1. (a) A department that elects to participate in the pension system and is not merging an existing pension plan into the system may, before the second anniversary of the date the department begins participation, make a one-time election to purchase service credit for qualified service performed for the department before the effective date of departmental participation by the persons who became members of the pension system on the effective date of the departmental participation.
2. (b) A department that elects or has previously elected to participate in the pension system and is merging or has merged an existing pension plan into the system may at any time purchase service credit for qualified service performed for the department before the effective date of participation by persons who are members of the system on the date the department contracts for the purchase.
3. (c) The maximum amount of prior service credit a member may receive under this section is 10 years. A department may choose to purchase prior service credit for a maximum number of less than 10 years. The pension system shall grant prior service credit under this section if the department agrees in writing to finance the prior service credit by a lump-sum payment or within a period not to exceed 10 years from the effective date of the election to purchase the credit.
4. (d) The cost to finance the purchase of prior service credit is based on the actuarially assumed rate of investment return on fund assets at the time payment for the credit begins A department may purchase prior service credit under subsection (a) of this section at any contribution rate at or above the minimum provided by statute or board rule for the period purchased and under subsection (b) of this section at any contribution rate at or above the current minimum provided by board rule at the time payment for the credit begins.
5. (e) To purchase prior service credit, a department must provide the commissioner with a detailed, verified record of prior service showing the amount of service performed by each member of the department. The record for each member must include the member's date of birth and entry date in the department.
6. (f) The maximum amount of prior service credit provided by this rule applies only to prior service credit purchased, or under a written agreement to be financed that is instituted, on or after September 1, 2007. Prior service credit purchased, or under a written agreement to be financed, under a procedure administered by the pension system before September 1, 2007, is subject to the maximum amount of credit and the terms and value in effect under system procedures at the time of purchase or written agreement to purchase.

Source Note:The provisions of this §306.1 adopted to be effective October 2, 2005, 30 TexReg 6061; amended to be effective August 26, 2007, 32 TexReg 5185; amended to be effective July 11, 2010, 35 TexReg 5898.