Part IV. Employees Retirement System of Texas

Chapter 61. Terms and Phrases

34 TAC §61.1

The Employees Retirement System of Texas adopts the amendment to §61.1, concerning definitions, without changes to the proposed text as published in the November 6, 1998, issue of the Texas Register (23 TexReg 11315) and will not be republished.

This rule is being amended in order to number each definition in accordance with Texas Register requirements.

No comments were received regarding adoption of the amendment.

The amendment is proposed under Texas Government Code §815.102, which provides authorization for the board to adopt rules necessary to carry out other business of the board.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 1998.

TRD-9818493

Sheila W. Beckett

Executive Director

Employees Retirement System of Texas

Effective date: January 10, 1999

Proposal publication date: November 6, 1998

For further information, please call: (512) 867-7125

34 TAC §65.7

The Employees Retirement System of Texas adopts an amendment to §65.7, concerning Appointment of Examiner, without changes to the proposed text as published in the November 6, 1998, issue of the Texas Register (23 TexReg 11315) and will not be republished.

This rule is being amended in order to update the rule.

No comments were received regarding adoption of this amendment.

The amendment is proposed under Texas Government Code §815.102, which provides authorization for the board to adopt rules necessary to carry out other business of the board.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 1998.

TRD-9818494

Sheila W. Beckett

Executive Director

Employees Retirement System of Texas

Effective date: January 10, 1999

Proposal publication date: November 6, 1998

For further information, please call: (512) 867-7125

34 TAC §§67.3, 67.5, 67.7, 67.9, 67.13, 67.15, 67.17, 67.21, 67.23, 67.25, 67.27, 67.31, 67.33, 67.35, 67.37, 67.39, 67.41, 67.43, 67.45, 67.47, 67.49, 67.51, 67.53, 67.55, 67.57, 67.61, 67.63, 67.65, 67.69, 67.73, 67.75, 67.77, 67.79, 67.81, 67.83, 67.87, 67.89, 67.91, 67.93, 67.97, 67.103, 67.105, 67.107, 67.109, 67.111

The Employees Retirement System of Texas (ERS) adopts amendments to §§67.3, 67.5, 67.7, 67.9, 67.13, 67.15, 67.17, 67.21, 67.23, 67.25, 67.27, 67.31, 67.33, 67.35, 67.37, 67.39, 67.41, 67.43, 67.45, 67.47, 67.49, 67.51, 67.53, 67.55, 67.57, 67.61, 67.63, 67.65, 67.69, 67.73, 67.75, 67.77, 67.79, 67.81, 67.83, 67.87, 67.89, 67.91, 67.93, 67.97, 67.103, 67.105, 67.107, 67.109, 67.111 of Chapter 67, concerning Hearings on Disputed Claims. Sections 67.3, 67.5, 67.7, 67.9, 67.13, 67.15, 67.21, 67.23, 67.25, 67.27, 67.31, 67.33, 67.35, 67.37, 67.39, 67.41, 67.43, 67.45, 67.47, 67.49, 67.51, 67.53, 67.55, 67.57, 67.61, 67.63, 67.65, 67.69, 67.73, 67.75, 67.77, 67.79, 67.81, 67.83, 67.87, 67.89, 67.91, 67.93, 67.97, 67.103, 67.105, 67.107, 67.109, 67.111 are adopted without changes and will not be republished. Section 67.17 is adopted with changes to the proposed text as published in the November 6, 1998, issue of the Texas Register (23 TexReg 11316).

These amendments are amended in order to bring the rules in line with current practices.

Section 67.17(2) is amended in order to correct a grammatical error.

No comments were received regarding adoption of these amendments.

The amendments are proposed under Texas Government Code §815.102 and Insurance Code, Article 3.50-2, §4.

§67.17. Parties Defined.

The following words and terms when used in this Chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Administering Firm - Any firm designated by the board to administer any coverages, services, benefits, or requirements in accordance with Article 3.50-2, Texas Insurance Code and by the rules of the board, and the administering firm shall be considered a party to any proceeding in connection with such matters.

