Table Of ContentDOCUMENT RESUME
ED 379 031
JC 950 107
TITLE
TJCTA Messenger, September 1993-April 1994.
INSTITUTION
Texas Junior Coll. Teachers Association, Austin.
REPORT NO
ISSN-8750-9644
PUB DATE
94
NOTE
I22p.
PUB TYPE
Collected Works
Serials (022)
JOURNAL CIT
TJCTA Messenger; v25 n1-4 Sep 1993-Apr 1994
EDRS PRICE
MF01/PC05 Plus Postage.
DESCRIPTORS
Community Colleges; *Employment Patterns; Faculty
Organizations; Graduate Surveys; *Part Time Faculty;
Salaries; State Surveys; Teacher Attitudes; *Teacher
Retirement; *Teacher Salaries; Two Year Colleges
IDENTIFIERS
*Texas
ABSTRACT
Published four times a year by the Texas Junior
College Teachers Association (TJCTA), this newsletter
discusses
events affecting Texas Junior Colleges and their
faculty, chronicles
the efforts and activities of the TJCTA, and provides
a forum for
discourse on topics in community college education.
Most of the
September 1993 issue is devoted to an analysis of Texas's
Optional
Retirement Program/Tax Deferred Annuities,
providing irformation on
selecting a tax-deferred program, types of investment
programs,
strategies for investment, managing funds, investment
return on
fixed-annuities, assessing costs, and safety
and reliability of
insurance companies. The December 1993 issue
contains an interview
with Texas State Senator John Montford
on educational fundinc; "The
Virtual Library and Equal Access," by David
Drake; a table showing
1993-94 base salaries for faculty by college
and years of service;
"Reminiscing," by Robert W. Wylie,
an account of a community service
writing class for older adults; and data
on compensation and
utilization of part-time instructors by college.
The January 1994
issue is the program for the TJCTA annual
convention, focusing on the
theme of "Strength in Diversity." The April 1994
issue announces the
adoption of a common course numbering system
for the state's
community colleges and every public senior
institution except one.
Also included are "Tran's Story--And Ours,"
by Scott Nelson, about a
professor's work with a Vietnamese student; "Counseling
Services and
Advising Functions: A Case for Separate Identities,"
by Mary Forbes
and Joe Rode; and "Study Indicates Job Placement
Rate Remains
Constant." (KP)
***********************************************************************
*
Reproductions supplied by EDRS
*
are the best that can be made
*
*
from the original document.
***********************************************************************
1-.4(
er)
C:4
N
MI
AM
w.4
i
.
a
a
i
I
Volume XXV
Numbers 1-4; September 1993-April 1994
'PERMISSION TO REPRODUCE THIS
U S DEPARTMENT OF EDUCATION
BY
MATERIAL HAS BEEN GRANTED
OfficeolFaucallonalaasmchandir,pm,ciiiem
EDUCATIONAL RESOURCES INFORMATION
C. Burnside
CENTER (ERIC)
This document has been reproduced as
received from the person or organization
originating it
Minor changes have been made to
improve reproduction quality.
TO THE EDUCATIONAL RESOURCES
Points of view or opinions slated in this
INFORMATION CENTER (ERIC)
document do not necessarily represent
official OERI position or policy
BEST COPY AVAILABLE
2
I
Copyright © 1993, Texas Junior College Teachers Association. All rights reserved. Permission is granted to reprint articles provided they are reprinted in their entirety and
appropriate credit is
given to the author and to the TJCTA Messenger. Brief quotations and statistical data may be reproduced provided that the TJCTA Messenger is cited as
the source.
VOLUME XXV
SEPTEMBER 1993
NUMBER 1
COLLEGES ESCAPE MAJOR FUNDING CUTS
Texas higher education advocates came
port which is essential to the continued
by the Legislature includes significant in-
away from the 73rd session of the Texas
growth and prosperity of our state."
creases for such programs as prisons, pub-
Legislature both frustrated by the lack of
lic schools, and health and human services.
Higher education
progress the state has made to provide ad-
Driven by court orders, lawsuits unfunded
received
greater
equate funding for its public colleges, and
federal mandates, and a public sentiment
funding than most
relieved that the sessioa did not bring the
demanding "no new taxes," the Legislature
observers expected
severe cuts many had earlier predicted.
struggled to meet growing demands for
when the session be-
Proposals to reduce the state contributions
.,
state services with increasingly limited re-
gan last January.
to the Optional Retirement Program and
sources. Sen. John T. Montford, co-chair
The omnibus appro-
Higher Education Employees Insurance
of the House-Senate conference commit-
priations bill agreed
Program were rejected, and total state ap-
tee which negotiated the final budget
upon by the confer-
propriations to two-year colleges were in-
agreement, said of his committee's work,
ence committee is
creased approximately seven percent over
"It's a frugal budget, but it's a responsible
11.6 percent higher
the preceding biennium. But with large
budget."
