1. (a) Notwithstanding any provision of the retirement plan to the contrary that would otherwise limit a distributee's election under this section, an eligible distributee of an eligible rollover distribution from the Teacher Retirement System of Texas (TRS) may elect, at the time and in the manner prescribed by TRS, to have any portion of the distribution paid directly to an eligible retirement plan or a Roth IRA specified by the distributee in a direct rollover, to the extent permitted by Internal Revenue Code of 1986 (IRC) , as amended, and guidance issued thereunder.
2. (b) To the extent permitted under the IRC, as amended, an individual beneficiary of a TRS participant, other than a surviving spouse or alternate payee, who is an eligible distributee of an eligible rollover distribution from TRS may elect, at the time and in the manner prescribed by TRS, to have any portion of the distribution paid directly to a traditional or Roth individual retirement account (IRA) or individual retirement annuity established for the purpose of receiving the distribution, specified by the distributee in a direct rollover, that shall be treated as an inherited IRA or annuity. A trust that is a beneficiary may be treated as a beneficiary eligible to make such an election only to the extent permitted under the IRC, as amended.
3. (c) TRS shall develop procedures to implement this section in accordance with the Internal Revenue Code of 1986, §401(a)(31), as amended, and related regulations. Terms used in this section, including eligible rollover distribution, eligible retirement plan, distributee, and direct rollover, shall have the meaning assigned in the IRC, as amended, and guidance issued thereunder.

Source Note:The provisions of this §35.2 adopted to be effective March 12, 2003, 28 TexReg 211; amended to be effective May 22, 2008, 33 TexReg 4007.