Rolling an ERS (Employees Retirement System of Texas) Account Into a Gold IRA

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Short on time? The essentials

• The monthly ERS service retirement annuity is a lifetime benefit and is not eligible for rollover. Only cash payouts from ERS can move into a gold IRA.
• The Partial Lump Sum Option (PLSO) lets an eligible ERS retiree take a one-time cash payment equal to any whole number of months from 1 up to 36 of the standard annuity. ERS states the PLSO is eligible for rollover to an IRA or to Texa$aver 401(k) or 457.
• ERS PLSO eligibility excludes disability retirees, Judicial Retirement System members, retirees taking a reduced-for-age payment, and most retirees using the Proportionate Retirement Program.
• A refund of the accumulated member account is available after separation from all ERS-covered employers. It carries the account balance plus interest and can be taken fully in cash, fully rolled to a traditional IRA or eligible plan, or split between the two.
• ERS process: file the request in ERS OnLine (menu path Withdraw My Retirement Account, Request A Retirement Account Withdrawal). ERS mails a Retirement Account Withdrawal Disclaimer that must be signed before a notary and returned. Payment is a check mailed within about 15 days of approval, and no earlier than 30 days off payroll.
• Groups 1, 2, and 3 accrue 2 percent annual interest on the account balance. Group 4 uses a cash-balance structure with 4 percent base interest plus a potential 3 percent five-year gain-share, for a ceiling of 7 percent.
• A direct rollover to the receiving custodian avoids the 20 percent federal income tax withholding under IRC Section 3405. It also removes the 60-day redeposit clock.
• Inside the self-directed IRA, cash buys IRS-approved bullion or coins meeting IRC 408(m)(3) fineness. Gold minimum purity is 99.5 percent. Silver is 99.9 percent. Platinum and palladium are 99.95 percent. The American Gold Eagle is IRA-eligible at 91.67 percent by statute.
• Texas has no state personal income tax under Article 8, Section 24 of the Texas Constitution. The state-run Texas Bullion Depository accepts IRA storage through Lone Star Tangible Assets, which received IRS nonbank trustee approval in 2023.
• ERS members are covered by Social Security under the Texas Section 218 agreement signed November 30, 1951. The Windfall Elimination Provision and Government Pension Offset do not apply to the ERS pension itself for typical members.

See the Augusta Precious Metals gold IRA company checklistAugusta is our primary affiliate partner. The free checklist gives you a clean way to vet any provider you call about an ERS PLSO or a Retirement Account Withdrawal rollover.Print / save as PDF

On this page

• What ERS cash forms can move to a gold IRA
• The ERS Partial Lump Sum Option in detail
• The Retirement Account Withdrawal in detail
• ERS Groups 1 through 4 and what changes for you
• Interest credited to the ERS member account
• The ERS-to-gold-IRA rollover in eight steps
• Direct vs indirect: the 20 percent withholding rule
• The age 55 penalty exception and what happens when you roll
• Social Security coverage: why WEP and GPO usually do not apply
• What gold the IRA can hold
• Texas advantages: zero state tax and the Texas Bullion Depository
• ERS member account interest by group
• The gold IRA fee stack you will see
• Check whether your ERS distribution is eligible to roll
• Worked example: an Austin state agency retiree elects a 24-month PLSO
• When rolling an ERS distribution into a gold IRA is a bad idea
• ERS to gold IRA FAQ

What ERS cash forms can move to a gold IRA

ERS is a defined benefit pension for employees of Texas state agencies. It pays a monthly annuity for life once a member meets an age and service threshold, calculated from a service credit formula. The monthly annuity itself is not an eligible rollover distribution. IRS Publication 575 excludes any payment that is part of a series of substantially equal amounts spread over the member's life expectancy.

Two ERS cash forms are eligible for rollover to a self-directed IRA holding IRS-approved bullion. The first is a Partial Lump Sum Option elected at retirement. The second is a withdrawal of the accumulated member account after permanent separation from every ERS-covered employer.

