PART 6. TEXAS MUNICIPAL RETIREMENT SYSTEM

CHAPTER 127. MISCELLANEOUS RULES

The Board of Trustees (Board) of the Texas Municipal Retirement System (TMRS or the System) adopts the repeal of current 34 TAC Chapter 127 (Chapter 127), relating to miscellaneous rules as published in the May 19, 2023, issue of the Texas Register (48 TexReg 2557). TMRS also adopts the replacement of the current Chapter 127 with the adopted new Chapter 127, also relating to miscellaneous rules as published in the May 19, 2023, issue of the Texas Register (48 TexReg 2557). The repeals will not be republished.

REPEAL OF CURRENT CHAPTER 127

TMRS repeals the following rules: 34 TAC §127.1, Procedures for Release of Board Records; 34 TAC §127.2, Payment to Beneficiaries of Decedents; 34 TAC §127.3, Conformity with Internal Revenue Code: Preservation of Benefits; 34 TAC §127.4, Credited Service under the Uniformed Services Employment and Reemployment Rights Act; 34 TAC §127.6, Acceptance of Rollovers and Transfers; 34 TAC §127.7, Rollovers of Plan Distributions; 34 TAC §127.8, Plan Limitations; 34 TAC §127.9, Authorization of Certain Payments in Accordance with the Pension Protection Act of 2006; and 34 TAC §127.10, Conformity with Internal Revenue Code: Additional Provisions.

ADOPTION OF NEW CHAPTER 127

The Board of TMRS adopts new 34 TAC Chapter 127, §§127.1, 127.3 - 127.13, relating to miscellaneous rules, without changes to the proposed text as published in the May 19, 2023, issue of the Texas Register (48 TexReg 2557). The rules will not be republished.

The Board of TMRS adopts the following new Chapter 127 rules: 34 TAC §127.1, Procedures for Release of Board Records; 34 TAC §127.3, Conformity with Internal Revenue Code: Preservation of Benefits; 34 TAC §127.4, Credited Service under the Uniformed Services Employment and Reemployment Rights Act; 34 TAC §127.5, Prorating of Contributions Based on Compensation Limited by Internal Revenue Code §401(a)(17); 34 TAC §127.6, Acceptance of Rollovers and Transfers; 34 TAC §127.7, Rollovers of Plan Distributions; 34 TAC §127.8, Plan Limitations; 34 TAC §127.9, Authorization of Certain Payments in Accordance with the Pension Protection Act of 2006; 34 TAC §127.10, Conformity with Internal Revenue Code: Additional Provisions; 34 TAC §127.11, Required Minimum Distributions: General Rule, Forfeiture and Reinstatement; 34 TAC §127.12, Refund of Unrecovered Contributions; and 34 TAC §127.13, Late Contributions Sent Electronically.

BACKGROUND AND PURPOSE

New Chapter 127 is adopted to update, modernize, and provide clarification to its rules relating to miscellaneous subjects. Statutes specific to TMRS are found in Title 8, Subtitle G, Chapters 851 through 855, Texas Government Code (the "TMRS Act"). TMRS may promulgate rules it deems necessary to implement the TMRS Act. In addition, the repeal and replacement of Chapter 127 is adopted as a result of TMRS' rule review, which was conducted pursuant to Texas Government Code §2001.039.

Six provisions of the adopted new Chapter 127 rules are unchanged from existing rules; these six rules are found in new 34 TAC §127.3, Conformity with Internal Revenue Code: Preservation of Benefits; 34 TAC §127.4, Credited Service under the Uniformed Services Employment and Reemployment Rights Act; 34 TAC §127.6, Acceptance of Rollovers and Transfers; 34 TAC §127.7, Rollovers of Plan Distributions; 34 TAC §127.8, Plan Limitations; and 34 TAC §127.9, Authorization of Certain Payments in Accordance with the Pension Protection Act of 2006. Two adopted new rules are amendments to the current rules to better clarify how the System interprets and administers benefits and to update references to laws or other TMRS rules that have been amended; these are 34 TAC §127.1, Procedures for Release of Board Record and 34 TAC §127.10, Conformity with Internal Revenue Code: Additional Provisions. Two adopted new rules are new clarifications of internal procedures: 34 TAC §127.12, Refund of Unrecovered Contributions and 34 TAC §127.13, Late Contributions Sent Electronically. Substantive changes, however, are adopted in the two remaining new rules, which changes are described as follows: adds a provision clarifying current practice for the proration of contributions subject to the compensation limit in Internal Revenue Code §401(a)(17) (in §127.5, Prorating of Contributions Based on Compensation Limited by Internal Revenue Code §401(a)(17)); and adds new procedures to comply with Internal Revenue Code §401(a)(9) and related regulations regarding required minimum distributions (in §127.11, Required Minimum Distributions: General Rule, Forfeiture and Reinstatement).

