34 Tex. Admin. Code § 87.1 - Definitions
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Account--A record that
a prior plan vendor or revised plan vendor uses to record the value of the
deferred compensation activity credited to the participant, including annual
deferrals, earnings or investment losses, transfers and any distributions made
to a participant or on behalf of the participant's beneficiary.
(2) Basic pension plan--The retirement
program in which an employee must participate.
(3) Beneficiary--The designated person (or if
none, the participant's estate) who is entitled to receive benefits under the
plan after the death of a participant.
(4) Beneficiary designation form--A form
authorized and approved by the plan administrator to designate a participant's
beneficiary.
(5) Benefits
coordinator--An employee of a state agency who has been designated by the
agency to perform certain administrative functions with respect to the
plan.
(6) Board of Trustees--The
Board of Trustees of the Employees Retirement System of Texas.
(7) Call-in day--The first five working days
of the month.
(8) Change
agreement--A contract signed by a participant to request certain changes
concerning the participant's deferrals, investment income, and participation in
the plan.
(9) Code--The Internal
Revenue Code of 1986, as now in effect or as hereafter amended. All citations
to sections of the Code are to such sections as they may from time to time be
amended or renumbered.
(10) Data
collection center--A private entity used by the State Treasury Department to
collect information from state depositories regarding deposits of state
funds.
(11) Day--A calendar
day.
(12) DCP--Deferred
compensation plan.
(13)
Deferral--The amount of compensation a participant has agreed to defer under
the plan.
(14) Distribution
agreement--A contract signed by a participant or beneficiary indicating the
disposition of the participant's deferrals and investment income.
(15) Disclosure form--A document completed by
a prior plan vendor's representative and signed by the vendor representative
disclosing the rate of return, fees, withdrawal penalties, and payout options
for the qualified investment product selected.
(16) Eligible rollover distribution--Any
distribution of all or any portion of a participant's account balance,
including an individual retirement account described in §408(a) of the
Code, an individual retirement annuity described in §408(b) of the Code, a
qualified trust described in §401(a) of the Code, an annuity plan
described in §403(a) or §403(b) of the Code, that accepts the
rollover distribution, except that an eligible distribution does not include:
(A) any installment payment for a period of
10 years or more;
(B) any
distribution as a result of an unforeseeable emergency; or
(C) for any other distribution, the portion,
if any, of the distribution that is required under §401(a)(9).
(17) Enrollment form--formerly
known as participation agreement. A contract signed by an employee agreeing to
defer the receipt of part of the employee's compensation in accordance with the
plan and containing certain information regarding prior plan vendors,
investment products, and other matters.
(18) Emergency withdrawal application--A form
completed by a participant requesting the full or partial distribution of the
participant's deferrals and investment income because of an unforeseeable
emergency.
(19) Employee--A person
who provides services as an officer or employee to a state agency.
(20) Executive director--The executive
director of the Employees Retirement System of Texas.
(21) FDIC--The Federal Deposit Insurance
Corporation or its successor in function. The FDIC consists of two funds, the
Savings Association Insurance Fund (SAIF), which insured savings associations
and savings banks, and the Bank Insurance Fund (BIF), which insures commercial
banks.
(22) Fee--The term includes
a fee, penalty, charge, assessment, market value adjustment, forfeiture, or
service charge.
(23) Includible
income--The total of:
(A) the value of salary
or wages;
(B) plus the value of
longevity pay, hazardous duty pay, imputed income, special duty pay, sick,
vacation, back pay and benefit replacement pay; and
(C) minus the present value of contributions
to the Employees Retirement System, the Teacher Retirement System, the Optional
Retirement Program, and the TexFlex program administered by the Employees
Retirement System.
(24)
Home office--The primary location at which a prior plan vendor maintains its
files and other records concerning the vendor's participation in the plan and
the participants whose deferrals and investment income have been invested in
the vendor's qualified investment products. The term is usually equivalent to
the vendor's headquarters.
