Tier Awarded CCCERA Pension Administration System Contract; New State-of-the-Art System will Automate and Streamline Functions.

RESTON, Va. -- Tier Technologies, Inc. (Nasdaq:TIER), a leading provider of transaction processing and packaged software and systems integration solutions for public sector clients, today announced that it has been awarded a contract by the Contra Costa County Employees' Retirement Association (CCCERA) to implement a new pension administration system. The value of the fixed-price, deliverable-based contract is approximately $2.6 million over 26 months.

CCCERA is a public employee defined benefit retirement system established in 1945 to provide service retirement, disability, death and survivor benefits for Contra Costa County, California, employees and 16 other participating agencies. CCCERA manages assets of approximately $4.0 billion for its 9,500 active members, 6,000 retirees or contingent annuitants, and 1,300 inactive members.

Tier will replace CCCERA's legacy pension systems with TierPAS, Tier's proprietary pension administration solution. TierPAS is a full-service, browser-based, open architecture pension administration solution that is designed to improve member service while lowering administrative expenses. TierPAS is expected to refine and enhance CCCERA's pension system responsiveness, flexibility, functionality and overall effectiveness.

When fully implemented, the new system will perform the various tasks associated with the entire life cycle of CCCERA's pension administration including membership enrollment, tracking and maintenance, electronic information receipt and transmittal, refunds, transfer of benefits, processing requests for information, benefits estimates and "what if analysis," retirement processing, analyzing contribution and payroll history, generating correspondence, statistical reporting, as well as retiree payroll functions such as printing checks, EFT statements, disability claims processing, benefit statement production, changing rates and tables, and other functions.

"After a careful consideration of alternatives, CCCERA awarded this contract to Tier. We believe the TierPAS solution will best meet our needs for a state-of-the-art, integrated application that will improve and enhance productivity within CCCERA, while accommodating plan change, membership growth and functional expansion with a minimum of expense," said Marilyn Leedom, Retirement Administrator, CCCERA.

"We are very pleased to have been awarded this contract. We look forward to working closely with CCCERA to utilize pension systems best practices in improving processes and increasing efficiencies through the application of new technologies," said James R. Weaver, Tier's Chairman and Chief Executive Officer. "TierPAS is a proven system that will provide for CCCERA's current administrative needs, and will carry CCCERA well into the future."

Tier provides a comprehensive set of technology solutions specifically designed to address the operational, service, and administrative needs of public retirement organizations.

About Tier

Tier is a leading provider of transaction processing and packaged software and systems integration services for public sector clients. We combine our understanding of enterprise-wide systems with domain knowledge enabling our clients to rapidly channel emerging technologies into their operations. We focus on sectors that we believe are driven by forces that make demand for our services less discretionary and are likely to provide us with recurring long-term revenue streams. More information about the Company is available at www.Tier.com.

Statements made in this press release that are not historical facts, including statements regarding expectations for future revenues, earnings, and expenses, are forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Tier undertakes no obligation to update any such forward-looking statements.

Each of these statements is made as of the date hereof based only on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; failure to achieve anticipated gross margin levels with respect to individual projects, including due to unanticipated costs incurred in fixed-price or transaction-based projects; the timing, initiation, completion, renewal, extension or early termination of client projects; the Company's ability to realize revenues from its business development opportunities and achieve cost savings from its restructuring activities; and unanticipated claims as a result of project performance, including due to the failure of software providers or subcontractors to satisfactorily complete engagements.

For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the Company's annual report on Form 10-K for the year ended Sept. 30, 2004, our most recent quarterly report on Form 10-Q for the quarter ended June 30, 2005, as well as other filings with the SEC.