Marilyn J. Lancaster
than the 1991-93
student enrollment increases expectedas
TJCTA State President Marilyn J. Lan-
budget of $62.7 billion. Funding for higher
many as 40,000 to 50,000 new students
caster testified more than a dozen times to
education will reach nearly $6 billion in
statewidethat budget increase will be
committees of the Legislature. In her tes-
the coming biennium.
sufficient only to maintain current ser-
timony before the Education Subcommit-
A significant portion of higher educa-
vices.
tee of the House Committee on Appropria-
tion appropriations will be devoted to the
tions, Mrs. Lancaster exhorted legislators
Budget Appropriations
"South Texas Initiative," a state aid pack-
to "reaffirm the mission of Texas two-year
The $70.1 billion state budget approved
colleges by giving them the financial sup-
(continued on page 4)
CONFERENCE PLANNED FOR FACULTY LEADERS
1
John T. Montford
John M. Rogers
Frank W. Hill
John E. Pickelman
Kenneth H. Ashworth
David C. England
The fourteenth annual TJCTA Con-
Education." After receiving his Bachelor
fecting College Faculty," by Frank W. Hill
ference for Faculty Leaders will be held
of Arts and law degrees from the Uni-
and John M. Rogers, attorneys with the
Friday and Saturday, Oct. 8-9, at the
versity of Texas at Austin, Mr. Montford
firm of Hill, Heard, Gilstrap, Goetz &
Wyndham Southpark Hotel, in Austin. The
Moorhead, in Arlington and Chicago.
served three years in the office of the judge
conference will begin with an informal
advocate general for the U.S. Marine
Founded in 1972, the firm now includes 30
reception at 7:00 p.m., Friday. Saturday
Corps. He was elected to the Texas Senate
practicing attorneys, several of whom are
activities will begin at 8:30 a.m., with
in 1982. Sen. Montford chairs the powerful
recognized as specialists in legal matters
registration and refreshments. Adjourn-
Committee on Finance. In each of the last
involving rights of teachers. Mr. Hill holds
ment is scheduled for 2:30 p.m., Saturday.
three legislative sessions, he was named to
the Bachelor of Arts degree in English,
"ten best" list of Texas
Texas Monthly's
with honors, from the University of Texas
Keynote speaker for the conference's
legislators.
at Arlington. He received his law degree,
opening session will be State Sen. John T.
also with honors, from Southern Methodist
The second session will feature a
Montford (D-Lubbock), who will discuss
"Legislative Issues Affecting Higher
discussion of "Current,Lcgal Issues Af-
(Continued on page 4)
work representing TJCTA is greatly appre-
PRESIDENT'S MESSAGE
RESOLUTIONS COMMITTEE
ciated.
INVITES SUGGESTIONS
Welcome back to the 1993-94 school
The 14th annual TJCTA Conference for
year! I hope you had an enjoyable summer
The TJCTA Resolutions Committee en-
Faculty Leaders will be held in Austin at
courages individual members and campus
and are returning rejuvenated and re-ener-
the Wyndham Southpark Hotel, Oct. 8-9.
faculty organizations to submit ideas and
gized for a produc-
suggestions for proposed resolutions to be
The conference is open to all interested
tive year.
considered at the 1994 convention at the
TJCTA members. An excellent program
Marriott Rivercenter hotel, in San Antonio.
Last spring's leg-
has been planned by a subcommittee of the
Suggestions should be received by Feb.
islative session left
Professional Development Committee, and
1, 1994, so that the Resolutions Committee
little doubt about the
I urge all interested persons to attend. I
can give ample consideration to the propos-
severity of the state's
als prior to the annual convention. In the
hope to see many of you there.
budget crisis. Pris-
meeting of the Resolutions Committee set
The highlight of the coming year will be
for Feb. 24, 1994, priority consideration will
ons and public edu-
the 47th annual TJCTA convention, at the
be given to proposals submitted in advance
cation dominated the
Marriott Rivercenter Hotel in San Antonio,
of the meeting.
budget talks as law-
Proposed resolutions should be sent to:
Feb. 24-26, 1994. Convention speakers,
makers struggled to balance the state bud-
section meetings, and other events are cur-
Ellen H. Brennan, Chairperson
get without raising taxes.
TJC LA Resolutions Committee
rently being planned for your enjoyment
San Antonio College
In the end, however, it appears commu-
and professional growth. Although ex-
1300 San Pedro Avenue
nity, junior, and technical colleges fared
penses will be noticeably higher in San An-
San Antonio, Texas 78212
comparatively well. In the final appropria-
tonio than other convention sites, the city
-_-----_-___ --
_--_
tions bill, two-year colleges received fund-
has a deserved reputation as the finest con-
EDITORIAL POLICY
ing at a level to maintain current services.
vention city in Texas. So start saving now!
I. The TJCTA Messenger provides a forum for TJCTA
Make your reservations and travel plans
members to address professional issues and subjects of
Other important legislative develop-
interest to educators in the two-year college. Prospective
early (a hotel reservation form appears or
ments included:
authors arc invited to submit articles dealing with the theory.
page 23), as hotel accommodations typi-
practice. history, and politics of two-year colleges in Texas.
A 10 percent increase in state appro-
Topics should be of general interest to members and not
cally fill up rapidly in San Antonio.
Articles normally
limited to a single teaching discipline.
priations for all four levels of employee
should be six to ten typed, double-spaced pages.
We have a challenging year ahead, par-
health insurance coverage for each year in
2. Longer articles may be published when their substance
ticularly in our membership drive. Last
Shorter
and likely reader-interest justify greater length.
the next biennium, an amount expected to
year TJCTA set an all-time enrollment
pieces of c ;Le to two pages intended as guest editorials, letters
cover at least a portion of an anticipated in-
to the editor, or personal perspectives on problems, issues, or
record of 6,324 members. I believe we can
concepts related to the two-year college are also accepted.
crease in premiums;
No excerpts from grant proposals, dissertations, theses. or
set a new record again this year, for the fifth
research papers written for course work should be sbmiaed
A state mandate that the December
consecutive year. Please joinor rejoin
3. Submissions should be original (not previously pub-
1992 salary increase be made a part of the
TJCTA! We need your support and mem-
lished or being considered for publication). Au:hors should
limit the use of specialized terminology. Authors' names and
permanent salary schedule for current em-
bership to continue our effective represen-
titles of key sources should be included within the text, with
ployees;
page numbers in parentheses. The editor reserves the right to
tation of community, junior, and technical
edit submissions so that their usage conforms with the
college interests. TJCTA must send a
Creation of a Council on Workforce
editorial practices of the Messenger. Publicity accorded to a
particular point of view does not imply endorsement by
forceful message to policy makers that
and Economic Competitiveness, expected
"FJCTA, except in announcement of policy. % hen such en-
community and technical colleges are
dorsement is specified clearly.
