TCERA also has different Tiers (benefit levels):
All employees who became members of the plan prior to 1980 are Tier I members. These members
receive the highest lifetime retirement benefits available from TCERA and are eligible for a
maximum of 3% annual cost-of-living adjustment on their benefits after retirement.
Employees who became members of the plan on or after January 1, 1980 through December 31, 1989
are Tier 2 members. These employees also receive lifetime retirement benefits, however, the
formula used to calculate their retirement benefits results in slightly lower benefits than
Tier 1. Tier 2 members are eligible fora maximum of 2% annual cost-of-living adjustment on their
benefits after retirement.
Employees who became members of the plan on or after January 1, 1990 are Tier 3 members.
The formula used to calculate retirement benefits for Tier 3 members is the same formula used
to calculate Tier 2 benefits. Tier 3 members also receive lifetime retirement benefits, with
the same annual cost-of-living adjustments after retirement, as Tier 2 members.
Tier 3 members are classified separately because they may be subject to benefit limitations
imposed by Internal Revenue Service regulations, section 415. (Recent changes to IRS Code have
removed the 100% of salary benefit limitation; however, indexed dollar limitations still apply.)
Special Note: If benefit improvements are granted, they may be limited by IRS Code section 415
for all members.
