1. (a) Effective September 1, 2001, an eligible member may purchase one year of service credit in the Teacher Retirement System of Texas ("TRS") for accumulated state personal or sick leave in accordance with Government Code §823.403 and subject to approval of TRS and to any plan qualification requirements and limits under the Internal Revenue Code of 1986, as amended from time to time.
2. (b) A member is eligible to purchase one year of service credit if the member retires from an employer defined by §821.001(7) of the Government Code and has at least 50 days or 400 hours of accumulated state personal or sick leave on the last day of employment before retirement. Not more than an aggregate of five days of unused state personal or sick leave may be accumulated per year. State personal and sick leave may be combined, if needed, for the purpose of calculating the necessary 50 days or 400 hours. No more than one year of service credit may be purchased even if more time has been accumulated.
3. (c) Credit purchased under this section may be used only for the purpose of calculating benefits and may not be used to determine eligibility for benefits or for retirement, including eligibility for Texas Public School Retired Employees Group Insurance Program per Article 3.50-4, §2(10)(A) of the Insurance Code.
4. (d) To establish service credit under this section, an eligible member must submit an employer certification in the form and manner prescribed by TRS. Additionally, the eligible member must deposit with TRS, in the manner prescribed by TRS, the actuarial present value of the additional standard retirement annuity benefits that would be attributable to the conversion of the unused state personal or sick leave into the service credit, as described in subsection (e) of this section.
5. (e) To compute these amounts, TRS will use the State Personal or Sick Leave Conversion Factor Tables furnished by the TRS actuary of record. Specifically, TRS will select the applicable conversion factor from the table based on the age of the member in full years and months at the effective date of retirement. To obtain the cost of the service credit, the conversion factor will be multiplied by the increase in the monthly standard retirement annuity resulting from the conversion of state personal or sick leave to an additional one year of service credit. The increase in the annuity will be determined using the standard retirement annuity without an adjustment for an optional service retirement annuity plan selected by the member because any optional plan selected by the member is required by Government Code §824.204(b) to be the actuarial equivalent of the member's standard retirement annuity.
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6. (f) Payments for the purchase of TRS service credit for accumulated state personal or sick leave shall be paid in a manner consistent with any applicable limitations of 26 United States Code § 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, pursuant to Internal Revenue Code §415. A member, or a beneficiary of a member if service is sought to be established after the death of the member, may not be permitted to purchase TRS service credit for accumulated state personal or sick leave if payments exceed applicable limitations on contributions.

Source Note:The provisions of this §25.162 adopted to be effective February 4, 2000, 25 TexReg 598; amended to be effective January 30, 2002, 27 TexReg 272; amended to be effective March 12, 2003, 28 TexReg 2100.