STATE OF OKLAHOMA

1st Session of the 52nd Legislature (2009)

SENATE BILL 1241	By:	Russell

AS INTRODUCED

An Act relating to retirement; amending 11 O.S. 2001, Section 49-138, as last amended by Section 4, Chapter 203, O.S.L. 2005 (11 O.S. Supp. 2008, Section 49-138), which relates to military service credit; amending 11 O.S. 2001, Section 50-128, as last amended by Section 4, Chapter 137, O.S.L. 2005 (11 O.S. Supp. 2008, Section 50-128), which relates to military service credit; amending 47 O.S. 2001, Section 2-307.4, as last amended by Section 26, Chapter 46, 2nd Extraordinary Session, O.S.L. 2006 (47 O.S. Supp. 2008, Section 2-307.4), which relates to military service credit; amending 70 O.S. 2001, Section 17-116.2, as last amended by Section 122, Chapter 1, O.S.L. 2005 (70 O.S. Supp. 2008, Section 17-116.2), which relates to service credits; amending 74 O.S. 2001, Section 902, as last amended by Section 134, Chapter 1, O.S.L. 2005 (74 O.S. Supp. 2008, Section 902), which relates to definitions; adding periods of time and conflicts that qualify for military service credit for retirement purposes; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     11 O.S. 2001, Section 49-138, as last amended by Section 4, Chapter 203, O.S.L. 2005 (11 O.S. Supp. 2008, Section 49-138), is amended to read as follows:
Section 49-138.  A.  Any member of a regularly constituted fire department of any municipality who is now serving or may hereafter serve in the Armed Forces of the United States whether such service is voluntary or involuntary, who shall have been a member of such fire department at the time of entering such service, shall be entitled to have the whole of the time of such service applied under the provisions of Section 49-106 of this title, so far as the same applies to a service pension; provided further, that the municipality shall continue its payment into said pension fund, to the same force and effect as though the member were in the actual service of such fire department; provided, that any person who is eligible for such service but who shall have volunteered for military or naval service for a period not to exceed five (5) years shall likewise be entitled to all of the benefits of Sections 49-138 through 49-142 of this title for the full period of such service or enlistment; provided further, that only one such period of voluntary service shall be considered hereunder.  If such person shall reenlist, unless he is required to do so by law, he shall not thereafter be entitled to the provisions of this subsection.  The provisions of this subsection shall not apply where any such person dies during the period of said service or enlistment, and shall not entitle the surviving spouse or children to any benefits, and shall not apply to any member who shall have served on active duty (including initial active duty) for training purposes only and/or inactive duty training.
B.  Effective February 1, 1997, credited service received pursuant to this section or credited service for wartime military service received as otherwise provided by law shall be used in determining the member’s retirement benefit but shall not be used in determining years of service for retirement, vesting purposes or eligibility for participation in the Oklahoma Firefighters Deferred Option Plan.  For a member of the System hired on or after July 1, 2003, if the military service credit authorized by this section is used to compute the retirement benefit of the member and the member retires from the System, such military service credit shall not be used to compute the retirement benefit in any other retirement system created pursuant to the Oklahoma Statutes and the member may receive credit for such service only in the retirement system from which the member first retires.
C.  A member who retires or elects to participate in the Oklahoma Firefighters Deferred Option Plan on or after July 1, 1998, shall be entitled to prior service credit, not to exceed five (5) years, for those periods of military service on active duty prior to membership in the Oklahoma Firefighters Pension and Retirement System.
For purposes of this subsection, “military service” means service in the Armed Forces of the United States by honorably discharged persons during the following time periods, as reflected on such person’s Defense Department Form 214, as follows:
1.  During the following periods, including the beginning and ending dates, and only for the periods served, from:
a.	April 6, 1917, to November 11, 1918, commonly referred to as World War I,
b.	September 16, 1940, to December 7, 1941, for members of the 45th Division,
c.	December 7, 1941, to December 31, 1946, commonly referred to as World War II,
d.	June 27, 1950, to January 31, 1955, commonly referred to as the Korean Conflict or the Korean War,
e.	February 28, 1961, to May 7, 1975, commonly referred to as the Vietnam era, except that:
(1)	for the period from February 28, 1961, to August 4, 1964, military service shall only include service in the Republic of Vietnam during that period, and
(2)	for purposes of determining eligibility for education and training benefits, such period shall end on December 31, 1976, or
f.	August 1, 1990, to December 31, 1991, commonly referred to as the Gulf War, the Persian Gulf War, or Operation Desert Storm, but excluding any person who served on active duty for training only, unless discharged from such active duty for a service-connected disability;
2.  During the following periods, including the beginning dates, and only for the periods served, from:
a.	September 11, 2001 to a date to be determined or the cessation of the Operation of Enduring Freedom, or
b.	March 10, 2003 to a date to be determined or the cessation of Operation Iraqi Freedom.
To qualify for the service specified in subparagraphs a and b of this paragraph, the service must be based on the criteria for the awarding of the Afghanistan Campaign Medal or the Iraq Campaign Medal;
3.  During a period of war or combat military operation other than a conflict, war or era listed in paragraph paragraphs 1 and 2 of this subsection, beginning on the date of Congressional authorization, Congressional resolution, or Executive Order of the President of the United States, for the use of the Armed Forces of the United States in a war or combat military operation, if such war or combat military operation lasted for a period of ninety (90) days or more, for a person who served, and only for the period served, in the area of responsibility of the war or combat military operation, but excluding a person who served on active duty for training only, unless discharged from such active duty for a service-connected disability, and provided that the burden of proof of military service during this period shall be with the member, who must present appropriate documentation establishing such service.
D.  An eligible member pursuant to subsection C of this section shall include only those persons who shall have served during the times or in the areas prescribed in subsection C of this section, and only if such person provides appropriate documentation in such time and manner as required by the System to establish such military service prescribed in this section, or for service pursuant to division (1) of subparagraph e of paragraph 1 of subsection C of this section, those persons who were awarded service medals, as authorized by the United States Department of Defense as reflected in the veteran’s Defense Department Form 214, related to the Vietnam Conflict for service prior to August 5, 1964.  The provisions of subsection C of this section shall include military retirees, whose retirement was based only on active service, that have been rated as having twenty percent (20%) or greater service-connected disability by the Veterans Administration or the Armed Forces of the United States.  The provisions of subsection C of this section shall not apply to any person who shall have served on active duty for training purposes only unless discharged from active duty for a service-connected disability.
E.  Notwithstanding any provision herein to the contrary, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with Section 414(u) of the Internal Revenue Code of 1986, which is in accordance with the Uniformed Services Employment and Reemployment Rights Act of 1994, (USERRA) as amended.  The municipality’s contributions to the System for a member covered by USERRA are due when such a member makes up his or her contributions that were missed due to his or her qualified military service.
F.  Members or beneficiaries shall make application to the System for credited service related to wartime military service.  Interest on additional benefits related to wartime military service owed by the System to a retired member or beneficiary as provided by law shall cease accruing one (1) year after the effective date the additional benefits are payable by the System or July 1, 2000, whichever is later, if the member has not applied to the System for credited service related to such wartime military service.
