Bill Text: IN SB0321 | 2010 | Regular Session | Introduced
Bill Title: TRF and 1977 fund military service credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-12 - First reading: referred to Committee on Pensions and Labor [SB0321 Detail]
Download: Indiana-2010-SB0321-Introduced.html
Citations Affected: IC 5-10.4-4-8; IC 36-8-8-8.2.
Synopsis: TRF and 1977 fund military service credit. Grants, under
certain conditions, up to six years of service credit in the teachers'
retirement fund (TRF) for a member's past active duty military service.
Grants, under certain circumstances, a member of the 1977 police
officers' and firefighters' pension and disability fund up to six years of
service credit for active duty military service. Provides that, except for
World War II veterans, the service credit may be used only in the
computation of benefits to be paid after June 30, 2012. Provides that
for World War II veterans the service credit may be used only in the
computation of benefits to be paid after June 30, 2010.
Effective: July 1, 2010.
January 12, 2010, read first time and referred to Committee on Pensions and Labor.
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A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
(b) This subsection applies to a member who retires after June 30, 1980. A member who completed four (4) years of approved college teacher education before voluntary or involuntary induction into
military service is entitled to credit for the member's active military
service as if the member had begun teaching before the induction. A
member who serves in military service is considered a teacher and is
entitled to the benefits of the fund if the following conditions are met:
(1) The member has an honorable discharge.
(2) Except as provided in subsection (g), the member returns to
active teaching service not later than twenty-four (24) months
after the completion of active military service.
(3) The member has at least ten (10) years of in-state service
credit.
The time served by a member in military service for the duration of the
hostilities or for the length of active service in the hostilities and the
necessary demobilization time after the hostilities is not subject to the
one-seventh rule set forth in section 7 of this chapter. However, not
more than six (6) years of military service credit may be granted under
this subsection.
(c) This subsection applies to a member who retires after May 1,
1989. A member who had begun but had not completed four (4) years
of approved college teacher education before voluntary or involuntary
induction into the military services is entitled to service credit in an
amount equal to the duration of the member's active military service if
the following conditions are met:
(1) The member has an honorable discharge.
(2) Except as provided in subsection (g), the member returns to a
four (4) year approved college teacher training program not later
than twenty-four (24) months after the completion of active
military service and subsequently completes that program.
(3) The member has at least ten (10) years of in-state service
credit.
The time served by a member in active military service for the length
of active service in the hostilities and the necessary demobilization is
not subject to the one-seventh rule set forth in section 7 of this chapter.
However, not more than six (6) years of military service credit may be
granted under this subsection.
(d) This subsection applies to a member who retires after May 1,
1991, and who is employed at a state educational institution. A member
who had begun but had not completed baccalaureate or
post-baccalaureate education before voluntary or involuntary induction
into military service is entitled to the member's active military service
credit for the member's active military service in an amount equal to
the duration of the member's military service if the following
conditions are met:
(1) The member received an honorable discharge.
(2) Except as provided in subsection (g), the member returns to baccalaureate or post-baccalaureate education not later than twenty-four (24) months after completion of active military service and subsequently completes that education.
(3) The member has at least ten (10) years of in-state service credit.
The time served by a member in active military service for the length of active service in the hostilities and the necessary demobilization is not subject to the one-seventh rule set forth in section 7 of this chapter. However, not more than six (6) years of military service credit may be granted under this subsection.
(e) For purposes of this section, a member returns to active teaching service on the earlier of:
(1) the date on which the member signs a teacher's contract; or
(2) the date on which the member is first employed in a position covered by this article.
(f) For purposes of this section, a member returns to:
(1) a teacher training program; or
(2) baccalaureate or post-baccalaureate education;
on the date the member registers for or enrolls in classes that the member attends.
(g) The board shall extend the twenty-four (24) month deadline contained in subsection (b)(2), (c)(2), or (d)(2) if the board determines that an illness, an injury, or a disability related to the member's military service prevented the member from returning to active teaching service or to a teacher education program not later than twenty-four (24) months after the member's discharge from military service. However, the board may not extend the deadline beyond forty-eight (48) months after the member's discharge.
(h) If a member retires and the board subsequently determines that the member is entitled to additional service credit due to the extension of a deadline under subsection (g), the board shall recompute the member's benefit. However, the additional service credit may be used only in the computation of benefits to be paid after the date of the board's determination, and the member is not entitled to a recomputation of benefits received before the date of the board's determination.
(i) Notwithstanding any provision of this section, a member is entitled to military service credit and benefits in the amount and to the extent required by the federal Uniformed Services Employment and Reemployment Rights Act (38 U.S.C. 4301 et seq.), including all later
amendments.
(j) Subject to this section, an active member may purchase not more
than two (2) years of service credit for the member's service on active
duty in the armed services if the member meets the following
conditions:
(1) The member has at least one (1) year of credited service in the
fund.
