The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

1. (1) Account--A record that a qualified vendor uses to account for deferrals and investment income on a participant-by-participant basis.
2. (2) Agency coordinator--An employee of a state agency who has been designated by the agency to perform certain administrative functions with respect to the plan.
3. (3) Basic pension plan--The retirement program in which an employee must participate.
4. (4) Board of Trustees--The Board of Trustees of the Employees Retirement System of Texas.
5. (5) Call-in day--The first five working days of the month.
6. (6) Change agreement--A contract signed by a participant to request certain changes concerning the participant's deferrals, investment income, and participation in the plan.
7. (7) Data collection center--A private entity used by the State Treasury Department to collect information from state depositories regarding deposits of state funds.
8. (8) Day--A calendar day.
9. (9) DCP--Deferred compensation plan.
10. (10) Deferral--The amount of compensation the receipt of which a participant has agreed to defer under the plan.
11. (11) Distribution agreement--A contract signed by a participant or beneficiary indicating the disposition of the participant's deferrals and investment income.
12. (12) Disclosure form--A document completed by a vendor representative and signed by both the representative and an employee disclosing the rate of return, fees, withdrawal penalties, and payout options for the qualified investment product selected.
13. (13) Emergency withdrawal application--A form completed by a participant requesting the full or partial distribution of the participant's deferrals and investment income because of a sudden and unforeseeable emergency.
14. (14) Employee--A person who provides services as an officer or employee to a state agency.
15. (15) Executive director--The executive director of the Employees Retirement System of Texas.
16. (16) FDIC--The Federal Deposit Insurance Corporation or its successor in function. The FDIC consists of two funds, the Savings Association Insurance Fund (SAIF), which insured savings associations and savings banks, and the Bank Insurance Fund (BIF), which insures commercial banks.
17. (17) Fee--The term includes a fee, penalty, charge, assessment, market value adjustment, forfeiture, or service charge.

18. (18) Gross income--The total of:

    1. (A) the present value of salary or wages;
    2. (B) plus the present value of longevity pay, hazardous duty pay, imputed income, special duty pay, and benefit replacement pay; and
    3. (C) minus the present value of contributions to the Employees Retirement System, the Teacher Retirement System, the Optional Retirement Program, and the TexFlex program administered by the Employees Retirement System.
19. (19) Home office--The primary location at which a qualified vendor maintains its files and other records concerning the vendor's participation in the plan and the participants whose deferrals and investment income have been invested in the vendor's qualified investment products. The term is usually equivalent to the vendor's headquarters.

20. (20) Inactive qualified vendor--A qualified vendor is an inactive qualified vendor if:

    1. (A) no new deferrals have been invested in any of the vendor's qualified investment products for 12 consecutive months; and
    2. (B) a transfer of deferrals or investment income to any of the vendor's qualified investment products has not occurred for 12 consecutive months.
21. (21) Includes--A term of enlargement and not of limitation or exclusive enumeration. The use of the term does not create a presumption that components not expressed are excluded.
22. (22) Includible compensation--Compensation from a state agency that is includible in a participant's gross income under the Internal Revenue Code of 1986. The term excludes deferrals.
23. (23) Investment income--The interest, capital gains, and other income earned through the investment of deferrals in qualified investment products.
24. (24) Investment product--The term includes a life insurance product, fixed or variable rate annuity, mutual fund, certificate of deposit, money market account, or passbook savings account. A vendor's investment product that is in any respect different from another investment product of the same vendor is a different investment product.
25. (25) NCUA--National Credit Union Administration, a United States Government Agency which regulates, charters and insures deposits of the nation's federal credit unions. Shares and deposits in credit unions are insured by the NCUSIF as detailed in this section.
26. (26) NCUSIF--National Credit Union Share Insurance Fund, is administered by the NCUA as detailed in this section and insures members' share and deposit accounts at federally insured credit unions.
27. (27) Non-filer--A qualified vendor which does not ensure that the plan administrator receives a quarterly report by the due date specified in §87.19(d)(1) of this title (relating to Reporting and Recordkeeping by Qualified Vendors).
28. (28) One-time election form--A form completed by a participant requesting the full distribution of deferred compensation funds with a total balance that does not exceed the dollar limit under Internal Revenue Code of 1986, §457(e)(9) as of the date of the election.
29. (29) Participant--A current, retired, or former employee who either has elected to defer a portion of the employee's current compensation or has a balance in a qualified investment product.
30. (30) Participation agreement--A contract signed by an employee agreeing to defer the receipt of part of the employee's compensation in accordance with the plan and containing certain information regarding vendors, qualified investment products, and other matters.
31. (31) Plan--The deferred compensation program of the State of Texas that is governed by the Internal Revenue Code of 1986, §457, and authorized by Chapter 609, Government Code. This plan is a continuation of the plan previously administered by the Comptroller of Public Accounts.
32. (32) Plan administrator--The Board of Trustees of the Employees Retirement System of Texas or its designee.
33. (33) Product approval notice--A written notice from the plan administrator to a vendor informing the vendor that a particular investment product has been approved for participation in the plan.
34. (34) Product contract--A contract between a qualified vendor and the plan administrator concerning the participation of one of the vendor's investment products in the plan.
35. (35) Product type—A categorization of an investment product according to its relevant characteristics. Examples of product types are life insurance products, mutual funds, certificates of deposit, savings accounts, share accounts, and annuities.
36. (36) Qualified investment product--An investment product concerning which the plan administrator and the sponsoring qualified vendor have signed a product contract.
37. (37) Qualified vendor--A vendor with whom the plan administrator has signed a vendor contract. The term includes a qualified vendor's officers and employees.
38. (38) Separation from service--A termination of the employment relationship between a participant and the participant's employing state agency, as determined in accordance with the agency's established practice. The term excludes a paid or unpaid leave of absence.
39. (39) State agency--A board, commission, office, department, or agency in the executive, judicial, or legislative branch of state government. The term includes an institution of higher education as defined by the Education Code, §61.003, other than a public junior college.
40. (40) Transfer--The redemption of deferrals and investment income from a qualified investment product for investment in another qualified investment product.
41. (41) Trust--The deferred compensation trust fund established to hold and invest deferrals and investment income under the plan for the exclusive benefit of participants and their beneficiaries.
42. (42) Trustee--The Board of Trustees of the Employees Retirement System of Texas.
43. (43) Vendor--An insurance company, bank, savings and loan association, credit union, or mutual fund distributor that sells investment products. The term includes a vendor's officers and/or employees.
44. (44) Vendor contract--A contract between the plan administrator and a vendor concerning the vendor's participation in the plan.
45. (45) Vendor representative--An agent, independent agent, independent contractor, or other representative of a vendor who is not an employee or officer of the vendor.

Source Note:The provisions of this §87.1 adopted to be effective March 28, 1991, 16 TexReg 1560; amended to be effective January 10, 1992, 16 TexReg 7743; amended to be effective November 23, 1992, 17 TexReg 7911; amended to be effective January 1, 1994, 18 TexReg 8460; amended to be effective January 5, 1996, 20 TexReg 11022; amended to be effective November 11, 1996, 21 TexReg 10766; amended to be effective March 21, 1997, 22 TexReg 2513; amended to be effective February 12, 1998, 23 TexReg 1113; amended to be effective September 10, 1998, 23 TexReg 9067; amended to be effective January 10, 1999, 24 TexReg 165.