Both can be split. A retiree taking the PLSO can direct part of the lump sum to a rollover and take the rest in cash. A departing member using the Retirement Account Withdrawal can request a full rollover, a full cash payout, or a defined partial rollover with the remainder paid as a check.

The ERS Partial Lump Sum Option in detail

ERS defines the PLSO as a one-time cash payment made at retirement, sized as any whole number of months from 1 up to 36 of the member's standard service retirement annuity. Payment is issued about five days after the first monthly annuity check. Once elected, the monthly annuity is reduced for the life of the member to reflect the lump sum taken up front.

The election range is where ERS differs most visibly from TRS. TRS allows only 12, 24, or 36 months. ERS lets a member pick any whole month count from 1 to 36. That matters when a retiree wants to size the lump sum to fund a specific goal, such as paying off a mortgage or funding a rollover to a self-directed IRA of a target amount.

Four categories are excluded from the PLSO. A disability retiree is not eligible. A Judicial Retirement System (JRS) member is not eligible. A member taking a reduced-for-age payment is not eligible. Most retirees using the Proportionate Retirement Program are not eligible either. Confirm your group and eligibility path with ERS or in ERS OnLine before you rely on any figure.

ERS lists three payment options for the PLSO itself. The first is a payment directly to the retiree. That triggers the 20 percent federal withholding under IRC Section 3405. It also opens the retiree to a 10 percent additional tax at ages under 55 at separation. The second and third options are a rollover to a traditional IRA or to a Texa$aver 401(k) or 457 account. A self-directed IRA counts as a traditional IRA for federal rollover purposes.

ERS counselors sometimes reference three benefits of rolling the PLSO. First: no 20 percent federal withholding on a direct rollover. Second: no 10 percent early-withdrawal exposure at ages 55 to 59 and a half on the rolled amount, as long as it stays inside the receiving IRA. Third: control over the timing of future distributions from the receiving IRA. Verify current guidance with ERS before you file.

The Retirement Account Withdrawal in detail

A Retirement Account Withdrawal is available only to a member who has permanently left every ERS-covered employer and has not applied for or received a promise of employment with another. It is not available to active state employees or to retirees currently drawing an annuity.

The withdrawal pays the accumulated member account balance, which is member contributions plus interest credited to the account. Groups 1, 2, and 3 accrue 2 percent annual interest. Group 4 uses a cash-balance structure with 4 percent base interest plus a possible additional 3 percent gain-share tied to the ERS five-year investment performance.

Four payment paths exist. Full cash payment, which triggers the 20 percent mandatory federal withholding. Full direct rollover to a traditional IRA or eligible plan. A split of partial cash plus partial rollover. Or leaving the balance with ERS to preserve the option of retiring later once eligible. ERS explicitly excludes rollovers to a Roth IRA, a SIMPLE IRA, or an education IRA on the direct withdrawal, so the receiving IRA must be a traditional IRA.

The paperwork does not use a public numbered form. The request is filed inside the member's ERS OnLine account, in the Withdraw My Retirement Account menu, using Request A Retirement Account Withdrawal. ERS then issues a Retirement Account Withdrawal Disclaimer by mail or email. The member signs the disclaimer before a notary and returns it.

ERS processes the withdrawal only after the member has been off payroll for at least 30 days and any final agency deposit has posted. Payment is issued as a paper check mailed to the member or the receiving plan trustee within about 15 days of approval. There is no direct deposit for this payment. Withdrawing the account terminates ERS membership. Contributions plus interest are paid out, and the future annuity that could have been built from that service is forfeited.

A member who has withdrawn and later returns to state employment is placed in Group 4 for future service, regardless of the original hire date. That places the returning employee in the cash-balance structure with 4 percent base interest.

