Emergency Sections An agency may adopt a new or amended section or repeal an existing section on an emergency basis if it determines that such action is necessary for the public health, safety, or welfare of this state. The section may become effective immediately upon filing with the Texas Register, or on a stated date less than 20 days after filing, for no more than 120 days. The emergency action is renewable once for no more than 60 days. Symbology in amended emergency sections. New language added to an existing section is indicated by the use of bold text. [Brackets] indicate deletion of existing material within a section. TITLE 34. PUBLIC FINANCE Part III. Teacher Retirement System of Texas Chapter 25. Membership Credit Military Service 34 TAC sec.25.67 The Teacher Retirement System of Texas (TRS) adopts on an emergency basis new sec.25.67, concerning the purchase of special military service credit in TRS and the adoption by reference of specific actuarial tables necessary to make the actuarial cost for this credit a definitely determinable amount. This section is being adopted on an emergency basis in order to comply with federal law, U.S. Internal Revenue Code, sec.401(a) and Federal Tax Regulations, sec.sec.1. 401- 1(b)(1), 1.401(a)-1, requiring that qualified pension plan benefits be definitely determinable, and state law requiring TRS to be administered so as to qualify as a U.S. Internal Revenue Code, sec.401(a) qualified plan. The new section is adopted on an emergency basis under the Texas Government Code, sec.823.3021(f)(1), which specifically provides for adoption of actuarial rates and tables for the purchase of the special military service credit, and sec.825.102, which authorizes TRS to adopt rules governing the administration of its funds and the transaction of its business. sec.25.67. Special Military Service Credit. (a) A member who has become a classroom teacher after participating in a special military service separation benefits program established under federal law may be eligible to purchase special military service credit for previous military service under the provisions of the Government Code, sec.823. 3021. (b) The number of years of special military service credit shall be determined under the retirement system's rules for crediting normal membership service credit subject to the limitations contained in Government Code, sec.823. 3021. (c) The cost of this special military service credit is the sum of: (1) the annual membership fees that would have been paid by the member if the military service being credited had been performed as a participating member of the retirement system; and (2) the actuarial present value of the special military service credit being purchased, determined in accordance with subsection (d) of this section. (d) The actuarial present value of the special military service credit is a lump-sum amount at the time of purchase equal to the annual salary rate of the member during the first year the person becomes a member of the retirement system after separation from military service, multiplied by the applicable factor from the table entitled "Price to Purchase Special Military Service Per $1 of Entry Salary" provided by the retirement system's consulting actuary, the Wyatt Company, on August 24, 1993, and adopted herein by reference. Information regarding and/or copies of this table may be obtained by contacting the Teacher Retirement System of Texas, 1000 Red River, Austin, Texas 78701-2698, (512) 397- 6400. Issued in Austin, Texas, on September 10, 1993. TRD-9328831 Wayne Blevins Executive Director Teacher Retirement System of Texas Effective date: September 14, 1993 Expiration date: January 13, 1994 For further information, please call: (512) 370-0506 Joint Service with Employees Retirement System 34 TAC sec.25.113 The Teacher Retirement System of Texas (TRS) adopts on an emergency basis new sec.25.113, concerning the transfer of credit between TRS and the Employees Retirement System so that members have an opportunity to retire with credit under one system. This section is being adopted on an emergency basis in order to comply with federal law, U.S. Internal Revenue Code, sec.401(a) and Federal Tax Regulations, sec.sec.1.401-1(b)(1), 1.401(a)-1 requiring that qualified pension plan benefits be definitely determinable and state law requiring TRS to be administered so as to qualify as a U.S. Internal Revenue Code, sec.401(a) qualified plan. The rules are needed to clarify the benefits available under the transfer legislation. The new section is adopted on an emergency basis under the Texas Government Code, sec.805.009, which authorizes the Board of Trustees to adopt rules to administer the transfer law. sec.25.113. Transfer of Credit Between TRS and ERS (a) Purpose. These rules are intended to implement the provisions of the Government Code, Chapter 805, concerning the transfer of credit between the Teacher Retirement System of Texas and the Employees Retirement System of Texas. (b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) "Receiving system" means the system which will pay benefits based upon service credit transferred from the other system. (2) "Transferring system" means the system from which service credit is transferred for the purpose of obtaining additional benefits from the other system. (3) "TRS" means the Teacher Retirement System of Texas. (4) "ERS" means the Employees Retirement System of Texas. (5) "Crediting system" means the system in which service credit is established prior to any transfer. (6) "ORP" means the Optional Retirement Program described in the Government Code, Chapter 830. (c) Forms. (1) Applicants for transfer must use forms prescribed by the receiving system. (2) Applicants for the establishment of any service credit must use the forms prescribed by the crediting system. (3) The systems will cooperate in adopting forms necessary to facilitate the exchange of information between the systems. (d) Notice. (1) A person electing to transfer service credit pursuant to these rules must file the appropriate form with the receiving system not later than said effective