PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS
CHAPTER 25. MEMBERSHIP CREDIT
The Teacher Retirement System of Texas (TRS) adopts amendments to §25.162 relating to State Personal or Sick Leave Credit of Chapter 25, Subchapter L, in Title 34, Part 3, of the Texas Administrative Code and §25.302 relating to Calculation of Actuarial Costs of Service Credit, and §25.303 relating to Calculation of Actuarial Cost for Purchase of Compensation Credit of Chapter 25, Subchapter P, in Title 34, Part 3, of the Texas Administrative Code without changes to the proposed text as published in the June 9, 2023, issue of the Texas Register (48 TexReg 2927). The rules will not be republished.
REASONED JUSTIFICATION
The adopted amendments update one or more actuarial table used to calculate the cost of a service credit or compensation credit purchase. The adopted amendments incorporate new actuarial tables into each rule that have been updated based on the most recently-approved actuarial assumptions and new investment return assumption adopted by the TRS Board of Trustees (Board). The new actuarial tables were prepared by the TRS actuary of record, Gabriel, Roeder, Smith & Company.
Adopted amended §25.162 updates the actuarial table for the purchase of one year of service credit based on accumulated state personal or sick leave. Adopted amended §25.302 updates several actuarial tables relating to the purchase of service credit that must be purchased based on the actuarial present value of the credit, such as service credit for unreported service or out-of-state service. Lastly, adopted amended §25.303 updates several actuarial tables relating to the purchase of compensation credit that statute must be purchased based on the actuarial present value of the compensation. Minor, conforming changes to text have also been made to adopted amended §25.302 and §25.303 to incorporate these tables.
The adopted amended rules and updated tables shall become effective on September 1, 2023 and will be used to calculate the cost of any relevant service or compensation credit purchases initiated beginning in the 2023-2024 school year and going forward.
COMMENTS
No comments on the proposed adoption of the amendments were received.
SUBCHAPTER L. OTHER SPECIAL SERVICE CREDIT
STATUTORY AUTHORITY
The amendments are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board and Government Code §823.403, which provides that an eligible member is entitled to receive service credit based on the member's accumulated sick and personal leave if the member pays to TRS at the time service credit is granted the actuarial present value of the additional standard retirement annuity benefits under the option selected by the member that would be attributable to the conversion of the unused state personal or sick leave into the service credit based on rates and tables recommended by the TRS actuary of record and adopted by the Board.
CROSS-REFERENCE TO STATUTE
The adopted amendments implement Chapter 823, Subchapter E, Texas Government Code, concerning establishment of equivalent membership service.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 2023.
TRD-202302755
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: September 1, 2023
Proposal publication date: June 9, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The amendments are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board; Government Code §823.401, which provides that eligible members may establish equivalent member service credit based on certain types of out-of-state service by depositing with TRS the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service credit based on rates and tables recommended by the TRS actuary of record and adopted by the Board; Government Code §823.402, which provides that eligible members may establish equivalent membership service credit for certain developmental leave by depositing with TRS the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service credit based on rates and tables recommended by the TRS actuary of record and adopted by the Board; Government Code §823.404, which provides that an eligible member may establish equivalent membership service credit for work experience for which the member is entitled to a salary step under Education Code §21.403(b) if the member deposits with TRS, for each year of service, the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the conversion of the work experience into service credit based on rates and tables recommended by the TRS actuary of record and adopted by the Board; Government Code §823.406, which provides that a member may establish membership service credit for service performed during a 90-day waiting period to become a member by depositing with TRS, for each month of service credit, the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service credit under this section, based on rates and tables recommended by the TRS actuary of record and adopted by the Board; and Government Code §825.403, which provides that to establish service or compensation credit for unreported service or compensation, a person must deposit with TRS the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service or compensation credit based on rates and tables recommended by the TRS actuary of record and adopted by the Board.
CROSS-REFERENCE TO STATUTE
The adopted amendments implement Chapter 823, Subchapter E, Texas Government Code, concerning establishment of equivalent membership service and Government Code §825.403, concerning the collection of member's contributions.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 2023.
TRD-202302756
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: September 1, 2023
Proposal publication date: June 9, 2023
For further information, please call: (512) 542-6506
The Teacher Retirement System of Texas (TRS) adopts amendments to §29.11 relating to Actuarial Tables and §29.21 relating to Beneficiary Tables of Chapter 29, Subchapter A, in Title 34, Part 3, of the Texas Administrative Code and §29.71 relating to Tables of Chapter 29, Subchapter F, in Title 34, Part 3, of the Texas Administrative Code without changes to the text as proposed in the June 9, 2023, issue of the Texas Register (48 TexReg 2931). The rules will not be republished.
