the longest stretch of open discussion. Trustees review reserve policies and investment strategy for both, and may hand the executive director authority to amend affected contracts. The retiree plan, covering 217,076 people, has been running a surplus, and trustees voted in July to cut its Medicare Advantage premiums starting in January. The plan covering 411,134 active school employees and their dependents is drawing down, projected to fall to $446 million by fiscal 2027 even after a 9.9 percent premium increase. The board also honors two departing trustees, Michael Ball and David Corpus, whose successors were seated in July. The meeting runs into Sept. 18.

Meeting at a glance

Board members

• Robert H. Walls Jr. — chair; San Antonio; former iHeartMedia general counsel.
• Elvis Williams — vice chair; Waco; chief operations officer, Waco schools.
• Brittny Allred — Dallas; principal, Luther King Capital Management.
• John Elliott — Austin; partner, Kelly Hart & Hallman.
• Laronda Graf — Queen City; human resources director, Atlanta schools.
• Pete Pape — Leander; chief financial officer, Eanes schools.
• John R. Rutherford — Houston; former energy and finance executive.
• Dan West — Houston; investor, SCF Partners.

Roster from the system’s trustee profiles, cross-checked against committee assignments, the last three sets of board minutes and the governor’s appointment releases. Eight of the nine seats are filled; the system does not publicly identify which seat is vacant, and the Dispatch could not confirm it, so none is named here. Chair Walls’s own term expired Aug. 31, 2025 and he serves as a holdover; Texas law lets appointees continue until replaced. Pape and West were appointed in June and seated in July; the system announced their appointments in the same release that noted Michael Ball’s and David Corpus’s service had concluded, though neither the system nor the governor’s office matched the new trustees to specific seats. Staff contact: Katherine Farrell, (512) 542-6569.