TITLE 34.PUBLIC FINANCE

Part 4. EMPLOYEES RETIREMENT SYSTEM OF TEXAS

The Employees Retirement System of Texas (ERS) proposes new Section 71.31, of Title 34, Texas Administrative Code. Section 71.31 concerns procedures for the establishment of and purchase option for certain waiting period service credit, which includes actuarial tables (Figure: 34 TAC §71.31(c)) reflecting the actuarial cost to purchase the service. This section is added to comply with and conform to House Bill 2359, 78th Legislature, Regular Session, as it relates to changes under Texas Government Code, Chapters 805, 812, and 813.

Paula A. Jones, General Counsel, has determined that for the first five-year period the rule is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the rule, and small businesses and individuals will not be affected.

Ms. Jones also determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be updated information and clarification of the rule establishing the option to purchase certain waiting period service credit. There are no known anticipated economic costs to persons who are required to comply with the rule as proposed.

Comments on the proposed rule may be submitted to Paula A. Jones, General Counsel, Employees Retirement System of Texas, P.O. Box 13207, Austin, Texas 78711-3207, or e-mail Ms. Jones at pjones@ers.state.tx.us. The deadline for receiving comments is February 16, 2004, at 10:00 a.m.

The rule is proposed under Texas Government Code, §805.009 and §815.102, which provides authorization for the Board of Trustees to adopt rules for administration of the retirement system and for eligibility of membership.

No other statutes are affected by this proposed rule other than as stated above.

§71.31.Credit Purchase Option For Certain Waiting Period Service.

(a) An eligible member may establish up to three months of service credit authorized by §813.514, Texas Government Code, and as provided in this section. The provisions of §71.14 of this chapter do not apply to service credit established under this section.

(b) A member is eligible to establish service credit under this section if the member:

(1) holds a position in the employee class;

(2) has completed the 90-day waiting period; and

(3) makes application for the establishment of service credit and payment of the required contributions in accordance with procedures developed by ERS.

(c) An eligible member shall deposit with the system in a lump sum a contribution in the amount determined by the system to be the actuarial present value of the benefit attributable to the service credit established under this section. The tables recommended by the system's actuary and adopted by the board shall be used to determine the actuarial present value:

Figure: 34 TAC §71.31(c) (.pdf)

(d) Actuarial present value shall be based on:

(1) the member's age on the date of the deposit required by this subsection;

(2) the earliest date on which the member will become eligible to retire and receive a service retirement annuity after establishing service credit under this section; and

(3) the future employment, compensation, investment and retirement benefit assumptions recommended by the system's actuary and adopted by the board.

(e) Waiting period service credit shall be established in increments of one month.

(f) This section does not apply to service credit transferred as authorized by Texas Government Code, Chapter 805.

(g) A member who withdraws contributions and cancels service credit established under this section may not reestablish such credit under §813.102, Texas Government Code, but may again establish credit only as provided by this section.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 5, 2004.

TRD-200400010

Paula A. Jones

General Counsel

Employees Retirement System of Texas

Earliest possible date of adoption: February 15, 2004

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

Chapter 77. JUDICIAL RETIREMENT

34 TAC §77.21

The Employees Retirement System of Texas (ERS) proposes new §77.21 of Title 34, Texas Administrative Code. Section 77.21 concerns the purchase of additional service credit, which includes the actuarial tables (Figure: 34 TAC §77.21(d)) reflecting the actuarial cost to purchase the service. This section is added to comply with and conform to House Bill 820 and House Bill 2916, 78th Legislature, Regular Session, as it relates to changes under Texas Government Code, Chapters 838 and 839.

Ms. Jones also determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be updated information and clarification of the rule pertaining to purchasing additional service credit. There are no known anticipated economic costs to persons who are required to comply with the rule as proposed.

Comments on the proposed new section may be submitted to Paula A. Jones, General Counsel, Employees Retirement System of Texas, P.O. Box 13207, Austin, Texas 78711-3207, or e-mail Ms. Jones at pjones@ers.state.tx.us. The deadline for receiving comments is February 16, 2004, at 10:00 a.m.

The new section is proposed under Texas Government Code, §835.002 and §840.002, which provides authorization for the Board of Trustees to adopt rules for administration of the judicial retirement systems.

No other statutes are affected by the proposed new section.

§77.21.Purchase of Additional Service Credit.

(a) The provisions of this section apply only to the Judicial Retirement System of Texas Plan Two (JRS-II).

(b) An eligible member may establish equivalent membership service credit authorized by §838.108, Texas Government Code, as provided in this section. The provisions of §77.15 of this chapter do not apply to service credit established under this section.

(c) A member is eligible to establish service credit under this section in the membership class in which the member holds a position if the member:

(1) has 120 months of service credit for one or more periods of time during which the member held a position as a judge and the required contributions were made;

(2) is a member of the system at the time credit is established; and

(3) is not eligible to establish other credit or service.

(d) An eligible member shall deposit with the system in a lump sum a contribution in the amount determined by the system to be the actuarial present value of the benefit attributable to the credit established under this section. The tables recommended by the system's actuary and adopted by the board shall be used by the system to determine the actuarial present value:

Figure: 34 TAC §77.21(d) (.pdf)

(e) Actuarial present value shall be based on:

(1) the member's age on the date of the deposit required by this subsection;

(2) the earliest date on which the member will become eligible to retire and receive a service retirement annuity after establishing credit under this section; and

(3) the future employment, compensation, investment and retirement benefit assumptions recommended by the actuaries and adopted by the board.

(f) Credit shall be established in whole year increments of credit.

(g) A member who establishes credit under this section shall certify that the member is not eligible to establish other credit or service and shall waive any and all right to establish such credit or service that the member had on the date of the deposit required by subsection (d) of this section.

(h) Credit established under this section may not be used to compute the amount of a disability retirement annuity.

(i) A member who withdraws contributions and cancels credit established under this section may not reestablish such credit under §838.102, Texas Government Code, but may again establish credit as provided in this section.