CHAPTER 823. CREDITABLE SERVICE - Texas Statutes

GOVERNMENT CODE

TITLE 8. PUBLIC RETIREMENT SYSTEMS

SUBTITLE C. TEACHER RETIREMENT SYSTEM OF TEXAS

CHAPTER 823. CREDITABLE SERVICE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 823.001. TYPES OF CREDITABLE SERVICE. The types of service

creditable in the retirement system are:

(1) prior service;

(2) membership service;

(3) military service; and

(4) equivalent membership service.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.001 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 823.002. SERVICE CREDITABLE IN A YEAR. (a) The board of

trustees by rule shall determine how much service in any year is

equivalent to one year of service credit, but in no case may all

of a person's service in one school year be creditable as more

than one year of service. Service that has been credited by the

retirement system on annual statements for a period of five or

more years may not be deleted or corrected because of an error in

crediting unless the error concerns three or more years of

service credit or was caused by fraud.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.002 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1995, 74th Leg., ch. 555, Sec. 6, eff.

Sept. 1, 1995; Acts 2003, 78th Leg., ch. 201, Sec. 44, eff. Sept.

1, 2003.

Sec. 823.003. BENEFITS BASED ON SERVICE CREDIT. Except as

otherwise provided under the optional retirement program, years

of service on which the amount of a benefit is based consist of

the number of years of service credit to which a member is

entitled.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.003 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 823.004. COMPUTATION OF AND PAYMENT FOR CREDIT. (a) All

credit for military service, out-of-state service, developmental

leave, work experience in a career or technological field, and

service transferred to the retirement system under Chapter 805

shall be computed on a September 1 through August 31 school year.

Payments for service described by this section must be completed

not later than the later of the member's retirement date or the

last day of the month in which the member submits a retirement

application.

(b) The retirement system by rule may establish an irrevocable

employer pick-up of member contributions as described by Section

414(h)(2) of the Internal Revenue Code of 1986 (26 U.S.C. Section

414(h)(2)) for the purchase of any service credit authorized by

law.

Added by Acts 1995, 74th Leg., ch. 555, Sec. 7, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 1416, Sec. 3, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1122, Sec. 2, eff. Sept.

1, 1999; Acts 2001, 77th Leg., ch. 1229, Sec. 5, eff. Sept. 1,

2001.

Sec. 823.005. ACCEPTANCE OF ROLLOVERS AND TRANSFERS FROM OTHER

PLANS. Subject to rules adopted by the board of trustees, the

retirement system shall accept an eligible rollover distribution

or a direct transfer of funds from another qualified plan in

payment of all or a portion of any deposit a member is permitted

to make with the system for credit for service. The rules adopted

by the board shall condition the acceptance of a rollover or

transfer from another plan on the receipt from the other plan of

information necessary to enable the retirement system to

determine the eligibility of any transferred funds for tax-free

rollover treatment or other treatment under federal income tax

law.

Added by Acts 1995, 74th Leg., ch. 555, Sec. 7, eff. Sept. 1,

1995.

Sec. 823.006. LIMITS ON ANNUAL CONTRIBUTIONS FOR PURCHASE OF

SERVICE CREDIT. Notwithstanding any other provision of this

subtitle, the retirement system may limit the purchase of service

credit to the extent required by applicable limits on the amount

of annual contributions a participant may make to a qualified

plan under Sections 401(a) and 415(c), Internal Revenue Code of

1986.

Added by Acts 1999, 76th Leg., ch. 1540, Sec. 2, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

1359, Sec. 9, eff. September 1, 2005.

SUBCHAPTER C. ESTABLISHMENT OF MEMBERSHIP SERVICE

Sec. 823.201. CURRENT MEMBERSHIP SERVICE. (a) Membership

service is credited in the retirement system for each year in

which a member is an employee and for which the member renders

sufficient service for credit under Section 823.002 and makes and

maintains with the retirement system the deposits required by

this subtitle or prior law.