SECTION 2.     AMENDATORY     11 O.S. 2001, Section 50-128, as last amended by Section 4, Chapter 137, O.S.L. 2005 (11 O.S. Supp. 2008, Section 50-128), is amended to read as follows:
Section 50-128.  A.  Any member who has heretofore left the Police Department qualifying under this article to enter the military service of the United States during World War II and who returned to said department on or before July 1, 1947, or the Korean conflict and who returned to said department on or before January 1, 1956, shall receive credit for such time in military service without having made contribution to the System; and any member who has heretofore left, or hereafter may leave said department because of involuntary conscription into the military services of the United States at any time and who returns to said department within ninety (90) days after the member’s release from such involuntary service shall receive credit for such time in said military service on the Police Department without having made contribution to the System only for that period that is involuntary; voluntary enlistments and voluntary extensions of military service being herewith specifically excluded for retirement credit.
B.  A member who began participation in the System prior to July 1, 2003, and who retires on or after July 1, 1998, shall be entitled to prior service credit, not to exceed five (5) years, for those periods of military service on active duty prior to membership in the Oklahoma Police Pension and Retirement System.  All members who initially begin participation with the System after June 30, 2003, may acquire prior military service credit for a maximum of five (5) years of such service credit upon payment of the actuarial cost of such service in the manner prescribed by and subject to all of the requirements of Section 50-111.4 of this title.  For members of the System hired or rehired on or after July 1, 2003, if the military service credit authorized by this subsection is used to compute the retirement benefit of the member and the member retires from the System, such military service credit shall not be used to compute the retirement benefit in any other retirement system created pursuant to the Oklahoma Statutes and the member may receive credit for such service only in the retirement system from which the member first retires.
For purposes of this subsection, “military service” means service in the Armed Forces of the United States by honorably discharged persons during the following time periods, as reflected on such person’s Defense Department Form 214, as follows:
1.  During the following periods, including the beginning and ending dates, and only for the periods served, from:
a.	April 6, 1917, to November 11, 1918, commonly referred to as World War I,
b.	September 16, 1940, to December 7, 1941, as a member of the 45th Division,
c.	December 7, 1941, to December 31, 1946, commonly referred to as World War II,
d.	June 27, 1950, to January 31, 1955, commonly referred to as the Korean Conflict or the Korean War,
e.	February 28, 1961, to May 7, 1975, commonly referred to as the Vietnam era, except that:
(1)	for the period from February 28, 1961, to August 4, 1964, military service shall only include service in the Republic of Vietnam during that period, and
(2)	for purposes of determining eligibility for education and training benefits, such period shall end on December 31, 1976, or
f.	August 1, 1990, to December 31, 1991, commonly referred to as the Gulf War, the Persian Gulf War, or Operation Desert Storm, but excluding any person who served on active duty for training only, unless discharged from such active duty for a service-connected disability;
2.  During the following periods, including the beginning dates, and only for the periods served, from:
a.	September 11, 2001 to a date to be determined or the cessation of the Operation of Enduring Freedom, or
b.	March 19, 2003 to a date to be determined or the cessation of Operation Iraqi Freedom.
To qualify for the service specified in subparagraphs a and b of this paragraph, the service must be based on the criteria for the awarding of the Afghanistan Campaign Medal or the Iraq Campaign Medal;
3.  During a period of war or combat military operation other than a conflict, war or era listed in paragraph paragraphs 1 and 2 of this subsection, beginning on the date of Congressional authorization, Congressional resolution, or Executive Order of the President of the United States, for the use of the Armed Forces of the United States in a war or combat military operation, if such war or combat military operation lasted for a period of ninety (90) days or more, for a person who served, and only for the period served, in the area of responsibility of the war or combat military operation, but excluding a person who served on active duty for training only, unless discharged from such active duty for a service-connected disability, and provided that the burden of proof of military service during this period shall be with the member, who must present appropriate documentation establishing such service.
C.  An eligible member pursuant to subsection B of this section shall include only those persons who shall have served during the times or in the areas prescribed thereunder and only if such person provides appropriate documentation in such time and manner as required by the System to establish such military service prescribed in this section, or for service pursuant to division (1) of subparagraph e of paragraph 1 of subsection B of this section, those persons who were awarded service medals, as authorized by the United States Department of Defense as reflected in the veteran’s Defense Department Form 214, related to the Vietnam Conflict for service prior to August 5, 1964.  The provisions of subsection B of this section shall include military retirees, whose retirement was based only on active service, that have been rated as having twenty percent (20%) or greater service-connected disability by the Veterans Administration or the Armed Forces of the United States.
D.  Effective December 12, 1994, a leave of absence on account of a period of “qualified military service” in the uniformed services of the United States (within the meaning of Section 414(u)(5) of the Internal Revenue Code of 1986), followed by a return to the service of the participating municipality within ninety (90) days after the completion of the period of service, shall constitute credited service.  Notwithstanding any provision herein to the contrary, contributions, benefits and service credit with respect to qualified military service shall be provided in accordance with Section 414(u) of the Internal Revenue Code of 1986, which is in accordance with the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA).  The municipality’s contributions to the System for a member covered by USERRA are due when such a member makes up his or her contributions that were missed due to his or her qualified military service.
SECTION 3.     AMENDATORY     47 O.S. 2001, Section 2-307.4, as last amended by Section 26, Chapter 46, 2nd Extraordinary Session, O.S.L. 2006 (47 O.S. Supp. 2008, Section 2-307.4), is amended to read as follows:
Section 2-307.4  A.  Any member of the Oklahoma Law Enforcement Retirement System shall be entitled to prior service credit, not to exceed five (5) years, for those periods of military service on active duty prior to membership in the Oklahoma Law Enforcement Retirement System.  Any active member of the Oklahoma Law Enforcement Retirement System whose initial membership in the System began on or after July 1, 2000, may receive up to five (5) years of prior military service credit as otherwise provided in this section, only upon payment of the amount determined by the Board in the manner as provided in Section 2-307.5 of this title.  For members of the System hired on or after July 1, 2003, if the military service credit authorized by this subsection is used to compute the retirement benefit of the member and the member retires from the System, such military service credit shall not be used to compute the retirement benefit in any other retirement system created pursuant to the Oklahoma Statutes and the member may receive credit for such service only in the retirement system from which the member first retires.
B.  For purposes of this section, “military service” means service in the Armed Forces of the United States by honorably discharged persons during the following time periods, as reflected on such person’s Defense Department Form 214, as follows:
1.  During the following periods, including the beginning and ending dates, and only for the periods served, from:
a.	April 6, 1917, to November 11, 1918, commonly referred to as World War I,
b.	September 16, 1940, to December 7, 1941, as a member of the 45th Division,
c.	December 7, 1941, to December 31, 1946, commonly referred to as World War II,
d.	June 27, 1950, to January 31, 1955, commonly referred to as the Korean Conflict or the Korean War,
e.	February 28, 1961, to May 7, 1975, commonly referred to as the Vietnam era, except that:
(1)	for the period from February 28, 1961, to August 4, 1964, military service shall only include service in the Republic of Vietnam during that period, and
(2)	for purposes of determining eligibility for education and training benefits, such period shall end on December 31, 1976, or
f.	August 1, 1990, to December 31, 1991, commonly referred to as the Gulf War, the Persian Gulf War, or Operation Desert Storm, but excluding any person who served on active duty for training only, unless discharged from such active duty for a service-connected disability;
2.  During the following periods, including the beginning dates, and only for the periods served, from:
a.	September 11, 2001 to a date to be determined or the cessation of the Operation of Enduring Freedom, or
b.	March 19, 2003 to a date to be determined or the cessation of Operation Iraqi Freedom.
