§ 5-10-5.5-7.5 — Purchase of service credit earned in certain Indiana public retirement funds

Indiana § 5-10-5.5-7.5

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 10: PUBLIC EMPLOYEE BENEFITS
• Ch. 5.5: State Excise Police, Gaming Agent, Gaming Control

Text

5. (a) As used in this section, "board" refers
to the board of trustees of the Indiana public retirement system
established by IC 5-10.5-3-1.
(b) As used in this section, "public retirement fund" refers
collectively to:
(1) the public employees' retirement fund (IC 5-10.3);
(2) the Indiana state teachers' retirement fund (IC 5-10.4);
(3) the state police pension trust (IC 10-12); and
(4) the 1977 police officers' and firefighters' pension and
disability fund (IC 36-8-8).
(c) Subject to this section, a participant may purchase and claim
service credit for the participant's prior service in a position covered by
a public retirement fund.
(d) To purchase the service credit described in subsection (c), a
participant must meet the following requirements:
(1) The participant has at least one (1) year of creditable service
in the retirement plan created by this chapter.
(2) The participant has not attained vested status in and is not an
active participant in the public retirement fund from which the
participant is purchasing the service credit.
(3) Before the participant retires, the participant makes
contributions to the retirement plan created by this chapter as
follows:
(A) Contributions that are equal to the product of the following:
(i) The participant's salary at the time the participant actually
makes a contribution for the service credit.
(ii) A rate, determined by the actuary for the retirement plan
created by this chapter, based on the age of the participant at
the time the participant actually makes a contribution for
service credit and computed to result in a contribution
amount that approximates the actuarial present value of the
benefit attributable to the service credit purchased.
(iii) The number of years of service credit the participant
intends to purchase.
(B) Contributions for any accrued interest, at a rate determined
by the actuary for the retirement plan created by this chapter,
for the period from the participant's initial participation in the
retirement plan created by this chapter to the date payment is
made by the participant.
(e) At the request of the participant purchasing service credit under
this section, the amount a participant is required to contribute under
subsection (d)(3) may be reduced by a trustee to trustee transfer from
a public retirement fund in which the participant has an account that
contains amounts attributable to member contributions (plus any
credited earnings) to the retirement plan created by this chapter. The
participant may direct the transfer of an amount only to the extent
necessary to fund the service purchase under subsection (d)(3). The
participant shall complete any forms required by the public retirement
fund from which the participant is requesting a transfer or the
retirement plan created by this chapter before the transfer is made.
(f) At least ten (10) years of service in the retirement plan created
by this chapter is required before a participant may receive a benefit
based on service credit purchased under this section.
(g) A participant who:
(1) terminates employment before satisfying the eligibility
requirements necessary to receive an annual retirement
allowance; or
(2) receives an annual retirement allowance for the same service
from another tax supported governmental retirement plan other
than under the federal Social Security Act;
may withdraw the purchase amount plus accumulated interest after
submitting a properly completed application for a refund to the
retirement plan created by this chapter.
(h) The following may apply to the purchase of service credit under
this section:
(1) The board may allow a participant to make periodic payments
of the contributions required for the purchase of the service credit.
The board shall determine the length of the period during which
the payments must be made.
(2) The 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 participant may not claim the service credit for purposes of
determining eligibility for a benefit or computing benefits unless
the participant 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 retirement plan created by this chapter may
accept, on behalf of a participant who is purchasing permissive service
credit under this chapter, a rollover of a distribution from any of the
following:
(1) A qualified plan described in Section 401(a) or Section 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
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 Section 408(b) of the Internal Revenue Code.
(j) To the extent permitted by the Internal Revenue Code and
applicable regulations, the retirement plan created by this chapter may
accept, on behalf of a participant who is purchasing permissive service
credit under this chapter, 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.

Legislative History

As added by P.L.180-2007, SEC.2. Amended by P.L.23-2011, SEC.5; P.L.8-2015, SEC.1.