(b) The board of trustees may adopt rules for the granting of

membership service credit.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 202, ch. 18,

Sec. 21, eff. Nov. 10, 1981. Renumbered from Vernon's Ann.Civ.St.

Title 110B, Sec. 33.201 and amended by Acts 1989, 71st Leg., ch.

179, Sec. 1, eff. Sept. 1, 1989.

Sec. 823.203. MEMBERSHIP SERVICE FOR OPTIONAL RETIREMENT

PROGRAM. A member may not establish service credit in the

retirement system for any period when the member was

participating in the optional retirement program under Chapter

830.

Added by Acts 1999, 76th Leg., ch. 1540, Sec. 3, eff. Sept. 1,

1999.

SUBCHAPTER D. ESTABLISHMENT OF MILITARY SERVICE

Sec. 823.301. CREDITABLE MILITARY SERVICE. (a) Except as

provided by Section 823.101(2), military service creditable in

the retirement system is active federal duty in the armed forces

of the United States, other than as a student at a service

academy, that was performed:

(1) as a direct result of being inducted or of first enlisting

for duty on a date when the federal government was actively

inducting persons into the armed forces under federal draft laws;

(2) as a reservist or member of the national guard who was

ordered to duty under the authority of federal law;

(3) during a time when the federal government was actively

inducting persons into the armed forces under federal draft laws;

or

(4) as a result of voluntarily entering on active duty.

(b) A member may not establish more than five years of service

credit in the retirement system under this subchapter for

military service. Service may be established in one-year

increments except as otherwise provided by this subchapter.

(c) The board of trustees may adopt rules expanding the military

service creditable in the retirement system in order to comply

with the requirements of federal law.

(d) Military service that is terminated by sentence of a

court-martial is not creditable under this section.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1987, 70th Leg., ch. 61, Sec. 3, eff. Aug.

31, 1987. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.301 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 13,

Sec. 1, eff. Nov. 12, 1991; Acts 1997, 75th Leg., ch. 1416, Sec.

5, eff. Sept. 1, 1997.

Sec. 823.302. MILITARY SERVICE CREDIT. (a) An eligible member

may establish service credit in the retirement system for

military service performed that is creditable as provided by

Section 823.301.

(b) A member eligible to establish military service credit is

one who has at least five years of service credit in the

retirement system for actual service in public schools, except

that a member meeting this condition does not qualify for

insurance coverage under Chapter 1575, Insurance Code, until the

member has 10 or more years of membership service credit.

(c) A member may establish credit under this section by

depositing with the retirement system for each year of military

service claimed a contribution in an amount equal to:

(1) the member's contributions to the retirement system during

the most recent full year of membership service that preceded the

military service, if the military service was performed while the

person was a member of the retirement system; or

(2) the member's contributions to the retirement system during

the first full year of membership service, if the military

service was performed before the person became a member of the

retirement system.

(d) In addition to the contribution required by Subsection (c),

a member claiming credit for military service must pay a fee of

eight percent, compounded annually, of the required contribution

from the date of first eligibility to the date of deposit.

(e) After a member makes the deposits required by this section,

the retirement system shall grant the member one year of military

service credit for each year of military service approved.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 203, ch. 18,

Sec. 22, eff. Sept. 1, 1982. Renumbered from Vernon's Ann.Civ.St.

Title 110B, Sec. 33.302 and amended by Acts 1989, 71st Leg., ch.

179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg.,

1st C.S., ch. 13, Sec. 2, eff. Nov. 12, 1991; Acts 1995, 74th

Leg., ch. 555, Sec. 8, eff. Sept. 1, 1995; Acts 2003, 78th Leg.,

ch. 1276, Sec. 10A.521, eff. Sept. 1, 2003.

Sec. 823.303. MILITARY LEAVE CREDIT. A member who performs

military service creditable in the retirement system but who does

not establish credit for the service by making the deposits

required by Section 823.302 is entitled to credit of a year for

each year of military service performed, if the member requests

the credit in writing before the later of the date of application

for retirement or the effective date of retirement. The credit is

usable only in determining eligibility for, but not the amount

of, benefits under Section 824.406.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.303 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 1416, Sec. 7,

eff. Sept. 1, 1997.

