Rewind
1989
The Texas Association of Public Employee Retirement Systems is celebrating its 35th anniversary this year, marking more than three decades of providing valuable information and insights to Texas's public employee pension industry.
rewind
The '80s icons who created a pensions education revolution
TEXPERS was founded in 1989 as a nonprofit organization by a group of pension trustees and administrators who wanted to promote sound retirement policies and practices for public employees in the Lone Star state. Since then, TEXPERS has served as a professional membership organization, offering networking and professional development covering a wide range of topics related to public pension systems, such as investment strategies, legislative updates, legal issues, best practices, and industry trends.
"TEXPERS serves as a beacon of light for its System Members and Employee Groups, guiding them to a future of secure retirement for active and retired law enforcement officers, first responders, municipal workers, and other public servants in communities across the state," says Sherry Mose, president of the Association's Board of Directors. "TEXPERS has been a vital source of information and advocacy for its members, who include trustees, administrators, investment professionals, consultants, actuaries, attorneys, and other stakeholders of public retirement systems in Texas."
Public employee retirement systems trustees and administrators are provided with the skills and industry insight needed to manage their retirement money through TEXPERS' conferences, educational seminars, and training programs. In addition, the Association advocates for a secure retirement, helping its collective systems deliver on their promises to provide retirement incomes for hardworking and dedicated employees.
"TEXPERS has stayed true to its mission statement, 'Providing
Protect
Pensions
Note: Images generated using prompts by OpenAI, DALL-E, 2024
trustees with high-quality education and training,' since its founding," Mose says. "With ever stronger educational programs, professional services, and alliances to support the needs and goals of our members, including a vigilant eye on the political landscape, the Association has never wavered from its purpose."
The Association is an approved continuing education provider of the Texas Pension Review Board, the independent state agency that oversees and reviews all public pension plans in Texas. TEXPERS has collaborated with the PRB on several occasions to provide training and guidance to pension trustees and administrators on how to comply with state laws and regulations and improve the governance and performance of their pension plans.
TEXPERS also has grown significantly during its 35-year history, making it a premier training provider for retirement systems.
"The Association continues to be a hub for the exchange of ideas and information on issues affecting public retirement systems," Mose says. "We're proud of our 35-year history of serving the public employee pension industry in Texas and look forward to continuing TEXPERS' mission of informing, educating, and advocating for our members in the coming years."
Founding Members
The vision of five individuals made TEXPERS possible. Willaim "Bill" Blythe Jr., George Cones, Rita Horwitz, Carlos Resendez, and Jennifer Cooper created the organization to protect and strengthen Texas' public employee retirement systems.
In a publication celebrating TEXPERS' 20th anniversary, Cones, the Association's first board president, said statues governing most state pension funds changed during the late 1970s and early '80s, giving fund trustees new responsibilities. He said fund trustees needed to educate themselves to better understand how to serve their plan participants and beneficiaries best.
"The introduction of the Prudent Expert Rule was a major boon to many pension funds," Cones says in a TEXPERS 2009 interview. "Prior to the change in the statutes, many funds had statutory lists dictating asset allocation and prohibiting investments in certain asset classes. The Prudent Expert Rule, like the [Employee Retirement Income Security Act of 1974's] fiduciary rule, allowed pension trustees to make investments based on the portfolio rather than on an investment-by-investment basis. An investment, while risky on its own, may reduce risk in the overall portfolio due to its low correlation with other asset classes. Under the new rule, diversification is prudent.”
At the same time as pension funds faced new state fiduciary laws, they also faced political challenges at the state and federal levels. Trustees from across the state began to see a need for a forum to provide educational opportunities to all interested pension fund trustees, staff, and affiliated organizations and a platform for Texas pension funds to join and protect their interests.
Cones worked with Cooper, Blythe (a former state legislator and founder of the Texas Pension Review Board), Resendez, and Horowitz to form TEXPERS's original nonprofit corporation. Blythe, the first executive director of TEXPERS, says that before creating the Association, he and others had to "put the message out to systems to see if they liked the idea" of establishing a nonprofit dedicated to providing training
and advocacy.
In a 2019 interview, Blythe says getting the message out to trustees across the state was difficult because there wasn't a database of contacts in 1989. A statewide meeting of firefighter funds solved that problem. Blythe attended and set up a raffle drawing for a deer rifle. To enter, people had to list their names, the funds they represented, and contact information.
“Funds belonging to the Texas Local Fire Fighter Retirement Act began to sign up, and the Houston Firefighters' Relief & Retirement Fund, which provided assistance with staff, phone calls, mailings and promotional materials," Blythe says.
The original founders instead wanted even the smallest groups in the organization to be protected, states Cones in his 2009 interview with TEXPERS.
"They believed it should not matter whether a member was a teacher, firefighter, police officer or city employee; nor whether one was from a large or small fund--everyone should feel that they have a role in the organization," Cones says in the interview. Together with Cooper, TEXPERS' first board treasurer, the group studied the bylaws of other organizations, establishing their own that worked for TEXPERS.
