Texa$aver is a voluntary retirement savings program
offered through ERS. Texa$aver can help you save for your future today.
Many financial experts agree that you will need 70-100% of your income to
maintain your current way of life in retirement. And while you may receive money
in the form of a pension and Social Security benefits when you retire, that may
not be enough. The ERS retirement plan does not provide automatic annual cost of
living adjustments (COLA). And while you may receive money in the form of a
retirement annuity and Social Security benefits when you retire, that may not be
That's where the Texa$aver 401(k)/457 Program comes into
Along with your pension and
Social Security income, you can save through the Texa$aver Program to have the
additional income you need when you retire. A balanced financial plan is like a
three-legged stool. All three legs are needed to provide stable income security
in retirement, including:
If you were hired after
January 1, 2008, you were automatically enrolled in the 401(k) plan at 1% of
your salary. You are invested in a Target Date Fund that is closest to the year
you turn 65. You can change the amount you are contributing, your investments or
cancel at any time.
Planning for your retirement is essential; the average
person spends 18 years in retirement and needs at least 70-120% of their
pre-retirement income to continue the same quality of life during retirement. It
is never too early or too late to begin saving. As you can see by looking at the
chart, the sooner you start saving, the more you will have when you retire.
Sign into your account on
website to enroll in or make changes to your 401(k) or 457 Plan any time of
If you do not have internet access, you can enroll/make changes by
calling Texa$aver at (800) 634-5091 or mailing in your form (401(k) form or 457
Important Note: As part of the enrollment
process, make sure you designate
a beneficiary for your account in the event of your death.
Participants have access to
objective, personalized investment advice through the Texa$aver Advisor Service.
Financial advisors can provide advice about investing your Texa$aver account
money. They can help you build a personalized profile of your financial
resources and a plan to help you meet your retirement goals. Advisors can build
a profile of your financial resources and a plan to help you meet your
Managed Account Service is available for an additional
fee of 0.0375% for accounts. Fees decrease as account balance increases.
The Target Date
Funds offer a simple solution to investing for
retirement. Choose the Target
Date Fund closest to your anticipated retirement year and let the Fund do
the rest of the work for you. With a single decision, you'll get a fund that
Quarterly you receive a statement
to monitor the performance and review the investment strategy you chose.
You can contribute as little as 1% of your paycheck per month to your 401(k) account, and as little as $20 per month to your 457 account.
Maximum contributions are $18,000 per year (per account).
If you are age 50 or older by year-end, you are automatically eligible to participate in the Age 50 and Over Catch-up. If you contribute the maximum amount, you can make an additional $6,000 "catch-up" contribution annually.
First, decide whether it is a direct or indirect rollover. Use the
forms located on the Texa$aver website. You can also call (800) 634-5091 for
help with rollovers.
A direct rollover is when a
distribution from your former employer is made to your Texa$aver 401(k) or 457
Plan. This lets you avoid a 20% withholding by the IRS. Follow these steps:
An indirect rollover is when you get a check from your previous
employer 401(k) or 457 Plan. The previous employer usually withholds 20% of this
check for federal income tax. Follow these steps:
457 plan also allows you to double your annual contribution limit if you are
within 3 years of retirement age. Keep in mind you cannot use the Special 457
Catch-up in conjunction with the Age 50 catch-up.
In the last 3 years
prior to retirement, you may defer up to double the normal Section 457
contribution limit. Visit the Texa$aver
website for annual limits and more information.
Texa$aver participants benefit by paying low
group-based fees. Participants do not pay any load fees and pay low
administrative. Texa$aver fees are already lower than the industry standard.
Fees are clearly noted on your statement.
Some participants in the
Texa$aver 401(k) / 457 Program will pay lower fees starting February 1, 2014.
In its annual review of the Texa$aver program, ERS determined that revenues
from current fees are more than enough to cover the program's costs. ERS
therefore recommended reducing fees for certain accounts, and the ERS Board of
Trustees approved the new fees at its December 2013 meeting.
visit the Texa$aver website for more
information about account fees.
Texa$aver has a
variety of distribution options to suit your financial needs when you retire
or leave employment. You can change your distribution arrangement as many
times as necessary. You must start taking distributions once you reach age
You can initiate a distribution after you leave employment by
submitting a distribution form. Use the Distribution/Direct Rollover Request
form available from the Texasaver
website. Payout options include:
You are encouraged to talk
with your tax advisor or financial planner before deciding to take your
Generally, taxes are withheld at 20% of any amount you
withdraw from your account.
Yes, withdrawal options are available while you are
still employed. You must exhaust your 401(k) loan and/or 457 loan options (if
applicable) before you can apply for a financial hardship withdrawal.
401(k) Financial Hardship Withdrawals can be taken for any
of the following reasons:
Emergency Withdrawals can be taken for any of the following reasons:
Distributions are subject to federal income taxes.
You must begin taking
distributions from your account at age 70½ (if you are retired). The required
minimum distribution is calculated separately for each Plan using your account
balance as of the last day of the previous year.
should consult with your own tax advisor or the IRS to discuss the best way to
comply with the rules based on your individual financial needs. Contact
Texa$aver to set up your plan.
do not have a penalty for withdrawals taken from your 401(k) account if you
are age 59½ or older. However, a 20% tax on your withdrawal will be withheld
if the funds are not rolled over to an IRA or other qualified plan. Funds that
are rolled over will not be subject to tax at that time. For more information
or withdrawal assistance, contact
If you're under age 59½, you may have to pay an
additional 10% when you file your tax return. If you are still working when
you are 59½, you can take money out of your 401(k).
200 East 18th Street Austin, TX 78701 ( map)
Toll Free (877) 275-4377
Relay Texas, TTY 7-1-1 or (800) 735-2989