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TITLE 34PUBLIC FINANCE
PART 3TEACHER RETIREMENT SYSTEM OF TEXAS
CHAPTER 29BENEFITS
SUBCHAPTER DPLAN LIMITATIONS
RULE §29.50Definitions

The following words and terms, when used in the sections under this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Annual additions--The sum of the following amounts credited to a member's account under any defined contribution plan (or a portion of a defined benefit plan treated as a defined contribution plan) maintained by the employer for the plan year:

    (A) employer contributions;

    (B) member contributions, including member contributions to a qualified defined benefit plan that have not been picked up under §414(h) of the Internal Revenue Code of 1986 but not including rollover contributions;

    (C) forfeitures; and

    (D) amounts allocated after March 31, 1984, to an individual medical benefit account, as defined in §415(1)(2) of the Internal Revenue Code, that is part of a pension or annuity plan maintained by the employer. Annual additions do not include amounts described in §415(1)(2) of that code for the purpose of computing the percentage limitation described in §415(c)(1)(B) of that code. For any plan year beginning before January 1, 1987, only that portion of the member contributions equal to the lesser of those member contributions in excess of 6.0% of annual compensation or one-half of the member's contributions to any qualified plan maintained by the employer is treated as annual additions.

  (2) Annual benefit--A service retirement, disability retirement, or pre-retirement member death benefit calculated on the basis of service and average compensation under Tex. Gov't Code §824.203 or §824.204, whether paid to a retiree or to a beneficiary, and payable annually in the form of a straight life annuity (ignoring that portion of any joint and survivor annuity which constitutes a qualified joint and survivor annuity, as defined in §417 of the Internal Revenue Code) with no ancillary or incidental benefits or rollover contributions and exclusive of any portion of the benefit derived from post-tax member contributions or other contributions that are treated as a separate defined contribution plan under §417 of the Internal Revenue Code (but inclusive of any such contributions that are picked up by the employer pursuant to §414(h)(2) of the Internal Revenue Code, or that otherwise are not treated as a separate defined contribution plan). A lump sum incidental death benefit is not part of the annual benefit. If the benefit is payable in any other form, the determination as to whether the limitation described in §29.51 of this title (relating to Plan Limitations on Annual Benefits and Member Contributions) or §29.52 of this title (relating to Adjustment to Annual Benefit Limit) has been satisfied shall be made by adjusting such benefit so that it is actuarially equivalent to the annual benefit described in this section in accordance with the regulations issued by the U.S. secretary of the treasury.

  (3) Annual compensation--For purposes of only applying plan limitations and not for computing benefits under Tex. Gov't Code §822.201 or 34 Tex. Admin. Code ch. 25, subch's B (relating to Compensation) and C (relating to Unreported Service or Compensation), all wages within the meaning of §3401(a) of the Internal Revenue Code relating to income tax withholding at source, but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the services performed and without regard to whether such wages are treated as compensation under any other provision of this chapter. For purposes of applying plan limitations, the definition of compensation where applicable will be compensation defined in Treasury Regulation §1.415(c)-2(d)(3), or successor regulations; provided, however, that the definition of compensation will exclude member contributions picked up under §414(h)(2) of the Internal Revenue Code, and for plan years beginning after December 31, 1997, compensation will include the amount of any elective deferrals, as defined in §402(g)(3) of the Internal Revenue Code and any amounts contributed or deferred by the employer at the election of the member and which is not includible in the gross income of the member by reason of §125 or §457 of the Internal Revenue Code, and for plan years beginning on and after January 1, 2001, §132(f)(4) of that code. Back pay, within the meaning of Treasury Regulation §1.415(c)-2(g)(8) shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition. For a limitation year beginning after January 1, 2007, compensation for the limitation year will also include compensation paid by the later of 2 1/2 months after an employee's severance from employment or the end of the limitation year that includes the date of the employee's severance from employment if

    (A) the payment is regular compensation for services during the employee's regular working hours, or compensation for services outside the employee's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments, and absent a severance from employment the payments would have been paid to the employee while the employee continued in employment with the employer; or

    (B) the payment is for unused accrued bona fide sick leave, vacation, or other leave that the employee would have been able to use if employment had continued.

  (4) Code--The Internal Revenue Code of 1986, as amended.

  (5) Defined contribution plan--A plan described in §414(i) of the Internal Revenue Code and, solely for purposes of this subchapter, employee contributions to any other qualified plan maintained by the employer, other than any picked-up contributions.

  (6) Employer--The agents, agencies or political subdivisions of the State responsible for education, including the governing board of any school district created under the laws of the State, any county school board, the board of trustees, the State Board of Education, the Texas Education Agency, the board of regents of any college or university, or any other legally constituted board or agency of any public school.

  (7) Limitation year--The limitation year for purposes of §415 of the Internal Revenue Code beginning on September 1 of each year and ending on the following August 31.

  (8) Member contributions--Those contributions within the meaning of §411(c)(2)(C) of the Internal Revenue Code, but not any contributions picked up by the employer within the meaning of §414(h)(2) of that code.

  (9) Plan year--The plan's accounting year beginning on September 1 of each year and ending on the following August 31.


Source Note: The provisions of this §29.50 adopted to be effective April 20, 1988, 13 TexReg 1672; amended to be effective June 1, 1995, 20 TexReg 3734; amended to be effective March 12, 2003, 28 TexReg 2105; amended to be effective March 8, 2007, 32 TexReg 1087; amended to be effective August 25, 2008, 33 TexReg 6970

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