(1) The organizational rule of the Teachers' Retirement Board is set forth in ARM 2.1.101 and is herein adopted and incorporated by this reference.

This rule has been repealed.

For the purpose of this chapter, the following definitions apply:

(1) "Alternate payee" means an alternate payee as defined in 19-20-305, MCA.

(2) "Board" or "retirement board" means the Teachers' Retirement Board as provided for in 2-15-1010, MCA.

(3) "Contingent beneficiary" means a beneficiary designated to receive payments if all primary beneficiaries are deceased. Contingent beneficiaries will be awarded benefits on a share-and-share-alike basis, unless specified otherwise on the member's designation form.

(4) "Direct rollover" means a distribution made by the Teachers' Retirement System directly to an eligible retirement plan specified by the participant.

(5) "Eligible retirement plan" means any of the following that accepts a participant's eligible rollover distribution:

(a) an individual retirement account described in Internal Revenue Code (IRC) section 408(a);

(b) an individual retirement annuity described in IRC section 408(b);

(c) an annuity plan described in IRC section 403(a);

(d) a qualified trust described in section 401(a);

(e) effective January 1, 2002, an annuity contract described in IRC section 403(b);

(f) effective January 1, 2002, a plan eligible under IRC section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into that plan from a plan under this chapter; or

(g) effective January 1, 2008, a Roth Individual Retirement Account (IRA) described in IRC section 408A.

(6) "Enrolled actuary" means a person who is enrolled by the Joint Board for the Enrollment of Actuaries established under Subtitle C of the Title III of the Employee Retirement Income Security Act of 1974.

(7) "Family law order (FLO)" means a family law order as defined in 19-20-305, MCA.

(8) "Nonqualified service credit" means permissive service credit other than for services as defined in IRC section 415(n)(3)(C).

(9) "Paraprofessional" means someone who provides instructional support which includes:

(a) one-on-one tutoring;

(b) classroom management, such as organizing instructional materials;

(c) instructional assistance in a computer laboratory;

(d) conducting parental involvement activities;

(e) a translator; or

(f) instructional support services under the direct supervision of a highly qualified teacher.

(10) "Participant" means a person who has or is eligible to receive a distribution from the Teachers' Retirement System including:

(a) a member or former member;

(b) a member's or former member's surviving spouse;

(c) a member's or former member's spouse or former spouse who is the alternate payee under a FLO that qualifies as a domestic relations order as defined in IRC section 414(p); and

(d) effective January 1, 2007, a nonspouse who is a designated beneficiary as defined in IRC section 401(a)(9)(E).

(11) "Primary beneficiary" means a beneficiary or beneficiaries designated to receive payments upon the death of an active, inactive or retired member, or alternate payee. Primary beneficiaries will be awarded benefits on a share-and-share-alike basis, unless specified otherwise on the member's designation form.

(12) "Service credits" or "creditable service" means the number of years credited to a member's account for which contributions have been received as required by statute or rule.

(13) "School term or school year" means the fiscal year July 1 through June 30.

This rule has been repealed.

This rule has been repealed.

(1) The actuary designated by the Teachers' Retirement Board, at a minimum, must:

(a) be a member of at least one of the following professional organizations, as designated:

(i) a Member of the American Academy of Actuaries;

(ii) a Fellow or Member of the American Society of Pension Professionals; or

(iii) an Associate or Fellow of the Society of Actuaries.

(b) comply with the qualification standards applicable to actuaries issuing statements of actuarial opinion as adopted by the American Academy of Actuaries, which qualification standards may be obtained from the American Academy of Actuaries, 1850 M Street NW, Suite 300, Washington, DC 20036, or on the Academy's web site at www.actuary.org; and

(c) comply with all applicable actuarial standards of practice (ASOPs) as adopted by the Actuarial Standards Board.

(2) The actuary designated by the Teachers' Retirement Board must comply with the identified qualifications at all times while engaged as the actuary for the Teachers' Retirement System, including that the actuary must comply with the standards set forth in (1)(b) and (1)(c) as those standards may be amended from time to time by the adopting entity.

