Texas Government Code 840.306 – Interest Rate
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(a) Except as provided by Section 840A.103 or 840A.104, interest on money in a member’s individual account in the retirement system is earned monthly and is computed at the rate of five percent a year on the mean balance of the member’s account for the fiscal year.
(b) Unless an account is closed before the last day of the fiscal year, interest is computed for the fiscal year and is credited to the member’s account as of the last day of the fiscal year.
Terms Used In Texas Government Code 840.306
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Month: means a calendar month. See Texas Government Code 312.011
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) If an account is closed before the last day of the fiscal year, interest is computed for the following period:
(1) if the account is closed because of death, from the first day of the fiscal year through the last day of the month that preceded the month in which the member’s death occurred;
(2) if the account is closed by withdrawal of accumulated contributions, from the first day of the fiscal year through the last day of the month that precedes the month in which the withdrawal request is validated by the retirement system; or
(3) if the account is closed because of retirement, from the first day of the fiscal year through the effective date of retirement.