34 Tex. Admin. Code § 25.302 - Calculation of Actuarial Costs of Service Credit
(a) When a member is
purchasing TRS service credit for which the law requires that the actuarial
cost or actuarial present value be deposited and for which the method in this
section is referenced by another section of this title, TRS will calculate the
cost using the cost factors obtained from the Actuarial Cost Tables adopted and
method described in this section. For purposes of this section, TRS will use
the age of the member and the service credit established by the member on
September 1 of the school year in which the cost of the purchase is
established.
(b) The factors for
individuals whose membership was established before September 1, 2007 and who
have five years of service credit on August 31, 2014, and maintain membership
in TRS until the time of purchase, are shown in the tables adopted as part of
this subsection. Within each set of tables, the number of years of service
credit to be purchased will determine which specific table will be used. Each
of the tables cross-references the member's age in rows with years of credited
service (before purchase) in columns. The intersection of the participant's age
and service is the cost per $1,000 of salary. The cost factor for a participant
with more years of service credit than shown on the table is the same as the
factor shown for the highest number of years of service credit on the table for
the participant. TRS will calculate the cost to purchase service credit under
this section by dividing the participant's salary by 1000 and multiplying the
resulting quotient by the appropriate cost factor obtained from the table. The
tables set forth the cost, per $1,000 of salary, to purchase from one year to
fifteen years of service credit. The number of years of service credit
available for purchase is determined by the laws and rules applicable to the
type of service credit to be purchased. For the purpose of calculating the
required amount for a member who is not grandfathered to use a three-year
salary average under §
51.12 of this title (relating to
Applicability of Certain Laws in Effect Before September 1, 2005), the term
"salary" is defined as follows:
(1) For the
upper region of the table (where the factors appear above the line), salary is
the greater of the annual salary for the last year of credited service or the
average of the member's highest years of compensation calculated on September 1
of the school year in which the cost of the service credit is established. The
fewer of five years of compensation or all of the member's years of
compensation shall be used for the average; or
(2) For the lower region of the table (where
the factors appear below the line), salary is the average of the member's
highest five years of compensation calculated on September 1 of the school year
in which the cost of the service credit is established. A member's highest five
years of compensation shall be calculated as if the member were retiring at the
time the service credit is purchased. The lower region of the table (where the
factors appear below the line) reflects those age and service combinations
where the purchase of service credit results in immediate eligibility of the
member for unreduced retirement benefits.
(c) For the
purpose of calculation of actuarial cost for service credit for a member
described in subsection (b) of this section who is grandfathered to use a
three-year salary average, the term "salary" shall have the same meaning as in
subsection (b) of this section except that a three-year salary average shall be
used instead of a five-year salary average. Additionally, the cost shall be
103.5 percent of the cost as calculated under subsection (b) of this
section.
(d) For individuals whose
membership was established on or after September 1, 2007 and who have five
years of service credit on August 31, 2014, and maintain membership in TRS
until the time of purchase, the methodology described in subsection (b) of this
section shall be used to determine cost of additional service credit, but TRS
shall use the factors in the tables adopted as part of this subsection. If the
member is not grandfathered to use a three-year salary average, the term
"salary" shall have the same meaning as in subsection (b) of this section.
(e) If an individual
established membership on or after September 1, 2007 and has five years of
service credit on August 31, 2014, and maintains membership in TRS until the
time of purchase, but is grandfathered to use a three-year salary average, the
term "salary" shall have the same meaning as in subsection (b) of this section
except that a three-year salary average shall be used instead of a five-year
salary average. The cost of establishing additional service credit for a
grandfathered member described in this subsection, shall be 1.035 times the
cost as calculated under subsection (d) of this section.
(f) An individual who first was a member of
TRS before September 1, 2007, but who terminated membership through withdrawal
of accumulated contributions and then again joined TRS on or after September 1,
2007, and has five years of service credit on August 31, 2014 and maintains
membership in TRS until the time of purchase, is subject to the calculation of
cost for additional service credit under subsections (d) and (e) of this
section.
(g) For members who do not
have five years of service credit on August 31, 2014 or whose current
membership began after August 31, 2014, the methodology described in
subsections (b) and (c) of this section shall be used to determine the cost of
additional service credit, but TRS shall use the factors in the tables adopted
as a part of this subsection.
(h) For the purpose of
calculation of actuarial cost for service credit for a member described in
subsection (g) of this section who is not grandfathered to use a three-year
salary average, the term "salary" shall have the same meaning as in subsection
(b) of this section.
(i) If the
individual did not have five years of service credit on August 31, 2014 or
whose current membership began after August 31, 2014, but is grandfathered to
use a three-year salary average, the term "salary" shall have the same meaning
as in subsection (b) of this section except that a three-year salary average
shall be used instead of a five-year salary average. The cost of establishing
additional service credit for a grandfathered member described in this
subsection shall be 1.035 times the cost as calculated under subsection (g) of
this section.
(j) The tables
adopted in this section shall be used when the service credit cost is paid on
or after September 1, 2023, or an installment agreement is entered into on or
after September 1, 2023.
Notes
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