FAST FORWARD
The Association started with 20 members. By 1993, TEXPERS comprised 58 system members and employee groups with 63 associate members. That year, TEXPERS helped get a constitutional amendment passed allowing plans to be administered by their members and their chosen advisors. In 2001, the Association had 88 members comprising Member Systems, statewide Employee Groups, and Consultants, and 102 Associate Members.
In 2003, the nonprofit professional membership Association helped convince state legislators to pass another constitutional amendment, this time to protect the pension benefits of members of public pension plans in the state.
"A committee with TEXPERS raised $400,000, and during the legislation's consideration, not a single vote was cast against it," says Paul Brown, TEXPERS Legislative Committee Chair and then Board President.
In 2008, the Association launched its Certified Trustee Training, establishing its Minimum Educational Requirements that TEXPERS' Board of Directors felt trustees should know. By the following year, TEXPERS' membership bloomed to 111 local System Members, State Employee Groups, and Consultants, and 138 Associate Members.
Today, TEXPERS System Members and Employee Groups manage a collective $32.7 billion in retirement assets for 57,728 active members and 60,737 retirees and beneficiary annuitants. Max Patterson, who retired as TEXPERS' executive director at the end of 2018, spent 11 years as the Association's top administrator. When TEXPERS' Board of Directors hired him, he said his primary focus was more on education and less on the legislature. His focus soon shifted.
"Over the next couple of years, the legislature started to focus more attention on public plans, primarily based on outside interest groups seeking to dismantle defined-benefit plans," he says in a 2019 interview with TEXPERS.
Legislators began filing bills in attempts to control local plans. Patterson found himself spending more time on legislative efforts and less on training.
"Over the next several years, I was testifying before legislative committees, which my predecessor never did," he says. "I worked very closely with the Pension Review Board and took a proactive approach in working with them. As a result, TEXPERS became recognized as a credible association and our testimony on bills was seen as very important to our members as well as to the legislative committees. I have to say that our lobbyist, HillCo Partners, was a major asset and working together helped a great deal."
Most local plans are created in state law; any changes must go through the legislature. For that reason, Patterson says, the Association's focus must be on the members of the legislature.
"Convince them that the plans are needed and are managed properly, then the likelihood of any changes are minimized," he says in the 2019 interview. "As long as there are outside groups advocating for defined-contribution [401(k)-like retirement] plans, TEXPERS will have to defend [more secure retirement option] plans.
Whatever challenges arise going forward, Mose, the Association's Board president, says TEXPERS will be prepared to meet them "just as we have done during the last 35 years."
"The success of TEXPERS would not have been possible without the support and faith of all its members," she says. "The Association is fortunate to have members who are incredibly passionate about the issues affecting public employee retirement." ■
TEXPERS
Icons
FROM LEFT, TOP, former TEXPERS board members Jake Soteriou, Jim Montero, and Fred
Holmes.
FROM LEFT, BOTTOM, former board members Kendall Thomas, Barbara Chelette, and Jesus “Chuy” Terrazas.
ABOVE, FROM LEFT, Rita Horwitz, Jennifer Cooper, Carlos Resendez, George Cones and Willaim “Bill” Blythe Jr. created TEXPERS to protect and strengthen Texas’ public employee retirement systems.
FROM LEFT, TOP, more recent TEXPERS influencers, past and present, include current Board President Sherry Mose; First Vice President Jose Cavazos; and Executive Director Art Alfaro; FROM LEFT, BOTTOM, is long-time TEXPERS member Michael Trainer, former TEXPERS board member Mike Curran (deceased), and former executive director Max Patterson.
Age of Inception
To celebrate its 35th anniversary, TEXPERS is interviewing and periodically publishing the thoughts of its state & national pension community members who have played a part in its development.
Written by Joe Gimenez
Our first two commentators have an extensive history in the public policy world of Austin; one serves on the Association's Board of Directors. The other has been a guiding voice for TEXPERS board presidents. Their stories testify to the Association's focus on education for the sustainability of public pension funds in Texas and the value of networking enabled by the organization. Look for additional interviews updated here.
Larry Reed
discussions with peers, networking, and attending meetings were all valuable experiences, Early on.
Larry Reed is a trustee of the San Antonio Fire and Police Pension Fund, representing retired firefighters. Reed played a part in the legislative pension reform effort of the late 1980s for SAFPPF. He also serves on the TEXPERS Board of Directors. He reflects on the first TEXPERS conference.
I attended the first TEXPERS conference at the La Mansion Hotel in San Antonio. At the time, it was a very small group, mainly comprised of representatives from Dallas, Houston, and San Antonio funds. That would have been 25-30 years ago, I guess.
At the time, I was an active firefighter trustee on the San Antonio Fire and Police Pension Fund Board. I served on the TEXPERS Board in the late 1990s and early 2000s, took a break, and came back on in 2010 or 2012. I may be the last guy who attended that first conference. I don't know.
