Texas Administrative Code
Title 34 - PUBLIC FINANCE
Part 5 - TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM
Chapter 103 - CALCULATIONS OR TYPES OF BENEFITS
Section 103.9 - Partial Lump-Sum Distribution on Service Retirement

Universal Citation: 34 TX Admin Code ยง 103.9

Current through Reg. 49, No. 38; September 20, 2024

(a) The following words and terms, when used in this section shall have the following meanings unless the context clearly indicates otherwise.

(1) Act--Subtitle F, Title 8, Government Code as amended.

(2) Subdivision--A subdivision participating in the retirement system that is subject to the provisions of §844.009 of the Act, authorizing a member to elect to receive a portion of the member's retirement benefit in the form of a single payment.

(3) Basic annuity--An annuity payable from the Current Service Annuity Reserve Fund and actuarially determined from the sum of the member's individual account balance and current service credit, as provided under the Act. A retired member receives a separate basic annuity for credited service with each subdivision.

(4) Eligible rollover distribution--The portion of the partial lump sum distribution that is eligible to be rolled over to a qualified plan in accordance with the Internal Revenue Code.

(5) Individual account--The account maintained by the retirement system in the name of a member reflecting monetary credit and which consists of the contributions deducted from the compensation the member received from the subdivision, the deposits the member made to the account, and interest credited to the account, as provided under the Act. A member has a separate individual account with respect to each subdivision with which the member has credited service.

(6) Member--A member of the retirement system who is eligible to apply for and receive a service retirement annuity based on service credited with a subdivision subject to §844.009 of the Act.

(7) Retirement account--The reserves on which the member's retirement benefit is determined and which consists of the sum of the member's individual account balance, current service credit, prior service credit, and multiple matching credit, as provided in the Act. A retired member has a separate retirement account with respect to each subdivision with which the member has credited service.

(8) Partial Lump Sum Distribution--The portion of the member's retirement benefit elected by the member to be paid to the member or to the alternate payee in the form of a single payment at the time of service retirement of the member. A partial lump sum distribution may not exceed 100 percent of the balances of the member's individual accounts with all subdivisions from which the member will retire.

(b) To be eligible to receive a partial lump sum distribution on service retirement, a member must file:

(1) an application for service retirement in accordance with the provisions of the Act; and

(2) an application for a partial lump sum distribution on or after the date the member files an application for service retirement and before the date the first annuity payment becomes due.

(c) An application for a partial lump sum distribution is a document subject to the certification and spousal consent requirements of § 103.3 of this title (relating to Beneficiary Designations and Payment Elections Requiring Spousal Consent).

(d) A member may revoke an application for a partial lump sum distribution or reduce the amount of the partial lump sum distribution at any time before the date the first annuity payment becomes due by filing written notice of the revocation or reduction with the system. The amount of a partial lump sum distribution may not be increased except by the timely filing of a new application.

(e) The portion of the partial lump sum distribution that is subject to taxation is a non-periodic distribution for income tax withholding purposes. A member or alternate payee receiving a partial lump sum distribution may elect to have the portion of the partial lump sum distribution that is an eligible rollover distribution transferred directly to a qualified plan, in accordance with the Internal Revenue Code.

(f) A member, or an alternate payee, receiving a partial lump sum distribution under this section may make, change, modify or revoke a rollover election, provided all checks issued by the system relating to the partial lump sum distribution paid to the member, or to the alternate payee, are returned and received by the system within 30 days of the date on which the retirement system mailed the check or checks.

(g) The reserves available to provide the member's basic annuity shall be reduced by the amount of the partial lump sum distribution.

(h) The amount of the partial lump sum distribution attributable to a retirement account is considered to be an annuity payment for purposes of determining whether the amount in the member's individual account at retirement exceeds the total amount of annuity payments made from the retirement account.

(i) No portion of the benefit awarded to an alternate payee under a qualified domestic relations order may be distributed in the form of a partial lump sum distribution under this section, except that a member and the alternate payee may agree in writing that instead of all or a portion of the benefits awarded to the alternate payee under the qualified domestic relations order the alternate payee should receive all or a portion of the partial lump sum distribution elected by the member under this section.

(j) The direct payment by the system to an alternate payee of a partial lump sum distribution elected by the member under this section and in accordance with the written agreement between the member and the alternate payee is full payment and in complete satisfaction of the portion of the alternate payee's marital property rights and interest in the member's benefit as set forth in the written agreement. The direct payment to the alternate payee of a partial lump sum distribution under this section is a non-periodic payment made directly to a former spouse for purposes of taxation, withholding requirements and rollover eligibility under the Internal Revenue Code.

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