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Retirement Plans

All benefited employees of Íæż½ã½ã will participate in a mandatory retirement plan. Your employment status will determine your eligibility for either the Texas Retirement System (TRS) or the Optional Retirement Plan (ORP). Both employees and employers contribute to these retirement systems, ensuring the security of retirement benefits.

Contribution rates may vary depending on the chosen retirement plan and are established by the Texas Legislature, subject to change. Additionally, you have the option to enroll in voluntary retirement savings plans such as a 403(b) or 457.

Teacher Retirement System

The Teacher Retirement System (TRS) is a defined benefit plan, meaning your retirement benefit is determined by a formula set by Texas law, not by your contributions. Once you retire under the plan’s rules, you receive a monthly benefit for life.

• Lifetime Annuity: Provides a lifetime annuity when full retirement criteria are met.
• Contributions: Both employees and the employer contribute 8.25% of the employee’s annual salary. Employee contributions are tax-deferred.
• Standard Annuity Calculation:
  • Average Salary = Average of three or five years of salary (determined by retirement tier)
  • Total Percent = Total years of service credit x 2.3%
  • Annual Annuity = Total Percent x Average Salary
  • Monthly Annuity = Annual Annuity / 12
• Vesting: Occurs after five years.

Optional Retirement Program (ORP)

In lieu of the Teacher Retirement System, the Optional Retirement Plan (ORP) is available to benefit-eligible employees in specific roles, such as faculty, certain administrative positions, executives, librarians, and athletic coaches. The ORP is a defined contribution plan, meaning your retirement income depends on your contributions and investment performance.

• Contributions: Employees contribute 6.65% of their annual salary, and the employer adds 6.6%. Employee contributions are tax-deferred.
• Portability: The plan is portable, so you can take it with you if you change jobs.
• Eligibility: HR Benefits will notify you when you become eligible. You have 90 days from eligibility to elect the ORP, and this decision is irrevocable.
• Vendors: If you choose the ORP, you must select one of the approved ORP vendors.
• Vesting: Vesting occurs after one year and one day.

Supplemental Retirement Accounts

In addition to participating in TRS and ORP, employees have the option to contribute additional funds to a 403(b) tax deferred annuity or the Texa$aver 457 Deferred Compensation Plan.

Tax-Deferred Annuity (TDA)

A 403(b) plan, also known as a Tax-Deferred Annuity (TDA) plan, is a voluntary savings plan designed for employees of public schools and certain non-profit organizations. The 403(b) retirement program allows you to save additional income for retirement through pre-tax contributions. Contributions are made through payroll deductions and may be invested in funds and annuities with any one of the authorized vendors. There is no employer contribution with the 403(b) Tax-Deferred Annuity (TDA) Plan.

Texa$aver 457 Deferred Compensation Plan

The Texa$aver Program is a voluntary retirement savings plan offered to employees of the State of Texas. It allows participants to save additional funds for retirement pre-tax and post-tax (Roth). There is no employer contribution with the Texa$aver 457 Deferred Compensation Plan.

Dual Participation

Employees can participate in both the 403(b) and the 457 plans.

Resources

Forms