Section 29.90 - Forfeiture of Certain Benefits Due to Criminal Offense(a) Upon receipt of a notice of judgment prescribed in subsection (b) of this section from a state or federal district court, state district or U.S. attorney, or the defendant's employer related to a qualifying felony described in § 824.009, Government Code, that was committed by a member or retiree and in which each and every element of the offense occurred after the effective date of this rule, the Teacher Retirement System of Texas (TRS) shall make only the disbursements described in this section on behalf of the defendant. Disability retirement benefits payable on behalf of a defendant are not affected by this section.(b) A notice of judgment must include the following: (1) the name and social security number of the defendant or other identifying information sufficient for TRS to correctly identify the defendant as a member or retiree of TRS;(2) a statement or sufficient information for TRS to conclude that the crime was a felony described in § 824.009(a) or (a-1), Government Code;(3) an affirmative statement that each and every element of the crime occurred after the effective date of this rule;(4) a statement that the defendant was a member or service retiree of TRS when the crime was committed;(5) a statement that the defendant was an employee of a TRS-covered employer at the time the crime was committed and that the crime related to the defendant's employment; and(6) a statement that the victim of the crime was a student at the time the qualifying felony occurred.(c) If the defendant is a member of TRS but has not retired under service retirement at the time TRS receives the prescribed notice of judgment required in subsection (a) of this section, TRS shall terminate the defendant's membership and issue a refund of the accumulated contributions in the member account, and in the event the defendant participated in the Deferred Retirement Option Plan (DROP) the refund shall include amounts in the defendant's DROP account, subject to the following: (1) The defendant or a person authorized to act on the behalf of the defendant must complete the documents required by TRS to effectuate the refund;(2) The refund of the defendant's accumulated contributions and any DROP balance is subject to the terms of any domestic relations order (DRO) determined by TRS to be a qualified domestic relations order (QDRO) that is in effect before September 1, 2017 and is subject to the terms of any QDRO entered on or after September 1, 2017 except as provided in paragraph (3) of this subsection;(3) Upon receipt of a certified copy of a DRO related to a division of retirement plan benefits entered on or after September 1, 2017 pursuant to § 824.009(i), Government Code, and a determination by TRS that the DRO is a qualified order under Chapter 804, Government Code, TRS shall apply the QDRO to the accumulated contributions in the member account and in any DROP account at the time notice is received by TRS and issue a refund to the defendant of any accumulated contribution amounts or DROP account balance not awarded to the alternate payee in the QDRO. In addition:(A) If the member has fewer than five years of service credit at the time the notice of judgment is received by TRS, TRS shall distribute to the alternate payee the portion of the accumulated contributions awarded to alternate payee, and TRS shall have no further obligation for the payment of benefits to the alternate payee;(B) If the member has five or more years of service credit at the time the notice of judgment is received by TRS, TRS shall maintain the portion of the accumulated contributions and any portion of a DROP account awarded to the alternate payee under the terms of the QDRO until the earliest month the defendant would have been eligible for service retirement benefits, including a benefit reduced for early age, and at that time shall commence distribution to the alternate payee of the alternate payee's portion of a standard annuity benefit, reduced for early age if applicable, based on the defendant's annual compensation and service credit maintained by TRS at the time of the refund to the defendant under this subsection. In addition to a portion of the standard annuity, TRS shall also distribute to the alternate payee in the form of a lump sum any portion of the balance remaining in a DROP account awarded to the alternate payee under the QDRO plus applicable interest; and(C) If the defendant dies before reaching the earliest age eligible for retirement, TRS shall distribute to the alternate payee the portion of the accumulated contributions plus applicable interest awarded to the alternate payee under the QDRO in the form of a lump sum payment, and TRS shall have no further obligation for payments of benefits to the alternate payee;(4) The alternate payee's interest in the standard annuity benefits payable by TRS under paragraph (3) of this subsection terminates at the earlier of the death of the defendant or the alternate payee as required in § 804.101, Government Code. If there are any unpaid accumulated contributions or amounts in the defendant's DROP account awarded to the alternate payee under the terms of the QDRO remaining at the time of the alternate payee's death, the unpaid accumulated contributions, unpaid amounts in the DROP account, and any excess unpaid accumulated contributions remaining if monthly annuity payments have commenced to the alternate payee, are payable to the defendant; and(5) The refund of accumulated contributions to an alternate payee under the terms of a QDRO pursuant to this subsection terminates the interest of the alternate payee in any future benefits payable by TRS on behalf of the defendant.