On the Front Lines: Texas
Across the U.S., states and localities are adjusting their practices in response to the outbreak of the new strain of coronavirus, Covid-19. NCPERS is reaching out to public employee retirement system leaders to understand how their organizations are being impacted, and to gain their insights into what the outbreak means for plan participants and employees. One of the lessons of any crisis is that no one has all the answers, and sharing our knowledge with others is vital to helping us all move forward.
We will be publishing the experiences and strategies of pension fund leaders in a series of articles. If you'd like to chat with us for an interview in this series, please contact Hank@ncpers.org and we'll take it from there.
On the Front Lines: Texas
Teachers Retirement System of Texas has shifted more than 90 percent of its 800 employees to work-from-home arrangements since the Covid-19 outbreak took hold in March. The largest pension fund in Texas, TRS, serves 1.6 million members across the state and manages approximately $150 billion in assets.
Executive Director Brian Guthrie says that while no transition is truly seamless, the disruptions have been less challenging than expected. TRS uses videoconferencing to enable teams to collaborate and managers to lead, using different platforms depending on specific needs.
“A byproduct of this is that more and more people are going to be working from home in the future,” Guthrie said. “That has implications for our long-term facilities planning. We never anticipated more than 25 percent of the workforce operating remotely, but we should see a larger percentage going forward.”
When the city of Austin issued a shelter-in-place order on March 24, it technically did not impact state agencies. However, Guthrie said, TRS made the decision to abide by the spirit of the order, Guthrie said. (A statewide stay-at-home order took effect April 2.)
In short order, everyone but 60 to 70 employees was operating from home. Those who remain at work in TRS's two Austin office buildings include people who handle the mail, those who manually process retirement applications, building security and maintenance teams. “We have a number of manual processes, and we are working every day to minimize those,” he said.
Changes are also coming to the board room. TRS's April board of trustees meeting is usually a two-day affair. Instead, it will be meeting virtually for approximately six hours on a Friday. While TRS has been streaming board meetings via the web, it required permission from the state to conduct a virtual board meeting by video. While a few people will be in the conference room, most of the nine trustees participate via video, as will most presenters.
While shifting to a video board meeting is a big change, TRS has grown comfortable with the technology, Guthrie said. “We have been using videoconferencing for the past year or two because we opened a small office in London and needed a way to incorporate them into our investment meetings,” Guthrie said. “We've also used it on a limited basis in board meetings when we had a presenter who couldn't make a trip.” He has fielded calls from smaller retirement systems to discuss how such technology has worked for TRS.
While TRS employees adapt to a different way of working, TRS has also had to be flexible, given the extraordinary demands the Covid-19 outbreak has placed on home life. “We are allowing flex time and flexible schedules so people can work on weekends and in the evening to balance out other responsibilities,” such as child care while schools are closed and daycare arrangements are disrupted.
Technology shifts that have been underway at TRS for some time helped with the transition, Guthrie said. For example, TRS has moved away from having tower PCs in the workplace. Instead, employees have laptops that dock to a monitor at their desk, and that made work more portable. The Covid-19 outbreak coincided with the spring break from most schools in Texas. Teachers planning for retirement often take advantage of spring break to schedule visits to the TRS office, so the organization had a full slate of in-person appointments scheduled for the month of March. TRS asked them to reschedule to a later date or participate in a video conference that could be conducted from a smartphone. TRS also runs seminars across the state, typically attended by 30 to 50 members. All of those had to be canceled, and they will be rescheduled for later in the year.
TRS also put energy into creating an informative section on its website that includes a video for members that provides assurance that their retirement assets are safe. “Just because the market is down doesn't mean their annuities are at risk,” Guthrie said. Social media has also been important. Guthrie has participated in Facebook Live events so that members can hear from him in person.
Guthrie said there are similarities between today's crisis and member responses to the global financial crisis of 2008. “Back then, the main thing members were concerned about was, Will I get my check every month? Will I get my health care? We are doing everything to reassure them that there won't be disruptions.”
When the Covid-19 threat has passed, pension systems will inevitably undertake reviews of their continuity of operations plans. Guthrie says that while the plan has operated well, for the most part, some tweaks will be needed.
“We had contemplated natural disasters and weather events that would displace us. But this situation—where the headquarters is fine, but we can't go there—was something no one anticipated,” Guthrie said. “You usually assume there will be a limited time of working from home, and then you'll transition secondary location,” he added, but that transition isn't feasible when social distancing is the goal.
“We need to contemplate what the workplace will look like a year from now and how does it look long-term,” Guthrie said. “Is working from home something we would prefer to do? Are we more efficient this way, or is it more efficient to be in an office together?”
One nut that still needs to be cracked is that many pension systems have manual processes, and automating them fully will require internal changes to systems, Guthrie added. Systems also need to be sensitive to what their memberships will and won't accept. “We still have a fax machine,” and even though it gets light use, it's there because TRS has decided to accommodate all forms, even paper ones that are faxed. “We continue to need to be able to offer our members paper forms they can fill out and sent to us until our population tells us they don't need that option.”