Mandatory Deductions
Mandatory Retirement Plan Contributions
The state of Texas provides a number of retirement plans: the Employees Retirement System (ERS), Teacher Retirement System (TRS), an optional retirement program (ORP) and the Judicial Retirement System of Texas.
The following table outlines who may participate in each system and the percentage of monthly compensation deducted:
| Retirement System | Eligible Participants | Percent of Monthly Compensation |
|---|---|---|
| Employees Retirement System (ERS) groups 1, 2 and 3 | State employees who were active or former members of ERS and who did not withdraw their account before Sept. 1, 2022 | 9.5 |
| Employees Retirement System (ERS) group 4 | State employees who became members of ERS after Aug. 31, 2022 | 6.0 |
| Teacher Retirement System (TRS) | Public education employees | 8.25 |
| Optional retirement program (ORP) | Faculty members of institutions of higher education | 6.65 |
| Judicial Retirement System of Texas JRS-1 | Judges, justices or commissioners of the supreme court, the court of criminal appeals, a court of appeals or a district court elected before Sept. 1, 1985, and never eligible for JRS-2 | 9.5 |
| Judicial Retirement System of Texas JRS-2 | Judges, justices or commissioners of the supreme court, the court of criminal appeals, a court of appeals or a district court elected after Aug. 31, 1985, and never eligible for JRS-1 | 9.5 |
Plan Membership
Membership is typically a condition of employment and mandatory for most employees. Membership continues until an employee retires, dies or withdraws his or her account balance after leaving state employment. An employee continues to be a member as long as he or she has an account with a system, regardless of whether he or she continues employment with the state. The participant contributions must be made through payroll deduction and are invested by the plan.
Other Considerations
Firefighters
Firefighters save for retirement under the Texas Emergency Services Retirement System.
Return-to-Work Retirees
Agencies that hire a person who retires under ERS rules on or after Sept. 1, 2009, will pay a surcharge of 9.50 percent of what would be retirement-eligible wages to ERS for each month the return-to-work retiree is employed by their agency. There are no appropriations for this surcharge. A state agency cannot hire a person who retired under ERS rules until at least 90 days after the retirement date.
It is our understanding that the ERS retirement annuity will not be affected for employees returning to state employment after they retire.
ERS retirees who return to work at an agency subject to ERS will no longer contribute a portion of their monthly pay to an ERS retirement account. Therefore, they are not eligible to receive a second retirement from the ERS.
LECOS Deduction
Effective Sept. 1, 2009, employees covered under ERS whose positions are included in the Law Enforcement and Custodial Officers Supplemental (LECOS) retirement fund are required to make additional contributions as outlined below:
| Retirement System | Eligible Participants | Percent of Monthly Compensation |
|---|---|---|
| Employees Retirement System (ERS) groups 1, 2 and 3 | State employees whose positions are included in LECOS, who were active or former members of ERS, and who did not withdraw their account before Sept. 1, 2022 | 0.5 |
| Employees Retirement System (ERS) group 4 | State employees whose positions are included in LECOS and who became members after Aug. 31, 2022 | 2.0 |
Sources
Texas Government Code, Sections 812.003(a)–(b), 815.402(a)(1), 820.002, 820.101, 821.001(8), 821.001(12), 822.001, 822.002(a), 825.402(5), 825.403(a), 830.002(b), 830.003, 830.101(a), 830.102(a), 830.201(a), 830.202, 830.202(a), 832.001(a–c), 835.101(a), 835.103, 837.001(a–c), 840.102(a), (b)(1), (g), 840.105(a–b); 34 Texas Administrative Code Sections 25.25(a), 25.171, 25.172(e), 69.1(2).