to have a major impact on two-year college
among the best investments in the future
4. Submissions are reviev..ed by an editorial review hoard.
vocational-technical programs.
though the editor maintains responsibility for final selection.
that Texas can make. TJCTA needs your
An author should send a high-contrast original of the manu-
Legislative initiatives which failed in-
script with the author's name only on a separate cover sheet.
support to continue its efforts.
cluded:
5. Articles published in the Messenger may be repro-
duced provided they are reprinted in their entirety and that
Proposals to reduce state contributions
appropriate credit is given to the author and to the TJCTA
Brief quotations and statistical data may be
Messenger.
to the Optional Retirement Program (ORP)
reproduced provided that the TJC'TA Messenger is cited as
(IRS).
and the Teacher Retirement Syst
the source.
6. Manuscripts should be sent to: Chairperson, TJCTA
These proposals were rejected and state
Publications Committee. 901 South MoPac Expressway
funding for both retirement programs con-
Building 1, Suite 410, Austin, Texas, 78746-5747. Author:
should retain copies of their manuscripts for their files.
tinues at 7.31 percent. A recommendation
to phase out the Optional Retirement Pro-
gram was also rejected.
latESSENGER
A proposal for the "downward expan-
sion" of the University of Texas at Tyler.
A Publication of the TEXAS JUNIOR COLLEGE TEACHERS ASSOCIATION
On 12 separate occasions, TJCTA rep-
!What Oaks Rasa I, Suits 410
Austin, Texas 74744-6747 TOLL-FREE 1-1100-2114-1450
401 Mona; Expressway South
resentatives presented formal testimony on
NUMBER 1
SEPTEMBER 1993
VOLUME XXV
these and other matters affecting Texas
in September,
TJC7A Messenger (ISSN 8750-9644) is published four times annually.
two-year colleges. Countless hours were
December, January, and April, by the TEXAS JUNIOR COLLEGE TEACHERS ASSOCIA-
spent monitoring committee and subcom-
TION, 901 MoPac Expressway South, Barton Oaks Plaza I, Suite 410, Austin. Texas 78746-
mittee deliberations and visiting privately
Second-class
5747. Annual dues $25, $5 of which is for subscription to
TJCTA Messenger.
with legislators. We are all greatly indebted
postage paid at Austin, Texas. POSTMASTER: Send address changes to TJCTA Messenger,
to Marilyn Lancaster's efforts on our be-
901 MoPac Expressway South, Barton Oaks Plaza 1, Suite 410, Austin. Texas 78746-5747.
half. She was an articulate and eloquent
CHARLES BURNSIDE
BRIAN K. DILLE
RICHARD MOORE
spokesperson for community, junior, and
Executive Director
President
Associate Executive Director
technical college concerns. Her tireless
4
TJCTA Messenger
2
RES.1 COPY AVAILABLE
HILL, HEARD, GILSTRAP, GOE'FZ & MOORHEAD
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS
CHICAGO OFFICE:
1400 WEST ABRAM STREET
Three First National Plaza
ARLINGTON, TEXAS 76013
FRANK HILL
Suite 3600
Chicago, IL 60602
TELEPHONE (817) 261-2222
TEL (312) 201-0522
September 15, 1993
To the Members of the Texas Junior
College Teachers Association:
For more than 20 years, it has been the
privilege of this firm to represent the
Texas Junior
College Teachers Association. During
that time many issues have arisen which
required sound
judgment, dedication, courage, and
integrity on the part of
your leaders. Events during the
last legislative session tested--and
confirmed--the professionalism and good
character of your
organization. Because of numerous
gross distortions and egregious untruths relating
to actions
of your leaders during the 1993
legislative session, we are taking the
extraordinary step of
writing to share our comments and
observations concerning some of the
events of recent months.
Two bills, particularly, were brought
before the Legislature which
were ill-conceived and
potentially harmful to faculty in
Texas two-year colleges. We strongly
recommended to your
officers that your organization
oppose these bills for the good of its membership.
Your Executive
Committee accepted our recommendations
and worked effectively against the
legislation.
House Bill 2442 (a so-called "faculty
rights" bill) was, in our judgment,
fundamentally
flawed in concept and design. The bill
failed to confer or enhance essential
rights for faculty
members and represented, instead,
a significant diminution of due
process rights already firmly
recognized in federal and state
case law. I met- -with several TJCTA representatives--with
the
House and Senate sponsors of the 'faculty
rights" proposal. After those meetings,
an aide to
the Senate sponsor called our office
and expressed agreement with
our position. He stated that
the Senator would not proceed with his
version of the bill but instead would
work to change
the House bill to address
our concerns. Subsequently, the House
sponsor agreed that TJCTA
concerns were valid and informed TJCTA leaders
on April 28 that he would not seek
passage of
the bill during the current legislative
session.
House Bill 1535, which would have prohibited
colleges from "directly or indirectly"
re-
quiring or discouraging faculty membership
in an organization, presented
serious constitutional
problems. First, college officials
have the right to express opinions
on matters covered by
the bill (whether or not
we agree with those opinions). The
vague language in the bill would
have compromised that right. Too,
intentionally or otherwise, the legislation
could have been
construed so as to prevent institutions
from encouraging faculty to join the
so-called "scholarly
societies," such as the American
Psychological Association or the
Texas Nursing Association,
or from promoting faculty membership and
involvement in local campus faculty
associations. A
third objection to the bill lay in
our suspicion (confirmed by the bill's
proponents) that the
legislation was sil'oly an effort by
an. :her organization to enhance its membership
to the det-
riment of TJCTA. Correctly,
we believe, your Association leaders felt
it was inappropriate to
involve the Legislature in
an inter-organizational rivalry, and they
felt, also, an obligation
to defend TJCTA against this brazen
political threat.
