2023 Texas Statutes › Government Code › Title 8 - Public Retirement Systems › Subtitle C - Teacher Retirement System of Texas › Chapter 830 - Optional Retirement Program › Subchapter B. Participation › Section 830.108. Correction of Certain Reporting Errors

Sec. 830.108.  CORRECTION OF CERTAIN REPORTING ERRORS.  (a)  For purposes of this section, an employer submits a member contribution to the retirement system on behalf of a person in error if the person:
(1)  previously elected to participate in the optional retirement program;
(2)  participated in the program for at least one year; and
(3)  is or was employed by an institution of higher education in a position normally covered by the retirement system and is or was at the time of that employment not eligible for membership in the retirement system under Section 830.106.
(b)  If an employer commits an error described by Subsection (a) and the person on whose behalf the member contribution is erroneously made is a participant in the optional retirement program:
(1)  the person's participation in the program shall be immediately restored; and
(2)  in accordance with this section and as soon as practicable, funds shall be deposited in the person's participant account in the program or otherwise remitted to the person.
(c)  Subject to Subsection (d), on discovery of an error described by this section, the retirement system shall, on certification by an employer that the employer committed the error:
(1)  make a direct trustee-to-trustee transfer to the trustee of the optional retirement program for deposit in the person's participant account in an amount equal to the participant contribution that would have been paid for the benefit of the person to the program under Section 830.201 during the period in which member contributions were submitted to the retirement system in error, plus an amount representing earnings on the member contribution at the assumed rate of return provided by Subsection (g);
(2)  credit the employer through the retirement system's employer reporting system an amount equal to the amount of any employer contributions made under Section 825.4041, 825.406, 825.407, or 825.4071 in error on compensation paid to the person; and
(3)  remit to the person:
(A)  the amount of any member contribution made to the retirement system in error that exceeds the amount of the participant contribution that would have been paid for the benefit of the person to the program during the period in which member contributions were submitted to the retirement system in error;
(B)  the amount of any member contribution made to the retirement system in error that was made on an after-tax basis and that the retirement system could not transfer via a direct trustee-to-trustee transfer under applicable provisions of the Internal Revenue Code, including regulations adopted under the Internal Revenue Code, or under the terms of the program established by the employer; and
(C)  any amount paid by the person to the retirement system to purchase or reinstate service credit during the period the person was not eligible for membership in the retirement system, including any administrative, reinstatement, and installment fees paid in connection with the purchase.
(d)  A transfer described by Subsection (c) may not include the amount of any member contribution made to the retirement system in error that:
(1)  exceeds the amount of the participant contribution that would have been paid for the benefit of the person to the optional retirement program under Section 830.201; or
(2)  was made on an after-tax basis unless the plan document for each employer program:
(A)  permits the employer program to receive direct trustee-to-trustee transfers of after-tax amounts; and
(B)  provides that the trustee of the employer program agrees to separately account for amounts transferred and earnings on amounts transferred, including accounting for the portion of the distribution that is includable in gross income and the portion of the distribution that is not includable in gross income.
(e)  On certification by an employer that the employer committed an error described by this section, the comptroller shall transfer to or credit the employer an amount equal to the state contribution that would have been paid for the benefit of the person under Section 830.201 plus an amount representing earnings on the state contribution at the assumed rate of return provided by Subsection (g).
(f)  An employer that commits an error described by this section shall deposit in the person's participant account in the program:
(1)  in accordance with Subsection (c), the amount of the employer contribution that would have been paid for the benefit of the person as a participant under Section 830.201 and under any other law, rule, or employer policy;
(2)  an amount representing earnings on the employer contribution at the assumed rate of return determined by the employer in accordance with applicable Internal Revenue Code correction requirements; and
(3)  an amount equal to the state contribution that would have been paid for the benefit of the person under Section 830.201 plus the amount representing earnings credited to the employer under Subsection (e).
(g)  The assumed rate of return is earned monthly and computed at the rate of four percent per year.  Except as provided by this subsection, the amount of earnings based on the assumed rate of return is credited annually at the end of each 12-month period.  The first 12-month period begins with the month the first deposit was submitted in error.  The amount of assumed earnings is prorated to the month of payment.
(h)  Amounts paid, transferred, or credited under this section are reduced by any amount required to be withheld by law or court order.
Added by Acts 2017, 85th Leg., R.S., Ch. 186 (S.B. 1954), Sec. 2, eff. September 1, 2017.