TITLE 34.PUBLIC FINANCE

Part 3. TEACHER RETIREMENT SYSTEM OF TEXAS

Chapter 29. BENEFITS

Subchapter E. DEFERRED RETIREMENT OPTION PLAN

34 TAC §29.63

The Teacher Retirement System of Texas (TRS) adopts new §29.63, concerning the deadline for the purchase of special service credit. The new rule, §29.63, is adopted without changes to the text as proposed in the February 11, 2000, issue of the Texas Register (25 TexReg 1045) and therefore will not be republished.

The new section implements the statutory provisions regarding the deadlines for the purchase of special service credit applicable to participants in the deferred retirement option plan (DROP).

The new rule clarifies to DROP participants they must purchase eligible special service credit on or before the effective date of the their DROP participation. Further, because service credit for state personal or sick leave cannot be purchased prior to the date of actual retirement, the rule clarifies that an election to participate in DROP affects the member's ability later on, at the time of retirement, to include leave accumulated at the time of the DROP election in calculating the number of days or hours of leave required to purchase the service credit. The new rule also provides that special service credit may be purchased upon termination of DROP participation under limited circumstances.

No comments on the proposal were received.

The new rule is adopted under the Government Code, Chapter 825, §825.102, which authorizes the Board of Trustees of the Teacher Retirement System to adopt rules for the administration of the funds of the retirement system.

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 April 20, 2000.

Executive Director

Teacher Retirement System of Texas

Effective date: May 10, 2000

Proposal publication date: February 11, 2000

For further information, please call: (512) 391-2115

Chapter 41. INSURANCE PROGRAMS

Subchapter B. LONG-TERM CARE, DISABILITY AND LIFE INSURANCE

34 TAC §41.15

The Teacher Retirement System of Texas (TRS) adopts new §41.15, concerning the requirements to bid on insurance for school district employees and retirees. The new rule, §41.15 is being adopted with no changes to the proposal as published in the January 7, 2000, issue of the Texas Register (25 TexReg 56).

The new rule implements Insurance Code Article 3.50-4A, which was passed by the 76th Legislature, 1999 in Senate Bill 1128 and became effective September 1, 1999. In addition, an amendment to the title of Chapter 41 is adopted to more accurately reflect the subject matter of the chapter. New titles for subchapters A and B are also adopted.

In accordance with the new law, the rule sets forth the requirements for the selection of contractors for new insurance plans established by Insurance Code article 3.50-4A, including long-term care insurance, optional permanent life insurance, and short-term and long-term disability insurance. The selection requirements include minimum premium income requirements and minimum capital and surplus requirements. These criteria are necessary to ensure financial stability and integrity of the new programs and are consistent with Insurance Code article 3.50-4A, §2(d), which provides that TRS may consider "ability to service contracts, past experiences, financial stability, and other relevant criteria." The rule also requires contractors to administer enrollment, adjudication of claims and coordination of services for the applicable insurance plans and requires contractors to account for premiums collected and disbursed.

No comments on the proposal were received.

The new section is adopted on an emergency basis under the Government Code, Chapter 825, §825.102, which authorizes the Board of Trustees of the Teacher Retirement System to adopt rules for the administration of the funds of the retirement system. Further, it is adopted under Insurance Code article 3.50-4A, including §2(d), which provides that competitive bidding shall be required under rules adopted by TRS and that the rules may provide criteria to determine qualified carriers. In addition, it is adopted under Insurance Code article 3.50-4A §3(a) and (b), which provide that TRS shall adopt rules for the selection of contractors, that the rules must require the contractors to perform certain functions and that TRS may adopt other rules necessary to administer the program.

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 April 20, 2000.

Executive Director

Teacher Retirement System of Texas

Effective date: May 10, 2000

Proposal publication date: January 7, 2000

For further information, please call: (512) 391-2115