Employees Retirement System: legacy payments and lump sums have improved funding; officials urge prudence before benefit changes

Porter Wilson, executive director of the Employees Retirement System of Texas, told the committee ERS administers several retirement plans and a large state health‑insurance program that covers roughly one in 56 Texans. He reviewed plan population figures and funding ratios and said the main ERS plan is currently about 74.4% funded.

Wilson recounted reforms dating to 2009 and 2013 and a major redesign in 2021 that created a cash‑balance plan for new hires. He highlighted a legislative legacy payment of $510,000,000 paid annually (with additional one‑time payments and a $900,000,000 lump sum in 2023) that has shortened the projected payoff period from 2054 toward roughly 2041 and avoided an estimated $8.5 billion in amortization costs.

Wilson told members the board's funding policy recommends a buffer—roughly 120%—so that benefit design changes are not rushed after a fund merely hits 100%. He said LECO (the law‑enforcement and custodial officer supplemental fund) and JRS2 (Judicial Retirement System 2) are now over 100% funded after recent appropriations, while the main ERS plan remains on the path to full funding.

Committee members asked for projections and the ERS director said staff will provide timing estimates for reaching higher funded ratios and that the legislature will need to consider whether to reduce contributions or alter benefits once the fund reaches fully funded status.