Buyback of Service Credit

If you have been a TMRS member and end your membership by leaving employment and withdrawing your member deposits, then return to work for a TMRS city, you may be able to buy back the TMRS service you refunded. The city you go to work for must adopt a buyback ordinance as part of its TMRS plan. Your former employment can be with your current city or another participating TMRS city.

Here's how it works. To buy back service credit you previously refunded:

• You must be an employee of the city and a member of TMRS on the date of the buyback ordinance's adoption;
• You must have at least 24 consecutive months of service credit as an employee of the city adopting the ordinance; and
• You must re-deposit, in one lump sum, all of the amount previously refunded plus a reinstatement fee equal to 5% of the amount you withdrew for each year since your refund.

Your member account with TMRS is credited with the lump sum payment, while the 5% reinstatement fee is credited to the city's account with the System.

Federal tax law allows you to use money from some deferred compensation plans and IRAs to purchase service credit. If you are eligible to buy back service credit previously refunded or to purchase Military Service Credit, you may use money from your deferred compensation plan or IRA without paying taxes or paying a penalty for early withdrawal. If you are interested in using this method to purchase service credit, please contact TMRS for more information about your options.

Updated Service Credit (USC)

Updated Service Credit (USC) is a special feature of the TMRS retirement plan that may increase the value of your retirement benefits. A city adopts USC as part of its TMRS plan.

USC is designed to help career members' benefits maintain their value. In calculating USC, TMRS looks at the changes in your salary over your career and at any changes the city has made to its TMRS plan, such as your deposit rate or the city's matching ratio. In many cases, USC can increase your monthly retirement payment.

Generally, USC protects your benefit by including increases in your salary and any changes your city might have made to its TMRS plan and assuming those increases and changes have been in effect throughout your career.

• In most cases, your salary should increase over your career, due to inflation and to promotions and raises. Your monthly deposits to TMRS during your early career may be substantially lower than they are in later years.
• Also, cities can increase member deposits or make other changes to their TMRS plans. For example, if your city increases your member deposit rate from 5% to 7%, you are now paying a larger portion (7%) of your wages toward your retirement, though your deposits from past years were at 5%.
• Other city plan changes, such as an increase in the city's matching ratio, will also be calculated.

Although USC may increase the value of your retirement benefit, USC does not affect the amount of money in your Member Account, or the amount you will receive if you take a refund of your member deposits and interest. USC will only be part of your benefit if you retire and receive a monthly retirement payment.

Updated Service Credit interest is prorated in the year you retire, so you receive the value of your USC no matter which month you choose to retire.

Cities adopt USC by ordinance. Prior to adoption, TMRS must prepare an actuarial study to determine the cost of the USC adoption. After receiving the TMRS study, the city determines the percentage (50%, 75%, or 100%) of Updated Service Credit it will provide and whether it will adopt USC on a one-time or annually repeating basis.

You must have made 36 monthly member deposits to be eligible for USC, and these deposits must have been made for service with the city that is adopting USC, prior to the USC study date. The study date is 13 months before the date the city adopts the provision.

Q:	If my city adopts USC, will I receive increased credit?
A:	Most members receive some increased credit. However, if you have had no significant salary increase over your career or if the city's matching ratio or member deposit rate has not changed, you may not receive USC.
Q:	How can I tell if my city has adopted USC?
A:	The easiest way to tell is to use this web page to check your city's specific plan. The USC percentage (50%, 75%, or 100%) and the effective year will be shown. If no percentage is shown, your city has not adopted USC. An (R) beside the year indicates that your city has chosen to perform a USC calculation every year.

For more information, you may wish to download a copy of A City's Guide to Updated Service Credit.

Prior Service Credit

When a city joins TMRS, the employees of that city receive credit for service performed before the city joined. Each city determines the percentage value and pays the cost of the service credit granted.

Prior Service Credit treats your account as if you had been a member of and making monthly deposits to TMRS throughout those earlier periods of time.

Depending on your city's choices, Prior Service Credit can include:

• Time you were employed by the city before the city joined TMRS;
• Time you were employed by the city before age limits were removed for TMRS participation;
• Time you were employed by an entity, such as a public hospital or utility, that has since become a city department; and
• Time spent as an elected city official if you became a TMRS member while serving in that office.

TMRS issues a letter to each eligible member detailing the amount of Prior Service Credit and the monetary value of the credit at the time it is granted.

Interest on Prior Service Credit is prorated in the year of retirement, so you receive the value of your Prior Service Credit no matter which month you choose to retire.

Loss of Prior Service Credit

If your membership in TMRS stops for any reason, any Prior Service Credit you have received becomes void. You keep Prior Service Credit only if you remain a member of TMRS until you retire.