ERS Groups 1 through 4 and what changes for you

ERS assigns each member to one of four groups based on original state agency hire date. The group sets the retirement multiplier basis, the eligibility rules, and how the account balance grows over time. The rollover mechanics discussed on this page apply the same way to every group; only the underlying benefit changes.

Two group facts change the size of the number you might roll. Group 1 has the most generous unreduced path, since the Rule of 80 can be met at any age with enough service. Group 4 members do not accrue years of service that translate to a defined benefit multiplier; their retirement benefit comes from a cash-balance account. Group 4 members who withdraw are taking their cash-balance value, and returning members go back into Group 4.

Interest credited to the ERS member account

The account interest rate matters because a Retirement Account Withdrawal pays the balance plus that interest, and the rolled amount into a gold IRA cannot exceed what has actually been credited. ERS publishes two rates on its Withdraw Your ERS Retirement page.

Groups 1, 2, and 3 accrue 2 percent per year on the account balance. Group 4 accrues 4 percent per year as the base rate. Group 4 members also have a potential additional 3 percent based on the ERS investment performance measured over a five-year period, which sets a 7 percent ceiling on annual interest.

Two practical points follow. A long-tenured Group 1, 2, or 3 member who withdraws is taking accumulated contributions grown at 2 percent per year, which underperforms the target for retirement growth in most models. A Group 4 member has a stronger interest floor, but the gain-share portion depends on ERS investment results and is not guaranteed in any given cycle.

The ERS-to-gold-IRA rollover in eight steps

The mechanical sequence is the same whether the ERS cash is a PLSO election at retirement or a Retirement Account Withdrawal after separation. The order of operations does not change with the funding source.

1. Confirm the ERS distribution is eligible for rollover. A PLSO election and a full or partial Retirement Account Withdrawal are both eligible rollover distributions. A monthly ERS annuity is not.
2. Open a self-directed IRA. A precious metals IRA requires a qualified non-bank trustee or self-directed IRA custodian. Equity Trust Company, STRATA Trust, and GoldStar Trust are commonly used with Texas accounts, and Equity Trust is the current custodian for storage at the Texas Bullion Depository.
3. Pick a gold IRA dealer. The dealer sources the metal and coordinates with the custodian. Verify the dealer partners with your chosen custodian and quotes tight spreads on common bullion.
4. File the request with ERS. For a PLSO, elect the option on your retirement paperwork and specify how you want it paid. For a Retirement Account Withdrawal, log in to ERS OnLine, open Withdraw My Retirement Account, and select Request A Retirement Account Withdrawal.
5. Complete the Retirement Account Withdrawal Disclaimer. ERS mails or emails the disclaimer after the request is filed. Sign it before a notary. Enter the receiving custodian by name, "for the benefit of" your new IRA account number, and the amount to be rolled. The receiving custodian confirms the plan is eligible to receive the rollover.
6. Return the disclaimer and let the direct rollover fund the IRA. The check is made payable to the receiving custodian, not to you. No federal withholding applies. No 60-day clock runs. Payment is issued about 15 days after ERS approves, and no earlier than 30 days off payroll.
7. Place the metal order. Once the cash arrives inside the new IRA, instruct the custodian to pay the dealer for IRS-approved bullion or coins meeting IRC 408(m)(3) fineness rules. The dealer ships to an IRS-approved depository, including the Texas Bullion Depository through Lone Star Tangible Assets.
8. File the right forms next April. ERS issues Form 1099-R with distribution code G for a direct rollover. The receiving custodian issues Form 5498. Report the gross amount on Form 1040 line 5a with a taxable amount of zero on line 5b.

Direct vs indirect: the 20 percent withholding rule

Federal rollover mechanics offer two paths. A direct rollover sends the ERS cash from the plan straight to the receiving IRA custodian. No withholding applies. No 60-day clock starts. This is the default recommendation on any ERS PLSO or Retirement Account Withdrawal that is destined for a gold IRA.