Finally, I should comment
on your Association' s actions regarding
House Bill 1484 (providing
for payroll deductions for organizational
duc.$). TJCTA leaders expressed
support for the bill
in the House. In the Senate,
however, the Committee on Education
adopted a crippling amendment
(said to be "acceptable" to the
Senate sponsor of the bill) barring
organizations from spending
funds raised through payroll deductions
for purposes of lobbying
3r litigation. I believe it
is safe to assume that
even the bill's main proponents would have
opposed the bill in its amended
form.
While this legislative session
presented serious challenges both
to TJCTA and higher educa-
tion in general, we were pleased
to be associated with TJCTA in these
important matters. Be
assured that your organization's leaders
conducted themselves with dignity and
integrity through
a long and difficult session of the
Legislature. We especially commend
Mrs. Marilyn Lancaster
for her diligence and hard work
on behalf of educators in Texas two-year
colleges.
Sincerely,
Hill, Heard, Gilstrap, Goetz
& Moorhead
Frank W. Hill
r-
5
TJCTA Messenger
3
AVERTED BY COLLEGES
MAJOR BUDGET CUTS
CONFERENCE PLANNED
of an ex-
state to cover at least a portion
(Continued from Page 1)
FOR FACULTY LEADERS
pected increase in premiums. Reflecting
$352.4 million in
age which provides
the
(Continued from Page 1)
the Senate-passed appropriations bill,
bonds and $65.4 million in special appro-
final funding measure will increase the
University. Mr. Rogers received his
priations to institutions in a 41-county area
each year
state contribution by ten percent
bachelor's degree from Baylor University
in South and West Texas. This funding pro-
of
of the biennium.
and his law degree from the University
of a lawsuit
gram is largely the result
Arkansas.
Downward Expansion
brought against the state by the Mexican
Speaker for the conference luncheon
American Legal Defense and Education
Legislators again this session struggled
the
session will be John E. Pickelman, chan-
Fund. or MALDEF, which charged that
of
with the issue of downward expansion
higher edu-
cellor of the North Harris Montgomery
state did not adequately fund
upper-level institutions. Early in the ses-
Community College District. Dr. Pickel-
cation in that region.
the
sion Rep. Ted Kamel (R-Tyler) sought
of Arts degree
man earned the Bachelor
of
Under legislation sponsored by Sen.
downward expansion of the University
the
from Albion (Michigan) College,
Eddie Lucio (D-Brownsville) and Rep.
Texas at Tyler. Mrs. Lancaster testified on
Master of Arts degree from the University
behalf of TJCTA against this effort, say-
Roberto Gutierrez (D-McAllen) the Texas
Ph.D.
of Missouri at Kansas City, and the
in
State Technical College extension
ing, "Our association believes that by ex-
from the University of Texas at Austin.
panding the University of Texas at Tyler
McAllen is being converted into the South
Prior to his appointment in 1991 to his
edu-
Texas Community College. Voters in the
the state will spend its limited higher
present position, Dr. Pickelman served as
cation funds to duplicate existing pro-
college's service area, covering Hidalgo
president of Galveston College (from 1983
grams." The language of the bill was later
and Starr counties, must approve a taxing
administrative
to 1991) and held various
district to support the college before 1996.
changed to encourage partnership agree-
Community
posts in the Dallas County
and
Until that time, the college will receive
ments between upper-level universities
College District. In his conference remarks
funds that would have been appropriated
community colleges.
College Decision-
on "The Faculty Role in
for the TSTC extension campus.
Making," Dr. Pickelman will discuss a
In a legislative effort led by Sen. Judith
chancellor's perspective on elements
South Texas Community College will
Zaffirini (D-Laredo), Laredo State Univer-
participation
from
necessary for effective faculty
offer academic and technical courses. Rep.
sity received authorization to convert
component
Gutierrez said the new college "will bring
in the decision-making process.
an upper-level institution to a
the best of both worlds: high tech educa-
of the Texas A&M University System. The
The afternoon discussion, entitled
tion ranging from robotics to computers,
school will be allowed to offer freshman
"Performance-Based Funding: Could
of
1995.
and sophomore classes in the fall of
and the solid foundation for associate
'Merit Pay' for Colleges Work?" will
arts degrees."
feature Kenneth H. Ashworth, Texas
Performance Funding
Commissioner of Higher Education, and
Insurance and Retirement
for
Omitted completely from the Senate
David C. England, Vice President
The legislature included funding to con-
Institutional Effectiveness at McLennan
version of the appropriations bill, the is-
tinue contributions to the Teacher Retire-
higher edu-
Community College. Dr. Ashworth is a Phi
sue of performance funding of
of 7.31 per-
ment System at the current rate
Beta Kappa graduate in economics from
cation did find its way into the bill finally
Optional
the University of Texas at Austin. He
cent. The state contribution to the
agreed upon by the conference committee.
Retirement Program will also continue at
received his master's degree in public
As finally passed, performance measures
7.31 percent, with the option given to each
administration from Syracuse University
would be used to allocate state dollars to
institution to supplement the state contri-
Dr.
institutions beginning in 1995. Perfor-
and his Ph.D. from UT-Austin.
bution with "local or other funds" to the
minority reten-
Ashworth has been commissioner of
mance measures include
level of 8.5 percent.
higher education since 1976. Dr. England
tion, course completers, credentials award-
successful remediation. While it is
holds BA and MA degrees from the Uni-
ed,
Funding for the Higher Education Em-
still less than certain whether it will ever
versity of Texas of the Permian Basin and
ployees Insurance Program will allow the
actually be used as a funding mechanism,
the Ed.D. from Texas A&M University.
performance funding has not gone away,
He joined the McLennan Community
and will continue to be an important issue
Texas. We believe every faculty group can
College administrative staff in 1991.
benefit from having its leaders attend the
in legislative sessions to come.
