How a New ERS-Style Pension Benefit Can Better Serve Future Texas Educators

Choose a TRS member profile above to see how a cash balance benefit can impact their retirement security.

John became a TRS member at age 25 with a $50,000 starting salary. If John stays employed by a TRS employer for

25
years, he will earn an ERS-style cash balance pension worth $79,470 compared to the current TRS benefit of $69,711. This equates to a monthly income of $6,623 versus the traditional TRS benefit of $5,809.

Defined Benefit
Annual Retirement
Benefit Earned
Median Cash Balance
Annual Retirement
Benefit Earned
Median Cash Balance
+ Supplemental 403(b)
Wealth Accrual
Annual Retirement
Benefit Earned
$0.0$20k$40k$60k$80kYear 5Year 10Year 15Year 20Year 25Year 30 57.8%Retention44.4%Retention38.6%Retention33.7%Retention29.6%Retention27.2%RetentionProbability John Remains with TRS Employer

Frequently Asked Questions About Providing a Cash Balance Benefit to Future Texas Educators

Question 1: 96% of Texas’ public educators do not participate in Social Security; how would those future employees fare under an ERS-style benefit structure?

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Question 2: Doesn’t the current defined benefit plan provide benefits at a lower cost than alternative plans?

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Question 3: Does moving new hires to a new tier eliminate existing liabilities?

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Question 4: Didn’t the legislature increase the employer contribution rate in 2019 to its current 9.1% level set TRS on track to full funding?

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Question 5: Aren’t the combined TRS employee and employer contribution rates the lowest in the nation among teacher plans?

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Question 6: Is the value of the retirement benefit available to TRS members really 30 percent less than the average benefits available to members of peer systems?

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Question 7: Haven’t active members borne approximately 70 percent of plan changes since 2005?

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Question 8: Doesn’t the current defined benefit plan inherently place more risk with the State and generally offer more favorable outcomes for TRS members?

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Question 9: Wouldn’t the majority of TRS members do significantly worse investing independently in a plan with a defined contribution component?

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