Part 3.
TEACHER RETIREMENT SYSTEM OF TEXAS
Chapter 25.
MEMBERSHIP CREDIT
Subchapter B. COMPENSATION
34 TAC §25.30
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis new §25.30, concerning the conversion of amounts of noncreditable
compensation to creditable compensation used as the basis for calculating
a member's retirement benefits. The new section implements the requirement
that TRS adopt rules excluding compensation in the member's final years of
employment that represents amounts converted from noncreditable compensation
to creditable compensation. The new section is adopted on an emergency basis
pursuant to §2001.034 of the Government Code, which allows TRS to adopt
an emergency rule if a requirement of state or federal law requires adoption
of the rule on less than 30 days notice. The section is also adopted in accordance
with §2001.006 of the Government Code, which allows TRS to adopt rules
and take other administrative action in preparation for the implementation
of legislation that has become law but has not taken effect. The new section
is simultaneously being proposed for permanent adoption in this issue of the
The new section applies to the three years before retirement and establishes
a base year of the fourth year or the fifth year if there is no compensation
in the fourth year. The characterization of the compensation in the base year
is used to determine whether conversion occurred. The new section describes
converted compensation. Payment for unused accrued leave or for accrued compensatory
time for overtime worked is expressly excluded from creditable compensation.
The new section relies on the certification of the reporting entity to notify
TRS if conversion has occurred in the final years. It also clarifies that
a member may provide supporting documentation if compensation is excluded
but the member believes it should be creditable, but states that TRS makes
the final decision regarding whether compensation is creditable. This approach
ensures a more consistent application of the rule and encourages members who
experience an increase in compensation due to the conversion of noncreditable
compensation to remain employed longer to receive any correlating compensation
increase in their retirement benefit calculation.
This emergency adoption is necessary because TRS and affected employers
and members are required to comply with the relevant provisions of Senate
Bill 1691, 79th Legislature, Regular Session, effective September 1, 2005.
The new section is adopted on an emergency basis to enable TRS to establish
new processes, forms, publications, and programming that are necessary and
appropriate to implement the Act by its effective date of September 1, 2005.
Further, the new section is adopted on an emergency basis to provide employers
and members affected by it necessary, appropriate, and timely guidance in
the form of a detailed rule to use in making informed budget, programming,
and other decisions before the start of the next school year, which is imminent.
TRS finds that these requirements of state law require the adoption of the
new section on fewer than 30 days notice pursuant to §2001.034, Government
Code. TRS has also determined that this section is necessary and appropriate
in accordance with §2001.006, Government Code, which allows TRS to adopt
rules and take other administrative action in preparation for the implementation
of legislation that has become law but has not taken effect. The new section
shall not be applied until the date the new law becomes effective, September
1, 2005.
The new section is adopted on an emergency basis under and implements §22
of Senate Bill 1691, 79th Legislature, Regular Session, which amends §825.110,
Government Code, and requires the Board to adopt rules to exclude from annual
compensation all or part of salary and wages in the final years of a member's
employment that reasonably can be presumed to have been derived from a conversion
of fringe benefits, maintenance, or other payments not includable in annual
compensation to salary and wages. The new section is also adopted under §825.102,
Government Code, which authorizes the Board to adopt rules for the administration
of the funds of the retirement system.
No other codes are directly affected by the new section.
§25.30.Conversion of Noncreditable Compensation to Salary.
(a)
TRS excludes from creditable compensation any amount of
otherwise eligible compensation that represents amounts converted into salary
and wages from noncreditable compensation in the last three years prior to
retirement.
(b)
For purposes of this section, conversion occurs when an
employer agrees to pay a member with creditable compensation for services
performed in the future that in the past were paid with noncreditable compensation.
Compensation in the form of accrued paid leave or accrued compensatory time
for overtime worked cannot be converted to eligible compensation and are expressly
excluded from creditable compensation at any time.