Dr. Ashworth and Dr. England will
meeting."
offer remarks on the concept of state
The Legislature also passed a bill which
funding for colleges based on "perfor-
While designed primarily for leaders of
adds two "purposes" to the statutory re-
will be
mance measures." This discussion
local faculty organizations, the conference
sponsibilities of community and junior col-
followed by questions and reactions from
is open to all interested TJCTA members
leges. These new responsibilities are the
Cynthia M. SoRelle, McLennan Com-
and faculty leaders. Conference registra-
offering of work force development pro-
munity College (chair of the TJCTA
tion should be completed by Oct. 5,
This
grams and adult literacy programs.
Professional Development Committee).
through the TJCTA State Office, 901 South
legislation was introduced by Sen. Bill
MoPac Expr'ssway, Building One, Suite
and Scott A. Nelson. Kingwood College,
Haley, D-Certer. Sen. Haley is Vice Chair
1 -800-
746 (or call toll-free,
TJCTA president-elect.
410, Austin.
of the Senate Committee on Education.
288- 6850). Hotel accommodations, at $76
TJCTA State President Brian Dille has
Also adopted was legislation introduced
for single or multiple occupancy, may be
organiza-
sent letters to leaders of faculty
by Sen. Gregory Luna, D-San Antonio, to
reserved by contacting the Wyndham
Cons inviting them to participate in this
prohibit a former junior college board
Southpark hotel directly, at Area Code 512,
year's conference. In his letter Dr. Dille
member from being appointed to a posi-
448-2222. A $30 registration fee, payable
said, "The major purpose of the annual
tion in the district for a minimum of one
will cover the
on arrival at the conference,
conference is to contribute to an improve-
service on
year after the hoard member's
Friday evening reception and lunch and
faculty
ment in the effectiveness of local
the board ends.
refreshment breaks on Saturday.
organizations at two-year colleges in
1.1
6
TATA Messenger
4
Significant savings:
AT&T
MCI
WESTEL
SPRINT
Austin to:
Dallas
$1.64
$1.74
$1.66
$ .90
Denver
1.15
1.09
1.15
.78
Chicago
1.15
1.13
1.15
.78
Los Angeles
1.23
1.19
1.23
.84
Above costs based on a 4.2 minute call made
during prime calling hours.
Premium Features:
Six seconds billing hicrements
No monthly charges
Fiber optic sound quality
No installation costs
Free calling cards
No minimums
Risk Free Trial:
90 day satisfaction guarantee
Free line conversion to Wstel
Free return to previous carrier if not fully satisfied with the excellent
sound quality and low rates.
Support TJCTA:
10% of your monthly long distance charges will be donated to TJCTA.
A benefit to you! A benefit to TJCTA! You can't lose! Enroll today,
and start enjoying Westel's
quality, service, and tremendous savings!
1
Westel TJCTA Calling Plan
Application
Yes!
I select Westel, Inc. as the primary long distance carrier for the
number(s) listed
below, and authorize Westel to notify
my local telephone company of my choice.
I
understand that my local telephone company
may impose a small, one time fee to change
my primary carrier to Westel and, if a copy of that conversion charge is sent to Westel
with
my first, second, or third month billing, Westel will issue credit for such
charge.
Name
Address
City
State
Zip
Phone Number(s)
Number of Calling Cards requested
Estimated monthly long distance usage
Social Security Number
Employer
Employer Phone Number
Signed
Date
If a copy of the local phone company's bill indicating
the conversion charge is sent to Westel
within 90 days of service, Westel will issue credit for
the charge. If within the initial 90 days, I'm
not satisfied with the low rates and excellent sound quality,
Westel will credit the phone
company's fee to convert my phone to
my previous carrier. For this credit. I just need to send
Westel a copy of the bill indicating this charge.
Mail application to:
Westel, Inc.
P. 0. Box 1985
Austin, Texas 78767-1985
Or call Westel's Association Representative
at 1-800-580-5565.
THANK YOU FOR SUPPORTING TJCTA BY CHOOSING
WESTEL LONG DISTANCE SERVICE.
TJCTA Messenger
7
5
TJCTA and the
Editor's Note: Under special arrangements between
publication rights to
Texas Association of College Teachers (TACT),
and Tar De-
the annual TACT study of Optional Retirement Pre grams
Results of the
fa-red Account investments were acquired by TJCTA.
issue of the Mes-
TACT analysis appear on the following pages of this
for the accuracy of data re-
senger. TACT assumes responsibility
by TACT offi-
ported in the study. This year's study was conducted
the late Frank L.
cials, based largely on prior research and writing by
his death in May
Wright, former TACT Executive Director. Prior to
TJCTA on retiremmt
1993, Mr. Wright served as special consultant to
issues.
for ORP/TDA
Analysis of Possibilities
401(k) deferred compensation plansbut
afford to put savings away until they reach
Makes Big Difference
the 403(b) program is preferred for most
age 59'h.
