1. (a) For a person who was a member of TRS on December 31, 2005, and whose out-of-state service was performed before January 1, 2006, including service in the 2005-2006 school year that began before January 1, 2006, but continued after that date, the cost of establishing out-of-state service credit is 12% per year of the full annual salary rate for the first year of service in Texas which is both after the out-of-state service and after September 1, 1956. Annual salary is limited to $8,400 for years prior to September 1, 1969, and $25,000 for years after September 1969 but before September 1, 1979. For years starting on or after September 1, 1979, TRS will apply any relevant creditable compensation limitations to determine the full salary rate. Cost will not be based on years granted for substitute service. In addition a crediting fee of 8.0% compounded annually of the amount of deposits due and paid shall be charged from the end of the school year in which the member was first eligible to purchase credit for such service until payment for the credit is received.
2. (b) For a person who does not meet the eligibility requirements of subsection (a) of this section, the cost of establishing out-of-state service credit is the actuarial cost, as determined by TRS, of the additional standard annuity retirement benefits that would be attributable to the out-of-state service credit purchased under this section.
3. (c) To calculate the actuarial cost, TRS will use the cost factors and method described in §25.302 of this title (relating to Calculation of Actuarial Cost).
4. (d) 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.
5. (e) No credit will be applied to the cost of a year of out-of-state service credit for any TRS contributions made in the same school year.
6. (f) Payments for out-of-state service credit shall be paid in a manner consistent with any applicable limitations of 26 U.S.C. §415, including any applicable limitations on payments as a percentage of compensation of the participant from the employer for the school year in which the payments are sought to be made. A member, or a beneficiary of a member if service credit is sought to be established after the death of the member, may not be permitted to purchase TRS service credit under this section if payments exceed the applicable limitations on contributions.

7. (g) The date of first eligibility to purchase credit for any year of out-of-state service shall be the latest of the following dates:

   1. (1) the date the member received 5 years' credit for service in the public schools of Texas;
   2. (2) the date state law made the out-of-state service available for TRS service credit;
   3. (3) the date in which the member qualified to deposit payment for each year of out-of-state service under the one for two rule in effect until March 20, 1975;
   4. (4) the date the member completed one year of creditable service in the public schools of Texas after relevant out-of-state service.
8. (h) No deposits for out-of-state service credit may be made before the member accumulates 5 years of credit for service in the public schools of Texas.

Source Note:The provisions of this §25.82 adopted to be effective January 1, 1976; amended to be effective September 26, 1979, 4 TexReg 3305; amended to be effective October 1, 1982, 7 TexReg 3367; amended to be effective June 15, 1999, 24 TexReg 4457; amended to be effective April 3, 2006, 31 TexReg 2869; amended to be effective March 8, 2007, 32 TexReg 1085.