1. (a) The subdivision shall certify to the system the total number of months of prior service performed by the member and the average prior service compensation paid to the member. Based on this certified information, the system shall record the amount of credited service for prior service granted to the member and determine the member's maximum and allocated prior service credit.
2. (b) Prior service is that service performed for the subdivision prior to the subdivision's effective date of participation. One month of credited service for prior service shall be granted to the member for each calendar month during which the member performed at least one day of service for the subdivision other than as a temporary employee, prior to the month that includes the subdivision's effective participation date.
3. (c) Average prior service compensation is the average monthly compensation paid to the member for those full months of employment performed for the subdivision during the 36 months prior to the subdivision's effective date of participation. Except for a member who does not have a full month of employment with the subdivision, only full months of employment and the compensation received for such full months of employment shall be considered in the calculation of average prior service compensation. For a member who does not have a full month of employment, the subdivision shall estimate a monthly compensation for the member using the member's rate of pay.
4. (d) Subject to subsections (e) and (f) of this section, instead of calculating the actual compensation paid to the member for each specific full month of employment performed for the subdivision during the 36-month period, the subdivision may calculate the average monthly compensation of its member using the total wages paid to the member for each full calendar quarter of employment during the 12 calendar quarters immediately preceding the effective date of participation as that member's compensation was reported to the Texas Workforce Commission on the employer's quarterly report, averaged over the total number of months in the calendar quarters of the member's employment recognized for purposes of this calculation.
5. (e) For those members having less than one full calendar quarter of employment during the 36-month period, the subdivision shall use the procedure described in subsection (c) of this section.
6. (f) A subdivision whose effective date of participation is in the third month of a calendar quarter may consider the quarter which includes the effective date of participation to be the first calendar quarter prior to the subdivision's effective date of participation. A subdivision described by this paragraph may estimate the member's compensation for the last month of the quarter.
7. (g) If, under §843.201 of the Act, a subdivision has acquired a public facility or assumed a governmental function, the date of acquisition or assumption shall be the effective date of participation for purposes of calculating the prior service and average prior service compensation of those members eligible under that section.

Source Note:The provisions of this §103.4 adopted to be effective October 12, 2006, 31 TexReg 8386.