Relating to the purchase of service credit by certain members of the Employees Retirement System of Texas.

Contracts

• Executive Employment Agreements: Review "signing bonus" and "make-whole" provisions for recruits coming from the public sector. If your agreement covers "loss of pension benefits" or "retirement buy-outs," you must clarify whether this includes the voluntary purchase of the 90-day waiting period.
• Severance Packages: If severance is tied to "years of recognized professional service," clarify if purchased state credit counts toward this metric.

Hiring/Training

• Recruitment Scripts: HR teams must update interview protocols for state agency candidates. You must now ask: "Have you purchased, or do you intend to purchase, your 90-day waiting period credit?" This answer materially changes the candidate's vesting status and the cost to lure them away.
• Benefit Modeling: Adjust compensation models to reflect that a candidate's "hire date" may be three months earlier than their resume states, potentially placing them in a different vesting tier.

Reporting & Record-Keeping

• Verification of Service: Require an updated ERS Statement of Service for any new hire claiming this credit. Do not rely on old statements, as the "official hire date" is now mutable.
• Expense Substantiation: If your firm agrees to reimburse a new hire for this service purchase as a recruitment incentive, you must retain the specific ERS actuarial invoice to classify the payment correctly as compensation/bonus rather than a standard fee.

Fees & Costs

• Variable Reimbursement Costs: The law requires the member to pay the "full actuarial cost" to prevent loss to the system. This is not a flat fee; it is a complex calculation based on age, salary, and service years.
• Budget Impact: If you offer to pay this for a recruit, do not agree to a fixed dollar amount. The cost is currently unknown and likely significant. Agree only to a capped amount.