34 Tex. Admin. Code § 25.201 - Acceptance of Rollovers and Transfers for Purchase of TRS Credit

(a) In addition to funds required to be accepted under Government Code § 823.005, the Teacher Retirement System of Texas (TRS) may accept the funds described in subsections (b) and (c) of this section, subject to the restrictions of this section.

(b) If permitted under and subject to the provisions of federal law, TRS may accept an eligible rollover distribution from another eligible retirement plan in payment of all or a portion of any deposit a member is permitted under applicable law to make with the system for TRS credit.

(1) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the member from an eligible retirement plan. An eligible rollover distribution does not include the following:

(A) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the member or the joint lives (or joint life expectancies) of the member and the member's designated beneficiary, or for a specified period of ten (10) years or more;

(B) any distribution to the extent such distribution is required under Internal Revenue Code § 401(a)(9);

(C) any distribution which is made upon hardship of the member; or

(D) the portion of any distribution that is not includible in gross income, except to the extent permitted under federal tax law.

(2) An "eligible retirement plan" is any program defined in Internal Revenue Code §§ 401(a)(31) and 402(c)(8)(B), from which the member has a right to an eligible rollover distribution, as follows:

(A) an individual retirement account under Internal Revenue Code § 408(a);

(B) an individual retirement annuity under Internal Revenue Code § 408(b) (other than an endowment contract);

(C) a qualified trust;

(D) an annuity plan under Internal Revenue Code § 403(a);

(E) an eligible deferred compensation plan under Internal Revenue Code § 457(b) which is maintained by an eligible employer under Internal Revenue Code § 457(e)(1)(A); and

(F) an annuity contract under Internal Revenue Code § 403(b).

(c) If permitted under and subject to the provisions of federal law, TRS may accept a direct trustee-to-trustee transfer of funds from a plan described under § 403(b) or 457(b) of the Internal Revenue Code in payment of all or a portion of any deposit a member is permitted to make with TRS for permissive service credit (as defined in Internal Revenue Code § 415(n)(3)(A)) in TRS.

(d) In order to authorize the rollover or transfer of funds described in this section, a member shall provide or cause to be provided to TRS information sufficient for TRS to reasonably conclude that the contribution is a valid rollover or direct trustee-to-trustee transfer as permitted under federal tax law. If TRS later determines that a contribution was an invalid rollover or direct trustee-to-trustee transfer or otherwise not permitted under federal tax law, TRS may take any action appropriate or required by the Internal Revenue Code or regulations issued thereunder, including return of the invalid contribution to the member within a reasonable time after the determination and cancellation of any credit purchased with the returned amounts.

(e) TRS shall construe and administer this section in a manner such that the TRS plan will be considered a qualified plan under § 401(a) of the Internal Revenue Code of 1986, (United States Code, Title 26, §401).

Notes

34 Tex. Admin. Code § 25.201

The provisions of this §25.201 adopted to be effective January 3, 2002, 26 TexReg 11034; amended to be effective March 12, 2003, 28 TexReg 2101; amended to be effective March 8, 2007, 32 TexReg 1079