ERS Texas Retirement Options: Payment Options, Partial Lump Sum

Updated October 2, 2026. Quick answer: A state employee retiring from the Employees Retirement System of Texas (ERS) chooses a monthly payment option: the Standard Annuity, which pays the most and continues nothing to a survivor, or one of five options that keep paying a beneficiary and reduce the annuity for life. Eligible members can add a Partial Lump Sum Option of up to 36 months of the standard annuity, which permanently reduces the monthly payment and can be elected only when retirement starts. Groups 1 to 3 can also take a Self-funded Increase Option that trades a lower start for a 2% yearly increase. A withdrawal of contributions pays a mandatory 20% tax unless rolled over, and moves a returning member into Group 4.

Texas police and firefighters in some cities belong to local systems with their own rules: San Antonio Fire and Police pension decisions and Austin Police Retirement System decisions.

The monthly payment options

ERS says: “When you apply for retirement, you will choose a monthly payment option. Each option pays you for your lifetime.” The Standard Annuity pays the most each month; under it, “No monthly payment continues to any survivor after your death. If there is money left in your account after your death, your survivor receives a one-time payment.”

The survivor options in ERS’s words: “After your death, your survivor gets 100% of your monthly payment for life. You can designate only one beneficiary.” “After your death, your survivor gets 50% of your monthly payment for life. You can designate only one beneficiary.” “After your death, your survivor gets 75% of your monthly payment for life. You can designate only one beneficiary.” Option 1 carries a caution: “Note: If you choose someone other than your spouse as a beneficiary, their monthly survivor payment may be less than 100%, depending on the difference in your ages.” The term-certain options work differently: “If you die before you get 60 monthly payments, your survivor gets the rest of the 60 monthly payments. Then the monthly payment stops.” “For example, if you die after 34 months of retirement, your beneficiary will get the payment for 26 months.” “If you die before you get 120 monthly payments, your survivor gets the rest of the 120 monthly payments.” On those two, “If you designate more than one beneficiary, you can decide the percentage of the monthly payments you’d like each beneficiary to get.”

What a survivor option costs and what can go wrong

The reduction is permanent: “If you choose an option that provides a continued monthly payment to your beneficiary after you die, your monthly annuity will be reduced for your lifetime.” It is not a flat percentage: “These survivor options are based on your age and your beneficiary’s age at the time you retire.” ERS does not print the factors in the pages read, but it offers a way to see them: “Before you retire, you can log in to your ERS OnLine account to get an estimate of your monthly annuity under each option”

A survivor option can lose its point. “If you select a survivor option and the beneficiary dies before you, your monthly payment will change to the standard annuity option for the rest of your life.” “You will not be able to name another beneficiary.” The Government Code states that rule with its exceptions in section 814.108(g): “Except as provided by Section 814.008 or 814.1081, a person who selected an optional service retirement annuity approved by the board of trustees or an optional service retirement annuity described by Subsection (c)(1), (c)(2), or (c)(5) may not change or revoke a beneficiary designation after the person’s effective date of retirement.” Section 814.008(d) limits the later change: “A retiree may not change a beneficiary under this section after retirement if the retiree has previously changed after retirement a beneficiary for optional retirement annuity payments under this subtitle.” That is worth weighing against the reduction you accept at the start. For the general version of this trade, see single life versus joint and survivor.

A retiree on a survivor option can change the beneficiary under section 814.008(a), once only (section 814.008(d), quoted above). If the beneficiary named at retirement is a spouse or former spouse, section 814.008(b) adds: “If the beneficiary designated at the time of the retiree’s retirement is the spouse or former spouse of the retiree: (1) the spouse or former spouse must give written, notarized consent to the change; or (2) a court with jurisdiction over the marriage must have ordered the change.” Section 814.008(c) limits what the new beneficiary receives: “A beneficiary designated under this section is entitled on the retiree’s death to receive monthly payments of the survivor’s portion of the retiree’s optional retirement annuity for the shorter of: (1) the remainder of the life expectancy of the beneficiary designated as of the effective date of the retiree’s retirement; or (2) the remainder of the new beneficiary’s life.”

