| (a) Contributions.
(1) Tax-Deferred. All ORP contributions shall be made
on a tax-deferred basis.
(2) IRS Limits on Defined Contributions. Contributions
to a participant's ORP account shall not exceed the maximum amount
allowed under §415(c) of the Internal Revenue Code of 1986, as
amended.
(A) 415(m) Plan. Institutions are authorized by the
ORP statute to establish a plan authorized under §415(m) of the
Internal Revenue Code of 1986, as amended, for a participant's ORP
contributions that exceed the 415(c) limit.
(B) Stopping ORP Contributions. In the absence of a
415(m) plan, an ORP employer shall discontinue ORP contributions for
participants who reach the 415(c) limit for the remainder of the applicable
tax year.
(C) Interaction with TSA/TDA Program. An employee's
contributions under the voluntary supplemental Tax-Sheltered Annuity/Tax-Deferred
Account Program shall be included in the 415(c) limit.
(3) No Co-Mingling of ORP and non-ORP Funds.
(A) No Non-Texas ORP Funds. No non-Texas ORP funds,
including any withdrawn TRS member contributions, may be rolled over
or transferred to an ORP account prior to the participant's termination
of ORP participation.
(B) No TSA/TDA Funds. Amounts that have been contributed
by the participant through the Tax-Sheltered Annuity/Tax-Deferred
Account Program may not be rolled over or transferred to an ORP account
prior to the participant's termination of ORP participation.
(C) Texas ORP Contract Required. ORP contributions
may only be made to a contract that is authorized by the participant's
current ORP employer for Texas ORP contributions, even if the participant
already has a contract with a company from a prior period of employment
with another employer, whether a Texas ORP employer or not.
(4) No Dual Contributions. A contribution to the applicable
retirement system and to an ORP company within the same calendar month
shall not be permitted, except when a person terminates employment
in a position covered by the applicable retirement system and, prior
to the end of the calendar month in which the termination occurs,
becomes employed in an ORP-eligible position at a different ORP employer
and elects to participate in ORP by signing and submitting the TRS
28 ORP election form (or its successor) or, for employees of the Board,
the ORP election form provided by the Board, on a date that results
in an ORP participation start date that is prior to the end of that
same calendar month, as provided in §25.4(g) of this title (relating
to Participation Start Date).
(5) Eligible Compensation.
(A) Definition. For purposes of determining the amount
of a participant's ORP contribution, institutions shall use the same
definition of eligible compensation that is used for TRS members in §821.001
of the Texas Government Code.
(B) IRS Limits. The maximum amount of salary that can
be taken into account for ORP purposes shall not exceed the limits
established by §401(a)(17) of the Internal Revenue Code of 1986,
as amended. An individual who first participated in ORP prior to September
1, 1996, regardless of a subsequent break in service, shall qualify
for the "grandfathered" rate established by IRC §401(a)(17).
(C) Stopping ORP Contributions. An ORP employer shall
discontinue ORP contributions for participants who reach the 401(a)(17)
limit for the remainder of the applicable tax year.
(6) Contribution Rates. The amount of each participant's
ORP contribution shall be a percentage of the participant's eligible
compensation as established by the ORP statute and the General Appropriations
Act for each biennium. Each contribution shall include an amount based
on the employee rate and an amount based on the employer rate.
(A) Employee Rate. The employee contribution rate shall
neither exceed nor be less than the rate established in the ORP statute
for employee contributions.
(B) Employer Rate. The employer contribution rate shall
consist of a state base rate (minimum), as established each biennium
in the General Appropriations Act, and an optional supplemental rate,
as provided in subparagraph (C) of this subsection.
(C) Supplemental Employer Rate. Institutions may provide
a supplement to the state base rate under the following conditions:
(i) Amount of Supplemental Rate. The supplemental rate
may be any amount that, when added to the state base rate, does not
exceed the maximum employer rate established in the ORP statute. For
example, if the state base rate is 6 percent and the maximum statutory
rate is 8.5 percent, then the supplement may be any amount up to and
including 2.5 percent.
(ii) Component Institution Policies. Governing boards
may establish a supplemental rate policy that covers all component
institutions or may establish different policies for one or more individual
components.
(iii) Annual Determination. The governing board of
each institution shall determine the amount of the supplement once
per year, to be effective for the entire year.
(iv) Method 1--All Participants. Institutions may provide
the same supplemental rate to all ORP participants, regardless of
the participant's first date to participate in ORP or a break in service.
If this method is selected, each ORP participant shall receive the
same supplemental rate as every other participant.
(v) Method 2--Two Groups. Institutions may, instead
of providing the same supplemental rate to all participants, provide
two different supplemental rates based on a participant's first date
to participate in ORP, as follows.
(I) Grandfathered. Each participant whose first date
to participate in ORP in lieu of the applicable retirement system
at any ORP employer, is prior to September 1, 1995, shall receive
the same supplemental rate as other participants in this group, regardless
of any break in service. This group of participants shall be referred
to as the grandfathered group.
(II) Non-Grandfathered. Each participant whose first
date to participate in ORP in lieu of the applicable retirement system
at any ORP employer is on or after September 1, 1995, shall receive
the same supplemental rate as other participants in this group, regardless
of any break in service. This group of participants shall be referred
to as the non-grandfathered group.
(vi) All ORP employers shall maintain documentation
of a participant's first date to participate in ORP in lieu of the
applicable retirement system at any ORP employer and shall provide
that information to any future ORP employers of the participant for
purposes of determining the participant's grandfather status. This
information shall be maintained for as long as the employer's plan
exists regardless of whether the ORP employer provides a supplemental
employer rate contribution and regardless of the amount of any supplemental
employer rate contribution provided.
(7) Proportionality. ORP employers shall pay ORP employer
contributions from the appropriate funding source in accordance with
applicable proportionality provisions, including provisions in the
General Appropriations Act and §830.201 of the Texas Government
Code.
(8) Three-Day Submission Deadline. ORP employers shall
send ORP contributions to the ORP company within three business days
of legal availability, except for contributions made on a supplemental
payroll or contributions that are sent to a grandfathered company
with less than 50 participants.
(A) Legal Availability. Contributions shall generally
be considered legally available on payday. For ORP employers that
normally pay participants on a twice-monthly basis, the three-day
minimum shall apply to each payday in the month.
(B) Grandfathered Company. For purposes of this paragraph,
a grandfathered company shall be a company that is no longer on a
particular ORP employer's list of authorized ORP companies, but that
continues to receive ORP contributions for certain participants as
authorized by that ORP employer.
(C) Exception Deadline. Contributions that are excepted
from the three-day submission deadline shall be sent to the company
as soon as practicable, but not later than 10 business days after
they are legally available.
(9) Electronic Funds Transfer (EFT).
(A) Requirement. ORP employers shall send all ORP contributions,
including contributions based on a supplemental payroll and contributions
sent to a grandfathered company as defined in paragraph (8) of this
subsection, to each ORP company by electronic funds transfer (EFT)
if the ORP employer is currently able to send funds by EFT and the
company is currently able to receive funds by EFT.
(B) Inability to Receive. If a company is unable to
receive funds by EFT, the ORP employer shall send contributions to
the ORP company by check and provide the following notifications.
Cont'd... |
