by Texas Public Employees Association | June 21, 2021
Essential Texans VI: Who Serves the Public Servants?
Thanks to consistent underfunding, the Employees Retirement System of Texas (ERS) may not be able to keep member pensions and benefits solvent past 2061. That makes it difficult to keep members. State employees with fewer than five years of state service make 65% of Texas’ turnover. They won’t stay for the promise of a program on trajectory to crash.
The Texas Public Employees Association (TPEA) applauds the public servants working to secure state employee benefits that attract top talent to Texas. That’s by design. Past employees of the State Highway Department (now TxDOT) considered a “State Highway Department Retirement System” after seeing their colleagues going to private industry. They joined with other state employees to advocate for a more comprehensive solution: ERS pensions. These early advocates also formed TPEA.
Though we track a broader scope of issues in the 87th Legislature today, our attention to ERS did not end at the 49th Legislature in 1945. TPEA and ERS have had a special relationship ever since. For example, TPEA offered insurance to its members until TPEA successfully lobbied the 64th Legislature in 1975 to provide health insurance through an ERS plan now called the Group Benefits Program. Notable advocates of ERS continue to find their way to TPEA.
The story of Ray Hymel, our lead consultant, and Ann Bishop, our executive director, is the story of the Employees Retirement System of Texas from 1990 through 2015. Essentially, it is a story of those serving those who serve the State.
The year was 1980. Bill Clements sat as Governor of Texas. Itching to see what he could accomplish with a Master’s in Public Administration, a young Ray Hymel left his doctoral track program to work towards systemic change he suspected would prove meaningful and quick. He jokes about 100 hour work weeks when we ask if he has any hobbies. It only took Hymel a decade to work his way to staff director of the Interim Joint Select Committee on Employee Benefits (‘89-’92). Set loose with a budget of $150,000, his committee brought about the inclusion of most higher education employees in the Group Benefits Program. Today, this ERS program serves about 1 in 53 Texans.
Coming to respect Hymel’s work, ERS offered him the opportunity to become a full-time state employee. In 1994, Hymel became one of the few ERS employees tasked to work with the Legislature. The Legislature not only directly impacts the operations of ERS, but it also molds the larger environment in which ERS programs thrive or falter. For example, the 78th Legislature in 2003 passed a retirement incentive for state employees. Legislators focused on reducing the State’s payroll as markets crashed. Their incentive succeeded with the unintended consequence of throwing off the retirement assumptions ERS actuaries made in previous years. Coordination matters.
Hymel stuck with ERS longer than most who served as Governmental Relations Liaison. His close connections at the Capitol gave the agency access to behind-the-scenes meetings where Hymel could inform — never intentionally influence — legislators of programs, issues, and other goings at ERS. State agencies cannot lobby. The fine line drawn on what Hymel was allowed left out upfront advocacy, bringing supporters to meet legislators, coaching supporters on how to testify, and any contributions or donation events. These are the tools Hymel gained leaving ERS to work for TPEA.
No one at TPEA could fault Ann Bishop if she initially found reason to dislike us. TPEA poached her point man on government relations a month into the 79th Legislature in 2005, her first session as executive director of ERS. Addressing the need to maintain open communication lines between ERS and key stakeholders at the Legislature, Bishop bulked up an entire Governmental Affairs Division after Hymel left. Her decades of state agency and private-sector executive experience prepared her to lead ERS.
Fresh out of law school, Bishop began her career as an attorney at the Texas Comptroller of Public Accounts in 1982. Bill Clements held on to his governorship, soon to be replaced by Mark White. In the decade that followed, Ann Bishop rocketed to management positions at the Comptroller’s office, promoted all the way to executive director of a new state agency now called the Department of Information Resources. Bishop put her undergraduate business school degree to good use. When Governor Rick Perry sought a “respected agency manager” to be his chief of staff in 2012, he asked Ann Bishop. As Ross Ramsey then wrote, “think of a scale with legislative/political candidates at one end and agency/management/wonks at the other. If there are fireworks ahead, they’ll probably come from some other part of the governor’s office.”
Bishop returned to ERS from her sabbatical at the governor’s office in 2013. By 2014, the retirement trust fund surpassed actuarial return assumptions of 8% by making one-year returns of 14.58% (net of fees). This allowed ERS to pay nearly two-thirds of retirement benefits from investment returns. In 2015, Bishop retired on that high note. Three years later, executive director Porter Wilson gladly reported that “As a result of sound cost management, we [at ERS] expect to maintain current coverage levels without increasing funding from the state or health plan members.” ERS employees are not just Essential Texans, but the unsung heroes responsible for ensuring our State keeps the Essential Texans it relies on by insuring, just as private-sector competition does.
One-third of retirement benefit payments still rely on combined state and employee contributions, yet ERS sees consistent underfunding. Fortunately, the Texas Public Employees Association can advocate for ERS as it always has.
It’s 2021. The Governor of Texas is Greg Abbott. Ann Bishop and Ray Hymel are back serving those who serve the State. Bishop came to fill a leadership opening at TPEA in 2019. She called Hymel out of his brief retirement and he answered because you “Don’t resist her call.” Lately, Bishop calls for Texans to prioritize the state employees who have prioritized us. She finds at her disposal the lobbying tools unavailable to her all the years she worked in-agency. Hymel and Bishop are well-equipped. The 87th Legislature finds itself with more money than anticipated. It will fulfill its duty to fund the ERS retirement plan.