(a) Pursuant to §§843.101 - 843.104 of the Texas Government Code, a subdivision must certify to the system the service performed by employees of the subdivision before the subdivision's participation in the retirement system became effective and must also certify the average prior service compensation of those members.
(b) The subdivision must certify each member's prior service by calculating one month of credited service for each calendar month during which the member performed at least one day of service for the subdivision, other than as a temporary employee, prior to the month that includes the subdivision's effective participation date.
(c) The subdivision must certify each member's average prior service compensation by multiplying the member's most recent annual rate of compensation as determined in subsection (d) of this section by .97, and dividing this product by twelve.
(d) The most recent annual rate of compensation is determined based on the definition prescribed in §844.503 of the Texas Government Code concerning computation of current annual compensation for purposes of group term life insurance. The subdivision shall compute the most recent annual rate of compensation for a member by converting to an annual basis the regular rate of pay of the member for the most recent regular hour worked and proportionally reducing that annual basis figure if the member is not employed in a full time position. The most recent annual rate of compensation of a member who is exempt from the minimum wage and maximum hour requirements of the federal Fair Labor Standards Act (29 U.S.C. Section 201 et seq.) and who is paid on a salary basis is computed by converting to an annual basis the regular salary paid to the member for the most recent pay period of active employment.
(e) The system shall provide the subdivision a worksheet for the subdivision to enter the data concerning the months of prior service worked as defined in subsection (b) of this section, to enter the data concerning the most recent rate of annual compensation as defined in subsection (d) of this section, and to calculate the average prior service compensation as described in subsection (c) of this section. The subdivision shall be responsible for entering the data, making the calculations, and then certifying the results to the system.
(f) Upon receipt of the prior service certification and the average prior service compensation certification, the system will review the data, validate the calculations, and make any necessary corrections in the event of a discrepancy between the subdivision's certifications and the system's validation. If the calculation of average prior service compensation as mandated by this section is infeasible for any reason, the system may approve an alternate method to determine average prior service compensation as long as the calculation is reasonable and consistently applied.
(g) A subdivision must certify the prior service and average prior service compensation of all eligible members no later than 30 days after the subdivision's effective date of participation. In the case of a member eligible for prior service credit under §843.102(a)(2) of the Texas Government Code, the subdivision must make the certification no later than 30 days after the six month period of re-employment. Calculations of prior service credit are governed by the law in effect at the time of the calculation. The system may extend the time periods set forth in this subsection.
(h) If, under §843.201 of the Texas Government Code, a subdivision has acquired a public facility or assumed a governmental function, the date of acquisition or assumption shall be the effective date of participation for purposes of calculating the prior service and average prior service compensation of those members eligible under that section.

Source Note: The provisions of this §103.4 adopted to be effective November 26, 2013, 38 TexReg 8447