January 2025 COLA for 20-year retirees and their beneficiaries
Increase for those who retired before January 2005
In January 2025, the Employees Retirement System of Texas (ERS) will implement a permanent, one-time cost-of-living adjustment (COLA) for retirees who retired on or before Dec. 31, 2004, or their surviving beneficiaries. The COLA will be a monthly increase of 3% or $100, whichever is less, and will apply to both regular service and law enforcement and custodial officer (LECO) annuitants.
In late December, ERS will mail a letter to every annuitant getting the COLA to let them know the amount of the increase and the new amount of their gross monthly annuity (before taxes and other deductions). Eligible annuitants will get the increase in their Jan. 31 annuity payment and will continue to get that new gross annuity amount every month. About one-quarter of retirees and surviving beneficiaries, almost 30,000 people, are eligible for the COLA. More than 90% of them will get the full 3% increase.
In its December 2024 meeting, the ERS Board of Trustees certified that the ERS pension plan is actuarially sound and would remain actuarially sound after the COLA, which activated the adjustment under Texas Government Code Section 814.604 enacted by the 83rd Texas Legislature 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. That is, the ERS Plan is actuarially sound because it has enough money to pay its debt within 30 years.
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 LECO Supplemental Retirement Fund.
Learn more about the COLA and actuarial soundness in the ERS Retirement Plan.