Section 25.173 - Correction of Ineligible Participation in TRS(a) Except as provided in subsection (e) of this section, a person who elected to participate in ORP and participated in ORP for at least one year and who was reported to TRS in error as described in § 830.108, Government Code, must be restored to participation in ORP and may not receive a distribution of benefits from TRS based on the ineligible participation.(b) Each employer that reported the person in error to TRS must, within 30 calendar days of receiving the request from TRS, certify on a form prescribed by TRS that the person was reported in error to TRS; the amount of the person's compensation that was creditable for ORP purposes and the amount of participant contributions that should have been contributed to ORP for each school year that the person was employed by that employer and reported in error to TRS; and the amount, if any, of employer contributions made to TRS under §§ 825.4041, 825.406, 825.407, or 825.4071, Government Code, based on the employment of the person reported to TRS in error.(c) The person reported to TRS in error must provide information required by TRS to make a direct trustee-to-trustee transfer to the trustee of the person's ORP plan account of authorized amounts and complete any forms prescribed and required by TRS to make the direct trustee-to-trustee transfer of funds, including the agreement of the trustee of the person's ORP plan account to accept the transfer in accordance with § 830.108(d)(2)(B), Government Code. The trustee must also agree to separately account for any after-tax funds that are part of the direct trustee-to-trustee transfer. Authorized amounts include the amount of participant contributions that should have been made to ORP plus an amount representing earnings authorized by §830.108. If the amount of ineligible member contributions received by TRS is less than the amount of participant contributions that should have been made to ORP, then TRS may only make a direct trustee-to-trustee transfer of an amount equal to the amount of ineligible TRS member contributions plus authorized earnings. TRS may not pay or transfer any amount of required ORP participant contributions that exceed the amount of ineligible member contributions received by TRS.(d) Each employer that reported the person in error to TRS and that made employer contributions in error to TRS under §§ 825.4041, 825.406, 825.407, or 825.4071, Government Code, must provide the certification required in subsection (b) and receive the approval of TRS before taking a credit for the employer contributions through the TRS employer reporting system. Earnings on the employer contributions paid in error to TRS are not authorized for payment by TRS and may not be taken as a credit through the employer reporting system.(e) If within 180 days of notice by TRS of the reporting error, the person does not have or cannot establish an ORP account; cannot obtain the required certification from the employer(s) that reported the person in error to TRS; cannot obtain the approval of the trustee of the person's ORP plan account to receive the direct trustee-to-trustee transfer of funds from TRS; or does not provide the forms required for TRS to make the direct trustee-to-trustee transfer of funds to the person's ORP plan account, TRS is authorized to pay directly to the person reported in error to TRS the ineligible TRS member contributions equal to the amount of ORP member contributions received by TRS that should have been contributed to ORP plus the amount representing earnings on amounts authorized by §830.108.(f) TRS must make a direct payment to the person of the amount of ineligible TRS member contributions deposited in error with TRS that exceed the amount of ORP participant contributions that should have been paid to the person's ORP account and any amounts paid by the person to purchase TRS service credit while ineligible to participate in TRS. The amount of direct payment to the person reported in error to TRS under this subsection does not include earnings that are authorized on amounts transferred to the person's ORP account by §830.108 or paid directly to the person pursuant to subsection (e).(g) An employer of a person who elected ORP but was reported in error to TRS may not take a credit through the TRS employer reporting system of any member or employer contributions authorized in §830.108(c)(2) without the knowledge and express approval of TRS.34 Tex. Admin. Code § 25.173
Adopted by Texas Register, Volume 42, Number 45, November 10, 2017, TexReg 6372, eff. 11/14/2017