(3) Upon request of the board, proof of qualification must be provided.

(1)  Each unit of the university system shall provide the Teachers' Retirement Board with a monthly report of all members participating in the optional retirement program and remit the employer contributions due. The report shall contain the following and be in alphabetical order:

(a) last name, first name;

(b) social security number;

(c)  salary earned. 

(2) This rule refers to but is not limited to the following:

(a) optional retirement table;

(b) monthly annuity table;

(c) termination pay rate table;

(d) rates for mortality, disability, retirement, and withdrawal;

(e) assumptions for future salaries, investment earnings, administrative expense and termination.

(3) The assumptions, rates and tables shall be effective as provided in the minutes.

(a) employed for 3.5 hours per day or 17.5 hours per week and;

(b) employed at least 210 hours during the school year.

(2) Teacher's aides employed prior to September 1, 1989, who remained in the public employee's retirement system are not eligible to participate in the teachers' retirement system while employed as a teacher's aide with the same employer.

(3) A teacher's aide will be considered in an instructional services capacity if they are assisting a certified teacher in the education and instruction of students in the regular curriculum of the institution.

(4) Part-time, post graduate instructors in the university system are not eligible for membership.

(5) A part-time employee, who has not been re-employed under 19-20-804 , MCA will be considered an active member after completing the equivalent of 30 full-time days of membership service.

(1) Any person employed as an independent contractor shall be ineligible for membership in the TRS. Certification from the Montana Department of Labor and Industry pursuant to 39-71-401, MCA, as an independent contractor shall be accepted as prima facie evidence of independent contractor status by the Teachers' Retirement Board.

(2) In absence of certification by the Department of Labor and Industry, it must be shown that the worker is both free from direction and control of the party utilizing their services and have an independently established business. 

(3) If a person's status as an independent contractor is in question, they must become a member of the TRS as provided under 19-20-302, MCA. The burden of proof before the Teachers' Retirement Board is on the employer. Upon request, the employer will submit to the Teachers' Retirement Board a copy of the independent contractor certification issued by the Department of Labor and Industry for any contractor employed in a position normally eligible for membership under the TRS.

(1)  The basic period of time for calculating service credit shall be the fiscal year July 1 through June 30. Generally, service credit in the Montana Teachers' Retirement System shall be based upon the following unless otherwise provided by rule or statute:

(a) Service credit for Public Employees' Retirement System service qualified in the Teachers' Retirement System shall be credited to the member's account at the same rate earned under and reported to the Public Employees' Retirement System.

(b) A member employed less than full-time during the fiscal year shall receive part-time service credit based on the total number of hours, days, or months reported to the Teachers' Retirement System, divided by the number of hours, days, or months of equivalent full-time service. For the purpose of this subsection, seven hours shall be considered one day.

(2) For employees of the university system and community colleges, part-time service credit shall be prorated based upon the portion of the full-time contract completed and/or the daily rate of pay if available.

(2) Any member having purchased military service that is subsequently granted at no cost shall receive a refund of their accumulated contributions.

(3) Verification of military service should be submitted on form DD 214, or if not applicable, a form which certifies the date of entry into active military duty and the date of separation. A form should be provided for each term of active duty.

(4) The period of time used for crediting military service shall be the fiscal year of July 1 through June 30. Military service shall be credited on the basis of 12 full months of active duty equals one year of creditable service or a proportion thereof, based on the number of full months to 12. A partial month will be credited on the basis of the number of active duty days divided by 360.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(2) The person applying to purchase private teaching service must have been in compliance with the certification requirements of the state (or federal agency) in which the institution was located at the time the service was performed.

(1) Not more than 1 month's creditable service shall be awarded in any school year for 1 or more continuous months of absence without pay. To qualify this service, a member shall contribute to the retirement system, upon his return to contributing membership service, an amount equal to the combined employee and employer contributions which would have been made had he not been absent, based on his compensation at the commencement of his absence.

(2) Service credit shall be determined based upon his monthly FTE at the commencement of his absence.

