Texas Locks In Retirement Partner Empower in $7B Deal Through 2032

AUSTIN, TX – June 22, 2026 – The Employees Retirement System of Texas (ERS) has solidified its long-standing relationship with financial services giant Empower, renewing a contract that keeps the firm at the helm of the state's supplemental retirement program through 2032. The six-year extension ensures continuity for the nearly 300,000 state and higher education employees who rely on the Texa$aver℠ 401(k) and 457 plans, which collectively hold approximately $7 billion in assets.

While the announcement signals stability for a massive public workforce, it also underscores key trends reshaping the landscape of public sector retirement: the growing reliance on defined contribution plans, the intense competition among administrators, and the quiet consolidation of market power. For Texas employees, the deal means their retirement savings accounts remain in familiar hands. For the industry, it's another testament to Empower's formidable presence in the government sector.

A Partnership Forged in Growth

Since Empower took the reins as administrator in 2009, the Texa$aver program has seen remarkable expansion. According to figures released by the company, assets in the 401(k) plan have swelled by 88%, while the 457 plan's assets have more than doubled with 106% growth. This isn't just market appreciation; it's a story of engagement. Annual contributions from employees have climbed by nearly 45% for the 401(k) and over 30% for the 457 plan.

ERS Executive Director Porter Wilson lauded the results, stating, “The continued growth of Texa$aver shows that our members are actively engaged in their retirement security.” Wilson also highlighted a critical factor in the decision, noting the partnership “helps ensure they continue receiving high‑quality administration at lower-than-average costs.”

This growth narrative is central to the partnership's success. The Texa$aver program, funded entirely by participants with no direct state contributions, serves as a crucial supplement to the state's traditional pension plan. Its success is a direct measure of employee confidence and their proactive steps toward building a secure financial future. Empower has supported this with a localized strategy, maintaining an Austin office with seven dedicated retirement plan advisors, including two who are Spanish-speaking, to serve the state's diverse workforce.

“Our Texas-based team understands their priorities and has helped the State of Texas reinforce its role as a model public employer,” said Joe Smolen, President of Empower’s Workplace Solutions. This local touch, combined with sophisticated tools like the My Total Retirement™ managed investment service, appears to be a winning formula for keeping participants engaged and invested.

Scrutinizing the 'Lower-Than-Average' Cost

For the professionals who rely on this column for actionable intelligence, a press release is a starting point, not a conclusion. The claim of “lower-than-average costs” warrants a forensic look. In the world of retirement plans, where fees are layered and often opaque, even small percentage points can erode tens of thousands of dollars from an employee's nest egg over a multidecade career.

Industry data indicates that for large defined contribution plans like Texa$aver, total costs—including administration, recordkeeping, and investment management—should fall at the low end of the typical 0.25% to 1.50% range. Given its $7 billion scale, the Texa$aver program commands immense bargaining power. The renewal with an incumbent provider like Empower, without a public competitive bidding process highlighted, raises questions about whether Texas secured the best possible terms. While continuity has value, it should not come at the cost of leaving money on the table that belongs to public servants.

Verifying the cost-effectiveness requires a deep dive into ERS board meeting minutes and the contract itself—documents not readily available in a press announcement. The true test of this deal's value lies in its fee structure, revenue-sharing agreements, and the expense ratios of the investment funds offered. Public employees in Texas should demand this transparency from ERS. The hidden cost of progress, or in this case, stability, is often found in the contractual fine print.

Empower's Public Sector Fortress

The Texas renewal is more than just another contract for Empower; it's a strategic fortification of its dominant position in the U.S. public sector retirement market. The company, which administers a staggering $2.0 trillion in assets nationwide, provides services for 29 state retirement programs. This latest win in Texas, following recent renewals with the State of Louisiana and New York's Metropolitan Transportation Authority, sends a clear message to competitors like Voya Financial, Nationwide, and MissionSquare Retirement.

Empower's strategy appears to be one of deep integration and scale. By growing through major acquisitions—such as MassMutual's retirement business and Personal Capital—it has built an operational machine that can efficiently manage massive, complex plans. According to the Pensions & Investments Defined Contribution Recordkeeper Survey, Empower consistently ranks at or near the top in total participants and assets. This scale allows it to invest heavily in technology, compliance, and the kind of localized service model that appeals to large government clients.

Securing a long-term renewal with a major state like Texas creates a powerful moat. The complexity and cost of switching administrators for a plan with 300,000 participants are enormous, giving the incumbent a significant advantage. This renewal demonstrates Empower's ability not just to win large contracts, but to defend them successfully, cementing its role as a go-to provider for state and local governments.

A Model for Public Employee Security?

Beyond the corporate strategy, the Texa$aver story offers a glimpse into the future of public sector retirement. As traditional defined benefit pension plans across the country face funding shortfalls and political pressure, supplemental defined contribution plans like the 401(k) and 457 are no longer just optional perks; they are essential pillars of retirement security for public servants.

The Texa$aver program's participant-funded model and impressive growth serve as a case study for other states. Its success demonstrates that with the right plan design, effective administration, and targeted educational outreach, public employees will actively save for their own retirement. The emphasis on financial wellness, personalized advice, and managed account options like My Total Retirement™ reflects a broader industry shift toward treating participants not as account numbers, but as individuals needing holistic financial guidance.

This renewal ensures that for the next six years, Texas state employees will have a stable and feature-rich platform to build their supplemental savings. The long-term health of their retirement, however, will depend not only on Empower's performance but also on the continued vigilance of ERS in ensuring that costs remain competitive and that the interests of its members are always the primary consideration.