PART 11. OFFICE OF THE FIRE FIGHTERS' PENSION COMMISSIONER
CHAPTER 302. GENERAL PROVISIONS RELATING TO THE TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM
The State Board of Trustees of the Texas Emergency Services Retirement System (System) proposes amendments to §302.2, regarding minimum and maximum benefit distributions.
The amended rule would provide that benefit distributions from the System must comply with specific requirements of the federal Internal Revenue Code of 1986 and related regulations of the U.S. Department of the Treasury.
Lisa Ivie Miller, Commissioner, has determined that the public benefit for the first five years that the amended rule is in effect will be to ensure that the System remains tax-exempt under federal Internal Revenue Service requirements.
There would be no cost to local governments as a result of adoption of the proposed amended rule. The state would retain the ability to reap considerable savings by maintaining the System as a tax-exempt plan under federal law.
Small businesses or individuals would not be affected by the adoption of the proposed amended rule.
Comments on the proposed amended rule may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin, Texas 78711-2577, not later than February 27, 2009. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The amended rule is proposed under the statutory authority of Title 8, Texas Government Code, Subtitle H, Texas Emergency Services Retirement System, §861.006.
No other statutes, articles, or codes are affected by the proposed amended rule.
§302.2.Benefit Distributions.
(a) In this section:
(1) "Code" means the Internal Revenue Code of 1986, as amended.
(2) "Section 401(a)(9) requirements" means the requirements under §401(a)(9) of the code and Treasury Regulations §§1.401(a)(9)-1 through 1.401(a)(9)-9.
(b) [(a)] The annual benefit
based on the service of a member may not exceed the amount permitted
by the code [Internal Revenue Code of 1986]
and related regulations for the appropriate year, including,
without limitation, §415(b) of the code. If the aggregated
benefit otherwise payable under the pension system and any other defined
benefit plan maintained by a political subdivision that has contributed
to the fund on behalf of the member would otherwise exceed the benefits
allowable under federal law, the reduction in benefits must first
be applied to the extent possible from the other plan, and only after
those reductions, from the fund.
(c) [(b)] A retirement annuity
or benefits to a qualified beneficiary under the pension system may
not begin after the deadlines provided under the code [
Internal Revenue Code of 1986] and related regulations
, including,
without limitation, the deadlines provided by subsection (d) of this
section.
(d) All distributions under the fund must at all times comply with and conform to the §401(a)(9) requirements, and any distribution required under the incidental death benefits requirements of §401(a) of the code will be treated as a distribution under the §401(a)(9) requirements. This subsection overrides any distribution options inconsistent with the §401(a)(9) requirements. The pension system shall develop procedures to ensure that distributions comply with the §401(a)(9) requirements, including the requirement that a member's entire interest under the system will be distributed, or begin to be distributed, to the member no later than April 1 of the year after the later of the year in which the member ceases performing qualified service for a participating department or the year in which the member attains age 70-1/2.
(e) If the annual compensation of a member is ever taken into account for any purpose of the fund, that annual compensation may not exceed the limit in effect under §401(a)(17) of the code, as periodically adjusted in accordance with guidelines provided by the United States Secretary of the Treasury.
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 15, 2009.
TRD-200900199
Craig Hudgins
General Counsel
Office of the Fire Fighters' Pension Commissioner
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-9935