If you lose Prior Service Credit, but you later become eligible for and choose to buy back previously refunded service credit, any Prior Service Credit that was voided when your membership terminated will be reinstated.

Military Service Credit

TMRS recognizes two types of Military Service Credit. One type, governed by the federal Uniformed Services Employment and Reemployment Rights Act - USERRA, is available to all TMRS members. The other type must be adopted by your city.

To qualify for either type of Military Service Credit, the following conditions must be met:

• Your active duty service cannot have been terminated on dishonorable terms; and
• You have not received credit for the same military service in any other retirement system or programs established under the laws of the State of Texas.

Military Service While a TMRS Member - USERRA Credit (Applies to all TMRS Cities):

If you enter active-duty military or war-related service - either voluntarily or because you are called to active duty - while you are a covered employee and do not withdraw your member deposits, you may be eligible to establish service credit in TMRS for a maximum of 60 months of military service.

In order to qualify for Military Service Credit, you must be re-employed by the city within 90 days of:

• Your release or discharge from active duty; or
• Your release from hospitalization (up to one year after discharge).

You receive credit for the months of active-duty service performed (maximum of 60). Under certain circumstances, you can make the member deposits you would have made to TMRS as an employee of the city had you not performed military service. Your rights are governed by the federal Uniformed Services Employment and Reemployment Rights Act - USERRA. For the rules and regulations regarding USERRA, please contact either your city's personnel department or TMRS.

Credit for Other Periods of Military Service (Provision must be adopted by your city):

This provision is optional for cities. Once adopted, the provision recognizes military service either:

• performed before you were employed by the city; or
• during a time when you voluntarily left city service for the military and withdrew your member deposits or did not exercise your rights under USERRA.

This type of Military Service Credit may only be received if you are not receiving (and are not eligible to receive) federal military retirement payments based on 20 or more years of active duty or the equivalent.

    1. If you voluntarily left employment with the city to enter into active-duty military service and terminated your TMRS membership by withdrawing your deposits, you may be eligible to establish a maximum of 60 months of Military Service Credit.

    2. If you performed active-duty military service before your employment with the city, you may be eligible to establish Military Service Credit for a maximum of 60 months. You must have been employed by a TMRS city or cities for at least five years, have at least five years of service credit in TMRS, and be a current employee of the city.

    3. If you are eligible to establish this credit under (1) or (2), you may apply to TMRS for Military Service Credit. There is no charge to establish this credit and you will receive time only service credit (a maximum of 60 months), which counts toward your retirement eligibility but has no monetary value. A copy of your discharge papers (DD-214 or equivalent) indicating your total active duty military service must be submitted to TMRS along with your application form.

If you have lost your military papers, you can get duplicates by writing:

National Personnel Records Center
Military Service Personnel Records
9700 Page Blvd.
St. Louis, MO 63132
ATTN: (i.e. Army Reference Branch, Navy Reference Branch, etc.)

NOTE: If you were employed on December 31, 2003, by a city that had previously adopted Military Service Credit, and you earn at least five years of TMRS credit, you have the option to purchase Military Service Credit (a maximum of 60 months) by paying TMRS $15 for each month you wish to establish, and submitting an application form along with a copy of your discharge papers. The money you deposit will become part of your TMRS account where it will earn interest. The Military Service Credit you purchase also counts toward your eligibility for service retirement, but is not included in any calculation of Updated Service Credit. If you choose to purchase Military Service Credit, you may be able to use funds from a deferred compensation plan, IRA, or other eligible plan to make the purchase. Federal tax law now allows you to roll over from some deferred compensation plans and IRAs to purchase certain military service credit, if you meet the requirements. You will not have to pay income taxes or penalties for early withdrawal at the time of withdrawal. If you are interested in purchasing military service credit and you participate in a deferred compensation plan or have an IRA, please contact TMRS for more information about your options.

Q:	Can my time in the Armed Forces Reserves or National or State Guard count?
A:	Yes, if your service was performed on active duty status, as certified on form DD-214.
Q:	Can I get credit for time served in the military by using Restricted Prior Service Credit?
A:	Yes. If your city has adopted Restricted Prior Service Credit, you can receive time credit only (no money will be added to your account) for any service performed on active duty. Restricted Prior Service Credit can be established for any military service - even for military retirees with 20 or more years of active duty or the equivalent.

Restricted Prior Service Credit

If your city adopts this provision, you can receive Restricted Prior Service Credit for the following types of previous, full-time employment:

• With any public authority or agency created by the United States;
• With any state or territory of the U.S.;
• With any political subdivision of any state in the U.S.;
• With any public agency or authority created by a state or territory of the U.S.; or
• As a commissioned law enforcement officer employed as a college campus security employee at a Texas institution of higher education.