A payment made to the retiree instead triggers IRC Section 3405. The plan must withhold 20 percent for federal income tax before releasing the check. The retiree then has 60 days to redeposit the full pre-withholding amount into the new IRA. The missing 20 percent has to come from personal savings during that window.

The 20 percent withholding is later credited against the federal tax bill at filing. If the retiree redeposited the full pre-withholding amount on time, the credit returns as part of any refund. If the retiree redeposits only the 80 percent that arrived, the missing 20 percent is treated as a taxable distribution. A 10 percent federal early-withdrawal penalty stacks on top for retirees under age 59 and a half unless an exception fits.

Failing the 60-day window has narrow relief. IRS Revenue Procedure 2016-47 and later guidance allow a self-certification waiver in a defined list of hardships, such as a plan administrator error or a serious illness. Do not plan on that safety net.

The age 55 penalty exception and what happens when you roll

IRC Section 72(t)(2)(A)(v) allows a penalty-free distribution from a qualified employer plan if the member separates from service in or after the calendar year they turn 55. ERS is a qualified plan. A Retirement Account Withdrawal taken directly from ERS at age 55 or older is not subject to the 10 percent federal early-distribution penalty. The distribution is still taxable federally.

The exception does not survive a rollover. Once ERS cash lands inside an IRA, the IRA distribution rules apply. The 10 percent penalty reappears on any IRA withdrawal before age 59 and a half unless a different IRA-side exception fits.

Practical implication for a Texas state agency employee separating between 55 and 59 and a half. If some of the cash is needed for living expenses within the next few years, keeping a portion of the withdrawal inside a different qualified plan preserves the age 55 penalty-free path.

ERS does allow a split payment. A member can take part of the balance in cash under the age 55 exception and roll the rest into a self-directed IRA for the long-term gold allocation.

Social Security coverage: why WEP and GPO usually do not apply

ERS members are covered by Social Security on their state agency wages. The original Texas Section 218 agreement was signed on November 30, 1951, and it extended Social Security coverage to Texas state employees. The Office of the State Social Security Administrator is housed at ERS. That coverage is the reason the ERS pension itself is not treated as a non-covered pension for benefit-calculation purposes.

Two federal offsets can reduce Social Security benefits earned from other work when the retiree also has a pension from work not covered by Social Security. The Windfall Elimination Provision reduces the retiree's own worker benefit. The Government Pension Offset reduces spousal or survivor benefits. For a typical ERS retiree these offsets do not apply to the ERS pension, because that pension was earned in Social-Security-covered employment.

Two edge cases still call for a conversation with the Social Security Administration. A worker who mixed ERS-covered employment with other employment that was not covered by Social Security may still be exposed to WEP or GPO on that non-covered piece. And WEP calculations changed under the Social Security Fairness Act signed on January 5, 2025. Ask SSA how your record will be treated on the actual facts.

What gold the IRA can hold

IRC Section 408(m) generally bans collectibles inside an IRA and then carves out an exception for bullion and certain coins that meet a fineness threshold. The gold floor is 99.5 percent purity. Silver is 99.9 percent. Platinum and palladium are 99.95 percent.

Two coins are named statutory exceptions inside the rule. The American Gold Eagle is IRA-eligible at 91.67 percent purity, which is 22-karat. The American Silver Eagle is IRA-eligible at 99.9 percent. Proof Eagles qualify when held in original mint packaging with the certificate.

Bars must come from a refiner or assayer approved by NYMEX, COMEX, LBMA, or produced by a national government mint. Common eligible names include PAMP Suisse, Credit Suisse, Valcambi, the Royal Canadian Mint, and the Perth Mint.

Common eligible coins include the American Gold Eagle (statutory), American Gold Buffalo at 99.99 percent, Canadian Gold Maple Leaf at 99.99 percent, Austrian Gold Philharmonic at 99.99 percent, and Australian Kangaroo at 99.99 percent. The South African Krugerrand sits at 91.67 percent gold with no statutory exception, and it is not IRA-eligible.