(2)

Appellant or claimant - Any person with standing to pursue an administrative appeal under this Chapter who, by written petition, including appeals, applies for or seeks an available administrative remedy from the board.

(3)

Insurer - The insurance carrier who has contracted with the board to provide coverages authorized by the Texas Employees Uniform Group Insurance Benefits Act, Article 3.50-2, Texas Insurance Code. The insurer shall be considered a party to any proceeding which involves a question of eligibility or coverage under its contract with the board.

(4)

Intervenor - A party other than an appellant or claimant who is permitted to become a party to a proceeding in accordance with §67.21 (relating to Intervention).

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 1998.

TRD-9818496

Sheila W. Beckett

Executive Director

Employees Retirement System of Texas

Effective date: January 10, 1999

Proposal publication date: November 6, 1998

For further information, please call: (512) 867-7125

34 TAC §§67.29, 67.59, 67.67

The Employees Retirement System of Texas (ERS) adopts the repeal of §§67.29, 67.59, and 67.67, concerning Hearings on Disputed Claims, as proposed in the November 6, 1998, issue of the Texas Register (23 TexReg 11323). The information contained in these repealed sections has been included elsewhere in Chapter 67.

No comments were received regarding adoption of the repealed sections.

The repeals are proposed under Government Code §815.102 and Insurance Code, Article 3.50-2, §4.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 1998.

TRD-9818495

Sheila W. Beckett

Executive Director

Employees Retirement System of Texas

Effective date: January 10, 1999

Proposal publication date: November 6, 1998

For further information, please call: (512) 867-7125

34 TAC §§87.1, 87.9, 87.15, 87.17

The Employees Retirement System of Texas adopts amendments to Chapter 87, concerning the Deferred Compensation Plan, with changes to the proposed text of §87.15 as published in the November 6, 1998, issue of the Texas Register (23 TexReg 11324). Amended §§87.1, 87.9, 87.17 are adopted without changes to the proposed text and will not be republished.

Section 87.1 is being amended to correct an administrative error and to clarify the definition of "Product Type". Section 87.9 is being amended to add new language regarding product contracts. Section 87.15 is being amended to add language regarding transfers and is adopted with changes due to typographical errors in subsections (e)(2)(B) and (e)(3)(C) and a punctuation error in Subsection (d)(3)(C). Section 87.17 is being amended to add language regarding death benefits and distribution requirements.

No comments were received regarding adoption of these amendments.

These amendments are proposed under Texas Government Code, §609.508, which provides the board of trustees the authority to adopt any rules necessary to administer the deferred compensation plan.

§87.15. Transfers

(a)-(c)

(No change.)

(d)

Procedures for making a transfer of all deferrals and investment income from a qualified investment product.

(1)

(No change.)

(2)

(No change.)

(3)

If a check is used to make a transfer, this paragraph applies.

(A)

The plan administrator, in its discretion, may direct the qualified vendor to make the check payable to the payee specified by the plan administrator, which may be another qualified vendor or an eligible plan in the case of a plan to plan transfer. If the plan administrator directs the qualified vendor to send funds directly to another qualified vendor, the plan administrator shall provide instructions concerning the investment of the amounts transferred. If the specified payee is another qualified vendor, the qualified vendor shall promptly deposit the check into the applicable account previously agreed upon. The qualified vendor shall ensure that the plan administrator or the specified payee receives the check no later than the 15th day after the vendor receives notification of the transfer.

(B)

If the check is sent to the plan administrator, the plan administrator must endorse the check and deposit the check with a qualified vendor selected by the plan administrator.

(C)

After or before receiving verification of a completed transfer from the qualified vendor selected by the plan administrator, and receiving a list of affected participants from the qualified vendor, the plan administrator shall direct the agency coordinators for the participants to:

(i)

notify each affected participant concerning the transfers; and

(ii)

request that each affected participant submit a change agreement to the participant's agency coordinator for the purpose of designating the qualified investment product that will receive the participant's deferrals and investment income.