Sec. 823.304. REEMPLOYED VETERAN'S CREDIT. (a) A person

eligible to establish reemployed veteran's credit is one who

qualifies under the Veteran's Reemployment Rights Act, 38 U.S.C.

Section 2021 et seq., for the benefits of reemployment in a

position included within the membership of the retirement system

and who is entitled under that Act to additional credit and

benefits from the retirement system because of the person's

active duty in the armed forces of the United States.

(b) A person who receives credit under this section may not

receive military service credit under Sections 823.301 and

823.302 for the same service.

(c) A person may establish credit under this section by

depositing with the retirement system for each year of service

claimed an amount equal to:

(1) the member contributions to the retirement system, as

determined by the retirement system, that the person would have

made had the person continued to be employed in the person's

former position covered by the retirement system during the

entire period of active duty in the armed forces for which the

person is to receive retirement credit; and

(2) a fee of five percent, compounded annually, of the required

contribution from the date of the person's first eligibility to

establish the credit to the date of deposit.

(d) To the extent required by the Veteran's Reemployment Rights

Act and permitted by Sections 401(a) and 415 of the Internal

Revenue Code of 1986 (26 U.S.C. Sections 401 and 415), the

retirement system may:

(1) grant the person service credit for the period of active

duty in the armed forces as if the person had been employed in a

position eligible for membership and credit with the retirement

system; and

(2) include in relevant benefit computations under this subtitle

the annual compensation, as determined by the retirement system,

that would have been otherwise received by the person for service

covered by the retirement system during any year in which the

person had active duty in the armed forces.

(e) The state shall deposit with the retirement system an amount

equal to the state contributions, as determined by the retirement

system, that the state would have made had the person continued

to be employed in the person's former position covered by the

retirement system during the entire period of active duty in the

armed forces for which the person has received service credit

under this section. The state shall deposit the required amount

with the retirement system not later than the 30th day after the

date the state receives notice from the retirement system of the

amount of state contributions required for service credit

established by a person under this section.

(f) The board of trustees may adopt rules that modify the terms

of this section for the purpose of compliance with the Uniformed

Services Employment and Reemployment Rights Act of 1994 (38

U.S.C. Section 4301 et seq.).

Added by Acts 1991, 72nd Leg., 1st C.S., ch. 13, Sec. 3, eff.

Nov. 12, 1991. Amended by Acts 1995, 74th Leg., ch. 555, Sec. 9,

eff. Sept. 1, 1995.

SUBCHAPTER E. ESTABLISHMENT OF EQUIVALENT MEMBERSHIP SERVICE

Sec. 823.401. OUT-OF-STATE SERVICE. (a) Except as provided by

Subsection (b), an eligible member may establish equivalent

membership service credit for employment with a public school

system maintained wholly or partly by another state or territory

of the United States or by the United States for children of its

citizens. A school receiving funds under 22 U.S.C. Section 2701

is considered a public school for the purposes of this section.

(b) A member may not establish credit under this section for

service performed for a public school while a member of the armed

forces, for which service the member was compensated by the

United States.

(c) A member eligible to establish credit under this section is

one who has at least five years of service credit in the

retirement system for actual service in public schools.

(d) A member may establish credit under this section by

depositing with the retirement system for each year 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 retirement

system's actuary and adopted by the board of trustees.

(e) A deposit for at least one year of credit must be made with

an initial application for credit, and all payments for service

claimed under this section must be made before retirement.

(f) The amount of service credit a member may establish under

this section may not exceed the lesser of the number of years of

membership service credit the member has in the retirement system

for actual service in public schools or 15 years.

(g) After a member makes the deposits required by this section,

the retirement system shall grant the member one year of

equivalent membership service credit for each year of service

approved. The retirement system may not use service credit

granted under this section in computing a member's annual average

compensation.

