Employees Retirement System of Texas:

An Inventory of Records at the Texas State Archives, 1942, 1947-2002, undated

Agency History

During the late 1930s, a group of state employees, some of whom eventually became the leaders of the Texas Public Employees Association, began thinking about a retirement system for state employees. Almost simultaneously, during World War II, officials of the Texas Highway Department were concerned by the loss of qualified employees to private industry and considered proposing a State Highway Department Retirement System. The two groups formed a coalition for all state employees that resulted in legislative action by the 49th Texas Legislature in 1945. Representatives George Parkhouse and Sherwood Brown sponsored House Joint Resolution 10, allowing Texans to vote in November 1946 to approve or reject the formation of a Retirement, Disability and Death Compensation Fund for state employees. The ballot measure passed, and, following two House-Senate Conference Committees, the Employees Retirement System of Texas (ERS) was created effective September 1, 1947 by House Bill 168, 50th Legislature, Regular Session, pursuant to a constitutional amendment (Article XVI, Section 67). The new agency was to provide a retirement program of benefits to state employees, retirees from state employment, and their beneficiaries. The programs administered by the Employees Retirement System were to include benefit payments for both service-related and disability-related retirements, and benefits for survivors of active and retired members. The ERS' continuing mission is to provide for, protect, and enhance the present and future well-being of members, retirees, and beneficiaries by effectively managing benefit programs, using sound actuarial principles and available resources consistent with applicable laws.

Legislation passed in 1955 by the 54th Legislature (Senate Bill 203, Regular Session) transferred the administration of the Judicial Retirement System of Texas to the ERS. In November 1957, Texans approved a constitutional amendment that implemented a major reorganization of the ERS, effective September 1, 1958, transforming the the agency from a money-purchase plan (based on employer and employee contributions and interest earned divided by life expectancy), to a defined benefit plan (with retirement payments based on length of service and a final average salary). The old system would still be in effect for 10 years, effectively meaning that the ERS operated two parallel retirement systems for a decade. In 1963, the membership of the ERS expanded to include elected state officials, including legislators. District attorneys were included by the 60th Legislature in 1967 (Senate Bill 281, Regular Session).

The ERS was limited in the beginning to investing only in government securities. During its first year, the $2.9 million in member and state contributions was invested in U. S. bonds. After the reorganization in 1958, investments were allowed, within specific parameters, in corporate securities, common stocks, preferred stocks, debentures, bonds, mortgages, etc. The first investment in corporate stocks was in 1960 when the ERS purchased 10,000 shares in 30 corporations at a cost of $614 million. The change that possibly affected the ERS operation more than any in its 50-year history came in 1975 (Senate Bill 90, 64th Legislature, Regular Session), when the Legislature created the Texas Employees Uniform Group Insurance Program to provide high quality health insurance and other optional coverages for employees, retirees and their eligible dependents beginning September 1, 1976. Known as the UGIP, it has grown over the years and now also offers this health insurance coverage to most state institutions of higher education.

Beyond the regular state employee retirement system, the Board of Trustees administers the following additional programs:

• Judicial Retirement System of Texas Plan One (established in 1955) and Plan Two (established in 1985);
• Death Benefits Program for Commissioned Peace Officers and Firemen (created in 1967);
• Uniform Group Insurance Program (UGIP, created in 1976); in 1992 membership in this program was expanded to include employees of state institutions of higher education, junior colleges, and community colleges, other than the University of Texas and Texas A&M Systems (which are covered by the Teacher Retirement System of Texas);
• Law Enforcement and Custodial Officer Supplemental Retirement Program (established in 1979);
• Flexible Benefits Program ("TexFlex," established in 1988); and
• Deferred Compensation Program (transferred from the Office of the Comptroller to the ERS in 1991).

Between 1947 and 1957, the Board of Trustees of the Employees Retirement System of Texas consisted of seven members, including four ex officio members (the State Life Insurance Commissioner, the Chairman of the Board of Control, the Chairman of the Texas Highway Commission, and the Attorney General) and three members nominated and elected by the members of the Retirement System. The composition of the Board was changed in 1957, thenceforth consisting of the Attorney General or an Assistant Attorney General (ex officio), one member appointed by the Governor, one member appointed by the Chief Justice of the Supreme Court, one member appointed by the Speaker of the House of Representatives, and three members elected by the members. In 1963, the Attorney General was removed from the Board, leaving the current six members. The appointed members must be confirmed by the Senate. Terms are for six years, overlapping. Positions are non-salaried, and the chair rotates annually.

Six executive directors have managed the growth of the ERS over the first 50 years. Gordon Lloyd, who had 24 years state service and at the time was head of accounting for the Texas Highway Department, was hired to lead the ERS as its first executive secretary. In addition to Lloyd, two other employees were on the payroll during the first month of operation - Rupert Gregory, assistant executive secretary, and one clerk. The ERS finished that first year with 11 employees. The ERS began its operation with a $25,000 state appropriation and was housed in several rooms on North Congress Avenue, north of the Capitol, in an apartment building behind a drug store. ERS built and occupied its first building in 1966. At the end of fiscal year 1997, active membership in the system included more than 158,000 persons, and more than 34,000 retirees and beneficiaries were receiving benefits.

