Indiana Code 36-8-10-12.5. Purchase of service credit earned in certain Indiana public retirement funds
(b) As used in this section, “public retirement fund” refers to any of the following, either singly or collectively:
Terms Used In Indiana Code 36-8-10-12.5
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Department: refers to the sheriff's department of a county. See Indiana Code 36-8-10-2
- Employee beneficiary: means an eligible employee who has completed an application to become an employee beneficiary and who has had the proper deductions made from the eligible employee's wages as required in the pension trust agreement. See Indiana Code 36-8-10-2
- Trustee: A person or institution holding and administering property in trust.
- Trustee: refers to the trustee of the pension trust, who may be one (1) or more corporate trustees or the treasurer of the county serving under bond. See Indiana Code 36-8-10-2
(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) The 1977 police officers’ and firefighters’ pension and disability fund (IC 36-8-8).
(6) A retirement plan established under this chapter by a department other than the department that employs the employee beneficiary who desires to purchase service credit under this section.
(c) Subject to subsection (j), if an employee beneficiary:
(1) has not attained vested status in; and
(2) is not an active participant in;
a public retirement fund other than the retirement plan established under this chapter by the department that employs the employee beneficiary, the employee beneficiary may make a transfer described in subsection (d) for the amount in the public retirement fund that is attributable to contributions made by or on behalf of the employee beneficiary (plus credited earnings).
(d) An employee beneficiary described in subsection (c) may transfer the amount described in subsection (c) to a retirement plan established under this chapter by the department that employs the employee beneficiary in order to purchase service credit in the retirement plan for the employee beneficiary’s prior service in a public retirement fund.
(e) A transfer under subsection (d) is irrevocable. A transfer cannot exceed the amount necessary to fund the service purchase under subsection (d). Any amounts in the public retirement fund after the transfer shall remain subject to the public retirement fund’s provisions.
(f) If an employee beneficiary makes a transfer under subsection (d), the employee beneficiary is entitled to receive service credit for the transferred amount equal to the service credit that would be purchased by a contribution of the same amount computed at the actuarial present value for an individual whose salary or wages and age would be the same as the salary or wages and age of the employee beneficiary on the transfer date.
(g) Before a transfer is made under this section, the employee beneficiary must complete any forms required by:
(1) the public retirement fund from which the employee beneficiary is requesting a transfer; and
(2) the retirement plan established under this chapter to which the transfer is being made.
(h) An employee beneficiary who makes a transfer under subsection (d) must have at least the number of years of credited service necessary to receive an unreduced pension benefit in a retirement plan established under this chapter by the department that employs the employee beneficiary before the employee beneficiary may receive a benefit based on the amount transferred under this section.
(i) An employee beneficiary who:
(1) makes a transfer under subsection (d); and
(2) terminates employment before satisfying the eligibility requirements necessary to receive a monthly pension;
may withdraw the transferred amount, plus accumulated interest, from the retirement plan established under this chapter by the department that employs the employee beneficiary after submitting to the retirement plan established under this chapter a properly completed application for a refund. If a withdrawal of the transferred amount occurs under this subsection, the benefit payable to the employee beneficiary from the retirement plan established under this chapter shall be adjusted as necessary to ensure that the plan remains actuarially cost neutral to the county.
(j) The department may deny an application to transfer an amount under this section if the transfer would exceed the limitations under Section 415 of the Internal Revenue Code.
(k) If an employee beneficiary makes a transfer under subsection (d), the employee beneficiary waives all credit for the employee beneficiary’s service in the public retirement fund from which the amount is transferred or paid.
(l) To the extent permitted by the Internal Revenue Code and applicable regulations, a retirement plan established under this chapter may accept, on behalf of an employee beneficiary who is purchasing permissive 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 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.
(m) To the extent permitted by the Internal Revenue Code and applicable regulations, a retirement plan established under this chapter may accept, on behalf of an employee beneficiary who is purchasing permissive 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.
As added by P.L.98-2009, SEC.2.