Texas advantages: zero state tax and the Texas Bullion Depository

Two Texas features change the wrapper around a federal rollover for an ERS member.

Article 8, Section 24 of the Texas Constitution prohibits a state personal income tax. Any taxable IRA distribution, including a botched indirect rollover, a future required minimum distribution, or a partial cash retention from an ERS PLSO, is taxed at the federal level only. A Texas resident does not pay a state layer on top.

Texas also runs its own bullion depository. The Texas Bullion Depository is an agency of the State of Texas, authorized by House Bill 483 signed by Governor Greg Abbott on June 12, 2015. It has operated since 2017 on a purpose-built campus in Leander, Texas, with Lone Star Tangible Assets LP as the depository contractor.

IRA storage is available at the depository. Lone Star Tangible Assets received IRS approval as a nonbank trustee in 2023, and the depository states plainly that it is available for IRA storage through its operator. Equity Trust Company is the first self-directed IRA custodian that works with the Texas Bullion Depository, and the depository has stated it plans to add custodial relationships over time.

Storage features published on the depository's site include a Class 3 vault (the highest security rating), biometric access, and 24/7 surveillance. Storage is segregated, without commingling of client metal. Insurance is through Lloyd's of London and covers theft, fire, flood, and natural disasters. IRA storage fees are negotiated between the custodian, the gold dealer, and the depository contractor.

ERS member account interest by group

The chart below plots the annual interest rate credited to the ERS member account balance, by group. That balance is what a Retirement Account Withdrawal pays out. It is also what caps a rollover to a traditional IRA. The rates come from the ERS Withdraw Your ERS Retirement page, checked June 2026.

Two clarifications on the chart. The Group 4 gain-share bar shows the 7 percent ceiling, not a guaranteed rate; the actual add-on depends on the ERS five-year investment result and can be zero in any given cycle. And a member who withdraws the account and later returns to state employment is enrolled in Group 4 on return, so the base 4 percent rate applies to any future accumulation.

The gold IRA fee stack you will see

ERS itself does not charge a visible administration fee on the PLSO or on a Retirement Account Withdrawal; the trust absorbs those costs. A self-directed gold IRA carries its own fee stack, with several stacked line items the retiree pays directly.

The dealer markup is the line with the widest range. Common bullion coins and bars carry tight spreads. Premium or proof coins marketed as exclusive or limited carry markups that can be several times higher. A clean ERS rollover is quickly undone if the metal is bought at a 25 percent or 35 percent markup over spot.

Check whether your ERS distribution is eligible to roll

Before calling a provider, confirm the ERS payment is actually eligible to roll under federal rules. The screening tool below walks through the eligibility questions and timing rules. It is a triage step, not legal or tax advice.

Can you roll your account into a gold IRA? Eligibility checker

Most retirement money can move into a gold IRA once it is an eligible rollover distribution. Pick your account and situation for a general answer. Always confirm the specifics with your plan administrator or custodian.

Account typeTraditional IRARoth IRASEP IRASIMPLE IRA401(k) or 403(b) from a former employer401(k) or 403(b) at your current employerGovernmental 457(b)Thrift Savings Plan (TSP)Pension lump sum or refund (after you separate) Your situationSeparated from that employerStill employed there, under 59 and a halfStill employed there, age 59 and a half or older

Check eligibility

General guidance only, not tax or financial advice. Eligibility depends on your specific plan document and IRS rules; confirm with your plan administrator and a tax advisor. A direct trustee-to-trustee transfer avoids the 60-day rule and 20% withholding.

Picking a company that explains every fee up front is the first step. Get the free gold IRA company checklist.

Worked example: an Austin state agency retiree elects a 24-month PLSO

Your next step

If an ERS PLSO or Retirement Account Withdrawal rollover into a gold IRA looks like the right move, the highest-leverage action is to vet the provider before signing any ERS distribution paperwork. Augusta Precious Metals is our primary affiliate partner and publishes a free gold IRA company checklist built for that vetting step.