To qualify for the service specified in subparagraphs a and b of the paragraph, the service must be based on the criteria for the awarding of the Afghanistan Campaign Medal or the Iraq Campaign Medal.
3.  During a period of war or combat military operation other than a conflict, war or era listed in paragraph paragraphs 1 and 2 of this subsection, beginning on the date of Congressional authorization, Congressional resolution, or Executive Order of the President of the United States, for the use of the Armed Forces of the United States in a war or combat military operation, if such war or combat military operation lasted for a period of ninety (90) days or more, for a person who served, and only for the period served, in the area of responsibility of the war or combat military operation, but excluding a person who served on active duty for training only, unless discharged from such active duty for a service-connected disability, and provided that the burden of proof of military service during this period shall be with the member, who must present appropriate documentation establishing such service.
C.  An eligible member under subsection B of this section shall include only those persons who shall have served during the times or in the areas prescribed in subsection B of this section, and only if such person provides appropriate documentation in such time and manner as required by the System to establish such military service prescribed in this section, or for service pursuant to division (1) of subparagraph e of paragraph 1 of subsection B of this section, those persons who were awarded service medals, as authorized by the United States Department of Defense as reflected in the veteran’s Defense Department Form 214, related to the Vietnam Conflict for service prior to August 5, 1964.
D.  Service credit received pursuant to this section shall be used in determining the member’s retirement benefit but shall not be used in determining years of service for retirement or vesting purposes.
E.  Such service credit may be paid by:
1.  A cash lump-sum payment;
2.  A trustee-to-trustee transfer from a Code Section 403(b) annuity or custodial account, an eligible deferred compensation plan described in Code Section 457(b) which is maintained by an eligible employer described in Code Section 457(e)(1)(A), and/or a Code Section 401(a) qualified plan; 
3.  A direct rollover of tax-deferred funds from a Code Section 403(b) annuity or custodial account, an eligible deferred compensation plan described in Code Section 457(b) which is maintained by an eligible employer described in Code Section 457(e)(1)(A), a Code Section 401(a) qualified plan, and/or a Code Section 408(a) or 408(b) traditional or conduit Individual Retirement Account or Annuity (IRA).  Roth IRAs, Coverdell Education Savings Accounts and after-tax contributions shall not be used to purchase such service credit; or
4.  Any combination of the above methods of payment.
SECTION 4.     AMENDATORY     70 O.S. 2001, Section 17-116.2, as last amended by Section 122, Chapter 1, O.S.L. 2005 (70 O.S. Supp. 2008, Section 17-116.2), is amended to read as follows:
Section 17-116.2  A.  1.  Beginning July 1, 1987, and prior to July 1, 1995, a member who retires on or after the member’s normal retirement age or whose retirement is because of disability shall receive an annual allowance for life, payable monthly, in an amount equal to two percent (2%) of the member’s highest three-year average salary upon which member contributions were made, multiplied by the number of the member’s years of creditable service.
A classified member who retired prior to July 1, 1986, shall have his retirement allowance calculated on a minimum average salary of Eleven Thousand Five Hundred Dollars ($11,500.00) or on his current minimum average salary plus Two Thousand Dollars ($2,000.00), whichever is greater.  Beginning July 1, 1994, a classified member who retired prior to July 1, 1993, shall have the member’s retirement allowance calculated on the member’s current minimum average salary plus Five Hundred Fifty Dollars ($550.00).  An unclassified member who retired prior to July 1, 1986, shall have his retirement allowance calculated on a minimum average salary of Nine Thousand Five Hundred Dollars ($9,500.00) or on his current minimum average salary plus One Thousand Dollars ($1,000.00), whichever is greater.  Beginning July 1, 1994, an unclassified member who retired prior to July 1, 1993, shall have the member’s retirement allowance calculated on the member’s current minimum average salary plus Two Hundred Seventy-five Dollars ($275.00).  Those individuals receiving benefits pursuant to subsection (3) of Section 17-105 of this title whose benefits commenced prior to July 1, 1993, shall receive an increase in benefits of two and one-half percent (2 1/2%).  No retirement benefit payments shall be made retroactively.
Except for those members retiring because of a disability, the retirement allowance shall be subject to adjustment for those members retiring before normal retirement age in accordance with the actuarial equivalent factors adopted by the Board of Trustees.
2.  Beginning July 1, 1995, a member, who has no service performed on or after July 1, 1995, for an entity or institution within The Oklahoma State System of Higher Education, who retires on or after the member’s normal retirement age or whose retirement is because of disability shall receive an annual allowance for life, payable monthly as follows:
a.	if the member becomes a member after June 30, 1995, and was not eligible to become a member prior to July 1, 1995, in an amount equal to two percent (2%) of the member’s average salary upon which member contributions were made, multiplied by the number of the member’s years of creditable service, or
b.	if the member became a member or is eligible to become a member prior to July 1, 1995, and elected to have a maximum compensation level in excess of Twenty-five Thousand Dollars ($25,000.00) pursuant to paragraph 1 of subsection C of this section or pursuant to subsection E of this section, or if the member’s salary has never exceeded Twenty-five Thousand Dollars ($25,000.00) prior to July 1, 1995, in an amount equal to:
(1)	two percent (2%) of the member’s average salary upon which member contributions were made not to exceed Forty Thousand Dollars ($40,000.00), multiplied by the number of the member’s years of credited service authorized and performed prior to July 1, 1995, plus any years of prior service authorized under this title, plus
(2)	two percent (2%) of the member’s average salary upon which member contributions were made, multiplied by the number of the member’s years of credited service authorized and performed after June 30, 1995, or
c.	if the member became a member or is eligible to become a member prior to July 1, 1995, and was eligible to elect to have a maximum compensation level in excess of Twenty-five Thousand Dollars ($25,000.00) and did not elect or elected not to have a maximum compensation level of Forty Thousand Dollars ($40,000.00) pursuant to paragraph 1 of subsection C of this section or pursuant to subsection E of this section, in an amount equal to:
(1)	two percent (2%) of the member’s average salary upon which member contributions were made not to exceed Twenty-five Thousand Dollars ($25,000.00), multiplied by the number of the member’s years of credited service authorized and performed prior to July 1, 1995, plus any years of prior service authorized under this title, plus
(2)	two percent (2%) of the member’s average salary upon which member contributions were made, multiplied by the number of the member’s years of credited service authorized and performed after June 30, 1995.
B.  Except as otherwise provided for in this section, the amount contributed by each member to the retirement system shall be:
1.  Beginning July 1, 1992, through June 30, 1996, six percent (6%) of the regular annual compensation of such member not in excess of Twenty-five Thousand Dollars ($25,000.00) and beginning July 1, 1995, through June 30, 1996, six percent (6%) of the maximum compensation level; and
2.  Beginning July 1, 1996, through June 30, 1997, six and one-half percent (6 1/2%) of the regular annual compensation of members, who are not employed by an entity or institution within The Oklahoma State System of Higher Education not in excess of Twenty-five Thousand Dollars ($25,000.00) and beginning July 1, 1996, through June 30, 1997, six and one-half percent (6 1/2%) of the regular annual compensation of members, who are employed by an entity or institution within The Oklahoma State System of Higher Education, not in excess of Twenty-five Thousand Dollars ($25,000.00);
3.  Beginning July 1, 1997, seven percent (7%) of the regular annual compensation of the member not in excess of any applicable maximum compensation level of the member; and
4.  All public schools in this state shall treat the employee contributions as being picked-up under the provisions of Section 414 (h) (2) of the Internal Revenue Code of 1986 in determining tax treatment.