(a) is an active contributing member of the teachers' retirement system; and

(b) is not eligible for membership under the public employees' retirement system.

(2) In no instance shall a member be able to qualify more service into the teachers' retirement system than they had in the public employees' retirement system.

(3) No more than 1 year's creditable service shall be awarded for service during the same fiscal year.

This rule has been repealed.

(2) A member must provide adequate documentation to permit the board to reasonably ascertain:

(a) if the services performed would be eligible for membership under the teachers' retirement system had they been performed in Montana and;

(b) if the school is a qualified institution established for the purpose of instructing students.

(1) Members of the TRS called to active duty for a period not to exceed five years and reemployed in accordance with the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994 shall be considered continuously employed during their military leave when determining vested interest and eligibility for retirement benefits.

(2) Reemployed National Guard, reservists, and veterans may elect to purchase creditable service for their military leave to be used in the calculation of retirement benefits. The cost to purchase this service shall be equal to the employee contributions that would have been made had they not been called to active duty. Interest accruing on the balance due to purchase active duty service will not be levied during the five years following the date of reemployment. If payment is not completed within five years following reemployment, interest will be assessed as provided under ARM

(3) To qualify for service under this rule, the member called to uniformed service must remain an inactive member of the retirement system during the period of service in the uniformed services by leaving his or her accumulated contributions on deposit.

(4) A member who is making additional contributions under a service purchase contract at the time he or she is called to service in the uniformed services may suspend payments under the contract if they return to employment as required by the Act.

(1) The actuarial cost to purchase creditable service will vary by the member's compensation, age and years of service at the time they apply or are eligible to purchase the additional service.

(a) The total compensation reported to the TRS for the most recent fiscal year or the member's average final compensation, whichever is greater, will be used to determine the actuarial cost.

(b) The members age at the time they make application to purchase service will be determined in compliance with ARM 2.44.525.

(c) The years of service used in the formula to determine the actuarial cost will include the total number of years of creditable service the member is eligible to purchase on the date they apply or are eligible to purchase service under this rule.

(2) Service will be credited to the member's account at the time they have completed payment in full. If the member retires or dies prior to completing payment in full, purchasable service will be credited on a prorated basis. 

(1) If a member signs an irrevocable payroll deduction authorization and subsequently terminates employment, the cost to purchase the balance of the remaining service will be recalculated at the time the member reapplies to purchase the balance of the service.  

This rule has been repealed.

(2) On the first monthly report coinciding with the effective date of the resolution, all additional contributions must stop and cannot be reinstated until the employee and employer have signed the irrevocable election form required by 19-20-415 , MCA.

(3) The service purchase-irrevocable election form will be available only through the office of the teachers' retirement system and must be requested at least 30 days prior to the effective date of the resolution to ensure the member will be able to continue payroll deductions uninterrupted.

(4) Employers who fail to withhold additional contributions in compliance with the applicable state and federal laws and rules adopted by the board will be notified that the additional contributions cannot be credited to the member's account. The employer will be required to take a credit on their next monthly report for any amounts reported in error, and to correct their tax withholding records.

(a) the voluntary additional contribution to be made by the member does not exceed the amount determined by the Teachers' Retirement System to be necessary to fund the benefit attributable to such service credit; and

(b) the requirements of Internal Revenue Code (IRC) section 415(b) are met (without regard to any reductions for early retirement age), determined by treating the accrued benefit derived from all such contributions as an annual benefit for purposes of IRC section 415(b); or

(c) the requirements of IRC section 415(c)(1)(A) are met (without regard to the compensation limit), determined by treating all such contributions as annual additions for purposes of IRC section 415(c).

(2) After-tax member contributions cannot be accepted if:

(a) the member is purchasing more than five years of nonqualified service credit; or

(b) any nonqualified service credit is taken into account under this rule before the member has at least five years of participation under the retirement system.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(2) Monthly benefits will be paid based upon information provided by the member and estimates prepared by the teachers' retirement system until final salary information and contributions are received.   Adjustments will be retroactive to the retirement effective date.