(c)
The employer certifies whether compensation was converted
in the last three years prior to retirement and the amount of the converted
salary. In certifying whether conversion occurred in the last three years
prior to retirement, the fourth year prior to retirement is the base year.
If there is no credited amount of compensation in the fourth year, the fifth
year prior to retirement is the base year. The characterization of the compensation
in the base year as creditable or noncreditable is used in determining whether
conversion occurred and the converted amounts are excluded as provided in
subsection (a) of this section.
(d)
If compensation is excluded under subsection (a) of this
section, the member may provide additional information in the form of written
documentation to demonstrate that the compensation should not be excluded.
TRS makes the final determination regarding the characterization of compensation
as creditable or noncreditable.
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503047
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
34 TAC §25.35
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis new §25.35, concerning the administration of employer
payments to the pension trust fund for new members. The proposed new section
implements the requirement that employers shall pay the equivalent of the
state contribution to the pension trust fund for new members in their first
90 days of employment. The new section is adopted on an emergency basis pursuant
to §2001.034 of the Government Code, which allows TRS to adopt an emergency
rule if a requirement of state or federal law requires adoption of the rule
on less than 30 days notice. The new section is also adopted in accordance
with §2001.006 of the Government Code, which allows TRS to adopt rules
and take other administrative action in preparation for the implementation
of legislation that has become law but has not taken effect. The new section
is simultaneously being proposed for permanent adoption in this issue of the
In accordance with Senate Bill 1691, 79th Legislature, Regular Session,
the new section implements the new employer payment requirement. It provides
guidance to employers regarding the start and end of the 90-day payment period
as well as guidance on how to coordinate the end of a person's membership
waiting period with the new payment requirement.
This emergency adoption is necessary because TRS and affected employers
are required to comply with the relevant provisions of Senate Bill 1691, 79th
Legislature, Regular Session, effective September 1, 2005, including consideration
of budgetary matters, preparation of communications for affected employers
and new members, modification of procedures, and programming of payroll systems
to implement the payment requirement. TRS finds that these requirements of
state law require the adoption of the new section on fewer than 30 days notice
pursuant to §2001.034, Government Code. TRS has also determined that
this section is necessary and appropriate in accordance with §2001.006,
Government Code, which allows TRS to adopt rules and take other administrative
action in preparation for the implementation of legislation that has become
law but has not taken effect. The new section shall not be applied until the
date the new law becomes effective, September 1, 2005.
The new section is adopted on an emergency basis under §825.102,
Government Code, which authorizes the Board of Trustees of TRS to adopt rules
for the administration of the funds of the retirement system. As described
above, the sections are also adopted on an emergency basis under §2001.006
and §2001.034, Government Code. The new section implements §29 of
Senate Bill 1691, 79th Legislature, Regular Session, which establishes new §825.4041,
Government Code.
Other code provisions affected by the new section are §§821.001(7),
825.408, and 830.102, Government Code.
§25.35.Employer Payments for New Members.
(a)
Effective September 1, 2005, the employer of a new member
as defined by §825.4041, Government Code, shall pay the retirement system
the required amount during the first 90 days of employment of the new member.
When used in this section, "employer" has the meaning given it in §821.001(7),
Government Code.
(b)
A person hired before September 1, 2005, whose 90-day waiting
period for membership in the retirement system did not end before September
1, 2005, is eligible to participate in the retirement system as a new member
starting September 1, 2005.
(c)
In determining the period of employment subject to employer
payments, the following provisions apply:
(1)
An employer shall count the date of employment of a new
member as the first day of the 90-day payment period.
(2)
An employer shall count calendar days of an employment
period on or after September 1, 2005, towards the payment period, regardless
of whether the days are in different school years.
(3)
An employer shall count calendar days on or after September
1, 2005, during which an individual previously served as an employee with
another TRS reporting entity towards the payment period.
