2021 annuity payments: Why the amount you earn may change in the new year

2021 annuity payments: Why the amount you earn may change in the new year

December 7, 2020
In January, some ERS retirees may see a change in their monthly annuity payment (net earnings). This isn’t uncommon with the start of a new year. Here are reasons your monthly payment may change:

Changes in federal tax withholding

screenshot of upcoming Annuity payment dates: December 31, January 29, February 26Federal tax withholding tables can change every year, and are published by the IRS. ERS is required to implement the IRS’ changes to the tax withholding tables as soon as feasibly possible after the IRS releases the new tables. You can see any federal tax-based changes to your next monthly payment through ERS OnLine generally the last week of the month. (Depending on when the IRS publishes the tax tables, it may or may not be reflected in your January payment.) A tax advisor can help you decide whether you should make changes to your tax withholding.

Changes in insurance premiums

If an insurance premium payment is deducted from your annuity (for your coverage or for a dependent’s), the amount of your annuity payment could change with a new benefits plan year. The plan year for Medicare-eligible participants in the Texas Employees Group Benefits Program (GBP) starts January 1; the plan year for retirees not eligible for Medicare started September 1.

For Plan Year 2021, GBP insurance premium rates for retirees and covered dependents did not increase, and decreased significantly for the HealthSelectSM Medicare Advantage Plan preferred provider organization (MA PPO). If you and/or your dependent are enrolled in HealthSelect MA PPO or if you are changing from another health plan to HealthSelect MA PPO, starting January 1 you could see the lower premium reflected in a higher annuity payment. This includes KelseyCare Advantage Medicare HMO participants who transition from KelseyCare to HealthSelect MA PPO. Medicare-eligible retirees could also see an increase in their annuity payment if they dropped any insurance coverage during Fall Enrollment. 

If you switched from another health plan (including KelseyCare Advantage) to HealthSelectSM Secondary; added optional insurance like dental, vision or life insurance; or added coverage for dependents, you could have a new or higher premium deduction, which could cause your annuity payment to be lower.

How to view and manage your payments

Remember, ERS deposits or mails your annuity payment on the last business day of the month.  View Manage Your Annuity Payments to see 2021 annuity payment dates, change your tax withholding and more.