(3) At the time application for retirement benefits is made, each applicant must submit a copy of their final year's contract, any previous contract(s) as may be requested and a copy of their letter of resignation if one was submitted to their employer.   If a member does not have a written contract, a statement from their employer verifying their daily or hourly rate of pay, their full time equivalent and the number of days they were employed in the fiscal year will be accepted.

(4) Monthly benefits will be prorated to the date of death of the retiree or beneficiary.

(2) A birth certificate or some evidence of birth date is required for each child eligible to receive the child benefit.

This rule has been repealed.

(1) The average final compensation of a member who retires or dies before they receive full service credit for the fiscal year, shall be determined by using the greater of:

(a) the equivalent of the final three consecutive years' contracts reported to the system, based on the percentage of the member's final contract reported during their last fiscal year, plus any additional compensation reported during the same period.   For example, if 50% of the member's contract is reported during their final fiscal year, then we would calculate AFC using the compensation reported during the last fiscal year, plus the salary reported the first fiscal year preceding retirement, plus the salary reported the second fiscal year preceding retirement, plus 50% of the salary reported the third fiscal year preceding retirement; or

(b) any 3 full consecutive fiscal years' compensation which yield the highest average.

(2) Only salaries earned under contract on which contributions have been made can be used to determine the average final compensation.

This rule has been repealed.

This rule has been repealed.

(2) If the change in beneficiary is due to the death of the beneficiary of record, the retired member shall submit a copy of the death certificate.

(3) If the change in beneficiary is due to dissolution of marriage, the retired member shall submit a copy of the decree of dissolution or marital property settlement, whichever provides documentation that the current beneficiary of record is not entitled to receive all or part of the optional allowances as part of the judicial decree.

(4) The effective date to change a retirement allowance shall be the first of the month, following the month in which the application is received.

(5) If the member wishes to retain the same retirement option or change options, the member shall so designate on the application form and also furnish a copy of the beneficiary's birth certificate if the option includes the new beneficiary.

This rule has been repealed.

This rule has been repealed.

(1) Corrections of errors may be made by the employer on subsequent monthly reports via a letter of explanation and credit taken or additional payment remitted. Corrections reducing an employee's contributions cannot be accepted if the employee has received a refund.

(2) Contributions and wages reported for prior school years must be corrected using the employee and employer contribution rates in effect for the period the wages were earned.

(3) If the error caused membership service to be credited incorrectly, the member's account must be adjusted accordingly.

This rule has been repealed.

(2) Upon disability retirement, the contributions due to

adequately compensate the system for the additional benefit for termination pay under Option 1, shall be based on 15 years or the member's total years of creditable service, whichever is greater.

(1) A completed and signed Termination Pay Form together with the employee and employer contributions due must be received by the TRS by the 15th of the month, following the month in which the employee terminated employment. Only termination pay that is paid at the time of termination and retirement is reportable to the TRS.

(2) Tax deferred contributions remitted by an employer cannot exceed the total termination pay amount payable to the employee. Any contributions due that are greater than the termination pay amount payable to the employee cannot be picked up by the employer.

(3) Interest will be assessed at the actuarially assumed rate on employee and/or employer contributions over 30 days delinquent.

(4) If contributions on termination pay are not received within 60 days of the effective date of retirement, monthly benefits calculated using termination pay may be recalculated and adjusted retroactive to the date of retirement.

(5) If the member submits the employee contributions due but the employer refuses or does not timely remit the employer contributions due, the member will be given 30 days to work with the employer to remit contributions due before benefits will be recalculated. 

(6) The retiree and their employer will be notified in writing prior to assessing interest on unpaid contributions, or recalculating retirement benefits.

