PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS
CHAPTER 25. MEMBERSHIP CREDIT
The Teacher Retirement System of Texas (TRS) adopts amendments to the following rules in Chapter 25 (relating to Membership Credit) in Part 3 of Title 34 of the Texas Administrative Code: §25.4 and §25.6 under Subchapter A (relating to General Provisions and Procedures); §§25.25, 25.31, 25.35, and 25.36 under Subchapter B (relating to Compensation); §25.113 of Subchapter H (relating to Joint Service with Employees Retirement System); §25.123 of Subchapter I (relating to Verification of Service or Compensation); §25.131 of Subchapter J (relating to Creditable Time and School Year); §25.152 of Subchapter K (relating to Developmental Leave); and §25.172 of Subchapter M (relating to Optional Retirement Program). The amendments are adopted without changes to the proposed text as originally published in the March 10, 2023, issue of the Texas Register (48 TexReg 1429), and the rules will not be republished.
REASONED JUSTIFICATION
TRS adopts these amendments to eleven rules in Chapter 25 of TRS rules to, in part, conform with changes made to the laws relating to service credit transfers between the Employees Retirement System of Texas (ERS) and TRS. TRS also adopts these amendments to implement the determinations made by the TRS Board of Trustees in TRS's recently adopted rule review (47 TexReg 4859).
First, TRS amends §25.113 (relating to Transfer of Credit between TRS and ERS) in order to ensure the rule conforms with recent legislative changes to the plan terms of the ERS retirement plan that impact TRS members who wish to transfer ERS service credit to TRS or TRS service credit to ERS. Senate Bill 321, which was passed last year during the 87th legislative session, created a mandatory cash-balance plan under Chapter 820, Government Code for ERS members who begin their membership on or after September 1, 2022. Importantly, ERS members who participate in this cash balance plan are no longer eligible to transfer their ERS service to TRS or their TRS service to ERS. In addition, TRS members who have not maintained an ERS membership established prior to September 1, 2022 will no longer be able to reinstate withdrawn service for the purpose of transfer to TRS. For these reasons, TRS amends §25.113, which governs transfers of service credit between the TRS and ERS retirement plans, so that the rule conforms to these limits on the ability of ERS cash-balance members to transfer credit to TRS or to ERS and to reinstate ERS service credit.
In addition to these amendments to §25.113, TRS also amends ten other rules, which were all recommended for amendment during TRS's recently completed rule review process. The amendments to these rules are primarily reference and terminology updates, deletions of outdated provisions, and other nonsubstantive and/or conforming changes. A detailed rule-by-rule description of the amendments is provided below.
SECTION-BY-SECTION SUMMARY
Amended §25.4 (relating to Substitutes) clarifies that the deadlines for verifying substitute service are the same as the deadlines to verify unreported service. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.6 (relating to Part-time or Temporary Employment) deletes the former standard for part-time and temporary employment, in particular how part-time employment can be combined to qualify as eligible TRS employment. This standard changed in 2015, and the former standard no longer needs to be in the rule. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.25 (relating to Required Deposits) deletes the reference to specific member contribution rates in the rule and replaces the reference with a reference to all applicable rates for member contributions under Section 825.402, Government Code so as to incorporate any future changes to member contribution rates under that section. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.31 (relating to Percentage Limits on Compensation Increases) deletes outdated provisions regarding documentation of compensation increases and exceptions for compensation increases that no longer apply to current school years. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.35 (relating to Employer Payments for New Members) updates the reference to the deadline under Government Code § 830.102 for electing to participate in the Optional Retirement Program. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.36 (relating to Employer Payments for Members Not Covered under the Federal Old-Age, Survivors, and Disability Insurance Program) changes its title as this contribution type now applies to all public schools, except institutions of higher education, and regional education service centers, not only employers that do not participate in the federal Old-Age, Survivors, and Disability Insurance Program. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.113 provides that members of the ERS cash balance benefit plan are not eligible to transfer TRS service credit to ERS or ERS service credit to TRS. In addition, amended §25.113 provides that TRS members cannot reinstate withdrawn ERS service credit for the purposes of transfer to TRS unless the members are current ERS members and their membership began prior to September 1, 2022.
Amended §25.123 (relating to Certification) deletes the notarization requirement from this certification in anticipation of possibly moving this requirement to online submission forms. In addition, amended §25.123 updates a reference to a Texas Education Agency rule. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.131 (relating to Required Service) updates the reference to the process for verifying substitute service to conform with the clarifying changes made to TRS Rule § 25.4 as described above. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.152 (relating to Eligibility, Cost, and Payment for Developmental Leave Credit) deletes reference to the process of purchasing developmental leave credit at the prior cost before actuarial cost was implemented in 2011. This is a rule that was identified for amendment during TRS's recently adopted rule review.