C.  1.  Prior to July 1, 1995, an active member of the System may elect to have a maximum compensation level of Forty Thousand Dollars ($40,000.00).  Such an election shall be made in writing and filed with the System.  Members whose salaries are in excess of Twenty-five Thousand Dollars ($25,000.00) on the effective date of this act shall file the election with the System prior to January 1, 1988.  Members whose salaries exceed Twenty-five Thousand Dollars ($25,000.00) after the effective date of this act shall file the election when the salary exceeds Twenty-five Thousand Dollars ($25,000.00).  If a member makes such an election, the member shall contribute the following amounts:
a.	beginning July 1, 1992, through June 30, 1993, eleven percent (11%) of the regular annual compensation of such member that is in excess of Twenty-five Thousand Dollars ($25,000.00) and is not in excess of Forty Thousand Dollars ($40,000.00),
b.	beginning July 1, 1993, through June 30, 1994, nine percent (9%) of the regular annual compensation of such member that is in excess of Twenty-five Thousand Dollars ($25,000.00) and is not in excess of Forty Thousand Dollars ($40,000.00), and
c.	beginning July 1, 1994, through June 30, 1995, eight percent (8%) of the regular annual compensation of such member that is in excess of Twenty-five Thousand Dollars ($25,000.00) and is not in excess of Forty Thousand Dollars ($40,000.00).  Except as provided in subsection E of this section, any such election shall be irrevocable.
2.  After June 30, 1995, in addition to the amount contributed by each member to the retirement system pursuant to subsection B of this section, the total amount contributed by each member to the retirement system shall include, beginning July 1, 1995, through June 30, 1997, seven percent (7%) of the regular annual compensation of each member, who is not employed by an entity or institution within The Oklahoma State System of Higher Education, that is in excess of Twenty-five Thousand Dollars ($25,000.00) and beginning July 1, 1996, through June 30, 1997, seven percent (7%) of the regular annual compensation of each member who is employed by an entity or institution within The Oklahoma State System of Higher Education in excess of Twenty-five Thousand Dollars ($25,000.00), but not in excess of any applicable maximum compensation level of the member.
D.  For purposes of Section 17-101 et seq. of this title, regular annual compensation shall include:
1.  Salary which accrues on a regular basis in proportion to the service performed, including payments for staff development;
2.  Amounts that would otherwise qualify as salary under paragraph 1 of this subsection but are not received directly by the member pursuant to a good faith, voluntary written salary reduction agreement in order to finance payments to a deferred compensation or tax-sheltered annuity program or to finance benefit options under a cafeteria plan qualifying under the United States Internal Revenue Code, 26 U.S.C., Section 101 et seq.; and
3.  Group health and disability insurance, group term life insurance, annuities and pension plans, provided on a periodic basis to all qualified employees of the employer, which qualify as fringe benefits under the United States Internal Revenue Code.
4.  Excluded from regular annual compensation are expense reimbursement payments, office, vehicle, housing or other maintenance allowances, the flexible benefit allowance provided pursuant to Section 26-105 of this title, payment for unused vacation and sick leave, any payment made for reason of termination or retirement not specifically provided for in paragraphs 1 through 3 of this subsection, maintenance or other nonmonetary compensation, payment received as an independent contractor or consultant, pursuant to a lawful contract which complies with the requirements of subsection B of Section 6-101.2 of this title, any benefit payments not made pursuant to a valid employment agreement, or any compensation not described in paragraphs 1 through 3 of this subsection.
E.  1.  Any member who was a contributing member of the Retirement System between July 1, 1987, and June 30, 1995, who at the time the member was eligible to make an election to increase the maximum compensation level of the member, failed to make an election or chose not to increase the maximum compensation level of the member to Forty Thousand Dollars ($40,000.00), may elect to make back contributions to the Retirement System.  The member shall complete a new election form and file with the Board of Trustees, the form and a payment equaling the difference between the amount contributed at the twenty-five-thousand-dollar level and the appropriate contribution on compensation in excess of Twenty-five Thousand Dollars ($25,000.00) up to a maximum of Forty Thousand Dollars ($40,000.00) shall be made prior to the official retirement date of the member.  The required payment shall include any contribution required by the employing school district, and shall include interest compounded annually at ten percent (10%) per annum of both employer and employee contributions.
2.  Any changes made pursuant to this subsection shall be irrevocable.
F.  1.  An individual who withdrew from the Teachers’ Retirement System and whose salary was in excess of Seven Thousand Eight Hundred Dollars ($7,800.00) and had elected to contribute only on Seven Thousand Eight Hundred Dollars ($7,800.00) before his or her withdrawal shall contribute on the earning ceiling as provided for in this section on his or her reentry into membership in the Teachers’ Retirement System.
2.  An individual who elected to contribute on a maximum of Seven Thousand Eight Hundred Dollars ($7,800.00) per annum shall, beginning July 1, 1979, contribute on his or her earning ceiling as provided for in this section.
3.  Any member who elected to contribute on Seven Thousand Eight Hundred Dollars ($7,800.00) prior to January 1, 1978, and whose salary was more than Seven Thousand Eight Hundred Dollars ($7,800.00) during the school years 1974-75 through 1978-79 may elect to make back contributions to the retirement system by paying the five percent (5%) contributions on the difference between Seven Thousand Eight Hundred Dollars ($7,800.00) and the actual salary of the member, not to exceed Ten Thousand Dollars ($10,000.00) for each applicable school year, plus interest compounded annually at ten percent (10%) per annum.  Such payment shall be made prior to the official retirement date of the member.
G.  Each employer shall cause to be deducted from the salary of each member on each and every payroll of such employer for each and every payroll period, the proper percentage of his or her earnable compensation as provided for in subsection B or subsection C of this section.
1.  Deductions shall begin with the first payroll period of the school year.  In determining the amount earnable by a member in a payroll period, the Board of Trustees shall consider the rate of annual compensation payable to such member on the first day of the payroll period as continuing throughout such payroll period, and it may omit deductions from compensation for any period less than a full period, and to facilitate the making of deductions, it may modify the deduction required of any member by such an amount as shall not exceed one-tenth of one percent (1/10 of 1%) of the annual compensation upon the basis of which such deduction is to be made.  Prior to January 1, 1991, any active contributing member who joined the System subsequent to July 1, 1943, may pay the normal cost, which shall mean the single sum which would have been paid under existing statutes at the time the service was performed, plus interest, for years of teaching service in Oklahoma from the date of establishment of the System in 1943 to date of membership, in a lump sum, or in installments equal to establishing one (1) year of creditable service.  Effective January 1, 1991, any active contributing member who joined the System subsequent to July 1, 1943, may pay the amount determined by the Board of Trustees pursuant to Section 17-116.8 of this title for years of teaching service in Oklahoma from the date of establishment of the System in 1943 to date of membership, in a lump sum, or in installments equal to establishing one (1) year of creditable service.  For purposes of this option, teaching service in Oklahoma shall include the teaching of vocational agricultural courses within Oklahoma for the federal government.  Years for which contributions are paid shall count as membership service under this plan.  A member may receive credit for not more than five (5) years of teaching service rendered while in the Peace Corps or in the public schools of a territory of the United States or the public schools, American Military Dependent Schools or state colleges or state universities outside this state by paying his or her contributions, plus interest, and membership fees to the retirement system, subject to the regulations of the Board of Trustees, providing he or she is not receiving and is not eligible to receive retirement credit or benefits from said service in any other public retirement system of this state, or any other state or territory of the United States subject to the following provisions:
a.	the member is required to have two (2) years of employed service teaching earned in Oklahoma for each year of Peace Corps, territorial, out-of-state, noncovered in-state or military membership credit granted.
b.	prior to January 1, 1991, the out-of-state or noncovered in-state payment shall be the normal cost, which means the single sum which would have been paid under existing law at the time the service was performed, plus interest, on the basis of what his or her annual salary would have been in Oklahoma or out of state, whichever is greater, had he or she been employed as a teacher.  Effective January 1, 1991, the Peace Corps, territorial, out-of-state or noncovered in-state payment shall be the amount determined by the Board of Trustees pursuant to Section 17-116.8 of this title.