(4)
An employer shall not count any calendar days between periods
of employment towards the payment period.
(5)
Service provided by an employee on one calendar day to
more than one employer that is a TRS reporting entity shall count as only
one calendar day in the payment period. Each employer shall include such an
employee's compensation in the aggregate compensation on which employer payment
is required.
(6)
A person who was hired before September 1, 2005, and who
did not complete the 90-day waiting period before that date becomes eligible
to participate in the retirement system starting September 1, 2005. The employer
shall treat the member as a new member for the purpose of employer payments
during the remainder of the 90-day period.
(d)
For the purpose of administering this section, the date
of employment means the date on which an employee begins to perform service
for an employer that is a TRS reporting entity and the service is of a type
that would otherwise qualify the employee for membership in the TRS pension
plan, as provided under Subchapter A of this chapter (relating to Service
Eligible for Membership). If the date of employment is a holiday or another
type of day on which the employer does not normally require actual service
to be performed by an employee, the employer may nevertheless count the day
as the date of employment if the employer considers the individual to be an
employee on that day.
(e)
During September 2005, an employer shall submit employer
payments to TRS on compensation paid to an employee for the first full pay
period starting on or after September 1, 2005. In subsequent months, an employer
shall submit employer payments and member and other required contributions
to TRS on compensation paid to an employee for the entire pay period that
contains the first date of the employee's eligibility for membership. An employer
also shall submit such payments to TRS on compensation paid to an employee
for the entire pay period that contains the 90th day of employment. For the
purpose of this section, a pay period is the normal, established period of
employment for which the employer regularly pays compensation to the employee,
regardless of the date on which the employer actually pays the compensation.
(f)
An employer required by law to pay the state contribution
from certain funds for its employees who are TRS members is not required to
make additional payment to TRS under this section during the first 90 days
of employment of a new member. A person employed by such an employer before
September 1, 2005, shall be eligible for TRS membership in the manner described
in subsection (b) of this section.
(g)
An employer shall submit reports in a form required by
TRS. Upon request by TRS, an employer or an employee shall provide copies
of, or otherwise make available, any records that TRS determines are necessary
to administer this section.
(h)
An employer shall notify TRS immediately if it has failed
to report an employee who was eligible for TRS membership and shall begin
to report the employee as a member no later than the month immediately following
the month in which the employer discovered the error. The employer shall correct
any previous reports filed with TRS and make payments as required by this
title.
(i)
Because participation in the Optional Retirement Program
("ORP") under Chapter 830, Government Code, is in lieu of participation in
TRS, a person employed on or after September 1, 2005, or whose 90-day waiting
period expires on or after September 1, 2005, and who is otherwise eligible
to elect to participate in ORP may elect to participate in ORP effective September
1, 2005. An election to participate in ORP must be made before the 91st day
after becoming eligible to make the election, as required by §830.102,
Government Code, but may not be made before the date on which an employee
is eligible for TRS membership.
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503044
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
Subchapter A. RETIREMENT
34 TAC §29.4, §29.12
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis amendments to §29.4, concerning changes to the computation
of compensation for the purpose of calculating a standard annuity at retirement
and new §29.12, concerning repeal of the subsidized early age retirement
benefit. The rule amendments and new section are adopted on an emergency basis
pursuant to §2001.034 of the Government Code, which allows TRS to adopt
emergency rules if a requirement of state or federal law requires adoption
of the rules on less than 30 days notice. The amendments and new section are
also adopted in accordance with §2001.006 of the Government Code, which
allows TRS to adopt rules and take other administrative action in preparation
for the implementation of legislation that has become law but has not taken
effect. The rule amendments and new section are simultaneously being proposed
for permanent adoption in this issue of the
Texas
Register
.
