| (a) Pursuant to the authority of the board of trustees
to act under the Act, and in accordance with the amendments to §415
of the Internal Revenue Code as set forth in Public Law 104-188, the
annual benefit payable under the Act shall not be reduced under §854.007
of the Act except in conformity with those limitations on the payment
of benefits set forth in the Internal Revenue Code as that Code applies
from time to time to the Texas Municipal Retirement System.
(b) Effective for limitation years beginning on or
after January 1, 2010, the following paragraphs (1) - (5) of this
subsection shall apply:
(1) The defined benefit payable to a member of the
system shall not exceed the applicable limits under Internal Revenue
Code §415(b), as periodically adjusted by the Secretary of the
Treasury pursuant to Internal Revenue Code §415(d). This limit
adjustment shall also apply to a member who has had a severance from
employment or, if earlier, an annuity starting date. Benefits that
are subject to Internal Revenue Code §415(b) shall comply with
the foregoing limit in each year during which payments are made. The
foregoing limit shall be adjusted pursuant to the requirements of
Internal Revenue Code §415(b)(2)(C) and (D) relating to the commencement
of benefits at a date prior to age 62 or after age 65, subject to
other applicable rules under Internal Revenue Code §415.
(2) No adjustment shall be required to a benefit subject
to an automatic benefit increase feature described in Treasury Regulation §1.415(b)-1(c)(5).
(3) To the extent that Internal Revenue Code §415
and the Treasury Regulations thereunder require that an interest rate
under Internal Revenue Code §417(e) apply, the applicable stability
period shall be one calendar year beginning January 1, and the look-back
month shall be the fourth full calendar month preceding the first
day of the stability period (September).
(4) If a member is, or has ever been, a participant
in another qualified defined benefit plan (without regard to whether
the plan has been terminated) maintained by the member's employer,
as determined pursuant to Internal Revenue Code §§414(b),
414(c), and 415, the sum of the participant's benefits payable annually
in the form of a straight life annuity from all such plans may not
exceed the limit described in paragraph (1) of this subsection. Where
the member's employer-provided benefits under all such defined benefit
plans (determined as of the same age) would exceed the limit described
in paragraph (1) of this subsection applicable at that age, the benefits
accrued under all such other plans shall be reduced first in order
to avoid exceeding the limit and shall be reduced under the system
only to the extent that the reduction under such other plans is insufficient
to avoid exceeding the limit.
(5) The defined benefit payable to a member of the
system plan shall be determined in accordance with the requirements
of Internal Revenue Code §415(b) and the Treasury Regulations
thereunder. The limitation year is the calendar year.
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