From that first meeting, networking and peer-to-peer discussions of the issues facing pension funds would be the most valuable reason for gathering like that. It spurred visitations among the funds across the state. We visited the Dallas Police and Fire Pension Fund, the Houston Firefighters' Relief and Retirement Fund, and the Houston Police Officers' Pension Fund to see how they did things. Networking was tremendously important. The smaller funds also benefited from the idea-sharing and discussions about best practices.
TEXPERS had to keep evolving because the pension fund business kept changing. It was becoming much more complicated than when TEXPERS first started. For example, SAFPPF probably had only about six investment managers 25 years ago.
Today, we probably have about 70, give or take, so it is much more complicated. We used to have one consultant. Now, we have consultants for real estate, private equity, and nearly every asset class. Investing is much more specialized.
TEXPERS' major accomplishment, in my mind, was the 2003 constitutional amendment (called the Texas Unalterable Retirement Benefits Amendment), which prohibits cities from reducing accrued benefits. That was a significant victory for all public employees. It said a municipality could change them but couldn't take them away. That was directly related to TEXPERS' efforts in the Legislature.
Pension funds have to stand together to protect defined benefit plans. You better hold on to your wallet every two years when the Legislature meets. There is strength in numbers and staying with the same message to all legislators.
Lisa
Ivie-Miller
Education and training for retirement system trustees later became the focus.
Lisa Ivie-Miller, AIF, is a principal and financial advisor at CAPTRUST. She began working with TEXPERS in the early 2000s as Commissioner of the Office of the Firefighters' Pension Commissioner. The Office of the Commissioner oversaw the 42 plans organized under the Texas Local Fire Fighters' Retirement Act (TLFFRA) and administered the Texas Emergency Services Retirement System (TESRS). She is an advisor to TEXPERS' board president, Sherry Mose, and two other past presidents.
When I was appointed by the Governor in 2004, the Office of the Firefighters’ Pension Commissioner needed support for its legislative mission. The statewide TESRS fund and many TLFFRA plans were struggling after the dot.com bubble. In 2004, TESRS was projected to be insolvent by 2013 if changes were not made to its structure.
The statewide Board or Commissioner’s office had not been involved very with TEXPERS, but in 2005, there were legislative initiatives needed to overhaul the statutes. I knew former Rep. Bill Blythe from his days in the Legislature and his authoring of the bill establishing the Texas Pension Review Board. After he left the Legislature, he formed TEXPERS, and at that time, as members of TEXPERS, we really needed his and TEXPERS' assistance. The following session in 2007, we had a major rewrite of the statutes and overhauled all the rulemaking of the statewide fund. Thanks to TEXPERS’ support, the legislation passed smoothly after the first try.
I also came to know Max Patterson, who, in the early 2000s, was on the TESRS Board and worked as executive director at the Houston Firefighters Relief and Retirement Fund. When Max took the reins at TEXPERS in 2010, I saw a significant change in TEXPERS because he stressed training and education for retirement system trustees, especially for the TLFFRA funds.
TESRS is a pooled investment pension fund for 240 municipalities. When Max served on the board, he saw and understood the needs from a trustees’ perspective of not only the investment side, but the administrative side as well. Former TEXPERS Chair Eyna Canales-Zarate, who was a public employee trustee for the City of Austin Employees Retirement System, also supported Max and his efforts.
When I left the Office of the Firefighters’ Pension Commissioner in 2010, Eyna appointed me as her presidential advisor. Sadly, the Office of the Firefighters’ Pension Commissioner was sunset (decommissioned) by the Texas Legislature in 2014, and its duties were rolled into the Pension Review Board.
TEXPERS' mission has rightly focused on enhancing its educational efforts for its members. This has really helped both the large and small pension systems pay attention to all the crucial matters that contribute to a healthy fund. In the early 2000s, diversification and reporting requirements became hallmarks of trend changes.
The pension systems also began to utilize investment consultants. However, systems should always recognize that consultants are good for assisting funds in structuring their pension programs, but the fiduciary responsibility cannot be abdicated to anyone other than the trustee and the funds of the systems are for the member’s benefits.
The PRB has become much more professional in analyzing and considering those sorts of issues. TEXPERS has been there every step of the way, working with the PRB board and staff and its member systems to ensure that
transparency and accountability work correctly for everyone.
In general, we are seeing lots more data everywhere. TEXPERS, the PRB and pension systems are doing a great job of managing the data and creating reporting that brings to light what the data means to all funds. Better data helps everyone do their job, and at the end of the day, that makes for accomplishing the number one goal of creating a secure retirement for police, firefighters, municipal employees, teachers, and other public sector workers.
Another big takeaway I have seen over the years through both TEXPERS and the TLFFRA Education Foundation is peer-to-peer assistance. It is vital that systems can learn from each other. The only difference in these funds is the amount of money and the number of members. All processes, actuarial, investment, legal, etc., are the same.
For example, Lubbock knows what is working in El Paso and Texarkana can learn from Dallas. TEXPERS and the TLFFRA Education Foundation support peer-to-peer educational growth making a huge difference in the management and administration of pension funds across Texas.
Going forward, the education and networking components of TEXPERS will continue to be its most valuable contribution to the pension community. ■