The amendments to §29.4 will allow TRS to implement Senate Bill 1691,
79th Legislature, Regular Session, which changes the basis for computing compensation
from a three-year to a five-year salary average for the purpose of calculating
a standard annuity at retirement. The statutory amendment is effective September
1, 2005. Senate Bill 1691, however, also contains a grandfathering provision
to preserve the current computation of compensation based on a three-year
salary average for members who meet one or more of the grandfathering requirements
on or before August 31, 2005. Adopted on an emergency basis and proposed for
permanent adoption elsewhere in this issue of the
Texas Register
, new 34 TAC §51.12, concerning the applicability
of certain laws in effect before September 1, 2005, sets out the details for
applying the grandfathering requirements to amended §29.4. The emergency
amendments to §29.4 set out the new five-year salary average for those
who are not grandfathered and, to administer the grandfathering provision,
preserve the current three-year salary average as part of the amended rule
for reference by TRS staff and the membership when the repealed statute no
longer will appear in official statutory texts.
New §29.12 will allow TRS to implement the section of Senate Bill
1691 that affects what is commonly referred to as the "subsidized early age
retirement benefit," which has been available to members who are at least
age 55 and have at least 20 years of service credit but do not meet the requirements
for normal age retirement, such as rule of 80. Under Senate Bill 1691, the
subsidized early age retirement benefit is repealed effective September 1,
2005. Senate Bill 1691, however, also contains a grandfathering provision
to preserve current law on the subsidized early age retirement benefit for
members who meet one or more of the grandfathering requirements on or before
August 31, 2005. New 34 TAC §51.12, concerning the applicability of certain
laws in effect before September 1, 2005, which is adopted on an emergency
basis and proposed for permanent adoption elsewhere in this issue of the
These emergency adoptions are necessary because TRS and affected members
are required to comply with the relevant provisions of Senate Bill 1691, 79th
Legislature, Regular Session, effective September 1, 2005, and because of
the need to establish new processes, forms, publications, and programming
to implement the statutory changes, as well as to provide necessary information
to members making career and retirement plans in the next few months. TRS
finds that these requirements of state law require the adoption of the amendments
and new section on fewer than 30 days notice pursuant to §2001.034, Government
Code. TRS has also determined that the amendments and new section are necessary
and appropriate in accordance with §2001.006, Government Code, which
allows TRS to adopt rules and take other administrative action in preparation
for the implementation of legislation that has become law but has not taken
effect. The amendments and new section shall not be applied until the date
the new law becomes effective, September 1, 2005.
Amended §29.4 is adopted on an emergency basis under §825.102,
Government Code, which authorizes the Board of Trustees of TRS to adopt rules
for the administration of the funds of the retirement system. The amended
section also is adopted under §2001.006 and §2001.034, Government
Code.
Other code sections affected by amended §29.4 include §12 of
Senate Bill 1691, 79th Legislature, Regular Session, which amends §824.203,
Government Code, and §58 of Senate Bill 1691, which contains the grandfathering
requirements related to the legislative amendment of §824.203, Government
Code.
New §29.12 is adopted on an emergency basis under §825.102, Government
Code, which authorizes the Board of Trustees of TRS to adopt rules for the
administration of the funds of the retirement system. The new section also
is adopted under §2001.006 and §2001.034, Government Code.
Other code sections affected by new §29.12 include §11 of Senate
Bill 1691, 79th Legislature, Regular Session, which amends §824.202,
Government Code, and §58 of Senate Bill 1691, which contains the grandfathering
requirements related to the legislative amendment of §824.202, Government
Code.
§29.4.Actual Compensation.
(a)
Actual compensation paid to a member is used
in computing the
highest five
[
(b)
A member eligible under §51.12
of this title (relating to Applicability of Certain Laws in Effect Before
September 1, 2005) is eligible for computation of average compensation using
a three-year salary average instead of a five-year salary average, as provided
by §824.203(a), Government Code, prior to its amendment effective September
1, 2005, by Senate Bill 1691, 79th Legislature, Regular Session (2005).
