(a) Except as provided in subsections (b), (g) and
(h) of this section, for the purpose of computing the amount of a
retirement benefit or a death benefit under §824.402, Government
Code, annual compensation means creditable compensation for service
paid to a member of the retirement system during a 12-month period
beginning September 1 and ending August 31 of the next calendar year
for service rendered during no more than a 12-month period.
(b) For the purpose of computing the amount of a retirement
benefit or a death benefit under §824.402, Government Code, for
retirements or deaths before April 1, 2015, annual compensation paid
prior to September 1, 2012 is the greater of:
(1) the amount of creditable compensation for service
paid to a member of the retirement system during a 12-month school
year as defined in §25.133(a) of this title (relating to School
Year); or
(2) the amount of creditable compensation paid to the
member during a 12-month period beginning September 1 and ending August
31 of the next calendar year.
(c) Unless otherwise provided by law or this chapter,
a member shall receive credit only for annual compensation actually
received.
(d) Compensation from which deductions for an Optional
Retirement Program annuity were made shall not be included in annual
compensation for benefit calculation purposes.
(e) If an employer changes their payroll reporting
to comply with §25.28(c) of this title (relating to Payroll Report
Dates) and, as a result of this payroll reporting change, a member
has only 11 months of salary credited by TRS in a school year, then
TRS will attribute an additional month of salary for purposes of benefit
calculation if that school year of compensation would have been used
in calculating the member's highest average salary for benefit calculation
purposes. The amount of compensation that TRS will attribute for the
additional month is equal to the amount that would have been reported
for the month that was excluded as a result of the payroll reporting
change.
(f) For the purpose of computing the amount of retirement
benefit or a death benefit under §824.402, Government Code, for
retirements or deaths after March 31, 2015, annual compensation shall
be calculated as follows:
(1) for the 2013-2014 school year and thereafter, annual
compensation is the amount of creditable compensation for service
paid to a member of the retirement system during a 12-month period
beginning September 1 and ending August 31 of the next calendar year;
(2) for the 2012-2013 school year, annual compensation
is the greater of:
(A) the amount of creditable compensation for service
paid to a member of the retirement system during the 12-month school
year as defined in §25.133(a) of this title (relating to School
Year); or
(B) the amount of creditable compensation paid to the
member during a 12-month period beginning September 1, 2012 and ending
August 31, 2013.
(3) for school years prior to the 2012-2013 school
year annual compensation shall be the amount of creditable compensation
for service paid to a member of the retirement system during the 12-month
school year as defined in §25.133(a) of this title (relating
to School Year).
(g) Effective with the 2015-2016 school year, annual
compensation for the school year in which the member retires is the
highest total of compensation received during a 12 consecutive month
period that occurs during a 14 consecutive month period provided:
(1) the member completes the full contract period for
the final year;
(2) the 14 consecutive month period includes the months
of September through August of the school year in which the member
retires;
(3) the 14 consecutive month period does not include
months prior to the month in which the member's contract for the final
year began;
(4) the annual compensation under this subsection does
not include compensation earned after retirement, except that as provided
in §25.24(e) of this title (relating to Performance Pay), creditable
annual compensation earned by the date of retirement but not yet paid
at the date of retirement is included in the annual compensation for
that year;
(5) the annual compensation under this subsection does
not include performance pay credited by TRS as annual compensation
in a prior school year;
(6) the annual compensation for the school year in
which the member retires is subject to all applicable Internal Revenue
Code limits for that school year;
(7) the member does not receive credit for more than
12 months of compensation in the annual compensation for the final
school year; and
(8) the member's compensation in the final year before
retirement is not paid out in fewer than 12 months.
(h) If due to an error of the employer, compensation
earned by the retiree in the final school year before retirement is
not paid and/or not reported before the first annuity payment is issued,
upon notice to TRS and the submission of all required corrected reports
and member and employer contributions on the compensation, TRS shall
adjust its records. If the additional compensation results in increased
benefits payable on behalf of the retiree, the adjusted benefit shall
be paid beginning in the month TRS receives the additional contributions
and the corrected reports. In no event may an error be corrected under
this subsection after the end of the school year following the school
year in which the member retired.
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Source Note: The provisions of this §25.26 adopted to be effective September 26, 1979, 4 TexReg 3303; amended to be effective January 5, 2012, 36 TexReg 9340; amended to be effective December 15, 2014, 39 TexReg 9705; amended to be effective March 5, 2015, 40 TexReg 937; amended to be effective January 1, 2016, 40 TexReg 9725; amended to be effective October 17, 2018, 43 TexReg 6844 |