Get the Augusta Precious Metals gold IRA company checklistSponsored link. Use it to evaluate any provider you call, including Augusta itself. Past performance is not a guarantee of future results.

When rolling an ERS distribution into a gold IRA is a bad idea

ERS to gold IRA FAQ

Sources

1. Employees Retirement System of Texas. State of Texas Retirement: Partial Lump Sum. ers.texas.gov/active-employees/retirement/state-of-texas-retirement/partial-lump-sum. Checked June 2026.
2. Employees Retirement System of Texas. Withdraw Your ERS Retirement. ers.texas.gov/Active-Employees/Retirement/Withdraw-Your-ERS-Retirement. Checked June 2026.
3. Employees Retirement System of Texas. Retirement Payment Options. ers.texas.gov/active-employees/retirement/retirement-payment-options. Checked June 2026.
4. Employees Retirement System of Texas. ERS Retirement Groups. ers.texas.gov/ers-retirement-groups. Checked June 2026.
5. Employees Retirement System of Texas. Retirement Eligibility. ers.texas.gov/Active-Employees/Retirement/Retirement-Eligibility. Checked June 2026.
6. Employees Retirement System of Texas. Proportionate Retirement Program. ers.texas.gov/active-employees/retirement/Service-Credit-for-State-of-Texas-Retirement/Proportionate-Retirement-Program-PRP. Checked June 2026.
7. Employees Retirement System of Texas. Section 218 and the Office of the State Social Security Administrator. ers.texas.gov/About-ERS/ERS-Organization/Section-218. Checked June 2026.
8. Employees Retirement System of Texas. Planning Your Retirement booklet (March 2023). ers.texas.gov/PDFs/Retirement/pyr_booklet.pdf. Checked June 2026.
9. Internal Revenue Service. Publication 575: Pension and Annuity Income. irs.gov/publications/p575. Checked June 2026.
10. Internal Revenue Service. Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs). irs.gov/publications/p590a. Checked June 2026.
11. Internal Revenue Service. Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). irs.gov/publications/p590b. Checked June 2026.
12. Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions. irs.gov/retirement-plans. Checked June 2026.
13. Internal Revenue Service. Topic No. 413, Rollovers from Retirement Plans. irs.gov/taxtopics/tc413. Checked June 2026.
14. Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans. irs.gov/taxtopics/tc558. Checked June 2026.
15. Internal Revenue Code Section 402(c). Rollovers from qualified plans. uscode.house.gov. Checked June 2026.
16. Internal Revenue Code Section 401(a)(31). Direct rollover option. uscode.house.gov. Checked June 2026.
17. Internal Revenue Code Section 3405. Special rules for pensions, annuities, and certain other deferred income; 20 percent mandatory withholding. uscode.house.gov. Checked June 2026.
18. Internal Revenue Code Section 408(m). Collectibles rule and bullion exception. uscode.house.gov. Checked June 2026.
19. Internal Revenue Code Section 72(t)(2)(A)(v). Separation-from-service exception at age 55. uscode.house.gov. Checked June 2026.
20. United States Tax Court. McNulty v. Commissioner, 157 T.C. No. 10 (November 18, 2021). Home-storage IRA confirmed as a full distribution.
21. Texas Bullion Depository. IRA Storage Services. texasbulliondepository.gov/ira-storage. Checked June 2026.
22. Office of the Texas Comptroller of Public Accounts. Texas Bullion Depository overview. comptroller.texas.gov. Checked June 2026.
23. Texas Constitution, Article 8, Section 24. Prohibition on a state personal income tax. statutes.capitol.texas.gov. Checked June 2026.
24. Social Security Administration. Windfall Elimination Provision and Government Pension Offset. ssa.gov. Checked June 2026.
25. Public Law 118-273. Social Security Fairness Act (signed January 5, 2025). congress.gov. Checked June 2026.

By Harry’s Coins Editorial. Last reviewed June 2026.