Understanding your Benefits
COAERS is a tax-qualified “defined benefit” plan under Section 401(a) of the Internal Revenue Code. COAERS is a type of pension plan in which an employer promises a monthly retirement benefit that is based on a predetermined formula.
One of the best things about a defined benefit plan like COAERS is that the ups and downs of the market do not affect the benefit promised. Once retired, you’ll receive a steady monthly payment for your lifetime. Another advantage of the plan is that member contributions are tax-deferred. While you are working, your yearly retirement contribution lowers your taxable income.
How Your Membership Works
As a regular City of Austin employee working 30 or more hours per week, you are automatically a member of COAERS.* Membership is mandatory if you are a regular, full-time City employee in a non-civil service position. Civil service positions such as uniformed police officers are excluded from membership, as are elected positions such as the Mayor and City Council.
You contribute 8% of your base pay, excluding overtime, not subject to any limit. Each pay period, your retirement contribution is automatically deducted from your paycheck. Participation is mandatory, and you cannot change your individual contribution rate. The City also contributes to COAERS each pay period. Texas law requires a base contribution equal to 8% of your base pay (excluding overtime and other types of pay); however, to ensure that COAERS is properly funded for the long term, the City has committed to supplementing this base contribution with an additional amount equal to 10% of your base pay each pay period. Effective January 2021, the City increased its contribution by an additional 1%, for a total City contribution of 19%.
COAERS provides you with a lifetime retirement benefit once you meet certain eligibility requirements. While you participate by contributing a percentage of your base pay, these contributions do not determine the amount of the benefit that COAERS promises you. Your benefits are determined by a formula which includes your salary and your years of service credit. Contributions are invested by COAERS, under the direction of our Board of Trustees, to provide benefits to all present and future members.
Which retirement group am I in?
Your retirement benefits and eligibility date are determined in part by your retirement group, which is determined by your employment date.
- If your full-time, regular employment date is before January 1, 2012, you are in Group A.
- If your full-time regular employment date is on or after January 1, 2012, you are in Group B.
You can find more information about Group A and Group B in the Retirement Benefits section of the handbook. If you are not sure which group you are in, please contact us.
For detailed information about your COAERS benefits, please review the COAERS Member Handbook. There you will find important information to help you learn about the System and plan for your future retirement.COAERS Member Handbook