§ 36-8-8-8.5 — Purchase of service credit in certain Indiana public retirement funds

Indiana § 36-8-8-8.5

• Jurisdiction: Indiana
• Title 36: LOCAL GOVERNMENT
• Art. 8: PUBLIC SAFETY
• Ch. 8: 1977 Police Officers' and Firefighters' Pension and

Text

5. (a) This section applies to a fund member
who, after June 30, 2010, completes service for which the 1977 fund
gives credit.
(b) As used in this section, "public retirement fund" refers to any of
the following, either singly or collectively:
(1) The public employees' retirement fund (IC 5-10.3).
(2) The Indiana state teachers' retirement fund (IC 5-10.4).
(3) The state excise police, gaming agent, gaming control officer,
and conservation enforcement officers' retirement fund (IC 5-10-5.5).
(4) The state police pension trust (IC 10-12).
(5) A sheriff's pension trust (IC 36-8-10-12).
(c) Subject to this section, a fund member may purchase and claim
service credit for the fund member's prior service in a position covered
by a public retirement fund.
(d) To purchase and claim the service credit described in subsection
(c), a fund member must meet the following requirements:
(1) The fund member has at least one (1) year of creditable
service in the 1977 fund.
(2) The fund member has not attained vested status in and is not
an active member in the public retirement fund from which the
fund member is purchasing service credit.
(3) Before the fund member retires, the fund member makes
contributions to the 1977 fund as follows:
(A) Contributions that are equal to the product of the following:
(i) The salary of a first class patrolman or firefighter at the
time the fund member actually makes a contribution for the
service credit.
(ii) A rate, determined by the actuary for the 1977 fund, that
is based on the age of the fund member at the time the fund
member actually makes a contribution for the service credit
and that is computed to result in a contribution amount that
approximates the actuarial present value of the retirement
benefit attributable to the service credit purchased.
(iii) The number of years of service credit the fund member
intends to purchase.
(B) Contributions for any accrued interest, at a rate determined
by the actuary for the 1977 fund, for the period from the fund
member's initial membership in the 1977 fund to the date
payment is made by the fund member.
(e) At the request of the fund member purchasing service credit
under this section, the amount a fund member is required to contribute
under subsection (d)(3) may be reduced by a trustee to trustee transfer
from the public retirement fund in which the fund member has an
account that contains amounts attributable to member contributions
(plus any credited earnings) to the 1977 fund. The fund member may
direct the transfer of an amount only to the extent necessary to fund the
service purchase under subsection (d)(3). The fund member shall
complete any forms required by the public retirement fund from which
the fund member is requesting a transfer or the 1977 fund before the
transfer is made.
(f) A fund member must have at least twenty (20) years of service
in the 1977 fund before a fund member may receive a retirement
benefit based on service credit purchased under this section. A fund
member's years of service may not exceed thirty-two (32) years with
the inclusion of the service credit purchased under this section.
(g) A fund member who:
(1) terminates employment before satisfying the eligibility
requirements necessary to receive a retirement benefit payment
from the 1977 fund; or
(2) receives a retirement benefit for the same service from another
tax supported governmental retirement plan other than the federal
Social Security Act;
may withdraw the fund member's contributions made under this section
plus accumulated interest after submitting a properly completed
application for a refund to the 1977 fund.
(h) The following apply to the purchase of service credit under this
section:
(1) The system board may allow a fund member to make periodic
payments of the contributions required for the purchase of the
service credit. The system board shall determine the length of the
period during which the payments may be made.
(2) The system board may deny an application for the purchase of
service credit if the purchase would exceed the limitations under
Section 415 of the Internal Revenue Code.
(3) A fund member may not claim the service credit for purposes
of determining eligibility or computing benefits unless the fund
member has made all payments required for the purchase of the
service credit.
(i) To the extent permitted by the Internal Revenue Code and
applicable regulations, the 1977 fund may accept, on behalf of a fund
member who is purchasing service credit under this section, a rollover
of a distribution from any of the following:
(1) A qualified plan described in Section 401(a) or 403(a) of the
Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b) of
the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a state or
a political subdivision of a state under Section 457(b) of the
Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or 408(b) of the Internal Revenue Code.
(j) To the extent permitted by the Internal Revenue Code and
applicable regulations, the 1977 fund may accept, on behalf of a fund
member who is purchasing service credit under this section, a trustee
to trustee transfer from any of the following:
(1) An annuity contract or account described in Section 403(b) of
the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section 457(b)
of the Internal Revenue Code.
(k) The fund member's employer may pay all or a part of the fund
member's contributions required for the purchase of service credit
under this section. In that event, the actuary shall determine the
amortization, and subsections (g), (h)(1), (h)(3), and (i) do not apply.

Legislative History

As added by P.L.70-2010, SEC.1. Amended by P.L.35-2012, SEC.123; P.L.8-2015, SEC.12.