Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 6 - TEXAS MUNICIPAL RETIREMENT SYSTEM › Chapter 127 - MISCELLANEOUS RULES › Section 127.3 - Conformity with Internal Revenue Code: Preservation of Benefits

Current through Reg. 49, No. 28; July 12, 2024
(a) Pursuant to the authority of the board of
				trustees to act under the Act, and in accordance with the amendments to
				§415 of the Internal Revenue Code as set forth in
				Public Law
				104-188, the annual benefit payable under the Act
				shall not be reduced under §854.007 of the Act except in conformity with
				those limitations on the payment of benefits set forth in the Internal Revenue
				Code as that Code applies from time to time to the Texas Municipal Retirement
				System.
(b) Effective for
				limitation years beginning on or after January 1, 2010, the following
				paragraphs (1) - (5) of this subsection shall apply:
(1) The defined benefit payable to a member
				of the system shall not exceed the applicable limits under Internal Revenue
				Code §415(b), as periodically adjusted by the Secretary of the Treasury
				pursuant to Internal Revenue Code §415(d). This limit adjustment shall
				also apply to a member who has had a severance from employment or, if earlier,
				an annuity starting date. Benefits that are subject to Internal Revenue Code
				§415(b) shall comply with the foregoing limit in each year during which
				payments are made. The foregoing limit shall be adjusted pursuant to the
				requirements of Internal Revenue Code §415(b)(2)(C) and (D) relating to
				the commencement of benefits at a date prior to age 62 or after age 65, subject
				to other applicable rules under Internal Revenue Code §415.
(2) No adjustment shall be required to a
				benefit subject to an automatic benefit increase feature described in Treasury
				Regulation §1.415(b)-1(c)(5).
(3) To the extent that Internal Revenue Code
				§415 and the Treasury Regulations thereunder require that an interest rate
				under Internal Revenue Code §417(e) apply, the applicable stability period
				shall be one calendar year beginning January 1, and the look-back month shall
				be the fourth full calendar month preceding the first day of the stability
				period (September).
(4) If a member
				is, or has ever been, a participant in another qualified defined benefit plan
				(without regard to whether the plan has been terminated) maintained by the
				member's employer, as determined pursuant to Internal Revenue Code
				§§414(b), 414(c), and 415, the sum of the participant's benefits
				payable annually in the form of a straight life annuity from all such plans may
				not exceed the limit described in paragraph (1) of this subsection. Where the
				member's employer-provided benefits under all such defined benefit plans
				(determined as of the same age) would exceed the limit described in paragraph
				(1) of this subsection applicable at that age, the benefits accrued under all
				such other plans shall be reduced first in order to avoid exceeding the limit
				and shall be reduced under the system only to the extent that the reduction
				under such other plans is insufficient to avoid exceeding the limit.
(5) The defined benefit payable to a member
				of the system plan shall be determined in accordance with the requirements of
				Internal Revenue Code §415(b) and the Treasury Regulations thereunder. The
				limitation year is the calendar year.