(2) The member serves on active duty in the armed services of the
United States for at least six (6) months.
(3) The member receives an honorable discharge from the armed
services.
(4) Before the member retires, the member makes contributions
to the fund as follows:
(A) Contributions that are equal to the product of:
(i) the member's salary at the time the member actually
makes a contribution for the service credit;
(ii) a rate, determined by the actuary of the fund, that is
based on the age of the member at the time the member
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; and
(iii) the number of years of service credit the member
intends to purchase.
(B) Contributions for any accrued interest, at a rate determined
by the actuary of the fund, for the period from the member's
initial membership in the fund to the date payment is made by
the member.
However, a member is entitled to purchase service credit under this
subsection only to the extent that service credit is not granted for that
time under another provision of this section. At least ten (10) years of
service in Indiana is required before a member may receive a benefit
based on service credits purchased under this section. A member who
terminates employment before satisfying the eligibility requirements
necessary to receive a monthly allowance or receives a monthly
allowance for the same service from another tax supported public
employee 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 fund.
(k) The following apply to the purchase of service credit under
subsection (j):
(1) The board may allow a member 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 member may not claim the service credit for purposes of
determining eligibility or computing benefits unless the member
has made all payments required for the purchase of the service
credit.
(l) This subsection applies to a member who retires after June 30,
2006. A member may not receive credit under this section for service
for which the member receives service credit under the terms of a
military or another governmental retirement plan.
(m) Notwithstanding any other provision of this section, a
member who:
(1) has at least ten (10) years of in-state teaching service;
(2) served on active duty in the armed services of the United
States;
(3) received an honorable discharge;
(4) is not entitled to receive a pension for service in the armed
services of the United States; and
(5) is not entitled to military service credit under subsections
(a) through (g) for purposes of determining eligibility for, or
the computation of, benefits under this chapter;
is entitled to service credit in an amount equal to the duration of
the member's military service. However, not more than six (6)
years of service credit may be granted under this subsection.
(n) The service credit granted under subsection (m) may be used
only:
(1) after the board determines that the member is eligible for
the service credit; and
(2) in the computation of benefits to be paid after:
(A) June 30, 2010, in the case of a member who is a World
War II veteran (as defined in 42 U.S.C. 1012); or
(B) June 30, 2012, in the case of any other member.
(1) completes at least one (1) year of active service for which the 1977 fund gives credit;
(2) serves on active duty in the armed services of the United States for at least six (6) months;
(3) receives an honorable discharge from the armed services;
(4) is not entitled to receive a benefit from the armed services of the United States or another governmental retirement system for the active duty service; and
(5) has not received credit in the 1977 fund for the active duty service under another section of this chapter;
is entitled to service credit in the 1977 fund in an amount equal to the length of the fund member's military service. However, not more than six (6) years of service credit in the 1977 fund may be granted under this section.
(b) The service credit granted under this section may be used only:
(1) after the board determines that the fund member is eligible for the service credit in the 1977 fund; and
(2) in the computation of benefits to be paid after:
(A) June 30, 2010, in the case of a fund member who is a World War II veteran (as defined by 42 U.S.C. 1012); or
(B) June 30, 2012, in the case of any other fund member.
(c) A fund member is entitled to receive service credit in the 1977 fund for the active duty service described in subsection (a) if the fund member pays in a lump sum or in a series of payments determined by the PERF board, not to exceed five (5) annual payments, the amount the fund member would have contributed to the 1977 fund if the fund member had been a member of the 1977 fund during the active duty service.
(d) If a fund member is entitled to receive service credit under subsection (c), the fund member's employer must contribute to the 1977 fund the amount the PERF board determines necessary to amortize the active duty service liability over a period determined by the PERF board, but not more than ten (10) years.
(e) An amortization schedule for contributions paid under subsection (c) must include interest at a rate determined by the PERF board.
(f) A fund member who:
(1) terminates service before satisfying the requirements for eligibility to receive a retirement benefit payment from the 1977 fund; or
(2) receives a retirement benefit for the same service from another retirement system, other than under the federal Social Security Act;
may withdraw the fund member's contributions made under this section plus accumulated interest after submitting to the 1977 fund a properly completed application for a refund.
(g) The following apply to the granting of service credit in the 1977 fund under this section:
(1) The PERF board may not grant credit for the service if doing so would exceed the limitations set forth in Section 415 of the Internal Revenue Code.
(2) 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 under subsection (c).
(h) 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 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.
(i) To the extent permitted by the Internal Revenue Code and the 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 either 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.
(j) Notwithstanding any provision in this section, a fund member is entitled to service credit and benefits in the amount and to the extent required by the federal Uniformed Services Employment and Reemployment Rights Act (38 U.S.C. 4301 et seq.).
(k) Before implementing this section, the PERF board may request from the Internal Revenue Service any rulings or determination letters that the PERF board considers necessary or
appropriate.
