Resources for Public School Employees

For teachers and other public school employees, there is little room for error in investing. Salaries and pension benefits are modest, and the vast majority of Texas school employees are not eligible to pay into the Social Security System.

This section of the Texas State Securities Board’s Investor Education site is intended to help educators navigate their specialized corner of the investment world. The links below contain information for educators who want to supplement their pension with an individual retirement savings account. At the time, it is important to know the warning signs of investment fraud and how you can avoid becoming a victim.

Public school educators saving for retirement are enrolled in the Teacher Retirement System of Texas (TRS), a state-mandated pension plan. Educators can also contribute to a 403(b) plan, which is a retirement plan for educators similar to a 401(k).
 

Who participates in TRS?

Membership in TRS is a condition of employment for employees of public schools unless excluded from membership by law; participation in TRS cannot be waived. As of February 2011, TRS members contribute 6.4% of their eligible compensation as their share of the funding for retirement plan benefits (including disability retirement and death benefits). The employer is required to deduct contributions from the participant’s salary on a pre-tax basis and forward the sums directly to TRS for each month of eligible employment.

Optional Retirement Program

Public education employees in Texas who are employed in membership-eligible positions are required to participate in TRS and are automatically enrolled in TRS on their first day of eligible employment. However, the Commissioner of Education and some higher education employees in certain positions designated by law may choose to participate in the Optional Retirement Program (ORP) instead of TRS.

Eligibility to participate in the ORP is determined by the employing institution. If you are newly employed in or promoted to a position that is eligible for ORP, then your eligibility to elect ORP participation begins on the first day of your employment in the ORP-eligible position. As of February 2011, election to participate in the ORP must be made within 90 days of first becoming eligible to do so. The 90-day election period may not begin before eligibility for TRS membership begins.

If you have questions regarding your eligibility for ORP participation, please contact your employer or the Texas Higher Education Coordinating Board. This election is a one-time, irrevocable decision between two distinct plans. The ORP is administered by the Texas Higher Education Coordinating Board and the governing board of each individual institution of higher education.

Additional information may be found in the Texas Higher Education Coordinating Board brochure “titled An Overview of TRS and ORP” available on that agency's Web site (www.thecb.state.tx.us).

For an in-depth discussion, our self-paced, online course Value of Investing has been created specifically for teacher and educators.