REASONED JUSTIFICATION
Each rule TRS adopts to amend currently incorporates one or more actuarial table used to calculate the retirement benefits of TRS retirees based on various retirement selections, such as electing for early-age retirement or a partial lump-sum option payment. The adopted amendments incorporate new actuarial tables into each rule that have been updated based on the TRS Board of Trustees (Board) most recently approved actuarial assumptions and new investment return assumption. The new actuarial tables were prepared by the TRS actuary of record, Gabriel, Roeder, Smith & Company.
Adopted amended §29.11 updates several actuarial tables relating to early-age retirement reduction factors, reduction factors for service and disability retirement options, and reserve transfer factors. Adopted amended §29.21 updates the tables for unisex joint beneficiary life expectancy that are used when calculating life expectancy for the purposes of option beneficiary changes made under §824.1013, Government Code. Lastly, adopted amended §29.71 updates the actuarial table relating to the reduction factors to be applied to the annuity payments of retirees that elect to receive a partial lump-sum payment at the time of retirement. Minor, conforming changes to text have also been made to adopted amended §29.11 to incorporate these tables.
The adopted amended rules and updated tables shall become effective on September 1, 2023, and will generally be used to calculate the benefits for all service or disability retirements or option beneficiary changes that will be effective in the 2023-2024 school year and going forward.
COMMENTS
No comments on the proposed adoption of the amendments were received.
SUBCHAPTER A. RETIREMENT
STATUTORY AUTHORITY
The adopted amendments are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board; Government Code §824.1013, which limits the monthly payments a new option beneficiary may receive after a beneficiary change under that section to the life expectancy of the beneficiary designated at retirement; Government Code §824.202, which provides the early-age retirement reduction factors and authorizes the Board to adopt tables that interpolate the application of each reduction factor by each month of age of retiree between two years of age; Government Code §824.204, which requires that an optional annuity payment be actuarially reduced from the standard annuity payment to its actuarially equivalent based on the service retirement option selected; Government Code §824.308, which requires that an optional annuity payment be actuarially reduced from the standard annuity payment to its actuarially equivalent based on the disability retirement option selected; and Government Code §825.309, which describes that if TRS transfers funds to a retired reserve account the amount transferred from the state contribution account must be an amount determined under actuarial tables adopted by the Board sufficient for the payments of benefits as they become due.
CROSS-REFERENCE TO STATUTE
The adopted amendments implement Chapter 824, Subchapter B (concerning Beneficiaries), Subchapter C (concerning Service Retirement Benefits), and Subchapter D (concerning Disability Retirement Benefits), Texas Government Code and Chapter 825, Subchapter D (concerning Management of Assets), Texas Government Code.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 2023.
TRD-202302757
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: September 1, 2023
Proposal publication date: June 9, 2023
For further information, please call: (512) 542-6506
STATUTORY AUTHORITY
The adopted amendment are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board, and Government Code §824.2045, which requires the service retirement annuity selected by a retiree to be actuarially reduced to reflect the lump-sum option selected by the member and shall be actuarially equivalent to a standard or optional service retirement annuity, as applicable, reduced for early age without the partial lump-sum distribution.
CROSS-REFERENCE TO STATUTE
The adopted amendments implement Chapter 825, Subchapter C (concerning Service Retirement Benefits), Texas Government Code.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 2023.
TRD-202302758
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: September 1, 2023
Proposal publication date: June 9, 2023
For further information, please call: (512) 542-6506
The Teacher Retirement System of Texas (TRS) adopts amendment to rule §47.17 relating to Calculation for Alternate Payee Benefits Before a Member's Benefit Begins, of Chapter 47, in Title 34, Part 3, of the Texas Administrative Code without changes to the proposed text as published in the June 9, 2023, issue of the Texas Register (48 TexReg 2933). The rule will not be republished.
REASONED JUSTIFICATION
The adopted amendment to §47.17 incorporates a new actuarial table to calculate distributions made to an alternate payee under Government Code §804.005. The new actuarial table incorporated into the rule that has been updated based on the TRS Board of Trustees most recently approved actuarial assumptions and new investment return assumption. The new actuarial table was prepared by the TRS actuary of record, Gabriel, Roeder, Smith & Company.
The adopted amended rule and updated table are adopted to become effective on September 1, 2023 and will generally be used to calculate distributions to an alternate payee under Government Code §804.005 that are initiated in the 2023-2024 school year and going forward.
COMMENTS
No comments on the proposed adoption of the amendment were received.
STATUTORY AUTHORITY
The amended rule §47.17 is adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board and Government Code §804.005, which requires that a distribution made pursuant to that section be the actuarial equivalent of the accrued retirement benefit of the member of the retirement system, determined as if the member retired on the date of the alternate payee's election.
CROSS-REFERENCE TO STATUTE
The adopted amendment to rule §47.17 implements Chapter 804, Subchapter A, Texas Government Code, concerning Qualified Domestic Relations Orders.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 2023.
TRD-202302759
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: September 1, 2023
Proposal publication date: June 9, 2023
For further information, please call: (512) 542-6506