Deferred Compensation History
Under the auspices of the Texas Comptroller of Public Accounts (CPA), the State of Texas introduced a 457 Plan as the state's Deferred Compensation Program (Program) in 1974.
By 1985 the Texa$aver 401(k) Plan was added to the Program. IDS served as the record keeper for the 401(k) Plan from 1985 until 1988. The Holden Group (THG) succeeded IDS as the plan's record keeper. In 1995 THG was renamed and began operating as Security First Group (SFG). MetLife acquired SFG in 1997 and, by combining this company with its 2000 acquisition of COVA, created MetLife Investors.
In the 71st Texas Legislative Session, Senate Bill 897 transferred the administrative control and supervision of the 401(k) and 457 Plans from CPA to Employee's Retirement System of Texas (ERS) effective January 1, 1991.
Effective January 2000, ERS froze deferrals to the 401(k) Plan.
ERS put a moratorium on new investment products into the 457 Plan and operated the Plan under a new name: Prior 457 Plan. ERS developed guidelines for the administration of the Prior 457 Plan. Deferrals to the Prior 457 Plan were frozen effective September 1, 2000 with the exception of life insurance payments.
In 2000, ERS began offering all new products for the 401(k) and 457 Plans under the Texa$aver Program name. Core funds with low management fees and a history of above average performance were selected for the Program. Deferrals to the Texa$aver Program were made to these new product offerings. With these new core funds, the Texa$aver Program offered enhanced product choices, low fees and fund performance for participants. Additionally, the Board authorized that a single TPA would provide record keeping services for both plans under the Program; MetLife Investors was named as the Program's TPA.
In April 2001, the Board authorized CitiStreet L.L.C. to serve as the Program's TPA. State Street Bank was later named the Program's Custodian.
Through a Request for Proposal (RFP) process, ERS contracted with CitiStreet Advisors L.L.C. to provide investment advice for the Program's participants in 2004.
In 2005, the Texa$aver 457 Plan was made available to employees of the community college systems.
In 2007, the University of Texas System (UT) transitioned out of the Texa$aver 457 Plan into UT's proprietary plan known as the UTSaver Deferred Compensation Plan.
Texas Gov't Code §609.5025 stipulates auto enrollment into the Texa$aver 401(k) Plan for all state employees hired on or after January 1, 2008. New employees are enrolled at a rate of 1.0% of their eligible salary. Also in January 2008, ERS added Target Date Retirement Funds (TDFs) to the Core Funds of the Texa$aver Program. TDFs have been established as the default investment option for the 401(k) Plan.
In September 2009, the Board authorized Great-West Life & Annuity Insurance Company to serve as the Program's TPA, and Wells Fargo Bank was named the Program's Custodian.
In 2012, the Texa$aver Program began offering the Roth option for the 401(k) and 457 Plans.
In 2013, the Core Funds of the Texa$aver Program expanded it line up to include a 1-3 Government Bond Fund and a Real Assets Strategy Fund.
ERS has implemented all federally mandated regulations and changes over the years. These changes include, but are not limited to, the Tax Reform Act of 1986, Small Business Job Protection Act, Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and Pension Protection Act of 2006 (PPA).