(25)
Inactive prior plan vendor--A prior plan vendor is an inactive prior plan
vendor if no new deferrals have been invested in any of the vendor's qualified
investment products for 12 consecutive months.
(26) Includible compensation--An employee's
actual wages in box 1 of Form W-2 for a year for services and compensation from
a state agency that is includible in a participant's includible income under
§401(a)(17) of the Code and increased (up to the dollar maximum) by any
compensation reduction election under §§125, 132(f), 401(k), 403(b)
or 457(b) of the Code.
(27)
Inherited IRA--An IRA that becomes property through inheritance of someone
other than the spouse of the deceased owner of the IRA. The beneficiary must
receive the distribution by December 31 of the fifth year after the death of
the owner. This type of IRA does not allow for tax deductible contributions nor
rollovers to and from other IRAs. The IRA can be paid as an annuity or in
periodic installments not extending beyond the beneficiary's life
expectancy.
(28) Investment
income--The interest, capital gains, and other income earned through the
investment of deferrals in qualified investment products.
(29) Investment product--The term includes a
life insurance product, fixed or variable rate annuity, stable value account,
mutual fund, certificate of deposit, money market account, self-directed
brokerage account, or passbook savings account. An investment product that is
in any respect different from another investment product of the same vendor is
a different investment product.
(30) Investment provider--a prior plan vendor
or revised plan vendor that offers an investment product in the plan.
(31) Qualified military service--a uniformed
service while on active or inactive duty, including training periods. Uniformed
services include the Army, Navy, Marine Corps, Air Force, Coast Guard, and
Public Health Service Commission Corps, the reserve components of those
services as well as training or service in the National Guard or Air National
Guard and any other category of persons designated by the President in a time
of war or emergency.
(32)
NCUA--National Credit Union Administration, a United States Government Agency,
which regulates charters and insures deposits of the nation's federal credit
unions. Shares and deposits in credit unions are insured by the NCUSIF as
detailed in this section.
(33)
NCUSIF--National Credit Union Share Insurance Fund, is administered by the NCUA
as detailed in this section and insures members' share and deposit accounts at
federally insured credit unions.
(34) Non-filer--A prior plan vendor which
does not ensure that the plan administrator receives a quarterly report by the
due date specified in §
87.19(d)(1) of
this title (relating to Reporting and Recordkeeping by Prior Plan
Vendors).
(35) Non-spousal
beneficiary--Any beneficiary other than a spouse or ex-spouse.
(36) Normal retirement age--A range of ages
beginning with the earliest age at which a person is eligible to retire under
the participant's basic pension plan as referenced in §
87.5(g) of this
title (relating to Participation by Employees).
(37) One-time election form--A form completed
by a participant requesting the full distribution of deferred compensation
funds with a total balance that does not exceed the dollar limit under the Code
§457(e)(9), EGTRRA, or the dollar limit under §411(a)(11) of the
Code, if greater, as of the date that payments commence. Also known as the de
minimis distribution election.
(38)
Participant--A current, retired, or former employee who either has elected to
defer a portion of the employee's current compensation, previously deferred
compensation or has a balance in the plan.
(39) Participation agreement--A contract
signed by an employee agreeing to defer the receipt of part of the employee's
compensation in accordance with the plan and containing certain information
regarding prior plan vendors, investment products, and other matters.
(40) Plan--The deferred compensation program
of the state of Texas that is governed by the Code §457 and authorized by
Chapter 609, Government Code. This plan is a continuation of the plan
previously administered by the Comptroller of Public Accounts.
(41) Plan administrator--The Board of
Trustees of the Employees Retirement System of Texas or its designee.
(42) Prior plan--Refers to the State of Texas
457 Deferred Compensation Plan, the vendors and products approved by the Board
of Trustees of the Employees Retirement System of Texas prior to September 1,
2000.
