1. (a) Except as provided by subsections (e) and (f) of this section, the cost of establishing unreported service or compensation credit is the actuarial cost, as determined by TRS, of the additional standard annuity retirement benefits that would be attributable to the unreported service or compensation credit purchased under this subchapter.
2. (b) To calculate the actuarial cost of purchasing a year of unreported service credit, TRS will use the cost factors and method described in §25.302 of this title (relating to Calculation of Actuarial Cost). To calculate the actuarial cost of purchasing unreported compensation credit, TRS will use the factors and method as set forth in §25.302, modified as may be necessary to reflect the purchase of compensation credit instead of service credit.
3. (c) The purchase cost described in this section assumes a lump-sum deposit will be made. If deposits are made under an installment agreement, a non-refundable installment fee of 9% applies.
4. (d) If a member has membership service and contributions in the same school year as the year in which the unreported service was rendered, TRS shall adjust the actuarial cost as calculated under subsection (b) of this section proportionately by applying a ratio, the numerator of which is the number of TRS-covered service days rendered by the member and the denominator of which is 90 days of service required for a year of membership service credit.

5. (e) A member may establish unreported service or compensation credit by paying the deposits and fees required in subsection (f) of this section if the member meets all applicable requirements to purchase unreported service or compensation credit and if:

   1. (1) the person otherwise meets all eligibility requirements of §825.403, Government Code, as amended by Acts of the 82nd Legislature, R.S., S.B. 1668 (2011);
   2. (2) the service for which credit is sought to be established was rendered, or the compensation for which credit is sought was paid, before September 1, 2011; and
   3. (3) the person makes payment for the credit, or enters into an installment agreement for payment, not later than August 31, 2013.
6. (f) The cost of establishing unreported service or compensation credit under subsection (e) of this section is the amount of deposits previously required but not paid plus a fee computed at the rate of 5.0% per annum of the deposits due from the end of the school year in which the deposits were due or the end of the 1974-1975 school year, whichever is later, until the date of payment.

Source Note:The provisions of this §25.43 adopted to be effective January 1, 1976; amended to be effective September 26, 1979, 4 TexReg 3304; amended to be effective January 24, 1992, 17 TexReg 251; amended to be effective March 8, 2007, 32 TexReg 1079; amended to be effective September 1, 2011, 36 TexReg 5370.