TRS is a state system. States cannot declare bankruptcy. It will be guaranteed by the state, and if they can somehow slip out of that, which Saipan has been unable to do, PBGC will cover it.
I think Rhode Island and possibly one or two other states have figured out ways to slip out of their obligations. Given enough time and and infinite number of lawyers, anything is possible.
It is a bit short sighted to just say do this or do that. The OP should verify information, run some numbers and find out what is best for them.
While I agree with this statement, having all of teh relevent information requires a crystal ball, and not just the ordinary one that predicts stock market returns. You need the type that can also predict political actions. In some states, Arizona for example, the state retirement system is under a full frontal attack from the legislature. Fortunately, nearly everything they have tried to do has been nullified by the courts. In most cases the issues are not about funding levels but about trying to screw teachers' unions or punish government employees for doing their jobs. In our situation teh legislature has lost every time and it has cost the state significantly so I think they have finally mostly given up. But the point remains, even if there are no funding issues, I'd personally start with a bias to get out of the system and research whether there are compelling reasons to stay in.
In my wife's case, she was smart to stay in the state system because she benefits from very generous terms in place a couple of decades ago. But the terms now are far less generous.
Also, be careful with what you think you know about inflation adjustments. I don't know how Texas works but in Arizona the legislature must vote one every year and does not always do so. But, since teh same adjustment is applied to all state retirement plans (employees, teachers, elected officials, cops) there is great incentive for granting a benefit every year and it usually happens. But that does not mean you can count on it.
And there are lots of lawyers working on ways to allow states to declare bankruptcy.