Texas Administrative Code
Title 34 - PUBLIC FINANCE
Part 6 - TEXAS MUNICIPAL RETIREMENT SYSTEM
Chapter 127 - MISCELLANEOUS RULES
Section 127.3 - Conformity with Internal Revenue Code: Preservation of Benefits

(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.