Current rule §127.2, Payment to Beneficiaries of Decedents, is repealed as it is no longer necessary for the administration of the System.

COMMENTS

No Comments were received regarding the adoption of the repeal and new Chapter 127.

34 TAC §§127.1 - 127.4, 127.6 - 127.10

STATUTORY AUTHORITY

The repeal of existing Chapter 127 is adopted under the authority granted under the following provisions of the TMRS Act or the Texas Government Code: (i) Government Code §851.006, which allows the Board to adopt rules to allow the System to make payments in accordance with Section 845 of the Pension Protection Act of 2006; (ii) Government Code §852.103, which allows the Board to adopt rules to implement withdrawals of contributions and rollover distributions; (iii) Government Code §853.004, which allows the Board to adopt rules necessary or desirable to implement Chapter 853; (iv) Government Code §853.506, which allows the Board to adopt rules to comply with the Uniformed Services Employment and Reemployment Rights Act; (v) Government Code §854.003, which allows the Board to adopt rules to comply with the distribution requirements of Section 401(a)(9) of the Internal Revenue Code of 1986; and (vi) Government Code §855.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of the System. In addition, the rule changes are adopted as a result of TMRS' rule review, which was conducted pursuant to Texas Government Code §2001.039.

CROSS-REFERENCE TO STATUTES

Texas Government Code:

Chapter 552, §851.001, §851.002, §851.006, §852.103, §853.003, §853.506, §854.002, §854.003, §854.004, §854.007, §854.008, §854.103, §854.502, §855.103, §855.112, §855.115, §855.306, §855.402, and §855.410.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 12, 2023.

TRD-202302490

Christine M. Sweeney

Chief Legal Officer

Texas Municipal Retirement System

Effective date: August 1, 2023

Proposal publication date: May 19, 2023

For further information, please call: (512) 225-3710

STATUTORY AUTHORITY

The new Chapter 127 rules are adopted pursuant to the authority granted under the following provisions of the TMRS Act or the Texas Government Code: (i) Government Code §851.006, which allows the Board to adopt rules to allow the System to make payments in accordance with Section 845 of the Pension Protection Act of 2006; (ii) Government Code §852.103, which allows the Board to adopt rules to implement withdrawals of contributions and rollover distributions; (iii) Government Code §853.004, which allows the Board to adopt rules necessary or desirable to implement Chapter 853; (iv) Government Code §853.506, which allows the Board to adopt rules to comply with the Uniformed Services Employment and Reemployment Rights Act; (v) Government Code §854.003, which allows the Board to adopt rules to comply with the distribution requirements of Section 401(a)(9) of the Internal Revenue Code of 1986; (vi) Government Code §855.102, which allows the Board to adopt rules it finds necessary or desirable for the efficient administration of the System; and (vii) Government Code 855.201, which allows the Board to delegate to the executive director powers and duties provided to the Board by the TMRS Act. In addition, the rule changes are adopted as a result of TMRS' rule review, which was conducted pursuant to Texas Government Code §2001.039.

CROSS-REFERENCE TO STATUTES

Texas Government Code: Chapter 522, §851.001, §851.002, §851.006, §852.103, §853.003, §853.506, §854.002, §854.003, §854.004, §854.007, §854.008, §854.103, §854.502, §855.103, §855.112, §855.115, §855.306, §855.402, and §855.410.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on July 12, 2023.

TRD-202302491

Christine M. Sweeney

Chief Legal Officer

Texas Municipal Retirement System

Effective date: August 1, 2023

Proposal publication date: May 19, 2023

For further information, please call: (512) 225-3710