Who is TCDRS?
TCDRS was created by the Texas Legislature, and charges no fees to employers or their employees. We do NOT receive funding from the State of Texas. Each plan is funded independently by a county or district and its employees. Our conservative funding methods ensure any debt is paid down to zero within 20 years. This means money is there when needed and debt is not pushed to future generations.
The TCDRS retirement plan has built-in features that make us unique. Our three primary differences include:
- TCDRS is a savings-based plan. Members are saving for their own retirement over the length of their careers. The TCDRS benefit is based on the total final employee savings balance and employer matching. This is contrary to a traditional pension plan where the benefit is based on the final salary and length of career. When a benefit is calculated based on final employee salary, benefit costs can jump beyond the employer’s expectations if there is a late-career promotion or if excessive overtime occurs.
- Benefits are responsibly funded. A key difference with TCDRS is that employers must pay 100% of their required contributions every year. This ensures that the necessary funds will be there when needed. In comparison, less than two-thirds of other public pension plans receive 90% or more of their employer contributions every year.
- Employers have flexibility and local control over benefits. Employers can choose benefit levels to meet their needs and budgets. This level of flexibility is not standard in most traditional retirement plans, making it difficult or impossible for employers to lower costs when needed.
Our plan is very efficient: We generate the same benefit at roughly half the cost to the employer compared to other retirement plans, such as 401(k) plans.
Our Plan Works in Three Simple Steps
Are you an employee at a participating county or district office? This is how the TCDRS plan will work for you.
- A percentage of your paycheck is deposited into your TCDRS account. That percentage (from 4% to 7% is set by your employer.
- Your savings grow at an annual, compounded rate of 7% interest.
- Once you retire, you receive a benefit payment for life that is based on your final account balance and employer matching.