(d) If the defendant is a service retiree at the time TRS receives the prescribed notice of judgment required in subsection (a) of this section, TRS shall cease distributions to the defendant of any future service retirement benefits, including any partial lump sum option (PLSO) payments, and any remaining DROP account balance, effective with the annuity for the month following the month in which TRS receives notice of judgment required in this section and shall, in lieu of future service retirement benefits, issue a refund of the accumulated contributions in the member account at the time of retirement and any balance remaining in the defendant's DROP account at the time of the refund, subject to the following: (1) The refund of accumulated contributions and payment of any unpaid DROP account balance is subject to the terms of any DRO determined by TRS to be a qualified order that is in effect on or after September 1, 2017 that is not entered pursuant to § 824.009(i), Government Code and the alternate payee shall receive the share of the accumulated contributions and any remaining DROP account balance awarded by the QDRO;(2) The refund of accumulated contributions and any DROP account balance pursuant to this subsection to an alternate payee under the terms of a QDRO entered on or after September 1, 2017 but not entered pursuant to § 824.009(i), Government Code terminates the interest of the alternate payee in any future benefits payable by TRS on behalf of the defendant;(3) The defendant shall receive the portion of a refund of accumulated contributions and any unpaid DROP balance awarded to the defendant pursuant to a DRO approved by TRS as a QDRO before September 1, 2017; however payments to the alternate payee of the portion of the service retirement annuity awarded to the alternate payee shall continue under the terms of the QDRO and the pension plan as set forth in paragraph 4 of this subsection. The alternate payee of a QDRO approved before September 1, 2017 shall not receive any portion of the refund of the accumulated contributions to the member required in this subsection;(4) Upon receipt of a certified copy of a DRO related to a division of property made pursuant to § 824.009(i), Government Code, entered on or after September 1, 2017, and a determination by TRS that the DRO is a qualified order under Chapter 804, Government Code, TRS shall apply the QDRO to the service retirement annuity amount and shall pay the alternate payee the portion of each service retirement annuity payment, including a portion of any PLSO payments remaining, and any remaining DROP amount ordered in the QDRO. The QDRO award shall also be applied to the amount of accumulated contributions in the defendant's account at the time of retirement and any balance remaining in the defendant's DROP account at the time the notice of judgment is implemented by TRS and TRS shall issue a refund to the defendant of the amount of accumulated contributions in the member's account at the time of retirement that is not awarded to the alternate payee in the QDRO and the portion of any remaining balance in a DROP account after distributions due to service retirement that were not awarded to the alternate payee. The alternate payee under a QDRO entered pursuant to § 824.009(i), Government Code, shall not receive any portion of the refund of the account balance; and(5) The alternate payee's interest in the benefits payable by TRS on behalf of the defendant, established in a QDRO approved by TRS before September 1, 2017 or entered pursuant to § 824.009(i), Government Code, terminates at the earlier of the death of the defendant or the alternate payee. In the event the defendant elected an optional annuity retirement plan, the alternate payee shall receive the portion awarded in the QDRO of the benefit amount payable to the beneficiary of the optional annuity but benefits shall not be paid to the beneficiary. The alternate payee's interest in the benefits payable by TRS under an optional annuity retirement plan terminates at the earlier of the death of the beneficiary or the expiration period, or the alternate payee as required in § 804.101, Government Code. If there are any remaining unpaid excess accumulated contributions or any DROP account balance awarded to the alternate payee under the terms of the QDRO remaining at the time of the alternate payee's death, the unpaid excess accumulated contributions and unpaid remaining DROP balance are payable to the defendant or the defendant's estate.34 Tex. Admin. Code § 29.90
Adopted by Texas Register, Volume 42, Number 52, December 29, 2017, TexReg 7719, eff. 1/4/2018