2.  In addition to the deductions hereinabove provided for, any member who becomes a member of the Armed Forces of the United States of America during any period of national emergency, including World War II, the Korean conflict, the Vietnam conflict, Operation Desert Storm, Operation Enduring Freedom, Operation Iraqi Freedom or others as may be determined by the Board of Trustees, or whose entrance into or training for the teaching profession was interrupted by his or her entrance into the Armed Forces, and who was or shall have become a member of the Teachers’ Retirement System shall be granted the privilege of making up his or her five percent (5%) contributions as provided for in this section until January 1, 1991, for not to exceed five (5) years of service in the Armed Forces by electing to pay said contributions on the basis of the rate of pay in his or her contract as a teacher at the time his or her service in the Armed Forces commenced or in the case of a teacher who was not teaching prior to entering the Armed Forces, on the basis of the salary of the first year of teaching after being honorably discharged from the Armed Forces.  Effective January 1, 1991, the member will receive such service upon payment of the amount determined by the Board of Trustees pursuant to Section 17-116.8 of this title.  Such contributions shall be credited in the regular manner, and the period for which said contributions were paid shall be counted as creditable years of service and allocated to the period during which the military service was rendered, except that the period for which contributions were paid must have been continuous and shall be credited in the aggregate, regardless of fiscal year limitations.  Notwithstanding any provision herein to the contrary, contributions, benefits and service credit with respect to qualified military service as defined by Section 414(u) of the Internal Revenue Code of 1986, shall be provided in accordance with Section 414(u) of the Internal Revenue Code.
3.  Retirement benefits for all service credits purchased pursuant to this subsection shall be determined in accordance with the provisions of paragraph 2 of this subsection.
H.  Effective July 1, 2004, the total creditable service of a member who retires or terminates employment and elects a vested benefit shall include not to exceed one hundred twenty (120) days of unused sick leave accumulated subsequent to August 1, 1959.  Twenty (20) days of unused sick leave shall equal one (1) month for purposes of creditable service credit.  If the member becomes a member or was eligible to become a member prior to July 1, 1995, the year of credit received in this section shall be treated as service earned prior to July 1, 1995.  This subsection shall apply to members retiring or vesting on or after the effective date of this act and shall not be retroactive.
I.  Any member who:
1.  Shall be absent from the teaching service because of election to the State Legislature or appointment to the executive branch in an education-related capacity shall be allowed thirty (30) days from the date as of which the person is officially elected or appointed to file an election with the Teachers’ Retirement System to retain his or her membership in the Teachers’ Retirement System upon payment of the contribution required of other members and employers of said members as provided for in this section and his or her service credits shall continue to be accumulated during such absence, provided he or she is not receiving retirement credits or benefits from said service beginning after July 1, 1992, in other public retirement systems; or
2.  Became an employee of the Oklahoma Commission for Teacher Preparation on or subsequent to June 1, 2001, but prior to July 1, 2002, who was previously employed by a participating employer within the Teachers’ Retirement System of Oklahoma, may elect to cancel any accumulated service credit accrued within the Oklahoma Public Employees Retirement System on or after June 1, 2001, but prior to July 1, 2002, by filing an election with the Oklahoma Public Employees Retirement System for the cancellation of such service credit.  The election shall be irrevocable and shall require the Oklahoma Public Employees Retirement System to transfer all accumulated employer and employee contributions made on behalf of or by the person making such election to the Teachers’ Retirement System for such period of time.  The Teachers’ Retirement System shall compute the employee contributions that would have been made to the System by such employee if the contributions had been computed pursuant to this section.  In order to receive the full amount of creditable service for the period of time on or after June 1, 2001, but not later than June 30, 2002, the employee shall be required to pay any difference between the transferred employee contributions and the amount computed by the Teachers’ Retirement System.  The employee may make payment of any required amount in the manner provided by and subject to the requirements of Section 17-116.8 of this title.  After payment of all required employee contributions, the Teachers’ Retirement System shall credit the period of time represented by the transferred employee contributions as creditable service within the meaning of Section 17-101 of this title.  After the transfer of the employee contributions, the Oklahoma Public Employees Retirement System shall cancel any service credit previously accumulated for the period of time represented by such transferred employee contributions.  Any person who makes the election provided for by this paragraph, and who continues employment with the Oklahoma Commission for Teacher Preparation on or after July 1, 2002, shall continue to accrue service credit in the Teachers’ Retirement System of Oklahoma.  The employer shall make employer contributions according to the requirements of Section 17-108.1 of this title and shall provide for the deduction of employee contributions as required by this section.
J.  Any member who shall be absent from the teaching service because of election or appointment as a local, state or national education association officer shall be allowed to retain his or her membership in the Teachers’ Retirement System upon payment of the contribution required of other members and employers of said members as provided for in this section and his or her service credits shall continue to be accumulated during such absence.  Provided, however, any one such absence shall not exceed eight (8) continuous years.  No member who has less than ten (10) years of contributory service on July 1, 1994, may make this election after June 30, 1994.  Members contributing to the System on July 1, 1994, may continue to contribute under this subsection until they have completed eight (8) years allowed by this subsection.  The member may file for retirement when otherwise eligible for retirement as provided by Section 17-105 of this title.  Conditioned upon receiving a favorable determination letter or private letter ruling from the Internal Revenue Service, the eligible absence and participation continuation in the Teachers’ Retirement System of Oklahoma pursuant to this subsection shall be increased to twelve (12) years.  The Teachers’ Retirement System of Oklahoma shall make any necessary efforts in obtaining an Internal Revenue Service determination letter or private letter ruling concerning such increase.
K.  A member may receive credit for those years of service accumulated by the member while employed by an entity which is a participating employer in the Oklahoma Firefighters Pension and Retirement System, the Oklahoma Police Pension and Retirement System, the Uniform Retirement System for Justices and Judges, the Oklahoma Law Enforcement Retirement System, or the Oklahoma Public Employees Retirement System, if the member is not receiving or eligible to receive retirement credit or benefits from said service in any other public retirement system.  A member also may receive credit for those years of service with the Department of Wildlife Conservation or with an employer that is a participating employer within one of the state retirement systems specifically referred to in this section when at the time of such service by the member the employer was not such a participating employer, if the member is not receiving or eligible to receive retirement credit or benefits from said service in any other public retirement system.  To receive the service credit provided in this subsection, the member shall pay the amount determined by the Board of Trustees pursuant to Section 17-116.8 of this title.  For purposes of this subsection, creditable service transferred from the Oklahoma Public Employees Retirement System shall include service authorized under paragraph (f) of subsection (2) of Section 913 of Title 74 of the Oklahoma Statutes as amended from time to time.  Members who retire prior to July 1, 1993, shall have their monthly benefit adjusted to include all services accrued under paragraph (f) of subsection (2) of Section 913 of Title 74 of the Oklahoma Statutes.  Provided however, any adjustment of existing retirement benefits caused by reason of inclusion of such service authorized under paragraph (f) of subsection (2) of Section 913 of Title 74 of the Oklahoma Statutes shall not affect any retirement benefit paid prior to July 1, 1993.
