34 Tex. Admin. Code § 107.3 - Direct Rollovers and Trustee-to-Trustee Transfers

(a) The retirement system may establish procedures for the acceptance of an eligible rollover distribution, including a direct trustee-to-trustee transfer, from an eligible retirement plan for the payment of any portion of the deposit a member is permitted to make for the purchase of types of credit in the retirement system, except that the system may not accept the distribution, if the system is to separately account for the amounts.

(b) Effective January 1, 1993, a distributee may elect, at the time and in the manner prescribed by the system, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(c) Definitions:

(1) Eligible Rollover Distribution--An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:

(A) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of 10 years or more;

(B) any distribution to the extent such distribution is required under § 401(a)(9) of the Internal Revenue Code of 1986.

(2) Eligible Retirement Plan--An eligible retirement plan is:

(A) an individual retirement account described in § 408(a) of the Internal Revenue Code of 1986;

(B) an individual retirement annuity described in § 408(b) of the Internal Revenue Code of 1986;

(C) a qualified trust described in § 401(a) of the Internal Revenue Code of 1986 or an annuity plan described in § 403(a) of the Internal Revenue Code of 1986 that accepts the eligible rollover distribution;

(D) for distribution made on or after December 31, 2001, an annuity contract described in § 403(b) of the Internal Revenue Code of 1986;

(E) for distributions made on or after December 31, 2001, an eligible plan under § 457(b) of the Internal Revenue Code of 1986 which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state which agrees to separately account for amounts transferred into such plan from this system; and

(F) for distributions made on or after December 31, 2007, a Roth IRA described in § 408A of the Internal Revenue Code of 1986;

(3) Distributee--A distributee includes a member or former member. In addition, the member's or former member's surviving spouse and the member's or former member's spouse or former spouse who is the alternate payee under a domestic relations order, as defined in § 109.2 of this title (relating to Definitions), are distributees with regard to the interest of the spouse or former spouse.

(4) Direct Rollover--A direct rollover is a payment by the system to the eligible retirement plan specified by the distributee.

(d) The system shall, upon the request of a beneficiary of a deceased member who is not a distributee, within the meaning of subsection (c)(3) of this section, transfer a lump sum distribution to the trustee of an individual retirement account established under § 408 of the Internal Revenue Code of 1986 (or for distributions after December 31, 2009, to the trustee of an individual retirement account established under § 408A of the Internal Revenue Code of 1986) in accordance with the provisions of § 402(c)(11) of the Internal Revenue Code.

(e) Notwithstanding anything in this section to the contrary, a distribution shall not fail to be an eligible rollover distribution merely because a portion of the distribution consists of after-tax contributions which are not includible in gross income. However, such portion may be paid only to an individual retirement account or annuity described in Internal Revenue Code § 408(a) or (b), or to a qualified plan described in Internal Revenue Code § 401(a) or §403(a) that agrees to separately account for amounts so transferred, including separate accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(f) The retirement system shall implement this section in a manner that causes the retirement system to be considered a qualified plan under § 401(a) of the Internal Revenue Code of 1986. It is the responsibility of the distributee or beneficiary to determine that the transferee plan is an eligible plan for receiving a transfer pursuant to this rule.

Notes

34 Tex. Admin. Code § 107.3

The provisions of this §107.3 adopted to be effective May 1, 1993, 18 TexReg 2416; amended to be effective December 31, 2002, 27 TexReg 12371; amended to be effective July 21, 2009, 34 TexReg 4739; amended to be effective July 26, 2012, 37 TexReg 5488