date. (2) A beneficiary eligible to transfer service to the receiving system for the payment of death benefits shall make the election on an application form not later than 90 days after the date of death of the member. (3) The receiving system will notify the transferring system of the pending transfer not later than 30 days following date of receipt of an application form. (e) Manner of Transfer. (1) Service credit and assets will be transferred through electronic and hard copy documentation pursuant to these rules, and the receiving system will maintain records of such transfers permanently. (2) The transferring system shall provide documentation of years of credit, periods of service, military service credit, average salary, method of calculation of service credit and average salary, information necessary to comply with all federal tax regulations, interest credited, fees and interest paid, and any other dollar amount which will be a part of the transfer. (f) Calculation of asset value. The value of assets transferred pursuant to these rules will be calculated on the basis of the 1983 Group Annuity Mortality Table and a discount rate necessary to determine the actuarial value of the benefit payable by the receiving system that represents the percentage of the total amount of the member's service credited in both systems that was credited in the transferring system. In the absence of an agreement by the two retirement systems, the "actuarial value" shall be based on a discount rate equal to the rate adopted by the receiving system for the actuarial value of its general benefit liabilities. (g) Purchase of withdrawn service credit. (1) An ERS member with at least 36 month's service credit in ERS may purchase service credit in TRS that was canceled by the person's withdrawal of a TRS membership account prior to September 1, 1993. (2) Such purchase of TRS credit shall be in the amounts and rates applicable to TRS members eligible to repurchase such credit. (3) A TRS member with three years' service credit may repurchase, through ERS, service credit canceled by withdrawal of an ERS membership account prior to September 1, 1993. (4) No service credit may be transferred based in whole or in part upon repurchased credit under this section unless the applicant meets all conditions for membership, amount of service credit, and payments required for the reinstatement of the credit. (5) Any TRS membership service credit repurchased under this subsection may be applied toward the service credit requirements of TRS laws and rules for the purchase of out-of-state, military or other special service credit. (h) Termination of membership. The transfer of TRS service credit to ERS will terminate TRS membership and cancel all rights to benefits from TRS based on that service. (i) Service in the month following retirement. A retirement shall be canceled and membership reinstated if a person who transferred service and retired pursuant to this chapter holds a position during the month following retirement with an employer covered by either ERS or TRS. (j) Average salary. In determining average salary used in computing benefits available to a person transferring credit under this section, the receiving system will use the higher of the average compensation factors derived solely from the service originally established in each system respectively. Each system will be responsible for determining its respective average salary factor. The transferring system will certify its average salary factor to the receiving system. If there is insufficient service to determine an average salary factor in the transferring system, benefits will be based upon the average salary factor of the receiving system. (k) Transfer of certain state employees to ERS. (1) Certain state employees are being transferred to ERS membership as a result of legislation enacted by the 73rd Texas Legislature, Regular Session. Among these are employees of the Texas Education Agency, employees of the Texas Surplus Property Agency transferred to the General Services Commission, and some employees of the Texas Rehabilitation Commission. Such employees are eligible to transfer TRS credit to ERS for benefit purposes under the Government Code, Chapter 805, subject to the modifications contained in this section. (2) Employees whose agencies have been transferred to ERS coverage, including the Texas Education Agency and the Texas Rehabilitation Commission, may not retire under TRS after the effective date of the transfer, unless they again become TRS members based on other employment and subsequently obtain TRS service credit qualifying them for TRS retirement. (3) Employees described in paragraph (1) of this subsection are not eligible for TRS death benefits other than a return of accumulated contributions. (4) Notwithstanding subsection (j) of this section, the average compensation of employees described in paragraph (1) qualifying for ERS benefits may be determined by combining monthly rates of pay while a TRS member with ERS credited monthly salary to obtain the highest 36 months of pay. (l) Death benefits. Service credit of a person may not be transferred between systems if (1) one of the systems has paid or begun to pay death benefits based on the person's account, or (2) the beneficiaries for death benefits in each system are not identical. (m) Service credit. (1) TRS will make and accept transfers of service credit in whole plan year increments based upon TRS rules for crediting service. No partial years will be transferred. (2) TRS and ERS credit in a plan year will not be combined to obtain a year of TRS service credit. (n) ORP participants. A person who has elected to participate in ORP but who is an ERS member may repurchase TRS service credit canceled by the election of ORP for purpose of transferring it to ERS under the Government Code, Chapter 805, provided TRS will not transfer or pay benefits for such service credit if the member participates in ORP between the date the TRS service credit is purchased and the date of the member's retirement or death. TRS will refund without interest any amounts deposited