Current through Reg. 49, No. 38; September 20, 2024
(a) Purpose. These
rules are intended to implement the provisions of the Government Code, Chapter
805, concerning the transfer of credit between the Teachers Retirement System
of Texas and the Employees Retirement System of Texas and to provide a
systematic method of funding the actuarial value of the annuity resulting from
transferred service.
(b)
Definitions. The following words and terms, when used in this section, shall
have the following meanings, unless the context clearly indicates otherwise.
(1) Receiving system--The system which will
pay benefits based upon service credit transferred from the other
system.
(2) Transferring
system--The system from which service credit is transferred for the purpose of
obtaining additional benefits from the other system.
(3) TRS--The Teacher Retirement System of
Texas.
(4) ERS--The Employees
Retirement System of Texas.
(5)
Crediting system--means the system in which service credit is established prior
to any transfer.
(6) ORP--The
Optional Retirement Program described in Government Code, Chapter
830.
(7) Cash Balance Group
Member--a member of ERS receiving or eligible to receive a retirement benefit
under Government Code, Chapter 820.
(c) Cash Balance Group Members. Cash balance
group members are not eligible to transfer TRS service credit to ERS nor ERS
service credit to TRS.
(d) Forms.
(1) Applicants for transfer must use forms
prescribed by the receiving system.
(2) Applicants for the establishment of any
service credit must use the forms prescribed by the crediting system.
(3) The systems will cooperate in adopting
forms necessary to facilitate the exchange of information between the
systems.
(e) Notice.
(1) A person electing to transfer service
credit pursuant to this section must file the appropriate form with the
receiving system not later than the person's intended effective date of
retirement or the last day of the month in which their retirement application
is filed, whichever is later.
(2) A
beneficiary eligible to transfer service to the receiving system for the
payment of death benefits shall make the election on an application form not
later than 90 days after the date of death of the member, unless both systems
agree to extend the deadline for an election, but in any event the beneficiary
shall make the election before either system has paid the death
benefit.
(3) The receiving system
will notify the transferring system of the pending transfer not later than 30
days following date of receipt of an application form.
(f) Manner of Transfer.
(1) Service credit and funds will be
transferred through electronic and hard copy documentation pursuant to this
section, and the receiving system will maintain records of such transfers
permanently.
(2) The transferring
system shall provide documentation of years of credit, periods of service,
military service credit, average salary, method of calculation of service
credit and average salary, information necessary to comply with all federal tax
regulations, interest credited, fees and interest paid, and any other dollar
amount which will be a part of the transfer.
(g) Transfer of funds. The ERS and the TRS
agree on the following method of transferring funds. Each system shall certify
on a monthly basis the total dollar amount of annuities paid by the system
which are based on service credit transferred pursuant to Government Code,
Chapter 805. The amount certified shall exclude any portion of annuities paid
consisting of post-retirement increases. Each system shall remit to the other
system the amount certified within thirty days of receipt of such
certification. It is recognized that adjustments will be made from
month-to-month as a result of such things as administrative errors, the death
of the annuitant or a beneficiary, return-to-work, and recovery from disability
by an annuitant. The systems will jointly agree on the administrative and
accounting procedures to be established in order to ensure the transfer of
funds pursuant to this section.
(h)
Reinstatement of withdrawn service credit.
(1) An ERS member with at least 36 months
service credit in ERS may reinstate service credit in TRS that was canceled by
the person's withdrawal of a TRS membership account.
(2) Such reinstatement of TRS credit shall be
in the amounts and rates applicable to TRS members eligible to repurchase such
credit.
(3) A TRS member with three
years' service credit may reinstate, through ERS, service credit canceled by
withdrawal of an ERS membership account if the TRS member is also current
member of ERS but is not a cash balance group member.
(4) No service credit may be transferred
based in whole or in part upon reinstated credit under this section unless the
applicant meets all conditions for membership, amount of service credit, and
payments required for the reinstatement of the credit.
(5) Any TRS membership service credit
reinstated under this subsection may be applied toward the service credit
requirements of TRS laws and rules for the purchase of out-of-state, military
or other special service credit.
(i) Termination of membership. The transfer
of TRS service credit to ERS will terminate TRS membership and cancel all
rights to benefits from TRS based on that service.
(j) Service in the month following
retirement. Both TRS and ERS laws require a separation from employment with any
employer covered by the respective system for a period following a member's
effective retirement date as a condition for retirement with a benefit from the
respective system. A member retiring under TRS whose last place of employment
is with an ERS-covered employer shall provide a certification of termination of
employment to TRS in the manner directed by the retirement system, specifying
the last date of employment. With respect to a service or disability retirement
by persons using credit transferred between the systems, the following
provisions apply:
(1) An ERS retiree whose
last place of employment is with a TRS-covered employer must be off the payroll
of any TRS-covered employer for the first full calendar month following
retirement under ERS, or the ERS retirement will be canceled. A TRS retiree
whose last place of employment is with an ERS-covered employer must be off the
payroll of any ERS-covered employer for the first full calendar month following
retirement under the TRS, or the TRS retirement will be canceled.
(2) An ERS retiree whose last place of
employment is with an ERS-covered employer may begin work for a TRS-covered
employer after retirement under ERS without a one month break in service. A
retiree from the TRS whose last place of employment is with a TRS-covered
employer may begin work for an ERS-covered employer after retirement under TRS
without a one month break in service.
