Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 3 - TEACHER RETIREMENT SYSTEM OF TEXAS › Chapter 35 - PAYMENTS BY TRS › Section 35.2 - Direct Rollovers from TRS

Current through Reg. 49, No. 28; July 12, 2024
(a) Notwithstanding
				any provision of the retirement plan to the contrary that would otherwise limit
				a distributee's election under this section, an eligible distributee of an
				eligible rollover distribution from the Teacher Retirement System of Texas
				(TRS) may elect, at the time and in the manner prescribed by TRS, to have any
				portion of the distribution paid directly to an eligible retirement plan or a
				Roth IRA specified by the distributee in a direct rollover, to the extent
				permitted by Internal Revenue Code of 1986 (IRC), as amended, and guidance
				issued thereunder.
(b) To the
				extent permitted under the IRC, as amended, an individual beneficiary of a TRS
				participant, other than a surviving spouse or alternate payee, who is an
				eligible distributee of an eligible rollover distribution from TRS may elect,
				at the time and in the manner prescribed by TRS, to have any portion of the
				distribution paid directly to a traditional or Roth individual retirement
				account (IRA) or individual retirement annuity established for the purpose of
				receiving the distribution, specified by the distributee in a direct rollover,
				that shall be treated as an inherited IRA or annuity. A trust that is a
				beneficiary may be treated as a beneficiary eligible to make such an election
				only to the extent permitted under the IRC, as amended.
(c) An eligible rollover distribution may
				generally only be transferred in a direct rollover to an "eligible retirement
				plan." An "eligible retirement plan" must use a trust established within the
				United States of America ("U.S.") and maintained as a U.S. domestic trust, a
				custodial account that satisfies IRC Section 401(f)(2) (generally requiring a
				U.S. entity), or an annuity contract issued by an insurance company licensed to
				do business in the U.S.
(1) Notwithstanding
				the requirement of this subsection, a direct rollover may be made to a foreign
				trust that is part of a stock bonus, pension, or profit-sharing plan
				established outside the U.S. if the receiving foreign trust would qualify for
				exemption from tax under IRC §401(a) and §501(a), except for the fact
				that it is a trust created or organized outside the U.S. To claim this
				exemption, in addition to any other information required by TRS, the
				distributee must furnish a written statement by an authorized official of the
				foreign trust stating that the foreign trust is a trust described under IRC
				§402(d). TRS will not make a transfer to the foreign trust without this
				statement.
(2) For a rollover
				distribution to an IRA, the IRA must be a trust created or organized in the
				U.S. and must be maintained at all times as a domestic trust in the U.S., the
				trustee of which must be a U.S. bank as defined in IRC §408(n) and the
				regulations thereunder, or who is listed as an approved non-bank trustee or
				custodian under Announcement 2007-47 or any successor publication of the IRS
				thereto.
(3) For a rollover
				distribution to a 403(b) custodial account or a 401(a) or 457(b) plan, the
				assets of which are held in a custodial account, the trustee must be a U.S.
				bank as defined in IRC §408(n) and the regulations thereunder, or a
				non-bank trustee or custodian who is listed as an approved non-bank trustee or
				custodian under Announcement 2007-47 or any successor publication of the IRS
				thereto.