PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS
CHAPTER 23. ADMINISTRATIVE PROCEDURES
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §23.7 and §23.8, concerning TRS' Code of Ethics for Contractors (Code of Ethics or Code) and related materials. The board adopts the amended sections without changes to the proposed text as published in the February 8, 2013, issue of the Texas Register (38 TexReg 633), and they will not be republished.
Amended §23.7 reflects the current version of the Code adopted by the board in April 2012 and filed with the Office of the Secretary of State. The amendments also update or clarify terminology involving the current Code and conform the section with the wording in the related rule, §23.8, which concerns ancillary reporting materials used in implementing the Code.
Amended §23.8 adopts by reference the latest version of the reporting memorandum approved by the executive director and filed with the secretary of state's office. The amendments reflect current terminology used in the Code and §23.7. The amendments also clarify references to the revised versions of the reporting memorandum and form and, as applicable, make such reference consistent with the wording used in connection with the updated Code adopted by reference in §23.7.
No comments regarding the proposed rules were received.
Statutory Authority: The amendments are adopted under Government Code §825.102, which authorizes the board to adopt rules for the administration of the funds of the retirement system and for the transaction of the business of the board.
Cross-Reference to Statute: Government Code §825.212, concerning a code of ethics for contractors.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302231
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013,
Proposal publication date: February 8, 2013
For further information, please call: (512) 542-6438
SUBCHAPTER B. COMPENSATION
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §25.21, relating to compensation subject to deposit and credit. The board adopts the amended section without changes to the proposed text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1845), and it will not be republished.
Section 25.21 addresses the types of compensation that are creditable for purposes of determining TRS member contributions and benefits. Before this amendment of §25.21, the section did not explicitly address workers' compensation as creditable compensation. The amended rule clarifies and provides notice of how TRS credits workers' compensation in determining benefits. With the change in the cost of unreported service increasing to the actuarial cost of the increased benefits associated with the additional compensation credit or service credit, the amended rule also provides that workers' compensation does not have to be purchased at an increased cost if the compensation is reported or verified to TRS by the end of the school year following the year in which it was paid. This amendment allows a member sufficient time to verify the compensation and pay the member contributions before the cost is increased.
No comments regarding the proposed rule were received.
Statutory Authority: The amended section is adopted under Texas Government Code §825.102, which authorizes the board to adopt rules for the administration of the funds of the retirement system.
Cross-Reference to Statute: The adopted amendments affect Texas Government Code §821.001(4), which defines "annual compensation," and Texas Government Code §822.201, which describes compensation subject to report, deposit, and credit.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302232
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §25.43, relating to the cost for unreported service or compensation, and §25.47, relating to the deadline for verification of unreported compensation or service. The board adopts the amended sections without changes to the proposed text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1846), and they will not be republished.
Amended §25.43 adds subsection (g), which addresses the amount that must be paid to TRS to receive not only compensation credit for workers' compensation but also service credit associated with the workers' compensation. Under adopted §25.43(g), if the workers' compensation is reported or verified to TRS no later than the last day of the school year following the school year in which the workers' compensation is paid, the cost to establish the compensation and associated service credit is the amount of member contributions owed on the compensation. The cost of the compensation and associated service credit must be paid in a lump sum no later than the last day of the school year following the year in which the workers' compensation was paid. If the compensation and associated service credit are not verified or reported and the member contributions not paid by the end of the school year following the school year in which the workers' compensation was paid, the cost of establishing the compensation or service credit is the actuarial cost of unreported service or compensation described in §25.43(a).
Amended §25.47 adds subsection (d) to clarify that workers' compensation paid as temporary wage replacement pay is not unreported compensation until after the end of the school year following the school year in which the compensation was paid.
No comments regarding the proposed rules were received.
Statutory Authority: The amendments are adopted under Texas Government Code §825.102, which authorizes the board to adopt rules for the administration of the funds of the retirement system and for the transaction of the business of the board.
