TITLE 34. PUBLIC FINANCE

PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS

CHAPTER 25. MEMBERSHIP CREDIT

SUBCHAPTER B. COMPENSATION

34 TAC §25.21

The Teacher Retirement System of Texas (TRS) adopts amendments to §25.21, relating to Compensation Subject to Deposit and Credit, under Subchapter B (relating to Compensation) of Chapter 25 in Part 3 of Title 34 of the Texas Administrative Code without changes to the proposed text as originally published in the January 7, 2022, issue of the Texas Register (47 TexReg 15). The rule will not be republished.

REASONED JUSTIFICATION

TRS amends §25.21 to conform with legislation passed during the regular session of the 87th Legislature. Specifically, House Bill 1525 amended Government Code §822.201 to provide that any increased compensation paid to a teacher by a school district using funds received by the district under the teacher incentive allotment (TIA) is creditable compensation for TRS purposes.

The TIA is an optional compensation program established by House Bill 3 during 2019 legislative session that entitles school districts to additional state funds for employee compensation based on the high performance of certain teachers within the district. In some cases, employees that receive additional compensation under the TIA can greatly increase their current salaries as one purpose of the program is to provide a viable pathway for highly-qualified classroom teachers to earn six-figure salaries. This means that the additional compensation that an employee receives under the TIA could have a substantial impact on that employee's TRS pension if that compensation is creditable compensation under TRS laws and rules.

Prior to House Bill 1525, TRS had to review the compensation plan for each district participating in the TIA to determine if the compensation the district paid its employees under the program qualified as creditable compensation. House Bill 1525 now provides, however, that any increased compensation paid under the TIA qualifies as creditable compensation for TRS purposes, and TRS amends §25.21 to conform with this change. In addition, TRS makes other conforming changes to §25.21.

COMMENTS

No comments on the proposed adoption of the amendments were received.

STATUTORY AUTHORITY

Amended §25.21 is adopted under the authority of Government Code § 822.201, which provides that increased compensation paid to a teacher by a school district using funds received by the district under the teacher incentive allotment under Section 48.112, Education Code qualifies as "salary and wage" for TRS purposes and is, therefore, subject to deposit and credit by TRS, and Government Code §825.102, which authorizes the board of trustees to adopt rules for administration of the funds of the retirement system and eligibility for membership.

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 May 5, 2022.

TRD-202201757

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: May 25, 2022

Proposal publication date: January 7, 2022

For further information, please call: (512) 542-6506