Part 5.
TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM
Chapter 105.
CREDITABLE SERVICE
34 TAC §105.5
Texas County and District Retirement System proposes new §105.5
concerning the adjustment of a person's record because of a reporting error
by a sponsoring employer. The rule implements the authority granted to the
retirement system pursuant to §7 of HB 1984 as passed in the regular
session of the 78th Legislature, to correct any administrative or operational
error by appropriate means. Under the proposed rule, if as a result of an
act or omission of an employer, a person contributes more or less than the
correct amount, or receives more or less credited service, service credit
or benefits than the person is rightfully entitled to receive, the employer
may file an application with the retirement system for an adjustment to the
person's record. Under the rule, a person seeking an adjustment to a record
because of a reporting error of the employer must apply to the employer for
a correction. The system will accept applications for adjustments and any
related deposits only from an employer. However, under Government Code, §842.112,
a person may pursue a legal remedy against the employer and submit that final
judgment or settlement agreement to the system in lieu of an application.
The system may adjust the person's record in accordance with the terms set
forth in the application provided: The terms of the adjustment would not grant
the person a right, status or benefit not otherwise available under Government
Code, Title 8, Subtitle F; the terms of the adjustment are reasonable and
can be feasibly implemented and administered by the system; and the terms
of the adjustment can be implemented without causing financial instability
with respect to the employer's participation in the system or causing a reduction
in the accrued benefit of any member or annuitant of the employer. Under the
proposed rule, adjustments to credited service (vesting) may be made separately
from adjustments to service credit (benefits). This allows for the recognition
of all properly creditable service for retirement eligibility purposes while
permitting limited or partial adjustments to benefit credits.
Tom Harrison, Director of Legal and Governmental Relations for the Texas
County and District Retirement System, has determined that for the first five-year
period the rule is in effect there will be no fiscal implications for state
government as a result of administering the rule. There will be no fiscal
implications for a local government as a result of administering the rule
aside from the expected costs of funding those benefits not taken into account
because of a reporting error by the participating local governmental entity.
Mr. Harrison has also determined that for each year of the first five years
the rule is in effect the public benefit anticipated as a result of administering
the rule will be the accumulation of retirement benefits for employees of
participating entities in the manner and to the extent intended by the local
governmental entity. There are no anticipated economic costs to persons who
are required to comply with the rule as proposed. There are no anticipated
economic costs to small or large businesses which are required to comply with
the rule as proposed.
Comments on the proposed new rule may be submitted to Tom Harrison, Director
of Legal and Governmental Relations, Texas County and District Retirement
System, P.O. Box 2034, Austin, TX 78768-2034.
The rule is proposed under the Government Code, §845.102,
which provides the board of trustees of the Texas County and District Retirement
System with the authority to adopt rules necessary or desirable for efficient
administration of the system.
The Government Code, §842.112 is affected by this proposed rule.
§105.5.Correction of Errors by Employers: Record Adjustments.
(a)
The sponsoring employer is responsible for the correction
of an error arising from an act or omission of the employer that results in
a person contributing more or less than the correct amount to the system or
receiving more or less credited service, service credit or benefits than the
person is rightfully entitled to receive under the system.
(b)
The employer may initiate the correction process by filing
an application with the system for an adjustment to the person's record. The
application must adequately describe the error and set forth the terms of
the adjustment to be made to the person's record.
(c)
A person seeking an adjustment to a record based on an
act or omission of the subdivision must apply to the sponsoring employer for
a correction of the error. The system will not receive applications for record
adjustments from any person other than an employer. If the system receives
information relating to a possible error from a person other than an employer,
the system shall forward the information to the appropriate employer.
(d)
If the director is provided with satisfactory evidence
of the error, the director may at his discretion accept the application and
order an adjustment to the person's record in accordance with the terms set
forth in the application provided:
(1)
The terms of the adjustment on the face of the application
would not grant the person a right, status or benefit not otherwise available
under this subtitle;
(2)
The terms of the adjustment are reasonable and can be feasibly
implemented and administered by the system; and
(3)
The terms of the adjustment can be implemented without
causing financial instability with respect to the employer's participation
in the system or causing a reduction in the accrued benefit of any other member
or annuitant of the employer.
(e)
In this section the term "record" means all information
and amounts relating to the person and the person's beneficiary and includes
information and amounts relating to the person's individual account, contributions,
deposits, credited service, service credit and benefits.
(f)
In this section the term "individual account" means the
separate account maintained for a member consisting of the member's contributions,
deposits and accumulated interest credited to the account for the benefit
of the member.
(g)
In this section the term "credited service" means months
of service recognized for purposes of retirement eligibility.
(h)
In this section the term "service credit" means the monetary
credits granted to a member who performs service for a participating employer.
(i)
In this section the term "filed" means received by the
system.
(j)
In this section the term "accepted" means approved by the
system for making adjustments to a person's record in accordance with the
terms of the application.
(k)
The application of a sponsoring employer under this section
may be filed at any time.
(l)
All applications filed under this section with the system
must be certified by the sponsoring employer before the application may be
accepted.
(m)
If an adjustment pursuant to this section relates to a
period of service that is greater than 12 months or ended more than 12 months
prior to the application filing date, the application must be approved by
the governing board of the employer before it may be accepted by the system.
(n)
If the terms of the adjustment as set forth on the application
specify a change to the person's credited service, that adjustment will be
made upon acceptance of the application.
(o)
If the terms of the adjustment as set forth on the application
specify a change to the person's individual account balance, service credit
or benefit, that adjustment may not be made until the system receives any
payment necessary to implement the terms of the adjustment. The system will
not accept any payments due under this section from any person other than
an employer.
(p)
With respect to certain errors that are the subject of
an adjustment under this section, the sponsoring employer may request the
system to provide a description of what the person's record would show if
no error had occurred. This description may include changes to amounts of
employee contributions, accumulated interest, prior service credit, current
service credit, multiple matching credit, retirement benefits, or retirement
eligibility dates. Evidence showing dates of service and the compensation
that was paid to the member by the employer for such service should be submitted
to the system in order that the system may accurately determine any changes.
(q)
The application may specify adjustments in any amounts
that do not exceed the changes to the person's record determined as if there
had been no error.
(r)
An application for an adjustment is not an application
for retirement; however, a retirement application may be filed simultaneously
with an application for adjustment. An adjustment to a person's prior service
credit may not be made if the application is filed more than five years after
the date the person became a member of the sponsoring employer.
(s)
Adjustments to service credits or benefits shall be considered
as part of, and funded in the same manner as, any other pension liabilities
of the employer.
(t)
The director may implement the terms of the proposed adjustment
to the extent that the funding of the pension liabilities attributable to
the adjustments proposed by the employer do not cause financial instability
with respect to the employer's participation in the system or cause a reduction
in accrued benefits of any other members or annuitants. This may include partial
implementation or implementation of the adjustments in stages.
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 May 10, 2004.
TRD-200403160
Tom Harrison
Director, Legal and Governmental Relations
Texas County and District Retirement System
Proposed date of adoption: June 24, 2004
For further information, please call: (512) 328-8889
Chapter 107.
MISCELLANEOUS RULES