L.  1.  An active member of the Teachers’ Retirement System of Oklahoma may receive credit for those years of service accumulated by the member while a member of the Oklahoma Public Employees Retirement System if:
a.	the member is an active member of the Teachers’ Retirement System of Oklahoma, and
b.	the member provides notice to the Oklahoma Public Employees Retirement System and the Teachers’ Retirement System of Oklahoma of the member’s election to transfer said service credit.  The notice shall include a list of the years to be transferred, and
c.	the member is not receiving or eligible to receive retirement credit or benefits from said service in any other public retirement system, notwithstanding the years of service sought to be transferred under this subsection.
Members electing to take advantage of the transfer authorized by this subsection who are receiving or eligible to receive retirement credit or benefits from said service in any other public retirement system shall have all service credit with the Oklahoma Public Employees Retirement System canceled which is not transferred to the Teachers’ Retirement System of Oklahoma or used as a cash offset in such a transfer pursuant to subparagraph d of paragraph 2 of this subsection.  Service credit transferred to the Teachers’ Retirement System of Oklahoma under this subsection shall also be canceled with the Oklahoma Public Employees Retirement System.
2.  For purposes of this subsection, the “sending system” shall mean the Oklahoma Public Employees Retirement System.  The “receiving system” shall mean the Teachers’ Retirement System of Oklahoma.
a.	Within thirty (30) days notification of an intent to transfer is received by the sending system, the sending system shall, according to its own rules and regulations:
(1)	for members who have accrued at least eight (8) years of credited service with the sending system, determine the present value of the member’s earned benefits attributable to the years of service sought to be transferred, discounted according to the member’s age at the time of transfer and computed as of the earliest age at which the member would be able to retire.  Said computation shall assume an unreduced benefit and be computed using interest and mortality assumptions consistent with the actuarial assumptions adopted by the Board of Trustees for purposes of preparing the annual actuarial evaluation, but shall not make any projections regarding future salary.  For employees who have accrued at least eight (8) years of credited service, the sending system shall use the product of this calculation for purposes of determining the transfer fee to be paid by the employee under subparagraph c of this paragraph so long as it is greater than the product of the calculation in division (2) of this subparagraph, and
(2)	determine the sum of the employee and employer contributions applicable to the years of service sought to be transferred plus interest consistent with the actuarial assumptions adopted by the Board of Trustees for purposes of preparing the annual actuarial evaluation.  For all non-vested members, and for members who have accrued at least eight (8) years of credited service, if the product of this calculation is greater than the product of the calculation in division (1) of this subparagraph, the sending system shall use the product of this calculation for purposes of determining the amount to be transferred by the sending system under subparagraph c of this paragraph and any transfer fee to be paid by the member under subparagraph d of this paragraph.
b.	Within thirty (30) days notification of an intent to transfer is received by the receiving system, the receiving system shall determine, according to the system’s own rules and regulations, the present value of the member’s incremental projected benefits discounted according to the member’s age at the time of the transfer.  Incremental projected benefits shall be the difference between the projected benefit said member would receive without transferring the service credit and the projected benefit after transfer of service credit computed as of the earliest age at which the member would be able to retire.  Said computation shall assume an unreduced benefit and be computed using interest, salary projections and mortality assumptions consistent with the actuarial assumptions adopted by the Board of Trustees for purposes of preparing the annual actuarial evaluation.
c.	The sending system shall, within sixty (60) days from the date notification of an intent to transfer is received by the sending system, transfer to the receiving system the amount determined in subparagraph a of this paragraph.  Except if the cost as calculated under subparagraph a of this paragraph is greater than the actuarial value of the incremental benefit in the receiving system, as established in subparagraph b of this paragraph, the sending system shall send the receiving system an amount equal to the actuarial value of the incremental projected benefit in the receiving system.
d.	In order to receive the credit provided for in paragraph 1 of this subsection, if the cost of the actuarial value of the incremental benefit to the receiving system is greater than the cost as calculated under subparagraph a of this paragraph for the same years of service to the sending system as established in subparagraphs a and b of this paragraph, the employee shall elect to:
(1)	pay any difference to receive full credit for the years sought to be transferred, or
(2)	receive prorated service credit for only the amount received from the Oklahoma Public Employees Retirement System pursuant to this subsection.
Such an election shall be made in writing, filed with the System prior to receiving the credit provided for in paragraph 1 of this subsection, and shall be irrevocable.
3.  Within sixty (60) days of successfully completing all of the requirements for transfer under this subsection, the sending system shall pay the receiving system any amount due under this subsection.  Within sixty (60) days of successfully completing all of the requirements for transfer under this subsection, the member shall pay the receiving system any amount due under this subsection.  In the event that the member is unable to pay the transfer fee provided for in this subsection by the due date, the Board of Trustees of the receiving system shall permit the member to amortize the transfer fee over a period not to exceed sixty (60) months.  Said payments shall be made by payroll deductions unless the Board of Trustees permits an alternate payment source.  The amortization shall include interest in an amount not to exceed the actuarially assumed interest rate adopted by the Board of Trustees for investment earnings each year.  Any member who ceases to make payment, terminates, retires or dies before completing the payments provided for in this section shall receive prorated service credit for only those payments made, unless the unpaid balance is paid by said member, his or her estate or successor in interest within six (6) months after said member’s death, termination of employment or retirement, provided no retirement benefits shall be payable until the unpaid balance is paid, unless said member or beneficiary affirmatively waives the additional six-month period in which to pay the unpaid balance.
4.  Years of service transferred pursuant to this subsection shall be used both in determining the member’s retirement benefit and in determining the years of service for retirement and/or vesting purposes.  Years of service rendered as a member of the Oklahoma Public Employees Retirement System prior to July 1, 1992, if any, shall be deemed to be years of service rendered as a member of the Teachers’ Retirement System of Oklahoma prior to July 1, 1992, and shall qualify such person as a member of the Teachers’ Retirement System of Oklahoma before July 1, 1992.
5.  Notwithstanding the requirements of subsection (5) of Section 917 of Title 74 of the Oklahoma Statutes, members electing to take advantage of the transfer authorized by this subsection who have withdrawn their contributions from the sending system shall remit to the sending system the amount of the accumulated contributions the member has withdrawn plus simple interest of ten percent (10%) per annum prior to making said election or the election shall be deemed invalid and the transfer shall be canceled.  If such an election is deemed invalid and the transfer is canceled, the accumulated contribution remitted to the sending system by the member who originally withdrew their contributions shall be returned to the member.  The member’s rights and obligations regarding any service credit reestablished in the sending system due to a failure to satisfy the requirements of this subsection shall be determined by the sending system in accordance with Section 901 et seq. of Title 74 of the Oklahoma Statutes.
6.  If any member fails for any reason to satisfy the requirements of this subsection, the election to transfer service credit shall be void and of no effect, and any service credited as a result of this transfer shall be canceled.  If such service is canceled, the years of canceled service credit which were unsuccessfully transferred to the receiving system from the sending system shall be reestablished in the sending system.  The member’s rights and obligations regarding any service credit reestablished in the sending system due to a failure to satisfy the requirements of this subsection shall be determined by the sending system in accordance with Section 901 et seq. of Title 74 of the Oklahoma Statutes.
