The TCRS Hybrid Plan: a pension plus a 401(k)

Short answer: the Hybrid Plan pays a TCRS pension of 1% × your five-year average × years of service, in full at 65 or under the Rule of 90, plus a 401(k) your employer pays 5% of your pay into. TCRS's example: $750.00 a month after 30 years on a $30,000 average. Compare Legacy and Hybrid, see early retirement and the COLA, or load this example in the calculator.

What goes in

• Pension (TCRS): you 5% of pay, your employer 4%.
• 401(k): your employer 5% of pay, whether or not you contribute. You're signed up at 2% automatically, and can change it or opt out.

Hybrid Member Guide p. 3-4, Contributions to the Hybrid Plan; p. 11-12, 401(k) Plan; Hybrid flyer p. 2

Part 1: the pension

1% × your five-year average × years of service. TCRS's example: $30,000 × 1% × 30 years = $9,000 a year, $750.00 a month. Hybrid Member Guide p. 6, Service Retirement Formula example

• Full benefit: at 65, or under the Rule of 90, when your age plus years of service add up to 90 (for example 55 with 35 years). Hybrid Member Guide p. 6, Service Retirement Eligibility
• Early benefit: at 60, or under the Rule of 80 (for example 57 with 23 years), with an actuarial cut. Hybrid Member Guide p. 6, Early Retirement Eligibility
• Vested: after 5 years. Hybrid Member Guide p. 4, Vesting; p. 11, 401(k) Plan

TCRS's early example: age 60 with 25 years gets $4,597 a year instead of $7,500. More on retiring early. Hybrid Member Guide p. 7, early retirement example

Part 2: the 401(k)

The 401(k) is an account in your name, not a pension. What it pays is what it's worth: the money you and your employer put in, plus or minus investment results, minus fees.

• It's yours from day one; you're always fully vested in it.
• You pick the investments. If you don't, the money goes into a target-date fund for around the year you turn 65.
• After you leave, you can take withdrawals. Before 59½ there may be a 10% federal early-withdrawal tax, and required minimum distributions start after 73.

Hybrid Member Guide p. 11-14, 401(k) Plan; Managing the 401(k) Account Following Termination of Employment or Retirement This site doesn't project the 401(k): it depends on your contributions and investment choices. Your account statement shows your balance.

Cost controls

The Hybrid pension has a safety valve in state law. If the plan's costs pass set limits, these steps apply in order until costs are back within them:

1. Suspend or reduce the maximum cost-of-living adjustment to the TCRS payment beginning the next July 1 after the valuation.
2. Suspend or reduce the employer 401(k) contribution and redirect it to the TCRS trust fund.
3. Increase the 5% member TCRS contribution by 1% of earnable compensation.
4. Reduce the 1% accrual to the level needed to bring the employer rate to 4%.
5. Suspend future service accruals until the employer rate is 4% or lower.

The June 30, 2025 valuation found no adjustments necessary. Hybrid Member Guide p. 16, Hybrid Plan Cost Controls; Hybrid actuarial valuation 2025 p. 4, Analysis of Cost Controls and Unfunded Liability Controls

From the sources

• Hybrid Plan: 1% x average final compensation x years of service. Example: $30,000 average, 30 years = $9,000 a year, $750 a month. The maximum is the lesser of 90% of average pay or $80,000 indexed since 2014.Hybrid Member Guide p. 5-7; Hybrid actuarial valuation 2025 p. 29
• Hybrid cost controls: if the plan's cost or unfunded liability passes limits set in law, the COLA, employer 401(k) money, member contribution, the 1% formula and future accruals can be changed, in that order. The June 30, 2025 valuation found no change needed.Hybrid Member Guide p. 16; Hybrid actuarial valuation 2025 p. 4
• The Hybrid 401(k) is separate from the pension: it pays whatever the account is worth, from the 5% employer and your contributions plus investment gains or losses. This calculator shows only the TCRS pension.Hybrid Member Guide p. 11, 401(k) Plan

Questions

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