You have probably heard It said that the
faculty under the 1986 tax law. Persons with
Saving "before tax" dollars is nearly al-
purchase of a home will be the most impor-
self-employed income from royalties or
ways advantageous because the savings on
tant financial decision you may ever make.
writing or consultation should, however, use
current taxes are put to work earning tax
But, in truth, the value of your retirement
self-
some version of the Keogh plan for
deferred dollars for future use. Withdrawals
program, including Optional Retirement
employed income in addition to the 403(b)
when taken at or before retirement will be
Program (ORP) or Teacher Retirement
program.
taxable as regular income, but the extra
System (TRS), social security, and other
Evaluating Products
earnings made by dollars that otherwise
possible savings, will greatly exceed the
would have been paid in taxes plus the tax
value of any home or build;ng you will ever
All of the products discussed herein are
sheltering of all earnings or growth in the
technically known as 403(b) programs (after
buy.
meantime will nearly always add up to more
IRS Code section) but common names are
A faculty member, for example, entering
than taxes due on withdrawal. Regulations
TSA (Tax Sheltered Annuity), TDA (Tax
the profession at age 30 and at an average
about withdrawing funds from TDA make it
Deferred Annuity or Account), or Salary
salary of about $30,000 can achieve an ORP
desirable to use this vehicle for planned
Reduction Account. In these articles the term
value of $2.1 million by age 65. (This figure
expenditures to take place after you have
TDA will be used to designate all vehicles for
assumes salary increases of 5% per year,
reached age 59'h. Prior to that age, with-
use under 403(b)Fixed Annuities, Var-
continuation of present rate of contributions,
drawals are restricted to death, disability, and
iable Annuities, Direct Investment in Mutual
and deposit into an account compounding at
certain financial hardships, with the latter
Funds, or Custodial Accounts.
8% annually.) Even more startling is the fact
having a 10% penalty in most cases.
Since IRS now allows a nontaxable trans-
that this figure would increase by more than
The amount you can save by salary re-
fer from one vehicle to another, since most
half a million dollars$561,084, to be
duction, in addition to ORP and TRS, is
colleges provide for changing vehicles for
exactif this faculty member could raise the
determined by a calculation called "Max-
ORP and TDA at least annually, and since
performance just 1%. to 9% compounding
imum Exclusion Allowance," and your
most companies will cooperate in transfer-
for this period.
college or university probably has an ap-
ring accumulated funds, no faculty member,
Have you paid attention to your ORP
proved way of calculating this amount.
librarian, or other qualified participant needs
investment recently? Or have you consider-
Using a formula which includes current
to remain locked into an inferior program.
ed supplementing TRS or ORP with a
salary (with some adjustments), years of
Companies Included
flexible TDA investment? Small differ-
service, previous tax sheltering (ORP, TDA,
ences at this time can make a major differ-
Every company writing any significant
and deferred compensation), and, for those in
ence over the long haul. This article
is
number of ORP/TDA programs in higher
TRS, a prorated portion of projected retire-
designed to stimulate you to consider this
education in Texas was invited to submit
ment benefits, the calculation determines the
matter and to help you make sound deci-
information for this presentation. All which
amount which now can be deferred through
sions about placement of ORP and/or TDA
supplied complete information are included.
a salary reduction agreement between you
savings.
If the company holding your TDA or
and your employer. For those in TRS, the
ORP is not included, chances are that its
formula can allow up to 18% of salary for
In Your Interest
product is out-of-date and being revised, and
"before tax" savings, while ORP participants
Everyone employed by a Texas public
you should check with your company.
are limited to a lesser percent of salary
college or university has a potential interest
Products not included should be tested by
(ranging from 3 to 7%). Very high salaried
in the information presented here. Persons
ORP participants, in fact, may be unable to
these same criteria and scrutinized carefully.
using ORP as their official retirement will
do any tax deferring beyond the 15.15% of
Not all companies or products listed in
want to use this information to assure
salary already going into ORP. For persons
this study will be available at every college
themselves that they are utilizing the best
nearing retirement or who have not pre-
in fact, some institutions may offer a very
possible vehicle for their purposes. All
viously used tax deferral, special calculations
limited number of possible choices. Spur-
others are qualified to make additional
allow amounts in excess of the above es-
red in part by a report from the State Aud-
savings in a tax sheltered form by utilizing
itor's office in 1991, a number of systems
timates.
these same products. They should plan to use
and institutions are considering reducing the
These same products can be used for other
one of these programs if they are able to save
number of authorized companies. Prob-
tax deferred savings--IRA, Keogh or HR I0,
systematically in any regular amount and can
5
TJCTA Messenger
6
lems with that effort are that criteria for
Maximum Performance
..ornfort level in this strategy is rather high,
determining which companies will be au-
Since actual performance among differ-
not necessarily because the results are always
thorized are difficult to develop, and that
ent plans can be compared only after the fact,
good, but because the threats to such a plan
some freedom of choice has become deeply
any attempt to compare products based on
are rather obscure and do not thrust them-
ingrained in the Texas system through the
past and current data is necessarily limited as
selves upon you. The major problem with
years since 1967. If some products in this
to its predictive capabilities about future
this strategy is that inflation eats away at
study appeal to you but are not available at
performance. Salespersons may make many
fixed dollars with a relentless attack, making
your institution, check with your personnel
predictions. Consider them all with some
it uncertain whether you are gaining or losing
department to see what can be arranged.
skepticism and insist that they be put into
purOasing power, both during the accumu-
Thanks to Participants
writing. You may be surprised at the de-
lation period and after retirement on a fixed
crease in certainty when you ask the sales-
dollar income. The other problem concerns
TJCTA appreciates the cooperation of all
person to put it in writing.
the reliability and dependability of the
companies supplying information for this
insurance company with which you are
study. Over the years this study has become
Kinds of Programs
dealing. Fixed annuities are wholly depend-
widely accepted and used all over the nation,
Variable: Two primary kinds
Fixed and
ent on the general fund of the company, and
but still maintains its primary purpose of
of investment vehicles are offered by many
assisting faculty in Texas colleges and
can be wiped out entirely or greatly reduced
insurance companies listed hereinFixed
universities.
if the company goes bankrupt or goes into
It is made possible by the
Annuities and Variable Annuities, or some
receivership. (Read the additional article on
cooperation of these companies.
combination of the two. Payments and
"Safety and Reliability of Insurance Com-
Selecting a Tax Deferred Program:
investments into the Fixed portion are placed
panies" on page 14 for more informatio- on
Factors to Consider
in bonds, mortgages, and debt instruments in
this subject.) Flexibility in such a strategy is
which your money is loaned out to earn
How are you to choc ;e which product to
generally limited only to a choice of com-
interest until returned as certain dollars at a
use in your own ORP a:.d/or TDA? When
panies and of settlement options, and thus is
future datehence the name "Fixed Ac-
should you change from one program to
not adaptable to changing circumstances and
count." Payments and investments into the
another? What questions should you ask
conditions in this volatile world.
