Sec. 853.105. DETERMINATION OF PRIOR SERVICE CREDIT. (a) After receiving a certification of prior service and average prior service compensation under Section 853.104, the board of trustees shall determine the member's prior service credit.
(b) For an employee of a municipality having an effective date of participation in the retirement system before January 1, 1976, the prior service credit is an amount equal to the accumulation at interest of a series of equal monthly amounts for the number of months of approved prior service. Each monthly amount equals 10 percent of the member's average prior service compensation, or $300 a month, whichever is less. Interest is allowed at the end of each 12-month period on an accumulated amount at the beginning of each period and is credited only for each whole 12-month period.
(c) For an employee of a municipality having an effective date of participation in the retirement system after December 31, 1975, the prior service credit is an amount computed as a percentage determined as provided by Subsection (d), times a base credit equal to the accumulation at three percent interest of a series of monthly amounts for the number of months of approved prior service, times the sum of:
(1) the rate of contributions required of employees of the municipality for current service; plus
(2) the rate described in Subdivision (1) times the municipal current service matching ratio.
(d) The governing body of a municipality having an effective date of retirement system participation after December 31, 1975, shall determine in the ordinance providing for participation the percentage to be applied against the base credit in computing a prior service credit under Subsection (c). The percentage adopted may be any multiple of 10 percent that does not exceed 100 percent of the base credit. A governing body may not adopt a percentage under this subsection until the actuary first determines, and the board of trustees concurs in the determination, that the municipality is able to fund, before the 25th anniversary of the effective date of its participation in the retirement system, all prior service obligations that the municipality proposes to assume under this section.
(e) The prior service credit of a person who becomes a member of the retirement system under Section 852.105 or who is entitled to prior service credit under Section 853.102(a)(3) is computed on the percentage of the base prior service credit that was most recently used by the person's employing municipality in computing prior or updated service credits for current employees.
(f) Interest on a prior service credit is earned for each whole calendar year beginning on the effective date of membership and ending on the effective date of retirement. If a person retires under this subtitle on a date other than December 31, interest on a prior service credit is earned for the partial year in which the retirement occurs, prorated from January 1 of the year in which the retirement occurs to the effective date of retirement.
Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 221, ch. 18, Sec. 75, eff. Jan. 1, 1982. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 63.105 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 121, Sec. 5, eff. Jan. 1, 2002.
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