A retiree can also drop a survivor option and return to the standard annuity in two situations, set by section 814.1081(a): “A person who retired and selected an optional service retirement annuity described by Section 814.108(c)(1), (c)(2), or (c)(5) may change the optional annuity selection to the selection of a standard service retirement annuity if: (1) pursuant to a divorce decree, a court orders the change in the annuity selection to a standard service retirement annuity; or (2) the retiree files with the retirement system a request to change the annuity selection, if the retiree designated a person as beneficiary who: (A) was not at the time of designation and is not currently the retiree’s spouse or dependent child; or (B) is not currently the retiree’s spouse or dependent child and has executed since the designation a written, notarized instrument that releases the retirement system from any claim to the annuity by the beneficiary and that transfers all of the beneficiary’s interest in the annuity to the retiree.”

The Self-funded Increase Option

This is the newer choice. “If you take the Self-funded Increase Option, it will initially reduce your annuity, but you will receive a 2% increase every year beginning the month following the first anniversary of the retirement date.” “The initial reduction is based on your actuarial factors, such as your age at retirement and your sex.” Availability is limited: members in retirement Groups 1 to 3 hired with a state agency before Sept. 1, 2022 “have the option to choose the Self-funded Increase Option”, beginning Sept. 30, 2024. The reason it matters: “Members of Retirement Group 1, 2 or 3 should not expect cost-of-living adjustments or other retirement annuity increases, unless they take the Self-funded Increase Option.”

The Government Code does provide for increases in some circumstances. Section 814.601(e) says: “If an appropriation is not made for a fiscal year for the purpose of this section, the retirement system may not increase under this section the amount of annuities for that year.”

Section 814.604(b), which applies when the board of trustees makes the funding finding in subsection (a) of that section, says: “The retirement system shall pay the cost-of-living adjustment under this section to a retiree who has been retired for 20 years or more on the date the board of trustees makes the finding in Subsection (a), or to a beneficiary of the retiree, as an increase to a monthly service retirement benefit, disability retirement benefit, or death benefit, as applicable, paid under this chapter for service credited in the employee class.” Subsection (c): “A cost-of-living adjustment under this section is limited to the lesser of: (1) an amount equal to three percent of the monthly benefit subject to the increase; or (2) $100 a month.”

The Government Code sets the option out in section 814.110. Who may choose it, from subsection (a): “A member who is eligible for a service retirement annuity not reduced because of age may select a standard retirement annuity or an optional service retirement annuity described by Section 814.108 together with the option for an increasing annuity as described by this section.” Subsection (e) adds: “The increasing annuity option under this section may be elected only once by a member and may not be elected by a retiree. A member retiring under the proportionate retirement program under Chapter 803 is not eligible for the option.” Subsection (f) adds: “This section does not apply to: (1) a disability retirement annuity; or (2) an annuity based on service credited in the elected class.”

How the increase works: “The annual 2% increase will compound for the rest of your life, meaning that each annual 2% increase will be based on your annuity over the previous 12 months.” ERS illustrates it with a retiree whose figures it prints: “Starting Oct. 31, 2026, her monthly annuity will increase by 2%, to $1,664.64.” Who is shut out, per ERS: ERS says the option “is not available to” Group 2 members “retiring before age 60” and Group 3 members “retiring before age 62” (each group is defined by hire dates on ERS’s page), “members using Proportionate Retirement Program service to reach retirement eligibility”, “members retiring under ERS Disability Retirement”, and “elected state officials or Judicial Retirement System members”.

Section 814.110(b) describes the increase this way: “The retirement system shall provide the increasing annuity option by reducing the member’s annuity for an appropriate implementation period beginning immediately after the member’s retirement and annually increasing the amount of the annuity by two percent or by another percentage rate, as determined by the system under Subsection (c), for each year during the applicable implementation period.” ERS says the 2% increase compounds for the rest of your life; the statute ties the increases to each year of the implementation period, and this page does not reconcile the two, so ask ERS how long the increases run for your own election.

It can be stacked: “You can choose one of the survivor payment options below in addition to the Self-funded Increase Option, but that will reduce your annuity even more.” “If you choose a survivor option and the Self-funded Increase Option, the 2% increase will continue as long as your beneficiary receives an annuity payment.” “If you are eligible for a Partial Lump-sum Option, you can chose the Self-funded Increase Option and a partial lump-sum payment, but that will reduce your annuity even more.”

