RULE §25.303 Calculation of Actuarial Cost for Purchase of Compensation Credit


Published: 2015

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(a) When a member is purchasing TRS compensation 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
the method described in this section.
(b) Each of the tables cross-references the member's
age in rows with years of credited service in columns. The intersection
of the participant's age and service is the cost factor that shall
be applied to the additional final average salary that may result
from the purchase. TRS will calculate the cost to purchase compensation
credit under this section by dividing the additional compensation
by three or five years, as determined by the standard annuity calculation
applicable to the member, and dividing that quotient by 1,000 and
multiplying the resulting quotient by the appropriate cost factor
obtained from the table. The eligibility of additional compensation
credit available for purchase is determined by the laws and rules
applicable to the type of compensation sought to be credited.
(c) 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, the methodology described in subsection (b) of this section
shall be used to determine cost of additional compensation credit,
but TRS shall use the factors in the tables adopted as part of this
subsection.
Attached Graphic
(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 compensation credit,
but TRS shall use the factors in the tables adopted as part of this
subsection.
Attached Graphic
(e) Effective September 1, 2014, 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 subsection (b) of this section shall be used to determine the cost
of additional compensation credit, but TRS shall use the factors in
the tables adopted as a part of this subsection.
Attached Graphic


Source Note: The provisions of this §25.303 adopted to be effective July 17, 2014, 39 TexReg 5432; amended to be effective December 23, 2014, 39 TexReg 10025