| (a) Annual compensation includes performance pay earned
under a total compensation plan specifically approved by vote of the
governing board of an employer. Such approval must be reflected in
the minutes of the governing board. Any employer reporting to the
retirement system is considered a school district for the purposes
of this section.
(b) For purposes of including performance pay as a
part of annual compensation under this rule, a total compensation
plan must describe all elements of compensation received by all employees
of the employer.
(c) Performance pay is compensation for service as
an employee in a Texas public educational institution that is paid
under a valid employment agreement based upon a performance standard
published in written documents adopted by the employer. The performance
standard may be based on evaluations or goal achievement of the individual
employee or of the group in which the individual belongs. Beginning
on the first day of the 2011-2012 school year and thereafter, specific
amounts of performance pay will be credited to the year in which the
performance pay is paid. For school years prior to the 2011-2012 school
year, specific amounts of performance pay will be credited to the
year in which the standards establishing the right to the performance
pay are met or in which the service occurred, whichever is earlier.
Performance pay paid in the 2011-2012 school year that is based on
service rendered prior to the 2011-2012 school year will be credited
to the school year in which the standards establishing the right to
the performance pay are met or the school year in which the service
occurred, whichever is earlier.
(d) An employer shall certify each year to the retirement
system, by a date specified by the system on a form prescribed by
TRS, whether it is providing performance pay under this section. A
district that has properly made this certification shall report all
qualifying performance pay as compensation and make appropriate deductions
for member contributions unless the retirement system advises the
employer that such pay does not qualify as performance pay under this
rule. Employer shall maintain records that show it provides such pay
for a period not less than 7 years after such pay is reported to the
retirement system.
(e) Beginning on the first day of the 2011-2012 school
year and thereafter, performance pay earned during the school year
in which the member retires or any previous school year and paid after
the member has begun receiving retirement benefits is not creditable
by TRS and will not be used in any benefit calculation. For school
years prior to the 2011-2012 school year, if performance pay earned
during the school year in which the member retires is paid after the
member has begun receiving retirement benefits, any benefit adjustment
needed will be made effective the month following the month in which
TRS receives the deposits for the performance pay, subject to any
applicable limits under 26 United States Code §415.
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| Source Note: The provisions of this §25.24 adopted to be effective October 28, 1999, 24 TexReg 9298; amended to be effective March 12, 2003, 28 TexReg 2094; amended to be effective April 1, 2011, 36 TexReg 1830; amended to be effective December 29, 2016, 41 TexReg 10390 |