Cross-Reference to Statute: The adopted amendments affect Texas Government Code §825.403 concerning the collection of member contributions.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302233
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §25.81, relating to out-of-state service eligible for credit. The board adopts the amended section without changes to the proposed text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1847), and it will not be republished.
Amended 25.81 requires a member to have worked in an otherwise eligible position in an out-of-state school for at least 90 days of a school year in order to purchase the related service credit. The amendment reflects the new 90-day standard adopted in §25.131 of this title (relating to required service) for establishing a creditable year of service credit. TRS implemented the new 90-day standard under §25.131 beginning with the 2011-2012 school year.
No comments regarding the proposed rule were received.
Statutory Authority: The amended section is adopted under Texas Government Code §825.102, which authorizes the board to adopt rules for the administration of the funds of the retirement system.
Cross-Reference to Statute: The adopted amendment affects Texas Government Code §825.401, which concerns out-of-state service.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302234
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
SUBCHAPTER B. EMPLOYMENT AFTER SERVICE RETIREMENT
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §31.14, relating to one-half time employment to establish a single standard for determining the amount of time that all service retirees can work without forfeiting the monthly annuity. The board adopts the amended section with changes to the proposed text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1848). Those changes do not require republication of the proposed rule, but the adopted rule text will be republished.
The amendments to §31.14 address how one-half time employment of a retiree by an institution of higher education is determined. One-half time means working no more than the equivalent of four clock hours for each work day in that calendar month. The amendments provide a conversion method for determining the number of clock hours that can be worked under the limits for one-half time employment by a retiree. The amendments also direct that the number of hours of instruction in the classroom or lab be converted to clock hours using the conversion ratio, which takes into account not only the amount of time spent instructing students, but also the amount of preparation time, time spent grading work and submitting grades, and similar work related to the classroom instruction. The amended section eliminates the need to specifically include the many different terms used by employers to describe the amount of work performed by faculty by using a single standard of the amount of time in the classroom or lab to ensure consistent application of the limit.
TRS staff received comments from an individual suggesting that §31.14 be clarified to apply only to retirees employed after January 1, 2011, in conformity with current law, including other TRS return-to-work rules. Based on those comments, the board adopts a minor, clarifying change to the published text of proposed §31.14 to make clear that the section applies only to retirees employed after January 1, 2011.
Statutory Authority: The amendments are adopted under the following statutes: Texas Government Code §824.601(f), which authorizes TRS to adopt rules necessary for administering Chapter 824, Subchapter G, of the Government Code concerning loss of benefits on resumption of service; Texas Government Code §824.602(j), which relates to exceptions to loss of benefits on resumption of service and requires the board to adopt rules defining "one-half time basis"; and Texas Government Code §825.102, which authorizes the board to adopt rules for eligibility for membership, the administration of the funds of the system, and the transaction of business of the board.
Cross-Reference to Statute: The adopted amendment affects Texas Government Code Chapter 824, Subchapter G, concerning loss of benefits on resumption of service.
§31.14.One-half Time Employment.
(a) A person who is receiving a service retirement annuity who retired after January 1, 2011 may be employed on a one-half time basis without forfeiting annuity payments for the months of employment. In this section, one-half time basis means the equivalent of 4 clock hours for each work day in that calendar month. The total number of hours allowed for that month may be worked in any arrangement or schedule.
(b) Employment by a third party entity is considered employment by a Texas public educational institution unless the retiree does not perform duties or provide services on behalf of or for the benefit of the institution or the retiree was first employed by the third party entity before May 24, 2003.
(c) Paid time-off, including sick leave, vacation leave, administrative leave, and compensatory time for overtime worked, is employment for purposes of this section and must be included in determining the total amount of time worked in a calendar month and reported to TRS as employment for the calendar month in which it is taken.