Scope and Contents of the Records

The records consist of minutes, agenda, exhibits, correspondence, reports, memoranda, memorandums of understanding, contracts, statements, notes, printed materials, studies, organizational charts, copies of legislation, surveys, action plans, resolutions, clippings, newsletters, press releases, pamphlets, publications, statistics, drafts, and financial records that document the interests, activities and functions of the Employees Retirement System of Texas (ERS) during 1942, 1947 through 2002, and undated. The materials record the activities of the agency and its Board of Trustees to fulfill its legislative mandate to provide retirement and health benefits to the employees of the State of Texas.

Two series of minutes and a series of Board of Trustees correspondence include meetings files of the Board of Trustees of the Employees Retirement System of Texas; agenda, meeting materials, and correspondence of the Joint Coordinating Committee of State of Texas Investment Funds; copies of minutes for meetings of the Investment Advisory Committee; and copies of minutes and agenda for meetings of the Group Insurance/Benefits Advisory Committee. The meeting files and correspondence of the Board of Trustees and its advisory committees document the work accomplished at each meeting, including administrative matters, fiduciary responsibilities, payment of benefits, and legal issues.

Several other series contain the agency's general correspondence, reports, and project files. The correspondence includes correspondence and interoffice memoranda that pass between various ERS staff members and between the ERS and other agencies, officials, state employees, and the general public. Topics of discussion include policies, procedures, and operations of the ERS and its benefit programs, as well as various administrative issues regarding staffing and employees. The reports illustrate the agency's interests in researching and studying issues such as pension and retirement plans around the country, the attitudes of Texas workers (both public and private) toward their retirement and insurance programs, the standards for HMO's [Health Maintenance Organizations] and investment prospects, and the performance of the agency itself. Project files include materials on the examination and selection of insurance companies, particularly Blue Cross/Blue Shield, the development of responses to the agency's sunset review, and the development of insurance policy coverages and a police pension program. A number of files concern the creation and design of the statewide uniform group insurance program, authorized by the Texas Legislature during the 64th Legislative Session (1975).

Legislative files document studies of state legislation affecting the Employees Retirement System of Texas (ERS) and legislation the agency wished to propose. The materials include correspondence and action plans regarding and in response to federal laws and legislation, and presidential orders. Major subjects include the expansion of the ERS system to include judges, law enforcement officers, district attorneys, and university professors; retirement credit for military service; inclusion of certain coverages in insurance contracts, such as for alcoholism, drug dependency, and mental illness; definitions of disability; and issues regarding taxes, contributions, and the payment of benefits.

Several smaller series round out this group of agency records. Organization charts display graphically the administrative organization of the entire agency, documenting both the titles of positions and the number of individuals employed within each division. Other records document the ERS's budget development process as well as the development of the agency's strategic plans. The rules and regulations series includes information on constitutional and statutory laws, descriptions and provisions of group insurance plans, rules of the ERS, and amendments and reforms to insurance plans and rules. Press releases and newsletters were intended for state agency benefit coordinators, computer users within ERS, and the employees of the State of Texas. The materials provide information regarding health insurance benefits, retirement benefits and annuities, new programs, and relevant changes in rules, policies, and laws. Finally, a number of surveys were completed for the National Council on Governmental Accounting (Financial Accounting Standards Board), the U.S. Postal Service, national corporations and research institutions, other Texas state agencies, the U.S. Congress, and the states of Wisconsin, Louisiana, and others.

To prepare this inventory, the described materials were cursorily reviewed to delineate series, to confirm the accuracy of contents lists, to provide an estimate of dates covered, and to determine record types.

Restrictions

Restrictions on Access

Because of the possibility that portions of these records fall under Public Information Act exceptions including, but not limited to, Texas Government Code Sections 815.503, 552.117, and 552.104, an archivist must review these records before they can be accessed for research. The records may be requested for research under the provisions of the Public Information Act (V.T.C.A., Government Code, Chapter 552). The researcher may request an interview with an archivist or submit a request by mail, fax, or email including enough description and detail about the information requested to enable the archivist to accurately identify and locate the information requested. If our review reveals information that may be excepted by the Public Information Act, we are obligated to seek an open records decision from the Attorney General on whether the records can be released. The Public Information Act allows the Archives ten working days after receiving a request to make this determination. The Attorney General has 45 working days to render a decision. Alternately, the Archives can inform you of the nature of the potentially excepted information and if you agree, that information can be redacted or removed and you can access the remainder of the records.

Restrictions on Use

None.

Related Material

Administrative Information

Preferred Citation

(Identify the item and cite the series), Records, Employees Retirement System of Texas. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession numbers: 1998/005, 1999/023, 2000/084, 2001/030, 2001/112, 2001/128, 2002/089, 2002/115

These records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by the Employees Retirement System of Texas on September 10, 1997; September 30, 1998; December 22, 1999; October 18, 2000; March 28, 2001; May 24, 2001; December 31, 2001; and March 27, 2002.

Processing Information

Tony Black, June 1998, September 2000, May 2001, December 2001

Nancy Enneking, June 2002

Accruals

The Employees Retirement System of Texas regularly transfers Board of Trustees minutes and exhibits, and Group Benefits Advisory Committee agenda to the Texas State Archives; they are added to this finding aid on an annual basis.

Other Formats for the Records

ERS Board of Trustees meeting minutes, 1947-1999, have been microfilmed and are available on four reels. For meetings prior to 1968, these are the only copies available at the Texas State Archives.

Detailed Description of the Records