(1) The earned compensation for each year used in calculating a member's average final compensation may not exceed either the member's actual earned compensation or earnings adjusted by this rule for the preceding year by more than 10% except for increases that result from:

(a) collective bargaining agreements;

(b) a change or adjustments in a salary schedule covering a certifiable group of employees not covered under a collective bargaining agreement. The employer must certify the group of employees affected by the change or adjustment in the salary schedule, the increase received by each employee, and the methodology for determining the increases;

(c) compensation received for summer employment, provided summer compensation does not exceed one-ninth of the academic year contract for each full month or prorated for each portion of a month employed during the summer;

(d) change of employer;

(e) re-employment for a period of not less than one year following a break in service;

(f) a promotion to an existing permanent position with the same employer. The assignment of temporary duties or a new job added to existing duties, an acting or interim appointment, a change in classification or title, or an increase in compensation received would not qualify as a promotion; or

(g) the combination of salary from multiple employers that when reviewed separately does not exceed 10%.

(2) The member must provide adequate documentation to permit the board to make an informed decision concerning exceptions to the 10% limitation. Adequate documentation includes but is not limited to the following:

(a) employment contracts;

(b) official minutes of board meetings;

(c) collective bargaining agreements; or

(d) salary schedules.

(3) The assignment of additional duties of a one time or temporary nature shall not be exempt from the 10% limitation.

(4) Average final compensation is equal to total compensation less excess earnings not qualifying for an exemption.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) The board will make available to the public model forms approved for inclusion in a proposed Family Law Order (FLO).

(2) If benefits are currently payable to the participant(s), the FLO may specify a future effective date; however, a FLO may not provide for payments to an alternate payee prior to the date on which the participant first becomes eligible for payment from the TRS.

(3) If benefits are payable pursuant to a FLO that meets the requirements of a domestic relations order as defined in IRC section 414(p), the applicable provisions of IRC section 414(p) will be followed by the Teachers' Retirement System in giving effect to the FLO.

(4) Two basic types of payment distributions are allowed to alternate payees: "fixed amount" and "actuarially equivalent benefit."

(a) A "fixed amount" must designate a specific total dollar amount to be paid to the alternate payee over a specified period of time, or a specified monthly amount payable for the life of the participant, neither of which can be greater than the total monthly benefit payable to the participant.

(b) An "actuarially equivalent benefit" is payable for the life of the alternate payee.

(1) A participant or alternate payee must submit a certified copy of a court judgment, decree, or order containing a proposed FLO to the board for approval. The board has delegated authority for approval of a proposed FLO to the executive director of TRS.

(2) The effective date for purposes of allocating benefits and payments in progress is the first day of the month following receipt of a certified copy of the FLO.

(3) For purposes of allocating a lump sum payment, a certified copy of the FLO must be received before the payment is mailed or otherwise conveyed to the participant.

(4) The board's decision to approve or not approve a proposed FLO is final unless the participant or alternate payee files a request for an administrative contested case hearing within ten days from the date the board sends notice of the decision. If an administrative hearing is properly requested, the final administrative decision must be made by the board after receiving the hearing examiner's proposed decision.

(5) Upon receipt of a certified copy of a stay from the issuing court or the Montana Supreme Court, the board will suspend further consideration or implementation of a proposed FLO. Unless otherwise directed by court order, the board will retain payments withheld prior to receipt of the stay and simultaneously resume making payments of participant(s) full benefit(s). The board will take further action only on receipt of a certified copy of an order directing such action. If the stay is lifted, the board will proceed with recognition, approval and implementation procedures as outlined herein. Any amount owing the alternate payee may be paid out of any payments owing the participant.

(6) Costs of reviewing and administering the FLO, including actuarial analysis and attorneys' fees, may be assessed by the board and billed to the party filing the proposed FLO with the board, unless another party is designated in the FLO to pay the costs. Amounts owing plus interest thereon at an annualized effective rate of 8% may be offset against payments to be received by the appropriate party.

(7) An alternate payee may receive payment by electronic fund transfer upon submission of a properly executed form required by the board.

(8) An alternate payee must promptly inform the board of any change of name or address.

(9) The Teachers' Retirement System may establish separate benefits for a member and an alternate payee.