(d) For the purpose of this section, actual course or lab instruction with an institution of higher education (including community and junior colleges) that is expressed in terms of number of courses; course or semester hours/credits; instructional units; or other units of time representing class or instructional time shall be counted as a minimum of two clock hours for each clock hour of instruction or time in the classroom or lab in order to reflect instructional time as well as preparation, grading, and other time typically associated with one hour of instruction. If the employer has established a greater amount of preparation time for each hour in the classroom or lab, the employer's established standard will be used to determine the number of courses or labs a retiree may teach under the exception to loss of annuity provided by this section. The equivalent clock hours computed under this subsection may not be greater than the number of work hours authorized in subsection (a) of this section.
(e) This exception and the exception for substitute service may be used during the same calendar month without forfeiting the annuity only if the total amount of time that the retiree works in those positions in that month does not exceed the amount of time per month for work on a one-half time basis. Beginning September 1, 2011 and thereafter, the exception for one-half time employment under this section and the exception for substitute service under §31.13 of this title (relating to Substitute Service) may be used during the same calendar month without forfeiting the annuity only if the total number of days that the retiree works in those positions in that month does not exceed one-half the number of days available for that month for work.
(f) A person working under the exception described in this section is not separated from service with all Texas public educational institutions for the purpose of the required 12 full consecutive month break described in §31.15 of this title (relating to Full-time Employment after 12 Consecutive Month Break in Service).
(g) The exception described in this section does not apply for the first month after the person's effective date of retirement (or the first two months if the person's retirement date has been set on May 31 under §29.14 of this title (relating to Eligibility for Retirement at the End of May)).
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302235
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
The Board of Trustees (board) of the Teacher Retirement System of Texas (TRS) adopts amendments to §31.41, relating to the employment pension surcharge. The board adopts the amended section without changes to the proposed text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1850), and it will not be republished.
The amendments to §31.41 address the requirements for triggering payment of the pension surcharge owed by the employer who employs a retiree who retired September 1, 2005, or after and is working in a TRS-eligible position. The standard for triggering the surcharge before the 2013-2014 school year is working at least one-half the full-time load for a period of four and one-half months or more. Under §31.14 of this title (relating to one-half time employment), the standard for one-half time employment that avoids loss of the monthly annuity is working no more than the equivalent of four clock hours for each work day in the calendar month. In light of the confusion experienced by employers, the difficulty in communicating the two standards to employers and retirees, and the unanticipated cost to both parties when the work triggered the surcharges, amended §31.41 applies the same standard for one-half time employment to the standard of triggering payment of the surcharge.
The opening phrases of new subsections (i), (j), and (k) of this section address how the rules apply for school years prior to the 2013-2014 school year by following the existing requirements and standard for triggering payment of the surcharge.
No comments were received on the rule proposal.
Statutory Authority: The amendments are adopted under the following statutes: Texas Government Code §824.601(f), which authorizes TRS to adopt rules necessary for administering Texas Government Code Chapter 824, Subchapter G, concerning loss of benefits on resumption of service; Texas Government Code §824.602(j), which relates to exceptions to loss of benefits on resumption of service and requires the board to adopt rules defining "one-half time basis"; and Texas Government Code §825.102, which authorizes the board to adopt rules for eligibility for membership, the administration of the funds of the system, and the transaction of business of the board.
Cross-Reference to Statute: The adopted amendments affect Texas Government Code Chapter 824, Subchapter G, concerning loss of benefits on resumption of service.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302236
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
SUBCHAPTER A. RETIREE HEALTH CARE BENEFITS (TRS-CARE)
The Teacher Retirement System of Texas (TRS) adopts amendments to §41.4, relating to the employer health benefit surcharge under TRS-Care. TRS adopts the amended section without changes to the proposed rule text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1851), and it will not be republished.