§29.12.Early Age Retirement Benefit Calculated on Law in Effect Before September 1, 2005.
If a member eligible under §51.12 of this title (relating to Applicability
of Certain Laws in Effect Before September 1, 2005) is at least 55 years old
and has at least 20 years of service credit in the retirement system, the
member is eligible to retire and receive a service retirement annuity reduced
from the standard service retirement annuity available under §824.202(a)(2),
Government Code, to a percentage derived from the following table, as provided
by §824.202(c), Government Code, prior to its repeal effective September
1, 2005, by Senate Bill 1691, 79th Legislature, Regular Session (2005):
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503050
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
34 TAC §29.72
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis new §29.72, concerning eligibility to select a partial-lump
sum option (PLSO). The rule is adopted on an emergency basis pursuant to §2001.034
of the Government Code, which allows TRS to adopt emergency rules if a requirement
of state or federal law requires adoption of the rule on less than 30 days
notice. The amendments and new rule are also adopted in accordance with §2001.006
of the Government Code, which allows TRS to adopt rules and take other administrative
action in preparation for the implementation of legislation that has become
law but has not taken effect. The rule is simultaneously being proposed for
permanent adoption in this issue of the
Texas Register
.
New §29.72 will allow TRS to implement the section of Senate Bill
1691 that changes the eligibility requirement for a PLSO to require that the
member meet the rule of 90 (age and service credit equal at least 90). Senate
Bill 1691 also reduces the amount of a PLSO for early age retirement, as applicable.
The statutory amendment is effective September 1, 2005. Senate Bill 1691,
however, also contains a grandfathering provision to preserve the current
PLSO eligibility requirements for members who meet one or more of the grandfathering
requirements on or before August 31, 2005. New 34 TAC §51.12, concerning
the applicability of certain laws in effect before September 1, 2005 and which
is adopted on an emergency basis and proposed for permanent adoption elsewhere
in this issue of the
Texas Register
, sets
out the details for applying the grandfathering provision to new §29.72.
To administer the grandfathering provision, new §29.72 preserves the
current PLSO eligibility requirements as part of the rule for reference by
TRS staff and the membership when the current text of the statute is replaced
by the law as amended under Senate Bill 1691 in official statutory texts.
This emergency adoption is necessary because TRS and affected members are
required to comply with the relevant provisions of Senate Bill 1691, 79th
Legislature, Regular Session, effective September 1, 2005, and because of
the need to establish new processes, forms, publications, and programming
to implement the statutory changes, as well as to provide necessary information
to members making career and retirement plans in the next few months. TRS
finds that these requirements of state law require the adoption of the new
section on fewer than 30 days notice pursuant to §2001.034, Government
Code. TRS has also determined that the new section is necessary and appropriate
in accordance with §2001.006, Government Code, which allows TRS to adopt
rules and take other administrative action in preparation for the implementation
of legislation that has become law but has not taken effect. The new rule
will not be applied until the date the new law becomes effective, September
1, 2005.
The new section is adopted on an emergency basis under §825.102,
Government Code, which authorizes the Board of Trustees of TRS to adopt rules
for the administration of the funds of the retirement system. The rule is
also adopted under §824.2045, Government Code, which authorizes the Board
to adopt rules for the implementation of §824.2045, relating to the partial
lump-sum option. The new rule is also adopted under §2001.006 and §2001.034,
Government Code.
Other codes affected by the new section include §13 of Senate Bill
1691, 79th Legislature, Regular Session, which amends §824.2045, Government
Code, and §58 of Senate Bill 1691, which contains the grandfathering
requirements related to the legislative amendment of §824.2045, Government
Code.
§29.72.Eligibility to Select PLSO.
(a)
Except as provided in subsection (b) of this section, effective
September 1, 2005, a member is eligible to select a partial lump-sum distribution
only if the member’s age and years of service credit total at least
90 at the time of retirement and the member meets the other requirements of §824.2045,
Government Code, as amended by Senate Bill 1691, 79th Legislature, Regular
Session (2005).