Amended §25.172 (relating to ORP and TRS) updates terminology and procedures relating to certain optional retirement program (ORP) requirements for consistency with Chapter 830, Government Code and the rules of the Texas Higher Education Coordinating Board, including when an individual who has elected to participate in ORP must return to membership in TRS or may remain in ORP. This is a rule that was identified for amendment during TRS's recently adopted rule review.
COMMENTS
No comments on the proposed adoption of the amendments were received.
SUBCHAPTER A. SERVICE ELIGIBLE FOR MEMBERSHIP
STATUTORY AUTHORITY
The amended rules are adopted under the authority of Government Code §822.001, which provides standards for membership in the TRS retirement system; Government Code §823.201, which authorizes the board of trustees to adopt rules for the granting of membership service credit; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rules affect the following statutes: Government Code §822.001, which relates to membership requirements; and Government Code §825.403, relating to collection of member's contributions.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301835
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
34 TAC §§25.25, 25.31, 25.35, 25.36
STATUTORY AUTHORITY
The amended rules are adopted under the authority of Government Code §825.110, which authorizes TRS to adopt rules that include a percentage limitation on the amount of increases in annual compensation that may be subject to credit and deposit during a member's final years of employment; Government Code §825.402, which provides the rates for member contributions; Government Code §825.4035, which relates to employer contributions for certain employed members; Government Code §825.4041, which provides for employer contributions due during the first 90 days of a new members employment; Government Code §830.102, which provides the deadline to elect to participate in ORP; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rules affect the following statutes: Government Code §825.110, which authorizes TRS to adopt rules that include a percentage limitation on the amount of increases in annual compensation that may be subject to credit and deposit during a member's final years of employment; Government Code §825.402, which provides the rates for member contributions; Government Code §825.4035, which relates to employer contributions for certain employed members; Government Code §825.4041, which provides for employer contributions due during the first 90 days of a new members employment; and Government Code §830,102, relating to the option to participate in ORP.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301836
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amended rules are adopted under the authority of Government Code §805.0015, which provides that credit transfers between ERS and TRS does not apply to ERS members subject to the cash-balance benefit plan provided under Chapter 820, Government Code; Government Code §805.009, which provides that TRS may adopt rules relating to the administration of Chapter 805, Government Code; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rules affect the following statutes: Government Code §805.0015, relating to the applicability of credit transfers between ERS and TRS for ERS members subject to the cash-balance benefit plan under Chapter 820, Government Code; and Government Code § 825.002, which relates to eligibility to transfer credit between ERS and TRS and the eligibility for TRS members to reinstate withdrawn ERS service credit for the purpose of transfer to TRS.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301837
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amended rule is adopted under the authority of Government Code §825.403, which relates to the collection of member contributions and the proof of service that must be provided to TRS for TRS to grant credit for member contributions that were previously required but not paid; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rule affects the following statutes: Government Code §825.403, relating to the collection of member contributions.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301842
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amended rule is adopted under the authority of Government Code §822.001, which provides standards for membership in the TRS retirement system; Government Code §823.201, which authorizes the board of trustees to adopt rules for the granting of membership service credit; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rule affects the following statutes: Government Code §822.001, which relates to membership requirements; and Government Code §825.403, relating to collection of member's contributions.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301839
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amended rule is adopted under the authority of Government Code §822.001, which provides standards for membership in the TRS retirement system; Government Code §823.201, which authorizes the board of trustees to adopt rules for the granting of membership service credit; Government Code §823.402, which relates to the eligibility of a TRS member to purchase service credit for certain developmental leave at actuarial cost; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rule affects the following statutes: Government Code §822.001, which relates to membership requirements; Government Code §823.403, relating to developmental leave; and Government Code §825.403, relating to collection of member's contributions.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301840
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amended rule is adopted under the authority of Government Code §822.002, which provides that an employee of the public school system who elects to participate in ORP is not permitted to be a member of the TRS retirement system; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.
CROSS-REFERENCE TO STATUTE
The amended rule affects the following statutes: Government Code §822.002, relating to exceptions to TRS membership requirement; Government Code §830.101, relating to the eligibility to participate in ORP; and Government Code §830.106, relating to resumption of TRS membership after electing to participate in ORP.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on May 19, 2023.
TRD-202301841
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: June 8, 2023
Proposal publication date: March 10, 2023
For further information, please call: (512) 542-6506