The Partial Lump Sum Option

ERS says: “You may choose to receive a one-time payment equal to one up to 36 months of your standard annuity payment at retirement.” “If you choose a PLSO, ERS pays this in addition to your monthly retirement payment.” The terms: “Choosing this option permanently reduces the amount of your monthly annuity payment.” “The PLSO payment can only be elected when you start the retirement process.” Timing: “If you choose this option, you will receive your PLSO payment approximately five days after your first monthly retirement payment.”

ERS lists who cannot take it: members retiring on a disability retirement, members of the Judicial Retirement System, members retiring with a monthly payment reduced for age, and most members retiring under the Proportionate Retirement Program.

The Government Code states these limits in section 814.1082. Who may take it, from subsection (a): “A member who is eligible for an unreduced service retirement annuity may select a standard retirement annuity or an optional retirement annuity described by Section 814.108 together with a partial lump-sum distribution.” Subsection (f): “The partial lump-sum option under this section may be elected only once by a member and may not be elected by a retiree. A member retiring under the proportionate retirement program under Chapter 803 is not eligible for the partial lump-sum option.” Two points differ from ERS’s wording: the statute bars every member retiring under the proportionate retirement program, not most, and on timing subsection (d) says: “Unless otherwise specified in rules adopted by the board of trustees, the lump-sum distribution will be made as a single payment payable at the time that the first monthly annuity payment is paid to the retiree.”

Tax: “If you take your PLSO as a direct payment to yourself, you’ll pay 20% in taxes and, based on IRS guidelines, may have to pay an additional 10% early withdrawal penalty if you retire from state employment younger than 55.” Rollover choices: “You can also roll your PLSO payment into a Texa$aver 401(k) or 457 Plan account.” “You can also roll your PLSO payment into an eligible outside retirement plan or an IRA.” “You cannot use the PLSO rollover to pay off an existing Texa$aver loan.” A computed example from an assumed $2,500 standard annuity, not an ERS figure: 36 months is $90,000, and the 20% tax on a direct payment of that sum would be $18,000. The reduced monthly payment that goes with it is calculated by ERS from your own record, so it cannot be computed here. See also the 20 percent withholding rule.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of ERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. ERS’s own pages describe rollover to a Texa$aver account, an outside plan or an IRA as the alternative to a taxed direct payment. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

Withdrawing your contributions or leaving them

There is no partial access while you work: “If you are actively employed with the state you can’t withdraw or borrow from your retirement account. There are no partial withdrawals.” After separation the choice opens. “If you are vested and separate from state employment, you can leave your account with ERS or process a withdrawal of your retirement contributions.” “If you are not vested and separate from state employment, you will have the option to withdraw your ERS Retirement.” Interest on the balance: “Groups 1, 2 and 3 members have a retirement account balance that accrues 2% interest every year.” “Group 4 members have a retirement account balance that accrues 4% interest every year with potentially an additional 3% interest based on ERS’ investments over a five-year period, this is called gain-share .”

Gain-share is defined in section 820.103(a): “Each fiscal year and subject to Subsection (b), the retirement system shall compute the gain sharing interest rate by: (1) determining the average return on the investment of the system’s cash and securities during the preceding five fiscal years, expressed as a percentage rate; (2) subtracting four percentage points from the percentage rate determined under Subdivision (1); and (3) multiplying the resulting difference under Subdivision (2) by 50 percent.” Section 820.103(c) caps it: “The gain sharing interest rate applied under Subsection (b) may not be less than zero or more than three percent.”