(h) Repealed by Acts 2003, 78th Leg., ch. 201, Sec. 61(2) and

Acts 2003, 78th Leg., ch. 1231, Sec. 9(2).

(i) In determining the amount of a contribution under Subsection

(d) required of a member who did not work full time or worked

fewer days or months than full-time employees in similar

positions, the retirement system shall compute an annual rate of

compensation from the member's reported compensation.

(j) The board of trustees may adopt rules providing for the

adoption of a reciprocal agreement with a state or territory of a

member's previous employment for the payment for service credit

established under this section through the transfer from the

state or territory to the retirement system of contributions made

on behalf of the member in the form of an eligible rollover

distribution as provided by Section 401(a)(31), Internal Revenue

Code of 1986, and its subsequent amendments.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 203, ch. 18,

Sec. 23, eff. Sept. 1, 1982. Renumbered from Vernon's Ann.Civ.St.

Title 110B, Sec. 33.401 and amended by Acts 1989, 71st Leg., ch.

179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg.,

ch. 812, Sec. 2, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch.

84, Sec. 1, eff. May 15, 1995; Acts 1995, 74th Leg., ch. 555,

Sec. 10, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1416, Sec.

8, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1540, Sec. 4,

eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 454, Sec. 1, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 201, Sec. 61(2), eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1231, Sec. 9(2), eff.

Sept. 1, 2004.

Amended by:

Acts 2005, 79th Leg., Ch.

1359, Sec. 10, eff. September 1, 2005.

Sec. 823.402. DEVELOPMENTAL LEAVE. (a) An eligible member may

establish equivalent membership service credit for developmental

leave that is creditable in the retirement system.

(b) Developmental leave creditable in the retirement system is

absence from membership service for a school year that is

approved by the member's employer for study, research, travel, or

another purpose designed, as determined by the employer, to

improve the member's professional competence.

(c) A member eligible to establish credit under this section is

one who:

(1) has at least five years of service credit in the retirement

system; and

(2) is an employee of a public school at the time the credit is

sought.

(d) On or before the date a member takes developmental leave,

the member shall file with the retirement system a notice of

intent to take developmental leave, and the member's employer

shall file with the retirement system a certification that the

leave meets the requirements of Subsection (b).

(e) A member may establish credit under this section by

depositing with the retirement system for each year of

developmental leave claimed an amount equal to the sum of:

(1) the rate of member contributions required during the year of

leave, times the member's annual rate of compensation during the

member's most recent year of creditable service that preceded the

year of leave; plus

(2) the amount that the state would have contributed had the

member performed membership service during the year of leave at

the member's annual rate of compensation during the most recent

year of service that preceded the leave.

(f) A member may not establish more than two years of equivalent

membership service credit under this section.

(g) A member may not establish credit under this section after

the end of the first creditable school year that begins after the

developmental leave has ended. The retirement system may not use

credit established under this section in computing service

retirement benefits until the member has at least 10 years of

service credit for actual service in public schools.

(h) If credit established under this section is not used in

determining benefits, all deposits made under this section are

refundable to the member or, if applicable, the member's

beneficiary.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

33.402 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 812, Sec. 3,

eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1416, Sec. 9, eff.

Sept. 1, 1997.

Sec. 823.403. CREDIT FOR ACCUMULATED PERSONAL OR SICK LEAVE.

(a) A member who retires from an employer as defined by Section

821.001(7) based on service or a disability is entitled to

membership service credit in the retirement system for the

member's state personal or sick leave that has accumulated and is

unused on the last day of employment pursuant to the terms of

this section. State personal or sick leave is creditable in the

retirement system in the amount of one year of service credit for

50 days or more, or 400 hours or more, of accumulated state

personal or sick leave. An accumulation of less than 50 days is

not creditable. Not more than five days of unused state personal

or sick leave may be accumulated per year. Credit established

under this section may be used only for the purpose of

calculating benefits under Section 824.203.

(b) The employer shall, under rules adopted by the retirement

system, certify the amount of a member's accumulated state

personal or sick leave on the last day of employment before

retirement.

