An eligible member may buy equivalent retirement service credit for certain out-of-state public school work, but must meet eligibility rules, make required deposits, and finish payment before retirement.
Sec. 823.401. OUT-OF-STATE SERVICE. (a) Except as provided by Subsection (b), an eligible member may establish equivalent membership service credit for employment with a public school system maintained wholly or partly by another state or territory of the United States or by the United States for children of its citizens. A school receiving funds under 22 U.S.C. Section 2701 is considered a public school for the purposes of this section. (b) A member may not establish credit under this section for service performed for a public school while a member of the armed forces, for which service the member was compensated by the United States. (c) A member eligible to establish credit under this section is one who has at least five years of service credit in the retirement system for actual service in public schools, including at least one year completed after the relevant out-of-state service. (d) A member may establish credit under this section by depositing with the retirement system for each year of service credit the actuarial present value, at the time of deposit, of the additional standard retirement annuity benefits that would be attributable to the purchase of the service credit under this section, based on rates and tables recommended by the retirement system's actuary and adopted by the board of trustees. (e) A deposit for at least one year of credit must be made with an initial application for credit, and all payments for service claimed under this section must be made before retirement. (f) Except as provided by Subsection (f-1), the amount of service credit a member may establish under this section may not exceed the lesser of the number of years of membership service credit the member has in the retirement system for actual service in public schools or 15 years. (f-1) A member may not purchase more than five years of service credit under this section for service credit considered nonqualified service credit under Section 415(n)(3), Internal Revenue Code of 1986. (g) After a member makes the deposits required by this section, the retirement system shall grant the member one year of equivalent membership service credit for each year of service approved. The retirement system may not use service credit granted under this section in computing a member's annual average compensation. (h) Repealed by Acts 2003, 78th Leg., ch. 201, Sec. 61(2) and Acts 2003, 78th Leg., ch. 1231, Sec. 9(2). (i) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 456, Sec. 7(a), eff. September 1, 2011. (j) The board of trustees may adopt rules providing for the adoption of a reciprocal agreement with a state or territory of a member's previous employment for the payment for service credit established under this section through the transfer from the state or territory to the retirement system of contributions made on behalf of the member in the form of an eligible rollover distribution as provided by Section 401(a)(31), Internal Revenue Code of 1986, and its subsequent amendments. Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 203, ch. 18, Sec. 23, eff. Sept. 1, 1982. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 33.401 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 812, Sec. 2, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 84, Sec. 1, eff. May 15, 1995; Acts 1995, 74th Leg., ch. 555, Sec. 10, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1416, Sec. 8, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1540, Sec. 4, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 454, Sec. 1, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 201, Sec. 61(2), eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1231, Sec. 9(2), eff. Sept. 1, 2004. Amended by: Acts 2005, 79th Leg., Ch. 1359 (S.B. 1691), Sec. 10, eff. September 1, 2005. Acts 2011, 82nd Leg., R.S., Ch. 456 (S.B. 1668), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 456 (S.B. 1668), Sec. 7(a), eff. September 1, 2011. Acts 2015, 84th Leg., R.S., Ch. 1102 (H.B. 2974), Sec. 5, eff. September 1, 2015.