Variable portion are used to purchase bonds
yourself? A salesperson? A professional
2) Stay
with Growth Fund.
Another strat-
or stocks issued by businesses, industries, or
financial planner These are legitimate and
egy is to select a good, solid growth oriented
governments through careful selection and
confusing questions; and, unfortunately,
mutual fund or variable annuity and hold it
diversification by management to achieve
there are no simple answers. The balance of
through the ups and downs of the market. All
the purpose of the account as stated in the
this presentation is devoted to helping you
studies indicate that such fw.ds have out-
prospectus. Dividends and gain/loss in
evaluate alternatives. Offerings of over 50
performed fixed alternatives in almost all
market value are represented in the unit
companies are described in the following
five or ten-year periods in the last 65 years,
value, which will change periodically, each
pages, and a serious effort has been made to
even though they have fluctuated in value
day in most instanceshence the name
deal with this very complex subject in a
decidedly within those periods, When you
"Variable Account."
relatively simple, understandable way.
are purchasing shares on a regular monthly
Many of the companies offering variable
If it were possible to predict with cer-
basis as is the case in either OR or TDA,
programs offer two or more investment
tainty the long-term financial and invest-
you do not mind serious drops in value
vehicles within the variable account, allow-
ment results of any product, then selection
because, through the "magic of dollar cost
ing free exchange between funds with
would depend almost wholly on this factor.
averaging," you will get more shares when
differing objectives. See Table I for infor-
Unfortunately, such prediction is not only
prices are down and thus increase the
mation on the variet1 of opportunities
impossible, but is dependent on many un-
multiplier for an enhanced value sometime in
offered by each company.
foreseeable possibilities.
It is further
the future. As one approaches retirement,
An even more varied and self-directed
confused by various claims and counter-
however, this instability of value becomes a
claims used by companies to assert an
investment has been allowed by law since
serious matter, and one will seek a less
apparent advantage. Maximum return
TJCTA helped pass legislation in 1981, and
volatile location for funds at that time.
depends on a number of interdependent
is now becoming available more widely in
Flexibility is generally maintained in such an
colleges and universities. This possibility
factors, most important of which are: (1)
investment. and while you are dependent on
allcws direct investment into mutual funds
choice of investment vehicles; (2) per-
the company for management expertise, the
without going through an insurance com-
formance of that vehicle in any given
value of your investment depends on the
pany's annuity vehicle. Placing your ORP or
segment of time and over a long time; (3)
stocks or bonds owned, not on the stability of
TDA in a family of mutual funds allows free
settlement alternatives at retirement and
the company.
transfer of accumulations, often by a tele-
annuity rates available then; (4) adapt-
3)
Managing Among Types of
fin
phone call, among a wide variety of in-
ability to changing circumstances; (5) costs
By choosing to utilize a company
and charges assessed.
vestments and thus provides a wide range of
which offers several variable accounts
or a
opportunities to adapt to changing object-
Since prediction of maximum return with
group of funds, at least one of which is
ives and economic conditions. Read the
any certainty is not possible, other factors
similar to a fixed account, you have the
article on page 15 for more information.
assume considerable importance in evaluat-
opportunity to direct your purchases toward
ing choices. Among these are: ( I ) transfer-
Strategies for Investment
Fixed or Variable and/or shift your
accum-
ability and flexibility without undue ex-
Three major strategies are employed by
ulated assets from one type of investment
pense; (2) guarantees offered; (3) security
varying numbers of persons in seeking
vehicle to another. Thus you can adjust to
and reliability of the company; (4) services
satisfactory results with their ORP/TDA
economic conditions, trends in financial
offered and performed; and (5) concurrence
programs. Each of these has some factors to
markets, changing needs, and changing
with your personal preferen _es concerning
recommend it and other factors which limit
attitudes toward risk on your part. This
risk tolerance and attention to financial
its value. They are:
strategy offers the most adaptability and
matters.
1 )Stay
with Fixed.
Probably the strategy
flexibility, the possibility of the greatest
Each of these factors will be considered in
most used is to purchase fixed annuities and
return (although if you mess it up, your return
subsequent pages.
just stay in the fixed type of investment. The
can be quite miserable), and the greatest
C)
TJCTA Messenger
7
PRODUCTS
INVESTMENT RETURN ON VARIABLE
independence from company vagaries.
Responsibility, however, centers on your
participant, but designed to achieve the stated
Accurate comparison of variable perform-
own decisions and thus removes the ease
objectives of the fund over the long term;
from
ance is complicated because data
with which poor performance can be blamed
value and return will vary greatly with the
company to company may not he comparable,
on others.
objective and the management. You are
because strength in one economic period may
Managing Funds
reminded that all mutual funds are managed,
imply weakness in another, and because
Utilizing the capacity to manage funds in
but most are managed within designated type
different annuities or funds have different
of investment (such as growth stocks), where-
this manner can make a marked difference in
spite of problems in
avowed objectives.