(D)-(E)

(No change.)

(4)

(No change.)

(e)

Procedures for making a transfer of less than all deferrals and investment income from a qualified investment product.

(1)

(No change.)

(2)

If the plan administrator initiates a transfer, this paragraph applies.

(A)

The plan administrator shall send a written notice to the qualified vendor that is sponsoring the qualified investment product. The notice must require the vendor to issue a check or a wire transfer in an amount equal to the deferrals and investment income being moved. The notice may be sent with or without prior notice to the participant whose deferrals and investment income are being moved.

(B)

The plan administrator, in its discretion, may direct the qualified vendor to make the check payable to the payee specified by the plan administrator, which may be another qualified vendor or an eligible plan in the case of a plan to plan transfer. If the plan administrator directs the qualified vendor to send funds directly to another qualified vendor, the plan administrator shall provide instructions concerning the investment of the amounts transferred. If the specified payee is another qualified vendor, the qualified vendor shall promptly deposit the check into the applicable account previously agreed upon. The qualified vendor shall ensure that the plan administrator or the specified payee receives the check no later than the 15th day after the vendor receives notification of the transfer.

(C)

If the check is sent to the plan administrator, the plan administrator shall endorse and deposit the check in a qualified investment product specifically designated to receive transfers initiated by the plan administrator.

(D)

After depositing the check, or after receiving notification from the qualified vendor that the check has been deposited, the plan administrator must notify the agency coordinator for the participant whose deferrals and investment income were moved. The notification must:

(i)

state the reason for the transfer;

(ii)

direct the agency coordinator to request that the participant complete a change agreement to designate the qualified investment product that will receive the participant's deferrals and investment income; and

(iii)

for a transfer from a credit union under subsection (b)(2) of this section, direct the agency coordinator to inform the participant that the participant may require the reinvestment of the transferred amounts in the credit union, unless the plan administrator determines that reinvestment in the credit union would not be in the best interests of the plan.

(E)

(No change.)

(F)

The receiving qualified vendor shall not reject and return funds to the ERS or to a previous qualified vendor who transfers funds at the direction of the plan administrator when plan forms have been signed by a valid vendor agent/representative to transfer or defer funds to that vendor;

(G)-(H)

(No change.)

(3)

If a participant initiates a transfer, this paragraph applies.

(A)-(B)

(No change.)

(C)

The plan administrator, in its discretion, may direct the qualified vendor to make the check payable to the payee specified by the plan administrator, which may be another qualified vendor or an eligible plan in the case of a plan to plan transfer. If the plan administrator directs the qualified vendor to send funds directly to another qualified vendor, the plan administrator shall provide instructions concerning the investment of the amounts transferred. If the specified payee is another qualified vendor, the qualified vendor shall promptly deposit the check into the applicable account previously agreed upon. The qualified vendor shall ensure that the plan administrator or the specified payee receives the check no later than the 15th day after the vendor receives notification of the transfer.

(D)

If the check is sent to the plan administrator, the plan administrator shall:

(i)

endorse the check in favor of the qualified vendor that will be receiving the transfer; and

(ii)

mail to the qualified vendor that will be receiving the transfer the endorsed check and written instructions concerning the investment of the amounts transferred.

(E)

The qualified vendor must send written confirmation to the plan administrator concerning the vendor's receipt of the transferred funds and written instructions. The qualified vendor must ensure that the plan administrator receives the written confirmation no later than the 15th day after the qualified vendor receives the transferred funds and instructions.

(F)

(No change.)

(f)-(h)

(No change.)

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 21, 1998.

TRD-9818497

Sheila W. Beckett

Executive Director

Employees Retirement System of Texas

Effective date: January 10, 1999

Proposal publication date: November 6, 1998

For further information, please call: (512) 867-7125