(b)
A member eligible under §51.12 of this title (relating
to Applicability of Certain Laws in Effect Before September 1, 2005) is eligible
to select a partial lump-sum distribution as provided by §824.2045, Government
Code, prior to its amendment effective September 1, 2005, by Senate Bill 1691,
79th Legislature, Regular Session (2005). Under §824.2045 prior to amendment,
to be eligible to select a partial lump-sum distribution, a member must be
eligible for an unreduced service retirement annuity under §824.202(a),
Government Code, as it existed prior to amendment effective September 1, 2005,
and must not be participating in the deferred retirement option plan under
Subchapter E of this chapter.
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503052
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
Subchapter D. EMPLOYER PENSION SURCHARGE
34 TAC §31.41
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis new §31.41, concerning the administration of an employer
pension surcharge related to employment after retirement. The proposed new
section implements the requirement that employers shall make monthly payments
to the pension trust fund for each TRS-retired employee reported to TRS on
the return to work report of retirees, unless exempted by law. The new section
is adopted on an emergency basis pursuant to §2001.034 of the Government
Code, which allows TRS to adopt an emergency rule if a requirement of state
or federal law requires adoption of the rule on less than 30 days notice.
The section is also adopted in accordance with §2001.006 of the Government
Code, which allows TRS to adopt rules and take other administrative action
in preparation for the implementation of legislation that has become law but
has not taken effect. The new section is simultaneously being proposed for
permanent adoption in this issue of the
Texas Register
.
In accordance with Senate Bill 1691, 79th Legislature, Regular Session,
the new section implements the new employer pension surcharge. It provides
guidance to employers regarding the reported retirees for whom the surcharge
is owed under Senate Bill 1691 and set out procedures related to payments.
In accordance with the legislative enactment, the TRS Board of Trustees separately
adopted by resolution the pension surcharge amount, which is an amount equal
to the sum of the combined member and state contributions (currently 12.4%
of salary).
This emergency adoption is necessary because TRS and affected employers
are required to comply with the relevant provisions of Senate Bill 1691, 79th
Legislature, Regular Session, effective September 1, 2005, including consideration
of budgetary matters, preparation of communications for affected employers
and reported retirees, modification of procedures, and programming of payroll
systems to implement the payment requirement. TRS finds that these requirements
of state law require the adoption of the new section on fewer than 30 days
notice pursuant to §2001.034, Government Code. TRS has also determined
that this section is necessary and appropriate in accordance with §2001.006,
Government Code, which allows TRS to adopt rules and take other administrative
action in preparation for the implementation of legislation that has become
law but has not taken effect. The new section shall not be applied until the
date the new law becomes effective, September 1, 2005.
The new section is adopted on an emergency basis under §825.102,
Government Code, which authorizes the Board of Trustees of TRS to adopt rules
for the administration of the funds of the retirement system. As described
above, the sections are also adopted under §2001.006 and §2001.034,
Government Code. The new section implements §30 of Senate Bill 1691,
79th Legislature, Regular Session, which establishes new §825.4092, Government
Code.
Other code provisions affected by the new rule are §§824.602,
824.6022, and 825.408, Government Code.
§31.41.Return to Work Employer Pension Surcharge.
(a)
For each report month a retiree is reported on the Employment
of Retired Member Report, the employer that reports the retiree shall pay
to the Teacher Retirement System of Texas (TRS) a surcharge based on each
retiree's salary. For purposes of this section the employer is the reporting
entity that reports the employment of the retiree.
(b)
The surcharge amount that must be paid by the employer
for each retiree reported is an amount that is derived by applying a percentage
to the retiree's salary. The percentage applied to the retiree's salary is
an amount set by the Board of Trustees and is based on the member contribution
rate and the state pension contribution rate.