Section 41.4 implements the statutory health benefit surcharge owed by a TRS-covered employer for each month that the employer reports that a retiree enrolled in TRS-Care is working in a position eligible for membership in TRS. The adopted amendments to §41.4 address the requirements for triggering payment of the health benefit surcharge. Currently, a health benefit surcharge is owed by the employer who employs a retiree who retired September 1, 2005, or after and who is working in a TRS-eligible position. Experience with using the standard for one-half time employment for retirees (equivalent of four clock hours for each work day in the calendar month) and the standard for one-half time employment eligible for membership (one-half the full-time load) to trigger payment of the health benefit surcharge revealed confusion on the part of employers, difficulty in communicating the two standards to the employers and retirees, and unanticipated cost to both when the retiree worked one-half time. The major changes in adopted §41.4 establish the same standard for triggering payment of the surcharge as is used for determining when retirees exceed allowable one-half time employment and lose their annuity under TRS rule §31.14 of this title, relating to one-half time employment.
The adopted amendments establish a new standard for triggering payment of the health benefit surcharge by incorporating the limit on one-half time employment after retirement that results in loss of the monthly annuity. Section 31.14 of this title establishes the standard for determining one-half time employment: retirees can work the equivalent of four clock hours for each work day in the calendar month without forfeiting their annuity for the month. Section 31.14 also establishes the ratio for converting course credits or semester hours to clock hours. The same standard under §31.14 for determining one-half time employment is incorporated into amended §41.4 for triggering payment of the pension surcharge. TRS will implement the newly incorporated standard under §41.4 beginning September 1, 2013.
The opening phrases of new subsections (b), (j), and (k) of this section address how the rules apply for school years prior to the 2013-2014 school year by following the existing requirements and standard for triggering payment of the health benefit surcharge.
The adopted section also deletes references to "TRS-covered employment," which unnecessarily restate existing law already specified in §41.4(a). Other non-substantive amendments are adopted for clarification purposes or to provide accurate internal references.
No comments were received on the rule proposal.
Statutory Authority: The amendments to §41.4 are adopted under the authority of §1575.052, Insurance Code, which authorizes TRS to adopt rules it considers necessary to implement and administer the TRS-Care program.
Cross-reference to Statute: The adopted amendments to §41.4 affect Chapter 1575 of the Insurance Code, which provides for the establishment and administration of the TRS-Care program.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302237
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438
The Teacher Retirement System of Texas (TRS) adopts amendments to §47.10, relating to qualified domestic relations orders. TRS adopts the amended section without changes to the proposed rule text as published in the March 15, 2013, issue of the Texas Register (38 TexReg 1853), and it will not be republished.
Section 47.10 concerns the determination of whether an order is a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that has been reviewed by TRS and found to meet applicable requirements to allow TRS to make direct payment to an alternate payee identified in the order.
The adopted amendments establish a requirement that domestic relations orders entered by a court on September 1, 2013, or after must be in a form prescribed by TRS. TRS has provided a model order to aid parties in drafting a domestic relations order that met all the plan requirements to be a qualified order. Although most orders were based in large part on the model order, many parties included limiting language or additional requirements that were difficult for TRS to administer or required TRS to manually administer. The 82nd Legislature authorized TRS to require use of a prescribed form. The adopted amendments to §47.10 implement that statutory authority.
No comments were received on the rule proposal.
Statutory Authority. Amended §47.10 is adopted under Texas Government Code §804.003 and §804.005, which authorize TRS to adopt rules relating to QDROs, and Texas Government Code §825.102, which authorizes TRS to adopt rules for the administration of the funds of the retirement system and the transaction of business. The amendments also are adopted in conjunction with 26 United States Code §414(p) relating to QDROs and qualified plans.
Cross-Reference to Statute. Amended §47.10 affects Texas Government Code §804.003, which sets out the requirements for QDROs; and 26 United States Code §414(p), a provision of the Internal Revenue Code relating to QDROs and qualified plans.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 31, 2013.
TRD-201302238
Brian K. Guthrie
Executive Director
Teacher Retirement System of Texas
Effective date: June 20, 2013
Proposal publication date: March 15, 2013
For further information, please call: (512) 542-6438