Purchase of service credit; direct rollover or financial agreement

Authority: IC 5-10.5-4-2 Affected: IC 5-10.2-3-1.2; IC 5-10.4-4 Sec. 10. (a) Eligible TRF members may purchase service under IC 5-10.2-3-1.2, IC 5-10.4-4-4, IC 5-10.4-4-5, IC 5-10.4-4-6, and IC 5-10.4-4-8 . (b) The eligible fund member may purchase such service subject to the following: (1) Service may be purchased in one (1) month increments. The minimum service purchase is one (1) year for a member who elects to purchase service through a finance agreement. (2) Installment payments are subject to the terms of the finance agreement. (3) Any service purchase may be made via a direct cash payment, a direct rollover under IC 5-10.4-4-12, or a combination of both. (4) Any direct rollover may not exceed the actual cost of such service as established by the fund. (5) Payment may be made in a lump sum or in annual installments for a period not to exceed five (5) years. Any installment shall bear interest at the interest rate (defined within this section) effective on the date of the first installment. Any payments are subject to applicable Internal Revenue Service limits, and the fund may limit any payments in a manner necessary to comply with these limits. (c) In the event of a payment default under the terms of the finance agreement, a partial service credit amount will be determined by INPRS. The partial service credit amount will be based on the payments made as of the date of payment default and the actuarial cost of the service. The minimum amount of partial service credit will be one (1) month. Partial service will be credited in monthly increments. The member has a thirty (30) day grace period from the date of the payment default to restore the missed payment. The member is not eligible to make service purchase payments more than thirty (30) days after the date of the payment default. (d) Any interest rate used will be set as determined by INPRS. (Board of Trustees of the Indiana Public Retirement System; 35 IAC 14-5-10; adopted Dec 16, 2009: 20100106-IR-550090990ONA; adopted Dec 13, 2019: 20191225-IR-035190683ONA) NOTE: Transferred from the Board of Trustees of the Indiana State Teachers' Retirement Fund (550 IAC 2-5-13) to the Board of Trustees of the Indiana Public Retirement System (35 IAC 14-5-10) by P.L.23-2011, SECTION 22, effective July 1, 2011.