(a) For members who on or before August 31, 2005 had attained the age of 50, had at least 25 years of service credit, or whose combined age and service credit equals 70 or greater, the amount of compensation credited by TRS in each of the last three school years prior to retirement may not exceed the amount of compensation allowed for the preceding school year by more than 10% or $10,000, whichever is greater.
(b) For members who on or before August 31, 2005 did not meet requirements of subsection (a) of this section, the amount of compensation credited by TRS in each of the last five school years prior to retirement may not exceed the amount of compensation allowed for the preceding school year by more than 10% or $10,000, whichever is greater.
(c) For members meeting the requirements of subsection (a) of this section, the base line amount used to determine the amount of allowable compensation in the third school year prior to retirement is the greater of either the amount of compensation for the fourth school year prior to retirement or the amount of compensation for the fifth school year prior to retirement, provided the member received service credit in the base year. If the member did not receive service credit in either the fourth or fifth school year prior to retirement, the base amount is the earliest salary credited in the three school years prior to retirement, provided the member received service credit in the base year. If the member does not have service credit in at least three school years during the last five school years prior to retirement, the limit in subsection (a) of this section does not apply.
(d) For members who do not meet the requirements of subsection (a) of this section and who are subject to the restriction in subsection (b) of this section, the base line amount used to determine the amount of allowable compensation in the fifth school year prior to retirement is the greater of either the amount of compensation for the sixth school year prior to retirement or the amount of compensation for the seventh school year prior to retirement, provided the member received service credit in the base year. If the member did not receive service credit in either the sixth or seventh school year prior to retirement, the base amount is the earliest salary credited in the five school years prior to retirement, provided the member received service credit in the base year. If the member does not have service credit in at least five school years during the last seven school years prior to retirement, the limit in subsection (b) of this section does not apply.
(e) The amount of allowable compensation is the greater of 110% of the base line amount or the amount of compensation in the base year plus $10,000. The amount of allowable compensation for each subsequent year is the greater of 110% of the allowable amount for the previous year or the allowable amount for the previous year plus $10,000.
(f) Beginning on the first day of the 2011-2012 school year and thereafter, all increases in compensation without regard to the reason for the increase, are subject to the limits in subsections (a) and (b) of this section.
(g) TRS will adjust a member's annual compensation at the time of retirement to comply with the limit on creditable compensation in subsections (a) or (b) of this section and refund the member contributions on the amount that exceeds the limits described in this section. The refund will be made after the date on which TRS makes the first annuity payment.
(h) No adjustment in compensation will be made if the limit on compensation increases would not affect the calculation of the member's retirement benefit.
(i) Upon the request of TRS, the employer shall provide documents or records evidencing the amount and nature of the increased compensation reported to TRS.

Source Note: The provisions of this §25.31 adopted to be effective January 31, 2006, 31 TexReg 553; amended to be effective April 1, 2011, 36 TexReg 1830; amended to be effective December 29, 2016, 41 TexReg 10390; amended to be effective June 8, 2023, 48 TexReg 2859