(c) On receipt of a certification under Subsection (b) and

payment under Subsection (d) of this section, the retirement

system shall grant any credit to which a retiree who is a subject

of the certification is entitled. The increase in the annuity

payment begins with the first payment that becomes due after

certification and payment.

(d) In order to receive credit, the member shall pay to the

retirement system at the time service credit is granted under

this section 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 actuary and adopted by the

board of trustees.

(e) In accordance with local policy, the employer from which the

retiring member was compensated on the member's last day of

employment may reimburse an employee for all or part of the cost

of purchasing service credit under this section.

Added by Acts 1991, 72nd Leg., ch. 882, Sec. 1, eff. Sept. 1,

1992. Amended by Acts 1995, 74th Leg., ch. 260, Sec. 36, eff. May

30, 1995.

Sec. 823.404. WORK EXPERIENCE BY CAREER OR TECHNOLOGY TEACHER.

(a) An eligible member may establish equivalent membership

service credit for one or two years of work experience for which

the member is entitled to salary step credit under Section

21.403(b), Education Code.

(b) A member is eligible to establish equivalent membership

service credit under this section if the member has at least five

years of membership service credit.

(c) A member may establish credit under this section by

depositing with the retirement system, 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

actuary and adopted by the board of trustees.

(d) After a member makes the deposits required by this section,

the retirement system shall grant the member one year of

equivalent membership service credit for each year of service

approved.

Added by Acts 1999, 76th Leg., ch. 1122, Sec. 1, eff. Sept. 1,

1999.

Sec. 823.406. CREDIT PURCHASE OPTION FOR CERTAIN SERVICE. (a)

A member may establish membership service credit under this

section only for service performed during a 90-day waiting period

to become a member after beginning employment.

(b) A member may establish service credit under this section by

depositing with the retirement system, 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 retirement

system's actuary and adopted by the board of trustees.

(c) After a member makes the deposits required by this section,

the retirement system shall grant the member one month of

equivalent membership service credit for each month of credit

approved.

(d) The retirement system shall deposit the amount of the

actuarial present value of the service credit purchased in the

member's individual account in the employees saving account.

(e) The board of trustees may adopt rules to administer this

section.

Added by Acts 2003, 78th Leg., ch. 201, Sec. 45, eff. Sept. 1,

2003.

SUBCHAPTER F. REINSTATEMENT OF SERVICE CREDIT

Sec. 823.501. CREDIT CANCELED BY MEMBERSHIP TERMINATION. (a)

An eligible person who has terminated membership in the

retirement system by withdrawal of contributions or absence from

service may reinstate in the system the service credit canceled

by the termination.

(b) A person eligible to reinstate service credit under this

section is one who is a member of the retirement system at the

time the service is reinstated.

(c) A member may reinstate canceled credit under this section by

depositing with the retirement system:

(1) the amount withdrawn or refunded; plus

(2) a reinstatement fee of six percent, compounded annually, of

the amount withdrawn or refunded from the date of withdrawal or

refund to the date of redeposit.

(d) The retirement system shall determine in each case the

amount of money to be deposited by a member reinstating service

credit under this section. The system may not provide benefits

based on the service until the determined amount has been fully

paid.

(e) Service credit canceled by a withdrawal of contributions not

authorized by Section 822.005 is required to be reinstated under

this section.

(f) A member may have an account that was terminated by absence

from service reactivated by requesting the reactivation in

writing. The beneficiary of a decedent who was a member at the

time of death may have an account that was terminated by the

decedent's absence from service reactivated by requesting the

reactivation in writing before the first payment of a death

benefit.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 203, ch. 18,

Sec. 24, eff. Sept. 1, 1982. Renumbered from Vernon's Ann.Civ.St.

Title 110B, Sec. 33.501 and amended by Acts 1989, 71st Leg., ch.

179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg.,

ch. 812, Sec. 4, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch.

1416, Sec. 10, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch.

1540, Sec. 5, eff. Sept. 1, 1999.