Changes in Plan Design
Cathy Terrell, Deputy Executive Director, Employees Retirement System of Texas
The State of Texas created an innovative cash balance defined benefit plan for new employees starting September 1, 2023. Implemented as part of the existing defined benefit plan as Group 4, the new group lowers the vesting period for new employees, reduces the member contribution and offers an opportunity for gain sharing when the ERS Trust earns over 4%. The cash balance plan calculates benefits based on an account balance, instead of salary and service, and had a 15-month implementation timeline. This session will discuss implementation challenges and successes.