Creditable Compensation

TRS Rules, Subchapter B, Compensation, Rule 25.24, Performance Pay.

Performance Pay must be reported through an RP20 on the Regular Payroll report. The employer must certify that the payment meets the criteria to be classified as Performance Pay Entity’s in the RE Portal prior to reporting it on the Regular Payroll Report. This certification is submitted through the My Worklist-Certifications option on the RE Portal. Performance Pay as eligible compensation is for public schools only. Institutions of higher education and region service centers may not report performance pay for employees.

Eligible when vacation, sick leave, or compensatory time is actually taken by the employee.

The following are examples of pay for additional duties performed by someone who is already serving in a TRS-eligible position:

• Teaching Driver Education as part of regularly assigned duties during the regular workday.
• Teaching Driver Education outside the regular workday and during the summer is an additional duty; however, the amount of compensation credited for this type of additional work is limited to $5,000.00 annually.
• Tutoring students outside the regular workday.
• Driving the school bus.
• Covering a class during an off-period for an absent teacher.
• UIL sponsor, class sponsors, student teacher sponsor, annual sponsor, etc.
• Teaching summer school when performed by an employee who had served in a TRS-eligible position during that school year and earned a year of TRS service credit.
• Overload scheduling (employment beyond the standard workload).

Eligible if paid as salary and wages rather than compensatory leave as the service is rendered. If compensatory leave is given for overtime worked in lieu of wages, payment at a later point for any unused leave is never eligible compensation.

Considered creditable compensation if verified to TRS on the form TRS 22W and the member contribution paid in a lump sum by the end of the school year after the school year in which the compensation was received. If the employee is also receiving compensation from the employer, the compensation should be reported on the regular monthly payroll report as well.

Eligible when it is paid in periodic payments as the service is rendered. Lump sum payments paid as retention bonuses or other incentives to retain employees are not considered longevity pay and should not be reported.

For example, a reporting employer may pay employees working at a specific school more than other employees performing similar duties at other locations. However, payment for relocating to a new employer or to compensate an employee for differences in the cost of living at a new location is not eligible compensation.

For example, paying an additional stipend for bilingual teachers or teaching advanced placement classes is creditable compensation.

Salary that is continued while the employee is on assault leave as authorized by Section 22.003 of the Education Code is eligible compensation for TRS purposes. If the employee receives both workers compensation paid as temporary wage replacement pay and compensation from the employer, the workers compensation may be verified to TRS on the form TRS 22W, and member contributions paid in a lump sum by the end of the school year after the year in which the workers compensation was paid. Member contributions on continuing compensation from the employer should be withheld and reported to TRS by the employer on the regular monthly report. See Section 22.003 of the Education code and Sections 25.21, 25.43, and 25.47 of the TRS Rules.

Eligible only if the employer paying amounts to a member pursuant to a settlement agreement obtains a written determination from TRS that the amounts are creditable compensation before reporting such amounts to TRS as compensation. In the absence of the written determination from TRS, amounts paid pursuant to a settlement agreement are not creditable compensation for TRS purposes.

By law or contract, these payments should have been paid at fixed intervals provided that the amounts are credited to the payroll period in which they were earned.

Note: Retroactive payments are NOT delayed payments. Delayed payments are, for TRS purposes, “delayed payments of lump-sum amounts which by law or contract should have been paid at fixed intervals and which otherwise meet the requirements of subsection (b) of this section provided the amounts are credited to the payroll period in which they are earned.” See § 25.21(c)(4), Title 34, Texas Administrative Code, Part 3. Payments authorized after work has commenced are not delayed payments under that section of the TRS rule because they were not required by law or contract to be paid at the time the work commenced; the increase in compensation was not approved until after the work has been performed in part.

This includes:

1. A tax-sheltered annuity (403(b))
2. A cafeteria plan qualifying under Section 125 of the United States Internal Revenue Code
3. Other deferred compensation under 401(k), 403(b), or 457

See TRS Rules, Chapter 25, Subchapter B, Rule 25.22.

Under Government Code 659.202 (Higher Education only)

These include one-time lump-sum merit payments made under Section 51.962, Education Code and defined in TRS Laws, Subchapter B, Section 822.201 (b) (8) (Higher Education only).

Eligible, provided the pay is for service rendered and the right to receive the salary increase accrues proportionately as service is rendered. These salary increases must be approved by the local Board of Trustees in advance of the school year and before employee begins work. Usually this type of pay increase is paid outside of the normal salary schedule but is not intended to bind the employer to continue to pay the increase in years to come. This type of pay increase is usually provided to all employees and may be paid in one lump sum provided the lump sum payment is made after all service under the contract has been rendered.

When a member is underpaid in a prior school year or school years and the employer issues a lump sum payment to correct the error in an amount equal to the additional amount the member should have received in previous months, the corrective payment is creditable for TRS purposes, provided the underlying compensation is creditable. However, the payment must be reported and credited as compensation for the report month in which the lump sum was paid to the employee, rather than the month(s) it should have been paid. See Rule 25.46(b).