(c)
The surcharge is due from each employer that reports a
retiree as working on or after September 1, 2005, beginning with the report
month for September 2005.
(d)
The surcharge is not owed by the employer for any retiree
reported by that employer for the report month of January 2005.
(e)
The surcharge is not owed by the employer for a retiree
that is reported by a second employer for the report month of January 2005
if both employers are school districts that consolidate into a consolidated
school district on or before September 1, 2005.
(f)
The surcharge is not owed by the employer for a retiree
that is reported as working under the exception for Substitute Service as
provided in §31.13 of this title unless that retiree combines Substitute
Service under §31.13 with One-half Time Employment under §31.14
of this title in the same calendar month. For each calendar month that the
retiree combines employment under these two sections, the surcharge is owed
by the employer that reports the retiree.
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503058
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
Subchapter A. RETIREE HEALTH CARE BENEFITS (TRS-CARE)
34 TAC §41.4
The Teacher Retirement System of Texas (TRS) adopts on an
emergency basis new §41.4, concerning the administration of an employer
health benefit surcharge related to employment after retirement. The new section
implements the requirement that employers shall make monthly payments to the
fund for the health benefits program ("TRS-Care") provided pursuant to the
Texas Public School Retired Employees Group Benefits Act for each TRS-retired
employee who is both (i) reported to TRS on the return to work report of retirees,
taking into consideration any exceptions allowed by law, and (ii) enrolled
in the TRS-Care health benefits program. The new section is adopted on an
emergency basis pursuant to §2001.034 of the Government Code, which allows
TRS to adopt an emergency rule if a requirement of state or federal law requires
adoption of the rule on less than 30 days notice. The section is also adopted
in accordance with §2001.006 of the Government Code, which allows TRS
to adopt rules and take other administrative action in preparation for the
implementation of legislation that has become law but has not taken effect.
The new section is simultaneously being proposed for permanent adoption in
this issue of the
Texas Register
.
In accordance with Senate Bill 1691, 79th Legislature, Regular Session,
the new section implements the new employer health benefit surcharge. It provides
guidance to employers regarding the reported retirees for whom the surcharge
is owed and procedures related to payments. The TRS Board of Trustees separately
adopted by resolution a table setting forth the monthly dollar amounts for
the surcharge, as shown in the graphic titled "TRS-Care Employer Surcharge
Amounts--Return to Work Effective September 1, 2005" and attached to the rule
as proposed for permanent adoption elsewhere in this issue of the
Texas Register
.
This emergency adoption is necessary because TRS and affected employers
are required to comply with the relevant provisions of Senate Bill 1691, 79th
Legislature, Regular Session, effective September 1, 2005, including consideration
of budgetary matters, preparation of communications for affected employers
and reported retirees, modification of procedures, and programming of payroll
systems to implement the payment requirement. TRS finds that these requirements
of state law require the adoption of the new section on fewer than 30 days
notice pursuant to §2001.034, Government Code. TRS has also determined
that this section is necessary and appropriate in accordance with §2001.006,
Government Code, which allows TRS to adopt rules and take other administrative
action in preparation for the implementation of legislation that has become
law but has not taken effect. The new section shall not be applied until the
date the new law becomes effective, September 1, 2005.
The new section is adopted on an emergency basis under §1575.052,
Insurance Code, which authorizes the TRS Board of Trustees ("Board") to adopt
rules it considers necessary to implement and administer the retirees' group
health benefit plan and associated fund. As described above, the sections
are also adopted under §2001.006 and §2001.034, Government Code.
The new section implements §30 and §42 of Senate Bill 1691, 79th
Legislature, Regular Session, which respectively establish new §825.4092,
Government Code, and amend §1575.204, Insurance Code.
Other code provisions affected by the new rule are §§821.001(7),
824.602, 824.6022, and 825.408, Government Code, and Chapter 1575, Insurance
Code.
§41.4.Employer Health Benefit Surcharge.