Withdrawal has a cost beyond lost future benefits. “After ERS processes your withdrawal, you will be enrolled in Group 4 and will not be reinstated to your previous retirement group if you return to state employment.” “You will have different retirement eligibility and annuity calculations.” “You also will not be able to purchase withdrawn service credit unless you are a member of another retirement system that participates in the Proportionate Retirement Program.” The Government Code is more specific. Who is in Group 4 (section 820.002): “This chapter applies only to a member of the employee or elected class of membership who: (1) was hired or took office on or after September 1, 2022; and (2) was not a member on the date the member was hired or took office.” Section 820.032(a) lets that member buy canceled credit back: “A cash balance group member who has withdrawn contributions and canceled service credit in a class of membership may purchase the canceled service credit in the retirement system for the purposes described by Subsection (c) by: (1) submitting a request to the system in a form and manner prescribed by the system; and (2) depositing with the retirement system in a lump sum the total amount of money withdrawn from a membership class not later than the first day of the 24th month after the month in which the person is reemployed or again holds office.” What a purchased credit can do, from section 820.032(c): “Service credit purchased under this section may be used only: (1) to determine whether the cash balance group member is eligible to retire and receive a cash balance annuity; and (2) for purposes of determining eligibility to participate in the group benefits program established under Chapter 1551, Insurance Code.” Section 820.031(c) says of credit reestablished without a purchase: “Service credit established under this section may be used only to determine whether the cash balance group member is eligible to retire and receive a cash balance annuity under this chapter. The service credit does not affect eligibility for any other purpose, including for purposes of determining eligibility to participate in the group benefits program established under Chapter 1551, Insurance Code.” Leaving the money is the alternative: “If you’re already vested or return to work with the state and become vested, you will get a monthly annuity when you retire with ERS.” “If you decide to leave your account with ERS, be sure to contact ERS to start the retirement process when you are first eligible.”

Process: “You must be off state payroll for at least 30 days. ERS must receive and approve your signed and notarized withdrawal disclaimer.” “Your last employing agency must report your last date of service to ERS.” Then “Once your last employing agency reports your last date of service, it has been at least 30 days since your last date of state service, and ERS has received and approved your withdrawal disclaimer, it takes an additional 15 days before we mail your withdrawal check.”

The statute states the withdrawal conditions in section 812.101(a): “A member of the retirement system may withdraw all of the member’s accumulated contributions for service credited in the employee class of membership if: (1) the member does not hold a position included in that class; (2) the member does not assume or resume, during the 30 days after the date on which the member terminates employment, a position included in that class; and (3) the member’s application for withdrawal is filed before the member assumes or resumes a position included in that class.” Section 812.103 states the effect: “A withdrawal of contributions cancels a member’s service credit and terminates the person’s membership in, and all rights to benefits from, each class from which the withdrawal is made.”

Tax: “Your payment will be taxed at a mandatory 20% and depending on your age you may be subject to an additional 10% when filing taxes for the next year.” On rollovers, “Your withdrawal won’t be taxed in the current year and no income tax will be withheld if you roll over the entire taxable amount.” “Any portion paid directly to you is subject to taxes.” Two limits: “The nontaxable portion (any contributions made to your account post-tax) of your withdrawal is not an eligible rollover distribution and can’t be rolled over to another retirement account.” “Your withdrawal can’t be rolled over to a Roth IRA, SIMPLE IRA or education IRA, because these IRAs are not considered Traditional IRAs.” The general comparison is on pension refund versus leaving it in.

Service credit: buying and counting it

ERS defines it simply: “Service credit is credit for time worked. It is one of the factors ERS uses to calculate when you can retire and how much your annuity will be.” What can be added: “Group 1 employees can apply unused sick and/or annual leave balances to their service credit to meet ERS retirement eligibility and increase their ERS annuity.” “Group 2 and 3 employees can apply unused sick and/or annual leave balances to their service credit only to increase their ERS retirement annuity (not to reach retirement eligibility).” “If you are retiring after you left state agency employment, you cannot apply sick or annual leave as service credit.”

The current text of the Government Code limits leave credit to the annuity. Section 813.509(k) says: “A member or a death benefit beneficiary of that member may use sick leave creditable under this section only for purposes of calculating the member’s or beneficiary’s annuity.” Section 813.511(j) says: “A member or a death benefit beneficiary of that member may use annual leave creditable under this section only for purposes of calculating the member’s or beneficiary’s annuity.”