In
broad
as these "managed" funds have very
the end result of your retirement accumul-
evaluating and predicting performance of
ation. Variable accounts and growth-
discretion.
variable products, and because of demon-
oriented funds can (and did in 1982, 1985,
'fable 1 Described
strated capacity to make substantial gain in
and 1992) gain 20%. 30%, and
some periods, you probably ought to have
1991
1989,
Table I shows the number and types of
more in a single year. On the other hand,
variable products available for use as.sug-
funds offered by each company that offers a
such accounts can (and did in 1981, 1984,
gested in the previous section.
variable annuity or a family of mutual funds.
1990 and 1992) lose as much as 5% or 15%
You will note that the range is from sonic
At least six kinds of investments are
or more in a single year. To take advantage
available from many "multiple choice"
insurance companies which offer only one
of substantial gains in Variable or growth
variable investment opportunity to one funds
variables or mutual fund groups, often with
funds in some years and then to preserve this
available
company offering 32 different choices and to
easy transferability among choices
gain (and avoid losses) by staying in Fixed or
two custodial plans offering all of the 3000+
within any one company or fund group.
Money Market funds in others can he very
mutual funds in the nation. Some offer funds
Briefly described, these kinds of invest-
beneficial and produce results not available
in each and all of the six categories listed
ments are:
above, while others limit their offerings to
in a single-purpose product.
Matter Market Funds: Invested in short-
1.
Exercising these sorts of choices to your
only a few types of funds.
term debt instruments, some restricted to
Records of Pcrforman.:e
advantage is not a simple matter, especially
government issues: maintains a constant share
since you have to react just about opposite to
Performance records for most funds which
value; produces a return slightly above that of
the general trend of the time. That is, when
most hank money market funds: generally
reported five or more years experience are
the stock market is flying high and everyone
maintains an unchanging value and thus
provided in Tables 2-A through 2-F, shown on
wants in. you get out and move some or all
operates much like the Fixed portion of an
pages 12-13 in this issue. The funds are listed
of your accumulated assets to a stable fixed
within the six categories of funds just de-
annuity.
type investment. On the other hand, when
scribed 'a alphabetical order by company.
2. Bond Funds: Invested in longer term
the market is low and everyone is complain-
Performance is expressed as a percentage of
corporate and/or government bonds; value
ing, you change your purchases to a variable
cumulative total return (all dividends and
fluctuates with interest rates. rising when
type investment and/or shift all or part et'
capital gains or losses included) for 1992 and
interest falls and falling when interest rises;
your accumulations from fixed type to
for the three, five, and ten year periods ending
produces a fairly constant dollar return
variable type. If you instead follow the
December 31, 1992. This is supposed to be
fluctuating around that of current interest in
genere! trend and move to Variable when the
the percentage of increase/decrease to each
fixed annuities.
dollar invested in that fund for the whole
market is flying high. and then desperately
3. Common Stock Funds: Invested in a
move to Fixed when the market has been low
period shown. Internal costs of operation are
selection of stocks chosen to produce divi-
for some time, your end result will be terribly
reflected in these results, but sales charges and
dend income and modest capital growth:
disappointing. Nevertheless, you stand to
non-periodic charges are not included.
value fluctuates up and down more or less in
benefit substantially from having this ability
The final column gives the dollar result of
line with general stock indices; produces a
and exercising it judiciously two or three
adding $200 per month to the fund for the 5-
return which also varies with economic
year period from January 1, 1988 to De-
times a decade.
conditions; includes funds often referred to as
cen er 31, 1992. This result is supposed to
"equity income" or "income and growth"
It Can Be Done!
include all costs involved in buying the funds
funds.
Use of any such varied offerings requires
and paying tees, and therefore reflects full
4. Growth Stock Funds: Invested in stocks
financial understanding and management
costs more accurately than the 5-year per-
of younger companies or new and developing
decisions which may be burdensome for
centage figure does. The charges made by
industries selected to produce major capital
many faculty, and there is no guarantee of
each company are recorded in Table 5. on
growth over a longer period without much
success! Many people say "you can't out-
page 14. Thus, the percentage figures provide
regard to current income: value fluctuates
guess the market" and thus advocate avoid-
a straight measure of total performance of
widely and risk is high along with potential for
ing it. The procedures recommended above
money already in the account, while the final
major increases over time; includes for our
do not suggest trying to get the last ounce out
figure shows the influence of sales charges.
purposes investing in stocks of overseas
of a market rise or to avoid the last bit of a
dollar-cost averaging in a changing market,
companies, in precious metals, or in real
market fall. They suggest simply responding
and other factors.
estate.
when it is quite evident that the market (for
The figures in the columns marked with
5. Balanced Funds: Invested in mixture of
stocks or bonds or certain kinds of mutual
"r" following each titled column give the
bonds and conservative stocks with purpose
funds) is clearly high or clearly low. Remem-
ranking by performance among the funds
of income and capital preservation; value
ber that money held as fixed dollars is losing
reporting on that particular element, with
I
fluctuates within relatively limited range;
value in times of inflation. No long-term
designating best performance for the period
produces a return usually falling somewhere
savings program is without riskinvestment
and on down the line.
between stock and bond funds.
risk and/or inflation risk. For any person
Some characteristics of various types of
6. Managed Funds: Invested solely at the
already informed about financial matters or
funds become evident from study of these
discretion of professional managers in a wide
willing to learn, having choices of varied
performance tables. Money Market funds
range of possible investments (stocks, bonds,
types of investments and the ability to shift
show a consistent but modest gain, with 1992
money market instruments, or other types of
among them is a distinct advantage and a
one-year returns down significantly from
investments) without direction from the
valued privilege in ORIVIDA.
TJCTA Messenger
10
8
