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The Texas State Employees Retirement Plan (ERS)

Is A Defined Benefit Pension Plan

The Texas State Employees Retirement Plan (ERS) is a Defined Benefit pension plan that provides a lifetime monthly annuity upon your retirement.

As an eligible employee, participation in the ERS is mandatory and you begin contributing to the ERS Trust Fund with your first paycheck. Currently, you contribute 9.5% of your pre-tax salary while your employer contributes 10%.

The amount of the monthly benefit you receive once you retire is based on an average of your highest 36, 48 or 60 months of salary, depending upon your hire date:

  • If you were hired before September 1, 2009, (Group 1) and never withdrew your account at ERS, an average of your highest 36 months of salary is used to calculate your monthly benefit.
  • If you were hired between September 1, 2009, and August 31, 2013, (Group 2), an average of your highest 48 months of salary is used to calculate your monthly benefit.
  • If you were hired on or after September 1, 2013 (Group 3), an average of your highest 60 months of salary is used to calculate your monthly benefit.

You become vested in the ERS when you have five years or more of accumulated service credit. With 10 years of service credit, health insurance benefits may also be available to you. Upon retirement, you have the option of taking the standard monthly annuity or a partial lump sum benefit followed by a reduced monthly annuity.

To be eligible to retire, the following conditions apply:

  • Your service credit must be established (not withdrawn) with ERS at the time of retirement.
  • You must be at least age 60 with a minimum of five years of service credit.
  • Or, you can qualify under the Rule of 80: your years and months of service credit (at least five years) and your years and months of age equal or exceed 80.

The Texa$aver 401(k)/457 Program

In addition to the mandatory ERS program, eligible state employees can contribute to a Texa$aver 401(k) and/or a 457 account to save even more for retirement. Employees hired by a state agency on or after September 1, 2008, are automatically enrolled contributing 1% of every paycheck. Those hired before that date can join the program at any time. Contributions may be deducted from your monthly paycheck before or after income taxes are taken out. Or, you can opt out of Texa$aver and stop your contribution at any time.

Texa$aver offers an excellent opportunity to open your own 401(k) or 457 retirement account and select from a range of investment options at lower-than-average fees. Add to this you can choose to contribute more to your account and change how your account is invested. The program also provides a website to track your account 24/7.

Other Texas Pension Plans

The state of Texas provides other Defined Benefit pension plans including:
  • 1.The Employees Retirement System (ERS)
  • 2.The Teacher Retirement System (TRS)
  • 3.The Optional Retirement Program (ORP)
  • 4.The Judicial Retirement System of Texas
Texas Pension Plans

PERS FAQ's

How long do I need to work before I am vested in ERS?

You become vested in the ERS when you have five years or more of accumulated service credit.

What is the ERS retirement Age?

To be eligible to retire, your service credit must be established (not withdrawn) with ERS at the time of retirement. You must be at least age 60 with a minimum of five years of service credit. Or, you can qualify under the Rule of 80: your years and months of service credit (at least five years) and your years and months of age equal or exceed 80.

Do I have to pay Federal Income Taxes on ERS retirement benefit?

Yes – once you retire and start receiving your ERS retirement benefits as income, those payments become subject to Federal taxes.

Will my ERS retirement benefits be reduced by Social Security Benefits I receive?

No, ERS does not reduce your benefit once you become eligible for Social Security.
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Pension Navigators is an educational organization dedicated to helping State Employees make informed decisions when planning their retirement. The educational resources we provide are designed to provide them with the most current information on their State Pension Benefits plus strategies for achieving their retirement income goals.

This website provides an overview of what we can provide to State Pension Agencies to help their employees stay current on the latest rules and requirements of their pension plans.

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