for such credit in the event the person returns to ORP participation. The person must agree to refund the amount of any benefits erroneously paid to the person as a result of any such return to ORP. Issued in Austin, Texas, on September 10, 1993. TRD-9328830 Wayne Blevins Executive Director Teacher Retirement System of Texas Effective date: September 14, 1993 Expiration date: January 13, 1994 For further information, please call: (512) 370-0506 Chapter 41. Insurance 34 TAC sec.41.11 The Teacher Retirement System of Texas (TRS) adopts on an emergency basis new sec.41.11, concerning the collection by TRS of an annual fee of $10 to be paid by each person employed full-time by a public school district in addition to any other fees required by law. The fees provide funds to initiate a statewide group health insurance program for public school-district employees to be considered by the next (74th) regular session of the Texas Legislature. This section is being adopted on an emergency basis because state law requires a study of group health insurance for public school employees with a reporting deadline of June 30, 1994, to be funded in whole or in part by a portion of these funds. Further, the funds will be placed in a trust fund for investment, and it is necessary to maximize the amount of the trust fund available to establish the insurance reserves which may be needed if a public school employees group health insurance program is implemented by the 74th Texas legislature. These statutory objectives necessitate rules for collection of the fees as soon as possible. The new section is adopted on an emergency basis under Chapter 812, sec.44(d) , Acts of the 73rd Texas Legislature, Regular Session, 1993, which specifically authorizes adoption of rules for the collection of these fees. sec.41.11. Active Member Insurance Contingency Reserve Fee. (a) Each member of the retirement system who is employed full-time by a public school district in this state, with the first contribution to the member savings account of the retirement fund in each fiscal year, must pay to the retirement system the annual insurance contingency reserve fee required by Chapter 812, sec.44(d), Acts of the 73rd Texas Legislature Regular Session, 1993. The member must pay the fee in the same manner as provided by the Government Code, sec.825.403, for the payment of membership contributions. (b) The executive director may establish further procedures to be followed in reporting and depositing the fee in accordance with law and this section. (c) For the purpose of this rule, full-time employment is that employment defined in sec.25.1 of this title (relating to Full-Time Service) as regular, full-time service-eligible for membership in the retirement system. (d) For the purposes of this rule, "public school district" shall be any employer whose employees are covered by the retirement system but are not covered by a group health insurance program for state employers or employees of public institutions of higher education. Issued in Austin, Texas, on September 10, 1993. TRD-9328832 Wayne Blevins Executive Director Teacher Retirement System of Texas Effective date: September 14, 1993 Expiration date: January 13, 1994 For further information, please call: (512) 370-0506 Chapter 51. General Administration 34 TAC sec.51.1 The Teacher Retirement System of Texas (TRS) adopts on an emergency basis new sec.51.1, concerning the determination of the amount and manner of compensation to advisory committee members. This section is being adopted on an emergency basis in order to comply with state law that may require a rule governing payments of members of these committees in order for TRS to continue to receive these services which the board has found to be necessary for the performance of its duties. The new section is adopted on an emergency basis under the Texas Government Code, sec.825.102, which authorizes TRS to adopt rules governing the administration of its funds and the transaction of its business, and sec.825. 114, which specifically authorizes the rule. sec.51.1. Advisory and Auxiliary Committees. (a) The following committees are created for an indefinite period to advise or otherwise serve the retirement system and are deemed necessary to assist the Board of Trustees in performing its duties: (1) a Medical Board, composed of three board physicians as provided by the Government Code, sec.825.204; (2) an Investment Advisory Committee composed of private sector investment professionals in accordance with the retirement system's investment policies; (3) a Real Estate Finance Committee composed of investment professionals as provided by the retirement system's investment policies; and (4) a Retirees Advisory Committee for the Texas Public School Retired Employees Group Insurance Program, composed as provided by the Insurance Code, Article 3.50-4, sec.6. (b) The duties of these committees are established by applicable statute or policies of the Board of Trustees. (c) Except for such retirement system personnel as may serve ex officio on such committees, the members of the Medical Board, Investment Advisory Committee, and Real Estate Finance Committee shall be paid as independent contractor fees and expenses in accordance with contracts negotiated by the executive director or his designee subject to the applicable resolutions, policies, and annual budget adopted by the Board of Trustees. To the extent such committees are composed of independent contractors they are to be considered consultants employed by the retirement system under the authority recognized by Texas Civil Statutes, Article 6252-11c, sec.2(a). (d) Members of the Retirees Advisory Committee for the Texas Public School Retireed Employees Group Insurance Program are entitled only to reimbursement for actual and reasonable expenses incurred in performing functions as members of the committee. Issued in Austin, Texas, on September 10, 1993. TRD-9328833 Wayne Blevins Executive Director Teacher Retirement System of Texas Effective date: September 14, 1993 Expiration date: January 13, 1994 For further information, please call: (512) 370-0506