| (a) Notwithstanding any other provision of law to the
contrary, and in accordance with §823.006, Government Code, this
rule describes application of the federal limits on service purchases.
TRS may refuse a request by a member to make a contribution to the
retirement system for the purchase of service credit if the amount
of the contribution would exceed the limits provided in §415
of the Internal Revenue Code.
(b) A member may use an installment payment plan to
the extent permitted under applicable law to avoid making a contribution
in excess of the limits under §415(c) or §415(n) of the
Internal Revenue Code.
(c) Effective for permissive service credit contributions
made in limitation years beginning after December 31, 1997, if a member
makes one or more contributions to purchase permissive service credit
under TRS, then the requirements of §415 of the Internal Revenue
Code will be treated as met only if:
(1) the requirements of §415(b) of the Internal
Revenue Code are met, determined by treating the accrued benefit derived
from all such contributions as an annual benefit for purposes of §415(b)
of that code; or
(2) the requirements of §415(c) of the Internal
Revenue Code are met, determined by treating all such contributions
as annual additions for purposes of §415(c) of that code.
(d) For purposes of applying subsection (c)(1) of this
section, the retirement system will not fail to meet the reduced limit
under §415(b)(2)(C) of the Internal Revenue Code solely by reason
of this section, and for purposes of applying subsection (c)(2) of
this section, the system will not fail to meet the percentage limitation
under §415(c)(1)(B) of that code solely by reason of this section.
(e) For purposes of subsection (c) of this section
the term "permissive service credit" means service credit:
(1) specifically authorized by state law and recognized
by the retirement system for purposes of calculating a member's benefit
under the system;
(2) which such member has not received under the system,
prior to the purchase of such service credit; and
(3) which such member may receive only by making a
voluntary additional contribution, in an amount determined under the
System, which does not exceed the amount necessary to fund the benefit
attributable to such service credit.
(f) Effective for permissive service credit contributions
made in years beginning after December 31, 1997, such term may include
service credit for periods for which there is no performance of service,
and, notwithstanding subsection (e)(2) of this section, may include
service credited in order to provide an increased benefit for service
credit which a member is receiving under the System. Permissive service
credit shall include:
(1) military service credit under §823.302, Government
Code;
(2) developmental leave service credit under §823.402,
Government Code;
(3) membership waiting period service credit under §823.406,
Government Code;
(4) substitute service credit under §25.4 of this
title (relating to Substitutes);
(5) out-of-state service credit under §823.401,
Government Code;
(6) unused leave service credit under §823.403,
Government Code;
(7) service credit for work experience by a career
or technology teacher; and
(8) "additional service credit" under the service credit
purchase option authorized by §823.405, Government Code.
(g) For the retirement system to meet the requirements
of subsection (c) of this section:
(1) more than five years of nonqualified service credit
shall not be taken into account for purposes of subsection (c) of
this section; and
(2) no nonqualified service credit shall be taken into
account under subsection (c) of this section before the member has
at least five years of participation under the system.
(h) For purposes of subsection (g) of this section,
effective for permissive service credit contributions made in years
beginning after December 31, 1997, the term "nonqualified service
credit" means permissive service credit other than that allowed with
respect to:
(1) service (including parental, medical, sabbatical,
and similar leave) as an employee of the government of the United
States, any state or political subdivision thereof, or any agency
or instrumentality of any of the foregoing (other than military service
or service for credit which was obtained as a result of a repayment
described in §415(k)(3) of the Internal Revenue Code);
(2) service (including parental, medical, sabbatical,
and similar leave) as an employee (other than as an employee described
in paragraph (1) of this subsection of an education organization described
in §170(b)(1)(A)(ii) of the Internal Revenue Code which is a
public, private, or sectarian school which provides elementary or
secondary education (through grade 12), or a comparable level of education,
as determined under the applicable law of the jurisdiction in which
the service was performed;
(3) service as an employee of an association of employees
who are described in paragraph (1) of this subsection; or
(4) military service (other than qualified military
service under §414(u) of the Internal Revenue Code) recognized
by TRS.
(i) In the case of service described in subsection
(h)(1) - (3) of this section, such service will be nonqualified service
if recognition of such service would cause a member to receive a retirement
benefit for the same service under more than one plan. The Internal
Revenue Code standards for qualified permissive service credit as
reflected in subsection (h)(1) - (4) of this section do not expand
the authorized types of service credit available to be purchased under
the TRS plan.
(j) In the case of a trustee-to-trustee transfer after
December 31, 2001, to which §403(b)(13)(A) or §457(e)(17)(A)
of the Internal Revenue Code applies (without regard to whether the
transfer is made between plans maintained by the same employer):
(1) the limitations of subsection (g) of this section
will not apply in determining whether the transfer is for the purchase
of permissive service credit; and
(2) the distribution rules applicable under federal
law to TRS will apply to such amounts and any benefits attributable
to such amounts.
(k) For an eligible member, the limitation of §415(c)(1)
of the Internal Revenue Code shall not be applied to reduce the amount
of permissive service credit which may be purchased to an amount less
than the amount which was allowed to be purchased under the terms
of the statutes and rules applicable to TRS as in effect on August
5, 1997. For purposes of this subsection, an eligible member is an
individual who first became a member of TRS before September 1, 2000.
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| Source Note: The provisions of this §29.55 adopted 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; amended to be effective December 23, 2014, 39 TexReg 10026 |