7.  The Board of Trustees shall promulgate such rules as are necessary to implement the provisions of this subsection.
M.  Any member whose regular annual compensation was not determined as provided for by law may pay the member contribution required pursuant to subsection B of this section on such amount not included in the member’s regular annual compensation and receive credit for such amount in the calculation of the member’s benefit.  The employees must pay the employer contributions required pursuant to Section 17-108.1 of this title.  Interest at the rate of ten percent (10%) per annum shall be charged to both employee and employer contributions.  Provided that the employing district may pay all or any portion of the contributions and interest the member is required to pay.  Any payment by the employing district for a prior year obligation shall be considered a current obligation of the employer.
N.  Any active member who elected during the 1978-79 school year to pay the difference between five percent (5%) on actual salary not exceeding Ten Thousand Dollars ($10,000.00) and six percent (6%) on actual salary not exceeding Fifteen Thousand Dollars ($15,000.00) shall receive credit for one (1) year of credited service upon receipt and approval of a proper request by the Board of Trustees.
O.  Effective July 1, 1988, any member who is employed by the Governor, the State Senate, the House of Representatives or the Legislative Service Bureau shall be allowed to elect to retain membership in the Retirement System upon payment of the accrued and current member contributions and employer contributions as provided in subsection B of this section and Section 17-108.1 of this title.  Such contributions may be paid on behalf of the member by the employing entity.  Upon payment of such contributions, service credits shall continue to be accumulated during such employment.  Accrued contributions shall be paid to the Retirement System by August 1, 1989.  Current contributions shall be paid to the Retirement System by the tenth of the following month beginning with the month of July 1989.
P.  Notwithstanding any requirements of this title to restrict the payment of service purchases, the Board of Trustees shall promulgate such rules as necessary to allow active members of the System to make installment payments for the redeposit of withdrawn accounts or other payments due under the provisions of this title.  The rules shall permit the member to amortize the balance due over a period not to exceed sixty (60) months, and shall include interest consistent with the actuarial assumptions adopted by the Board of Trustees for purposes of preparing the annual actuarial evaluation.  Further, the rules shall provide that all payments must be completed prior to the effective retirement date of the member.
Q.  1.  A member of the Oklahoma Public Employees Retirement System who becomes a member of the Teachers’ Retirement System of Oklahoma because the member has become employed by an entity or institution within The Oklahoma State System of Higher Education, State Board of Education, State Board of Career and Technology Education, Oklahoma Department of Career and Technology Education, Oklahoma School of Science and Mathematics, Oklahoma Center for the Advancement of Science and Technology, State Department of Rehabilitation Services, Oklahoma State Regents for Higher Education, Department of Corrections, State Department of Education, Oklahoma Board of Private Vocational Schools, Board of Regents of Oklahoma Colleges, Oklahoma Student Loan Authority, or the Teachers’ Retirement System of Oklahoma, may elect to receive credit in the Teachers’ Retirement System of Oklahoma for those years of service accumulated by the member in the Oklahoma Public Employees Retirement System pursuant to this subsection.  A member shall be eligible to elect to receive credit for such years of service if:
a.	the member is an active member of the Teachers’ Retirement System of Oklahoma,
b.	the member provides notice to the Teachers’ Retirement System of Oklahoma and the Oklahoma Public Employees Retirement System of the member’s election to transfer such retirement credit.  The notice shall include a list of the years to be transferred, and
c.	the member is not receiving or eligible to receive retirement credit or benefits from such service in any other public retirement system, notwithstanding the years of service sought to be transferred under this subsection.
Members electing to take advantage of the transfer authorized by this subsection shall have all service credit with the Oklahoma Public Employees Retirement System canceled which is transferred to the Teachers’ Retirement System of Oklahoma.
2.  For purposes of this subsection, the “sending system” shall mean the Oklahoma Public Employees Retirement System.  The “receiving system” shall mean the Teachers’ Retirement System of Oklahoma.  Within thirty (30) days after notification of an intent to transfer is received by the sending system, the sending system shall, according to its own rules, send to the receiving system all employer and employee contributions made on behalf of the member which were made to the sending system plus an additional amount of earnings based on the actuarial assumed rate of the sending system.  Upon receipt of these contributions by the receiving system, the receiving system shall give credit to the transferring member in an amount equal to the years of service accrued in the sending system.
3.  If the transferring member’s normal retirement date calculation is based upon the sum of the member’s age and number of years of credited service totaling eighty (80) in the sending system, then the member shall retain such calculation in the receiving system.
4.  The Board of Trustees shall promulgate such rules as are necessary to implement the provisions of this subsection.
R.  A former member of the Teachers’ Retirement System of Oklahoma who withdrew his or her contributions from the System prior to January 1, 1983, and who had at least ten (10) years of service in the System and purchased that service in the Oklahoma Public Employees Retirement System, may elect to revoke that purchase from the Oklahoma Public Employees Retirement System and to repay the withdrawn contributions to the System in order to be eligible, once such member reaches the normal retirement age, to receive a retirement benefit that is based upon years of service and compensation at the time such member terminated employment.  In addition, such former member may elect to transfer service credit accrued in the Oklahoma Public Employees Retirement System to the Teachers’ Retirement System of Oklahoma pursuant to subsection L of this section.  The election, pursuant to this subsection, shall be made prior to September 1, 2000.  The election and the repayment shall be made according to rules promulgated by the Board.
SECTION 5.     AMENDATORY     74 O.S. 2001, Section 902, as last amended by Section 134, Chapter 1, O.S.L. 2005 (74 O.S. Supp. 2008, Section 902), is amended to read as follows:
Section 902.  As used in Section 901 et seq. of this title:
(1)  “System” means the Oklahoma Public Employees Retirement System as established by this act and as it may hereafter be amended;
(2)  “Accumulated contributions” means the sum of all contributions by a member to the System which shall be credited to the member’s account;
(3)  “Act” means Sections 901 to 932, inclusive, of this title;
(4)  “Actuarial equivalent” means a deferred income benefit of equal value to the accumulated deposits or benefits when computed upon the basis of the actuarial tables in use by the System;
(5)  “Actuarial tables” means the actuarial tables approved and in use by the Board at any given time;
(6)  “Actuary” means the actuary or firm of actuaries employed by the Board at any given time;
(7)  “Beneficiary” means any person named by a member to receive any benefits as provided for by Section 901 et seq. of this title.  If there is no beneficiary living at time of member employee’s death, the member’s estate shall be the beneficiary;
(8)  “Board” means the Oklahoma Public Employees Retirement System Board of Trustees;
(9)  “Compensation” means all salary and wages, as defined by the Board of Trustees, including amounts deferred under deferred compensation agreements entered into between a member and a participating employer, but exclusive of payment for overtime, payable to a member of the System for personal services performed for a participating employer but shall not include compensation or reimbursement for traveling, or moving expenses, or any compensation in excess of the maximum compensation level, provided:
(a)	For compensation for service prior to January 1, 1988, the maximum compensation level shall be Twenty-five Thousand Dollars ($25,000.00) per annum.
For compensation for service on or after January 1, 1988, through June 30, 1994, the maximum compensation level shall be Forty Thousand Dollars ($40,000.00) per annum.