That text applies only to later hires. Section 27 of Senate Bill 1459 (2013), which gave both subsections their current wording, says the changes “apply only to a person who is hired on or after September 1, 2013, to work in a position that requires membership in the Employees Retirement System of Texas”, and that a person hired before that date “is subject to those laws as they existed immediately before that date, and the former law is continued in effect for that purpose”. The earlier wording, from House Bill 2559 (2009), limited leave to the annuity only for a member who “was not a member on the date hired and was hired on or after September 1, 2009”. That is the split ERS describes: Group 1 can count leave toward eligibility, Groups 2 and 3 cannot.

Purchases: “Purchase up to three years of ASC if you have at least 10 years of earned ERS service credit, not including military and unused sick/annual leave, and have purchased all other service credit available to you.” “Purchase up to 60 months of active duty United States military service credit.” “If you had a waiting period before you started contributing, you can buy this time to help you retire earlier and increase your monthly payment.” For earlier withdrawals: “If you worked for the State of Texas before, left and withdrew your retirement account then returned to State of Texas employment, you can buy back the service credit you withdrew.” “You will stay in the retirement group based on the date you returned to State of Texas employment.” For additional service credit the price and limits are in section 813.513. Subsection (a): “An eligible member may establish not more than 36 months of equivalent membership service credit, including law enforcement or custodial officer service, in either the elected class or the employee class.” Subsection (b): “A member is eligible to establish service credit under this section if the member has at least 120 months of actual membership service of the type of service that the member seeks to establish.” Subsection (c) sets the price: “A member may establish service credit under this section by depositing with the retirement system, for each month of service credit, the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service credit under this section, based on rates and tables recommended by the retirement system’s actuary and adopted by the board of trustees.” The cost of other purchases is not stated on the pages read; to test whether one pays for itself, see the pension buyback calculator.

The Government Code limits waiting-period credit (section 813.514(a) and (a-1)): “This section applies only to a member who became a member before September 1, 2015.” “A member may establish service credit under this section in the employee class only for service performed during a 90-day waiting period to become a member after beginning employment or holding office. The member may establish service credit for each month of any 90-day waiting period in which the member performed service, regardless of whether the member made a contribution during the 90-day waiting period for which the member establishes service credit.”

Military credit has a limit too. Section 813.301(b): “A member may establish one month of service credit for each month or fraction of a month of duty, but not more than 60 months of service credit in the retirement system for military service.” Section 813.304(b) says: “The retirement system shall use military service credit in computing service retirement or nonoccupational disability retirement benefits of a member of the employee class only if the member has, without military service credit, at least five years of service credit in that class.”

Contributions: “All state agency employees, except return-to-work ERS retirees and contracted/temporary employees, make a monthly contribution to the Plan by direct deduction from their paycheck.”

Retirement eligibility for employee class service is set by statute. Section 814.104(a): “Except as provided by Subsections (d) and (e) of this section, Section 814.102, or by rule adopted under Section 813.304(d) or 803.202(a)(2), a member who has service credit in the retirement system is eligible to retire and receive a service retirement annuity if the member: (1) is at least 60 years old and has at least 5 years of service credit in the employee class; or (2) has at least 5 years of service credit in the employee class and the sum of the member’s age and amount of service credit in the employee class, including months of age and credit, equals or exceeds the number 80.”

For a member who was not a member on the date hired and was hired on or after September 1, 2009, section 814.104(d) says: “Except as provided by Subsection (e) of this section, Section 814.102, or by rule adopted under Section 813.304(d) or 803.202(a)(2), a member who was not a member on the date hired, was hired on or after September 1, 2009, and has service credit in the retirement system is eligible to retire and receive a service retirement annuity if the member: (1) is at least 65 years old and has at least 10 years of service credit in the employee class; or (2) has at least 10 years of service credit in the employee class and the sum of the member’s age and amount of service credit in the employee class, including months of age and credit, equals or exceeds the number 80.”

For a Group 4 member, section 820.052 says, for employee class service: “who has service credit in the employee class of membership is eligible to retire and receive a cash balance annuity if the member: (A) is at least 65 years old and has five years of service credit in that class; or (B) has at least five years of service credit in that class and the sum of the member’s age and amount of service credit in that class, including months of age and credit, equals or exceeds the number 80” The same section sets separate routes for law enforcement, custodial and elected class service.

