Know before you go

7-minute read

Some of us know we’re destined to work in public service and some of us found our way to state offices merely because of the convenience of local public transit. No matter how you got here, most folks find that their State of Texas benefits are a good reason to stay. Defined benefit plans (also known as pensions) like your State of Texas Retirement are becoming less common as private sector employers have turned to alternatives that cost less for the employer. In fact, the Federal Reserve cites only 22% of retired adults had access to a pension plan in 2021. So while a career change might be in the cards this new year, here’s some things you can consider before you start a job hunt outside of state employment.

In addition to a retirement pension, state agency employees have access to high-quality health insurance provided by the state. The state pays 100% of the premium for eligible full-time employees and 50% of the premium for their eligible family members. Few private-sector employers offer such good health insurance at no cost for employee coverage.

State benefits usually transfer agency to agency

Michael is a great example of how employees can grow their career within state government and maintain their valuable benefits package. If you are exploring changing your job, consider another state agency to maintain your health benefits and service credit for retirement. After all, state employment is rewarding work with growth opportunities as big as Texas! You can likely continue contributing to your State of Texas Retirement while keeping your current Texas Employees Group Benefits Program (GBP) insurance if you continue your career with another agency. Depending on when they started state employment, employees vest for lifetime retirement payments after five or 10 years of state service. Currently, employees can earn insurance benefits in retirement after 10 years of state service.

When looking for a new state agency job, you can always ask the hiring contact whether your Employees Retirement System of Texas (ERS) retirement and GBP benefits will follow you to the new job. If the new agency participates in the GBP and you are transferring directly to the new agency, your coverage continues without the 60-day wait after the start of your employment.

The change in your role will likely come with a change in salary, which could automatically increase your contributions to your State of Texas Retirement, which are based on a percentage of your pay. If you are also contributing to the Texa$aver^SM 401(k) / 457 Program, make an appointment to speak with a Texa$aver Retirement Plan Advisor (RPA) to explore your options to increase your contributions and let them know about your change in employment. Texa$aver RPAs are ready to talk about your account at no cost to you.

Think before you withdraw your ERS retirement account

If you decide to leave state employment, you might consider leaving your State of Texas Retirement contributions in your ERS account. This ensures you maintain your service credit that counts toward your retirement eligibility (and for those in Groups 1, 2 and 3), your annuity calculation) and keeps you in the retirement group you were in when you started with the state. This would mean, if you decided to come back to the state later in your career, your retirement group would remain the same and you can pick up where you left off with your contributions.

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. Former employees who return or returned to state employment without an active ERS Retirement account can purchase their withdrawn/refunded service to help reach retirement eligibility sooner and increase their retirement annuity.

However, purchasing withdrawn/refunded service will not return you to the ERS retirement group you were in before. When purchasing withdrawn service, sooner is better. For Groups 1, 2 and 3, the cost goes up every year. Group 4 employees have only 24 months from the date of their rehire to purchase withdrawn service credit.

Become benefits savvy

So should you stay or should you go? Only you can decide what is best for you, your career and your financial health. Whether you are sticking with your organization or moving on, you should be informed about your benefits.

Understand your insurance benefits, so you can make the best use of them for better health and cost savings.

It’s never too early to learn more about your retirement benefits.

Attend an upcoming Ready, Set, Retire! presentation

• Wed, Jan. 29, 12:30 p.m. – Ready, Set, Retire! – Regular-service agency employees webinar
• Thu, Jan. 30, 10 a.m. – Ready, Set, Retire! – Higher education employees webinar
• Thu, Feb. 13, 2 p.m. – Ready, Set, Retire! – Regular-service agency employees webinar

If you can’t attend a live session, watch a recording. You can also create a retirement estimate in your ERS OnLine account to give you a good idea about how much your annuity will be each month. This will process will only be available to people that have contributed to their State of Texas Retirement with ERS.

When you are closer to your retirement date, you can meet with an ERS retirement counselor.

Tell your story

Liked hearing from a fellow state employee? We welcome you to share your story and ideas with our membership. Email us today at story_ideas@ers.texas.gov to tell us how you use your benefits or share an idea that might benefit our membership.