ERS Retirement Groups

Each ERS member’s eligibility for retirement and their pension annuity calculation depend on their retirement group, which is based on when they started working at a participating State of Texas agency. It’s important to know your ERS retirement group to understand your pension benefit.

Important information about leaving and returning to state employment

• If you leave state employment and withdraw your ERS account, you are no longer in the retirement group you became part of when you started work. If you return to state employment after withdrawing your ERS retirement account, your retirement group is based on the date you return to work for the state. You may be able to buy back your withdrawn service credit, but buying withdrawn service credit does not return you to your former group.

• If you leave state employment, but keep your account with ERS, you will remain in the retirement group you were in when you left.

How are the groups the same?

All four ERS groups have a pension, or defined benefit retirement. When you’re eligible and choose to retire, you’ll get a monthly pension annuity for the rest of your life—no matter which group you’re in, how long you live or how much money you contributed to your ERS retirement account.

All four groups have the same requirements to be eligible for retiree insurance.

How are the groups different?

• Groups 1, 2 and 3 have a traditional defined benefit retirement structure, with a retiree’s lifetime annuity based on a calculation that uses the years and months they worked at a State of Texas agency (or agencies) and their highest average salary with the state. These members also contribute more to their retirement accounts than Group 4. Groups 1, 2 and 3 all have annuities based on their years and months of service and highest average salary, but the annuity calculations and requirements for retirement eligibility are different for each group.

  The benefit for Groups 1, 2 and 3 was not set up and is not funded to provide annuity increases. Retirees in these groups should not expect increases like cost-of-living adjustments or additional retirement payments (sometimes called “13^th checks”).

• Group 4 has a cash balance benefit structure, with a lifetime retirement annuity based on their total ERS Retirement account balance—including member and state contributions, interest and gain-sharing—and their age when they retire. This structure might sound like a 401(k), but it’s not. Like Groups 1, 2 and 3, the Group 4 retirement benefit pays a monthly annuity for the rest of the retiree’s like—no matter how long they live or how much money was in their account when they retired.

  Group 4 retirees have the possibility of getting annuity increases through a feature called gain-sharing. When ERS’ investment returns allow, gain-sharing provides Group 4 retirees with a permanent annuity increase of up to 3% per year. These increases are not guaranteed, but once a gain-sharing increase is applied to the annuity, the annuity will never be reduced.

To learn more about the different eligibility requirements and annuity calculations for each group, see the overview of retirement groups.

Why are there different groups?

In 2009, 2013 and 2021, the Texas Legislature changed retirement benefits and eligibility requirements for new employees at State of Texas agencies. Each change created a new retirement group that must meet different service requirements to retire and that has different calculations to determine their annuity.