The formula is in section 814.105, and its current text applies only to a member hired on or after September 1, 2013 (Senate Bill 1459, section 27, quoted above, keeps the former law for earlier hires). For those members, subsection (a): “The standard service retirement annuity for service credited in the employee class of membership is an amount computed as the member’s average monthly compensation for service in that class for the 60 highest months of compensation multiplied by 2.3 percent for each year of service credit in that class.” Subsection (d): “The standard service retirement annuity computed under this section is reduced by five percent for each year the member retires before the member reaches age 62.” This page does not restate the former formula for members hired before September 1, 2013; ask ERS which formula applies to you.

Section 815.402(a) deducts from each member other than a cash balance group member 9.5 percent of compensation for a member of the legislature, and for any other member on service rendered on or after September 1, 2017, “the lesser of: (A) 9.5 percent of the compensation; or (B) a percentage of the compensation equal to 9.5 percent reduced by one-tenth of one percent for each one-tenth of one percent that the state contribution rate for the fiscal year to which the service relates is less than the state contribution rate established for the 2017 fiscal year”

What this page could not settle

• Whether a spouse must consent to an option election at retirement is not stated in the ERS pages read. The Government Code requires written, notarized spouse consent for a change of beneficiary after retirement (section 814.008(b), quoted above); in chapters 811 to 815 and 820 the word “consent” appears only in that section, in the rule on appointing trustees and in the payroll deduction rule, so those chapters contain no spousal consent requirement for the election itself; the board of trustees’ rules were not read.
• The exact reduction for each survivor option is not stated; ERS says only that it depends on your age and your beneficiary’s age.
• The ERS pages read do not state the member contribution rate, vesting years or retirement eligibility; the Government Code sections 814.104, 814.105, 815.402(a) and 820.052, quoted above, do for the members they cover.
• The pages read do not state every purchase cost or deadline; the paragraphs above give the statute’s price for additional service credit and the 24-month deposit deadline for a withdrawn Group 4 account.
• When an option election becomes final is not stated in the ERS pages read; section 814.108(g), quoted above, fixes the beneficiary designation after the effective date of retirement except as the sections cited there allow, and section 814.101(b) says: “An application for a service retirement annuity may not be made: (1) after the date the member wishes to retire; or (2) more than 90 days before the date the member wishes to retire.” Ask ERS before you submit.
• ERS does not say on the pages read whether a withdrawal forfeits more than your retirement group; section 812.103, quoted above, says it cancels service credit and ends membership and all rights to benefits from the class withdrawn from.

Common mistakes

• Picking the Standard Annuity for the larger check without asking what a surviving spouse would live on.
• Choosing a survivor option and forgetting that if the beneficiary dies first the payment reverts and no new beneficiary can be named.
• Taking the Partial Lump Sum Option without seeing the permanent cut to the monthly annuity; it can be elected only at the start of retirement.
• Withdrawing contributions after leaving and not realizing a returning member is enrolled in Group 4.
• Taking a direct payment and paying the mandatory 20 percent tax, and possibly 10 percent more, instead of rolling it over.

Related on this site: Texas retirement taxes, TRS Texas retirement decisions, a different system, TMRS retirement decisions, the municipal system, pension lump sum versus monthly annuity and public pension retirement decisions by system.

Sources

• ERS of Texas, Retirement Payment Options: https://www.ers.texas.gov/active-employees/retirement/retirement-payment-options
• ERS of Texas, Partial Lump Sum: https://www.ers.texas.gov/active-employees/retirement/state-of-texas-retirement/partial-lump-sum
• ERS of Texas, Withdraw Your ERS Retirement: https://www.ers.texas.gov/active-employees/retirement/withdraw-your-ers-retirement
• ERS of Texas, Service Credit for State of Texas Retirement: https://www.ers.texas.gov/active-employees/retirement/service-credit-for-state-of-texas-retirement
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 2, 2026; the Texas Government Code sections named on this page (Title 8, Subtitle B, chapters 811 to 815 and 820, statutes.capitol.texas.gov) and the enrolled texts of Senate Bill 1459 (2013) and House Bill 2559 (2009) (capitol.texas.gov) were read on October 24, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.