(1) A disabled member who is engaged in a gainful occupation must notify the Teachers' Retirement System within thirty days of being engaged in that occupation. Notification must include:

(a) name and address of employer, including if self-employed;

(b) salary or hourly rate of pay and estimated yearly earnings; and

(c) description of their duties and responsibilities and if the position is full-time or part-time.

(2) The disabled member must report to the Teachers' Retirement System, no less than annually, the total amount earned each year. Members are encouraged to report earnings each month so that the TRS can advise the member when they will earn more than allowed and adjust their benefit if necessary.

(3) A disabled member who is at least sixty years of age and is not engaged in a gainful occupation is not required to file an annual earnings statement if the disabled member has not been engaged in a gainful occupation and has reported no earnings for at least the three consecutive preceding years.

(4) A disabled member who is not required to submit an annual earnings statement by application of (3) must resume submitting annual earnings statements if the disabled member again becomes gainfully employed, and must continue to submit annual earnings statements until the disabled member again has not been gainfully employed and has reported no employment income for at least the three consecutive preceding years.

(1) If the final payment due to purchase service credits is over 60 days past due, the member will be notified in writing that contributions, plus accrued interest, are due and payable, and that benefits will be recalculated and corrected retroactive to the date of retirement if payment is not received within 30 days of notification.  

(a) maintain and publish an extra duty schedule that is approved and adopted by the governing body;

(b) include extra duty compensation in the member's employment contract; and

(c) specifically include the extra duty in the official job description.

(2) Employers are required to report such extra duty compensation paid to a member and to withhold employee contributions as provided under 19-20-602 , MCA, and submit employer contributions as provided under 19-20-605 , MCA.

(3) The term does not include:

(a) termination pay;

(b) secondary employment; or

(c) payments for employment or bonus or additional salary paid to an employee on account of his promise, expressed or implied, to retire on a specified date or within a specified period, or any bonus or additional salary paid to an employee predicated upon his eligibility to retire whether promised or not.

(i) Failure to pay a like bonus or additional salary to another employee in like circumstances who has not promised to retire, creates an inference that payment to the first employee was on account of his promise to retire or terminate. Other probative evidence may be presented to explain away this inference.

(ii) Unless otherwise limited by a specific statute, such payments may be considered termination pay and may not be reportable as earned compensation to the teachers' retirement system.

(2) For purposes of applying the limits under Internal Revenue Code (IRC) section 415(b), in no event shall a member's annual benefit payable under the Teachers' Retirement System in any limitation year be greater than the limit applicable at the annuity starting date, as increased in subsequent years pursuant to IRC section 415(d) and the regulations thereunder.

(3) If the form of benefit is not a straight life or a qualified joint and survivor annuity, then (2) is applied by either reducing:

(a) the limit in IRC section 415(b) applicable at the annuity starting date; or

(b) adjusting the form of benefit to an actuarially equivalent straight life annuity benefit determined using the assumptions required by the Treasury Regulation under IRC section 415, and the applicable mortality table described in Treasury Regulations section 1.417(e)-1(d)(2) (the mortality table specified in Revenue Ruling 2001-62).

(a) the incentive or bonus has been paid to the member for at least five consecutive years;

(b) the employer publishes, in some official manner (in board minutes, in a collective bargaining agreement, in employment contracts, etc.):

(i) its intent to make the incentive or bonus payments;

(ii) who will receive the incentive or bonus payments;

(iii) the criteria for determining the award and amount of the incentive and bonus payments with respect to all employees and certification classes to receive the payments;

(iv) the anticipated duration of the incentive or bonus payments;

(v) the specific annual amount of the incentive or bonus payment or the specific percentage of annual salary by which the incentive or bonus payment will be calculated;

(vi) how the incentive or bonus payments will be made (annually, monthly, etc.); and

(vii) the date by which the payment will be made.

