§ 5-10.2-3-1.2 — Additional service credit purchase

Indiana § 5-10.2-3-1.2

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 10.2: PUBLIC RETIREMENT AND DISABILITY
• Ch. 3: Creditable Service; Contributions; Withdrawals; Death

Text

2. (a) A member who has earned at least ten
(10) years of service in a position covered by PERF, TRF, or a
combination of the two (2) funds may purchase one (1) year of service
credit for each five (5) years of service that the member has completed
in a position covered by PERF or TRF.
(b) Before a member retires, a member who desires to purchase
additional service credit under subsection (a) must contribute to the
fund as follows:
(1) Contributions that are equal to the product of the following:
(A) The member's salary at the time the member actually makes
a contribution for the service credit.
(B) A rate, determined by the actuary for the fund, that is based
on the age of the member at the time the member actually
makes a contribution for the 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.
(C) The number of years of service credit the member intends
to purchase.
(2) Contributions for any accrued interest, at a rate determined by
the actuary for the fund, for the period from the member's initial
membership in the fund to the date payment is made by the
member.
(c) The following apply to the purchase of service credit under this
section:
(1) The board may allow a member to make periodic payments of
the contributions required for the purchase of 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 member may not claim the service credit for the purpose of
computing benefits unless the member has made all payments
required for the purchase of the service credit.
(4) To the extent permitted by the Internal Revenue Code and
applicable regulations, a member may purchase service credit
under this section by a rollover distribution to the fund from any
of the following:
(A) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(B) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(C) 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.
(D) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue Code.
(d) A member who terminates employment before satisfying the
eligibility requirements necessary to receive a monthly benefit may
withdraw the purchase amount, plus accumulated interest, after
submitting a properly completed application for a refund to the fund.
However, the member must also apply for a refund of the member's
entire annuity savings account under section 6 or 6.5 of this chapter to
be eligible for a refund of the member's rollover amount.
(e) For a member who is a state employee, the employer may pay all
or a part of the member contributions required for the purchase of
service credit under this section. In that event, the actuary shall
determine the amortization, and subsections (c)(1), (c)(3), (c)(4), and
(d) do not apply.
(f) For a member who is an employee of a participating political
subdivision, the employer may adopt an ordinance to pay all or a part
of the member contributions required for the purchase of service credit
under this section. In that event, the actuary shall determine the
amortization, and subsections (c)(1), (c)(3), (c)(4), and (d) do not
apply.

Legislative History

As added by P.L.61-2002, SEC.3. Amended by P.L.115-2008, SEC.6.