(43) Prior plan vendor--A
vendor in the prior plan with whom the plan administrator has signed a vendor
contract. The term includes a prior plan vendor's officers and employees. The
prior plan vendor may be an insurance company, bank, savings and loan, credit
union, or mutual fund. The term applies only to vendors approved and
implemented by the Board of Trustees before January 1, 2000.
(44) Product approval notice--A written
notice from the plan administrator to a prior plan vendor informing the vendor
that a particular investment product has been approved for participation in the
plan.
(45) Product contract--A
contract between an investment provider and the plan administrator concerning
the participation of one of the vendor's investment products in the
plan.
(46) Product type--A
categorization of an investment product according to its relevant
characteristics. Examples of product types are life insurance products, mutual
funds, certificates of deposit, savings accounts, share accounts, stable value
account, self-directed brokerage account, and annuities.
(47) Public safety employee--Any employee of
a state or political subdivision who provides police protection, firefighting
services, or emergency medical services for any area within the jurisdiction of
such state or political subdivision. It may also include a chaplain or a member
of an ambulance or rescue crew. This does not include judges, Texas Department
of Criminal Justice guards, probation, parole, juvenile delinquency or similar
officers.
(48) Qualified investment
product--An investment product concerning which the plan administrator and the
sponsoring prior plan or revised plan vendor have signed a product
contract.
(49) Revised plan--Refers
to the State of Texas 457 Deferred Compensation Plan and the vendors and
products approved by the Board of Trustees of the Employees Retirement System
of Texas after August 31, 2000 for the Texa$aver program. The term "Texa$aver
program" is used as it is defined in Texas Government Code §
609.502.
(50) Revised plan vendor--An insurance
company, brokerage firm, or mutual fund distributor that sells investment
products in the revised plan. The term includes a vendor's officers and/or
employees. This applies only to vendors approved and implemented by the Board
of Trustees subsequent to December 31, 1999.
(51) Separation from service--A termination
of the employment relationship between a participant and the participant's
employing state agency, as determined in accordance with the agency's
established practice. The term excludes a paid or unpaid leave of
absence.
(52) Spousal
beneficiary--The current or ex-spouse of a participant who is designated to
receive a participant's account balance.
(53) State agency--A board, commission,
office, department, or agency in the executive, judicial, or legislative branch
of state government. The term includes an institution of higher education as
defined by the Education Code, §
61.003. The term shall
not include the University of Texas System.
(54) Third Party Administrator (TPA)--An
entity under the direction of the plan administrator that operates
independently of both the employer and investment providers to perform agreed
upon administrative services to a tax-deferred defined contribution plan. These
tasks may include recordkeeping, preparation of participant statements,
monitoring deferral limits, and other specified services.
(55) Transfer--The redemption of deferrals
and investment income from a qualified investment product for investment in
another qualified investment product.
(56) Trust--The deferred compensation trust
fund established to hold and invest deferrals and investment income under the
plan for the exclusive benefit of participants and their
beneficiaries.
(57) Trustee--The
Board of Trustees of the Employees Retirement System of Texas.
(58) Unforeseeable emergency distribution--A
severe financial hardship of the participant resulting from: an illness or
accident, loss of property due to casualty, funeral expenses or other
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the participant.
(59) Valuation date--A point in time in which
an asset is assigned a dollar value. It may be the designated time of closing
(daily, last day of the calendar month, the last day of the calendar quarter,
each December 31) for determination of account balances in a defined
contribution plan.
(60) Vendor
contract--A contract between the plan administrator and an investment provider
concerning the vendor's participation in the plan.
(61) Vendor representative--An agent,
independent agent, independent contractor, or other representative of a prior
plan who is not an employee or officer of the vendor.
(62) 401(a)(9), §401(a)(9) and Section
401(a)(9)--These terms refer to Internal Revenue Code
§401(a)(9).
(63) 457,
§457 and Section 457--These terms refer to Internal Revenue Code
§457.
Notes
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