(c) the incentive or bonus payment amount in each year is the same or is subject to fluctuation only if the payment is determined as a percentage of annual salary, in which case, the percentage increase in annual salary is the same in each year for all employees of the certification class (teacher, administrator, or superintendent);

(d) continuation of the incentive or bonus payment is relatively certain and not subject to budgetary discretion, revenue stream factors, or award or payment criteria that puts the payment at any greater risk of nonpayment than the base salary; and

(e) eligibility criteria and payment calculation methodologies do not weight the award of or amount of incentive or bonus payments in a manner that disproportionately increases compensation to employees based on years of service or age, including that:

(i) if an incentive or bonus is paid to one employee of a certification class, the incentive or bonus must be paid to every member of that certification class; and

(ii) the amount of the incentive or bonus paid to each employee of a certification class must be the same, except that the incentive or bonus payment amount paid to each member of the certification class may be calculated as a percentage of each employee's annual salary, in which case, the percentage of annual salary to be calculated must be the same for all employees of the certification class.

(2) If incentive or bonus payments that are otherwise part of a series of annual payments have not been paid to a member for at least five consecutive years at the time the member retires, any amounts reported in the three-year period that constitutes a member's average final compensation will be included in average final compensation as termination pay Option 2 as provided under 19-20-716, MCA.

(3) An employer who wants incentive and bonus payments that are part of a series of annual payments included as part of the earned compensation of its employee(s) should submit the published information described in (1)(b) to the Teachers' Retirement System for review prior to submitting contributions for those compensation amounts.

(4) As used in this rule, "annual salary" means the salary to be paid to a member of the Teachers' Retirement System in a particular year as set forth in the employer's salary schedule or in a written employment agreement, without consideration for pay for additional duties, bonuses, incentives, fringe benefits, or other additions to remuneration.

(5) Bonus and incentive payments that are part of a series of annual payments are subject to the 110% cap set forth in 19-20-715, MCA, and administrative rules clarifying 19-20-715, MCA.

This rule has been repealed.

(a) over the member's life or the lives of the member and a designated beneficiary; or

(b) over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary.

(2) If a member dies after the required distribution of benefits has begun, the remaining portion of the member's benefit must be distributed at least as rapidly as under the method of distribution before the member's death.

(3) If a member dies before the required distribution of the member's benefits has begun, the member's entire benefit must be:

(a) distributed (in accordance with federal regulations) over the life or life expectancy of the designated beneficiary, with the distributions beginning no later than December 31 of the calendar year following the calendar year of the member's death; or

(b) distributed within five years of the member's death.

(2) Effective for any annuity commencing on or after July 1, 2008, the amount of annuity paid to a member's beneficiary may not exceed the minimum distribution incidental benefit rule under Treasury Regulation section 1.401(a)(9)-6, Q&A-2.

(2) The total death or disability benefits payable may not exceed 25% of the cost for all of the members' benefits received from the Teachers' Retirement System.

(1) A participant may elect to have any portion of an eligible rollover distribution made as a direct rollover.

(2) An "eligible rollover distribution" means any allowed distribution of all or any portion of the accumulated contributions of a member to an eligible retirement plan to the credit of a participant, 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 the life expectancy) of the participant or the joint lives (or joint life expectancies) of the participant and the participant's designated beneficiary, or for a specified period of ten years or more;

(b) any distribution to the extent such distribution is required under IRC 401(a)(9);

(c) the portion of any distribution that is not includible in gross income; and

(d) any other distribution that is reasonably expected to total less than $200 during the year.

(3) Effective January 1, 2002, a portion of a distribution will not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income; however, such portion may be transferred only:

(a) to an individual retirement account or annuity described in IRC section 408(a) or (b);

(b) to a qualified defined contribution plan described in IRC section 401(a);

(c) on or after January 1, 2007, to a qualified defined benefit plan described in IRC section 401(a); or

(d) on or after January 1, 2007, to an annuity contract described in IRC section 403(b) that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible.

(4) Effective January 1, 2002, the definition of eligible rollover distribution also includes a distribution to a surviving spouse, or to a spouse or former spouse who is an alternate payee under a FLO, as defined in IRC section 414(p).

(5) A participant who is a nonspouse beneficiary may rollover a distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution. The account or annuity will be treated as an inherited individual retirement account or annuity.