(a)
When used in this section, the term "employer" has the
meaning given in §821.001(7), Government Code.
(b)
A retiree who is enrolled in the health benefits program
("TRS-Care") provided pursuant to the Texas Public School Retired Employees
Group Benefits Act and is reported on the Employment of Retired Member Report
to the Teacher Retirement System of Texas ("TRS") shall submit the Employer
Health Benefit Surcharge form, promulgated by TRS, to the employer, providing
details of the retiree's TRS-Care coverage, the cost of the coverage for the
retiree and all other individuals enrolled under the same account identification
number, the premium paid for such coverage, and other employment of a retiree
or any other individual enrolled under the same account identification number,
as required by the form. It is the employer's and the retiree's responsibilities
to update the Employer Health Benefit Surcharge form, as necessary (
(c)
For each report month a retiree is enrolled in TRS-Care
and is reported on the Employment of Retired Member Report, the employer that
reports the retire shall, using the information provided by the retiree to
the employer on the Employer Health Benefit Surcharge form, pay to the Retired
School Employees Group Insurance Fund (the "Fund") a surcharge amount that
is derived by taking the difference, if any, between:
(1)
the monthly full cost, as set by the trustee, for all individuals
(including a spouse and children, if any) enrolled under the same account
identification number, and
(2)
the monthly total premium, as set by the trustee, for all
individuals (including a spouse and children, if any) enrolled under the same
account identification number.
(d)
The surcharge under subsection (c) of this section is due
from each employer that reports a retiree as working on or after September
1, 2005, beginning with the report month for September 2005.
(e)
The surcharge under subsection (c) of this section is not
owed:
(1)
by an employer for any retiree reported by that employer
for the report month of January 2005;
(2)
by an employer for any retiree reported by a second employer
for the report month of January 2005, if both employers are school districts
that consolidate into a consolidated school district on or before September
1, 2005; or
(3)
by an employer for a retiree reported as working under
the exception for Substitute Service as provided in §31.13 of this title
(relating to Substitute Service) unless that retiree combines Substitute Service
under §31.13 of this title with One-half Time Employment under §31.14
of this title (relating to One-half Time Employment) in the same calendar
month. For each calendar month that the retiree combines employment under
these two sections of this title, the employer that reports the retiree owes
the surcharge.
(f)
An employer who reports to TRS the employment of a retiree
who is enrolled in TRS-Care shall inform TRS as soon as possible in writing
of the name, address, and telephone number of any other employer that employs
the retiree or any other retiree who is also enrolled under the same account
identification number.
(g)
If more than one employer reports the employment of a retiree
to TRS during any part of a month, the surcharge under subsection (c) of this
section required to be paid into the Fund by each reporting employer for that
month is the total amount of the surcharge due that month divided by the number
of reporting employers. The pro rata share owed by each employer is not based
on the number of hours respectively worked each week by the retiree for each
employer, nor is it based on the number of days respectively worked during
the month by the retiree for each employer.
This agency hereby certifies that the emergency adoption
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 July 25, 2005.
TRD-200503045
Ronnie Jung
Executive Director
Teacher Retirement System of Texas
Effective Date: September 1, 2005
Expiration Date: December 29, 2005
For further information, please call: (512) 542-6438
Chapter 29.
BENEFITS
best three
]-years' average
compensation.
The computation of
[
Best three-years'
]
average compensation for members with credit transferred from the Employees
Retirement System of Texas
("ERS")
may not include compensation
for any month which was credited or should have been credited by the ERS if
the member received compensation for service [
during
] the same
month covered by Teacher Retirement System of Texas.
Subchapter F. PARTIAL LUMP-SUM PAYMENT
Chapter 31.
EMPLOYMENT AFTER RETIREMENT
Chapter 41.
HEALTH CARE AND INSURANCE PROGRAMS
Chapter 51.
GENERAL ADMINISTRATION