OR

If you were an employee of the State of Texas or any branch, agency, or subdivision of the state and refunded service credit under:

• The Employees Retirement System of Texas;
• The Teacher Retirement System of Texas;
• The Judicial Retirement System of Texas (Plan 1 or 2);
• The Texas County & District Retirement System;
• The City of Austin Employees Retirement System; or
• TMRS.

To receive Restricted Prior Service Credit for service in one of the other statewide systems, you cannot have received service credit for that service in that system or in TMRS. You must have refunded your service credit in the other statewide system by withdrawing your deposits. If you have service credit in another statewide system that has not been refunded, you may be eligible for the Proportionate Retirement Program.

Also, please see this information on Proportionate Buyback for another option regarding any refunded service with these systems.

Q:	What qualifies as a public authority or agency?
A:	Generally, a public authority or agency is one operated by a city, county, state, or federal government. This includes regional councils of governments, public school districts, and airport authorities. Publicly operated hospitals, electric cooperatives, water and utility districts, and colleges and universities also qualify. Service as a contracting agent with a government does not count.

IMPORTANT: Only your service time is counted under Restricted Prior Service Credit; you do NOT receive any monetary credit.

Adding Restricted Prior Service Credit toward your length-of-service requirements helps you reach vesting requirements and retirement eligibility sooner. For example, if you work for a city with a five-year vesting requirement, have three years of service credit in TMRS and you are granted two years of Restricted Prior Service Credit for your time as a public school teacher in another state, you are now vested with five years of service credit.

NOTE: If you were an elected official and you were not eligible to participate in TMRS, you cannot receive Restricted Prior Service Credit for your service as an elected official.

Probationary Prior Service Credit

If you were employed by a TMRS city on a probationary basis before September 1, 1989, and did not make TMRS deposits during your probationary period, you may be entitled to a maximum of six months of Prior Service Credit if the city adopts an ordinance granting this credit.

Concurrent Service Credit

Concurrent Service Credit occurs when you make a member deposit with more than one city or retirement system in the same calendar month.

Deposits you make count toward your retirement benefit, however, you only receive one month of service credit toward vesting and retirement eligibility.

Concurrent Service Credit often occurs when an employee leaves one TMRS city during a part of the month and begins a new job with another TMRS city later in that month.

Family and Medical Leave Act (FMLA)

In cities subject to the Family and Medical Leave Act, employees can take an unpaid leave of absence under FMLA.

If you are on leave under FMLA, you do not receive service credit under TMRS because you are not receiving a salary from your city and are not making the required member deposits.

Although you are not making deposits for your retirement, you still retain your TMRS membership. If your city has adopted Supplemental Death Benefits, you should apply for extended coverage in order to maintain this death benefit.

Once you return to work and again make member deposits to TMRS, you will start receiving service credit.

Proportionate Retirement Program
(Combined Service Credit)

The Proportionate Retirement Program is a program that allows people with service in two or more designated retirement systems to combine service credit to meet retirement eligibility. Each participating system has its own procedures for administering benefits under the Proportionate Retirement Program.

If you currently have service credit in two or more of these retirement systems:

• TMRS;
• Teacher Retirement System of Texas;
• Employees Retirement System of Texas;
• Judicial Retirement System of Texas (Plan 1 or 2);
• Texas County & District Retirement System; or
• City of Austin Employees Retirement System,

you may, under certain circumstances, combine that service credit to meet service retirement eligibility in TMRS and the other systems. Please notify TMRS if you become a member of one of these other retirement systems. Proportionate credit can also help you meet the length-of-service requirement for leaving your member deposits with TMRS.

You should consult each system in which you have credit about Proportionate Retirement before making retirement plans.

IMPORTANT: If you have refunded your deposits from one of these retirement systems, service credit in that system may not be counted under Proportionate Retirement but you may be eligible for Proportionate Buyback or Restricted Prior Service Credit.

If you qualify for benefits under Proportionate Retirement, you will receive benefit payments from each system, based on your service credit with that system.

NOTE: In certain situations, service credit earned in one system may not be recognized by another system. If you have service credit with more than one of the statewide retirement systems listed, please contact each system to make an accurate determination of what will be allowed.

Proportionate Buyback

If you are a current member of TMRS and have previously refunded service credit from another Proportionate Retirement participating system, you may choose to re-establish that service credit under the participating system's rules. TMRS will verify your current membership in TMRS to the participating system to enable you to establish previously canceled service credit.

Likewise, if you are a current member of a participating Proportionate Retirement Program system other than TMRS, and you have previously refunded service credit in TMRS, you may establish credit for your TMRS time by notifying TMRS of your eligibility and intention to establish the credit. Service credit in TMRS that is established using Proportionate Buyback has no monetary value and counts only as time.