Updated October 30, 2026. Quick answer: The Employees Retirement System of Texas has no automatic COLA for Retirement Groups 1, 2 and 3: past increases came from the Legislature. The latest was a one-time, permanent increase of 3% or $100 a month, whichever is less, for retirees retired 20 or more years as of December 31, 2024, starting with the January 31, 2025 payment. Group 4 retirees get a gain-share of up to 3% in a year when the five-year average investment return is more than 4%. No 2027 COLA is set.
More on public pension retirement ages and eligibility: the Texas ERS retirement age and eligibility rules by group.
The last COLA
ERS announced on December 11, 2024 that the board “certified that the ERS pension plan is actuarially sound, triggering a one-time, cost-of-living adjustment for some retired state workers that the 83rd Texas Legislature approved in 2013”. “The COLA will be a permanent, one-time 3% or $100 monthly increase, whichever is less, and will apply to ERS annuitants”.
The Fall 2024 ERS newsletter adds: “Eligible retirees’ monthly annuities would increase by 3% or $100, whichever is less, starting with their Jan. 31, 2025 payment.” “There are no provisions in statute to provide any other COLAs.”
Why there is no regular COLA
ERS states: “In past years, ERS retirees received COLAs or 13th checks from the Legislature on an ad hoc basis, but the benefit design for Groups 1, 2 and 3 does not include regular annuity increases in retirement.”
Group 4 gain-share
Retirees in Retirement Group 4 get a different benefit. “By law, gain-share is capped at 3% annually, so Group 4 retirees’ annuities will never increase more than 3% a year.” “Retirees in ERS Retirement Group 4 received a permanent increase of 2.96% in their ERS annuity, beginning with their Dec. 31, 2025 payment.”
| Fiscal year ending August 31 | Five-year average of annual investment returns | Gain-share |
|---|---|---|
| 2025 | 9.91% | 2.96% |
| 2024 | 9.48% | 2.74% |
| 2023 | 7.53% | 1.77% |
Where 2027 stands
No 2027 COLA for ERS Retirement Groups 1, 2 and 3 is set or scheduled in the documents read, and the Group 4 gain-share for fiscal year 2026 is not yet published; this page updates when ERS announces either.
A worked example
As computed illustrations (not source figures), 3% of a monthly annuity of $2,000 (invented, for the computation) is $60 (computed), below the $100 limit, so the increase would be $60. For a monthly annuity of $4,000 (invented, for the computation) it would be 3%, $120 (computed), limited to $100.
Common mistakes
- Expecting an annual COLA. For Groups 1, 2 and 3 ERS says the benefit design does not include regular annuity increases.
- Mixing up the 2025 COLA with the gain-share. They apply to different retirement groups.
- Assuming the Legislature will grant another. Nothing in the documents read schedules one.
Related: Texas ERS retirement decisions, how public pension decisions work, and whether Texas taxes pensions.
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Answer againSources
- Employees Retirement System of Texas, 2024-12-11-ERS-COLA press release: ers.texas.gov
- Employees Retirement System of Texas, Your ERS Connection, Fall 2024 retiree newsletter: ers.texas.gov
- Employees Retirement System of Texas, ERS Retirement Group 4 Gain-share for Retirees: ers.texas.gov
- Employees Retirement System of Texas, History of Group 4 Retirement Gain-share Values: www.ers.texas.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.