(k) Average salary.
(1) In determining average salary used in
computing benefits available to a person transferring credit under this
section, the receiving system will use the higher of the average salary derived
solely from the service originally established in each system respectively. In
comparing average salaries and determining benefits payable, the receiving
system shall accept the transferring system's determination of its average
salary, applying all laws and policies of the transferring system in the
calculation of that system's average salary.
(2) Each system will be responsible for
determining its respective average salary. The transferring system will certify
its average salary to the receiving system.
(3) If there is less service than is required
in the applicable formula to compute the average salary in TRS under the laws
and rules applicable to that system, the average salary will be computed using
salaries for the service for which credit was established. This average salary
shall be used in the comparison of average salaries to determine which system's
average salary is higher.
(l) Transfer of Certain State Employees to
ERS.
(1) Certain state employees have been
transferred to ERS membership as a result of legislation enacted by the 73rd
Texas Legislature, Regular Session. Among these are employees of the Texas
Education Agency, employees of the Texas Surplus Property Agency transferred to
the General Services Commission, some employees of the Texas Rehabilitation
Commission, the Texas School for the Deaf, the Texas School for the Blind, the
Higher Education Coordinating Board, and the Texas Youth Commission. Such
employees are eligible to transfer TRS credit to ERS for benefit purposes under
the Government Code, Chapter 805 subject to the modifications contained in this
section.
(2) Employees whose
agencies have been transferred to ERS coverage, including the Texas Education
Agency and the Texas Rehabilitation Commission, the Texas School for the Deaf,
the Texas School for the Blind, the Higher Education Coordinating Board, and
the Texas Youth Commission, may not retire under TRS after the effective date
of the transfer, unless they again become TRS members based on other employment
and subsequently obtain TRS service credit qualifying them for TRS retirement,
except as provided for in Government Code, §
805.002(a).
(3) Employees described in paragraph (1) of
this subsection are not eligible for TRS death benefits other than a return of
accumulated contributions.
(4)
Notwithstanding subsection (k) of this section, the average compensation of
employees described in paragraph (1) of this subsection qualifying for ERS
benefits may be determined by combining monthly rates of pay while a TRS member
with ERS credited monthly salary to obtain the highest 36 months of
pay.
(m) Death benefits.
Service credit of a person may not be transferred between systems if:
(1) one of the systems has paid or begun to
pay death benefits based on the person's account; or
(2) the beneficiaries for death benefits in
each system are not identical. However, when only reinstated service is being
transferred and no beneficiary designation was made at or after the time of
reinstatement, a transfer will be allowed.
(n) Service credit.
(1) TRS will make and accept transfers of
service credit in whole plan year increments based upon TRS rules for crediting
service. No partial years will be transferred.
(2) TRS and ERS service in a plan year will
not be combined to obtain a year of TRS service credit.
(3) A person who transfers credit to TRS or
ERS may not receive more than a total of five years of service credit for
military service. The retirement system from which credit is transferred may
refund contributions made for military service, other than any amount that
represents a fee, that exceeds the maximum amount creditable. A person who
retires under Government Code, Chapter 805, who returns to work under TRS or
ERS may not purchase additional military service credit if the purchase would
cause the total of all military service credit to exceed five years.
(4) A person who purchased out of state
service credit before retirement under Government Code, Chapter 805, may not
purchase additional out of state service credit upon return to work under TRS
if the purchase would cause the total of all out of state service credit to
exceed fifteen years.
(o)
ORP participants. A person who has elected to participate in ORP but who is an
ERS member may repurchase TRS service credit canceled by the election of ORP
for purpose of transferring it to ERS under the Government Code, Chapter 805,
provided TRS will not transfer or pay benefits for such service credit if the
member actively participates in ORP between the date the TRS service credit is
purchased and the date of the member's retirement or death. TRS will refund
without interest any amounts deposited for such credit in the event the person
returns to active ORP participation. The person must agree to refund the amount
of any benefits erroneously paid to the person as a result of any such return
to ORP.
(p) Return to TRS covered
employment.
(1) A person who transferred
service to ERS and retired under Government Code, Chapter 805, and who returns
to employment in a position eligible for TRS membership continues to be
governed by the provisions of state law as described under §
51.12(a) of this
title (relating to Applicability of Certain Laws in Effect Before September 1,
2005) upon resumption of TRS membership, if, while a member of TRS, the person
met at least one of the requirements of §
51.12(a) of this
title by August 31, 2005.
(2)
Regardless of status under paragraph (1) of this subsection, a person who
transferred service to ERS and retired under Government Code, Chapter 805, and
who returns to employment in a position eligible for TRS membership after
August 31, 2007, is subject to the provisions of Government Code §
824.202(a-1) and
(d-1) and §
29.1(a) of this
title (relating to Eligibility for Service Retirement) for eligibility for
retirement under TRS.
(3) A person
who has at least five years of TRS service credit on August 31, 2014 and
transfers that service credit to ERS, retires from ERS under Government Code,
Chapter 805, and returns after September 1, 2014 to employment in a position
eligible for TRS membership is subject to the provisions of Government Code
§
824.202(a-2),
(b-2), and (d-2) and §
29.1(e) of this
title (relating to Eligibility for Service Retirement).
