Texas ERS trustees certify pension plan is actuarially sound, prompting COLA for some retired state workers

Cost-of-living adjustment benefits nearly 30,000 retirees or beneficiaries

AUSTIN – The Employees Retirement System of Texas Board of Trustees today certified that the ERS pension plan is actuarially sound, triggering a one-time, cost-of-living adjustment for some retired state workers that the 83rd Texas Legislature approved in 2013.

Under state law, a pension plan is actuarially sound if the amortization period of funded actuarial liabilities for the plan will be less than 31 years.

The COLA will be a permanent, one-time 3% or $100 monthly increase, whichever is less, and will apply to ERS annuitants, both regular service and law enforcement and custodial retirees, who have been retired for 20 or more years as of Dec. 31 (retired on or before Dec. 31, 2004), or their beneficiaries.

“It is very satisfying to finally be able to provide this COLA that was authorized by the Texas Legislature back in 2013,” ERS Executive Director Porter Wilson said.  “This is really possible because of the substantial financial commitment made by state legislators and the governor to setting the pension program back on a path to full funding. Our Board of Trustees and dedicated investment staff have also played critical roles in getting us to this point.”

In 2021, the Texas Legislature passed Senate Bill 321 to address a shortfall in funding in the ERS pension plan by making additional annual payments through 2054. In 2023, the Legislature moved to further address or eliminate liabilities related to the state’s three pension plans, including the Law Enforcement and Custodial Officer Supplemental Retirement Fund.

About one quarter of retirees and surviving beneficiaries, almost 30,000 people, are eligible for the COLA, which will start with the Jan. 31 payments. More than 90% of those eligible will get the full 3% increase.

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About ERS

The Employees Retirement System of Texas proudly serves the public servants who work for or have worked for the state of Texas. Since 1947, ERS has managed benefits for employees and retirees of Texas state agencies and some higher education institutions. These benefits contribute to the financial security and overall well-being of employees, retirees, and their families.