For compensation for service on or after July 1, 1994, through June 30, 1995, the maximum compensation level shall be Fifty Thousand Dollars ($50,000.00) per annum; for compensation for service on or after July 1, 1995, through June 30, 1996, the maximum compensation level shall be Sixty Thousand Dollars ($60,000.00) per annum; for compensation for service on or after July 1, 1996, through June 30, 1997, the maximum compensation level shall be Seventy Thousand Dollars ($70,000.00) per annum; and for compensation for service on or after July 1, 1997, through June 30, 1998, the maximum compensation level shall be Eighty Thousand Dollars ($80,000.00) per annum.  For compensation for services on or after July 1, 1998, there shall be no maximum compensation level for retirement purposes.
(b)	Compensation for retirement purposes shall include any amount of elective salary reduction under Section 457 of the Internal Revenue Code of 1986 and any amount of non-elective salary reduction under Section 414(h) of the Internal Revenue Code of 1986.
(c)	Notwithstanding any provision to the contrary, the compensation taken into account for any employee in determining the contribution or benefit accruals for any plan year is limited to the annual compensation limit under Section 401(a)(17) of the federal Internal Revenue Code.
(d)	Current appointed members of the Oklahoma Tax Commission whose salary is constitutionally limited and is less than the highest salary allowed by law for his or her position shall be allowed, within ninety (90) days from the effective date of this act, to make an election to use the highest salary allowed by law for the position to which the member was appointed for the purposes of making contributions and determination of retirement benefits.  Such election shall be irrevocable and be in writing.  Re-appointment to the same office shall not permit a new election.  Members appointed to the Oklahoma Tax Commission after the effective date of this act shall make such election, pursuant to this subparagraph, within ninety (90) days of taking office;
(10)  “Credited service” means the sum of participating service, prior service and elected service;
(11)  “Dependent” means a parent, child, or spouse of a member who is dependent upon the member for at least one-half (1/2) of the member’s support;
(12)  “Effective date” means the date upon which the System becomes effective by operation of law;
(13)  “Eligible employer” means the state and any county, county hospital, city or town, conservation districts, circuit engineering districts and any public or private trust in which a county, city or town participates and is the primary beneficiary is to be an eligible employer for the purpose of this act only, whose employees are covered by Social Security and are not covered by or eligible for another retirement plan authorized under the laws of this state which is in operation on the initial entry date.  Emergency medical service districts may join the System upon proper application to the Board.  Provided affiliation by a county hospital shall be in the form of a resolution adopted by the board of control.
(a)	If a class or several classes of employees of any above-defined employers are covered by Social Security and are not covered by or eligible for and will not become eligible for another retirement plan authorized under the laws of this state, which is in operation on the effective date, such employer shall be deemed an eligible employer, but only with respect to that class or those classes of employees as defined in this section.
(b)	A class or several classes of employees who are covered by Social Security and are not covered by or eligible for and will not become eligible for another retirement plan authorized under the laws of this state, which is in operation on the effective date, and when the qualifications for employment in such class or classes are set by state law; and when such class or classes of employees are employed by a county or municipal government pursuant to such qualifications; and when the services provided by such employees are of such nature that they qualify for matching by or contributions from state or federal funds administered by an agency of state government which qualifies as a participating employer, then the agency of state government administering the state or federal funds shall be deemed an eligible employer, but only with respect to that class or those classes of employees as defined in this subsection; provided, that the required contributions to the retirement plan may be withheld from the contributions of state or federal funds administered by the state agency and transmitted to the System on the same basis as the employee and employer contributions are transmitted for the direct employees of the state agency.  The retirement or eligibility for retirement under the provisions of law providing pensions for service as a volunteer fire fighter shall not render any person ineligible for participation in the benefits provided for in Section 901 et seq. of this title.  An employee of any public or private trust in which a county, city or town participates and is the primary beneficiary shall be deemed to be an eligible employee for the purpose of this act only.
(c)	All employees of the George Nigh Rehabilitation Institute who elected to retain membership in the System, pursuant to Section 913.7 of this title, shall continue to be eligible employees for the purposes of this act.  The George Nigh Rehabilitation Institute shall be considered a participating employer only for such employees.
(d)	A participating employer of the Teachers’ Retirement System of Oklahoma, who has one or more employees who have made an election pursuant to enabling legislation to retain membership in the System as a result of change in administration, shall be considered a participating employer of the Oklahoma Public Employees Retirement System only for such employees;
(14)  “Employee” means any officer or employee of a participating employer, whose employment is not seasonal or temporary and whose employment requires at least one thousand (1,000) hours of work per year and whose salary or wage is equal to the hourly rate of the monthly minimum wage for state employees.  For those eligible employers outlined in Section 910 of this title, the rate shall be equal to the hourly rate of the monthly minimum wage for that employer.  Each employer, whose minimum wage is less than the state’s minimum wage, shall inform the System of the minimum wage for that employer.  This notification shall be by resolution of the governing body.
(a)	Any employee of the county extension agents who is not currently participating in the Teachers’ Retirement System of Oklahoma shall be a member of this System.
(b)	Eligibility shall not include any employee who is a contributing member of the United States Civil Service Retirement System.
(c)	It shall be mandatory for an officer, appointee or employee of the office of district attorney to become a member of this System if he or she is not currently participating in a county retirement system.  Provided further, that if an officer, appointee or employee of the office of district attorney is currently participating in such county retirement system, he or she is ineligible for this System as long as he or she is eligible for such county retirement system.  Any eligible officer, appointee or employee of the office of district attorney shall be given credit for prior service as defined in this section.  The provisions outlined in Section 917 of this title shall apply to those employees who have previously withdrawn their contributions.
(d)	Eligibility shall also not include any officer or employee of the Oklahoma Employment Security Commission, except for those officers and employees of the Commission electing to transfer to this System pursuant to the provisions of Section 910.1 of this title or any other class of officers or employees specifically exempted by the laws of this state, unless there be a consolidation as provided by Section 912 of this title.  Employees of the Oklahoma Employment Security Commission who are ineligible for enrollment in the Employment Security Commission Retirement Plan, that was in effect on January 1, 1964, shall become members of this System.
(e)	Any employee employed by the Legislative Service Bureau, State Senate or House of Representatives for the full duration of a regular legislative session shall be eligible for membership in the System regardless of classification as a temporary employee and may participate in the System during the regular legislative session at the option of the employee.  For purposes of this subparagraph, the determination of whether an employee is employed for the full duration of a regular legislative session shall be made by the Legislative Service Bureau if such employee is employed by the Legislative Service Bureau, the State Senate if such employee is employed by the State Senate, or by the House of Representatives if such employee is employed by the House of Representatives.  Each regular legislative session during which the legislative employee or an employee of the Legislative Service Bureau participates full time shall be counted as six (6) months of full-time participating service.
(i)	Except as otherwise provided by this subparagraph, once a temporary session employee makes a choice to participate or not, the choice shall be binding for all future legislative sessions during which the employee is employed.
(ii)	Notwithstanding the provisions of division (i) of this subparagraph, any employee, who is eligible for membership in the System because of the provisions of this subparagraph and who was employed by the State Senate or House of Representatives after January 1, 1989, may file an election, in a manner specified by the Board, to participate as a member of the System prior to September 1, 1989.
(iii)	Notwithstanding the provisions of division (i) of this subparagraph, a temporary legislative session employee who elected to become a member of the System may withdraw from the System effective the day said employee elected to participate in the System upon written request to the Board.  Any such request must be received by the Board prior to October 1, 1990.  All employee contributions made by the temporary legislative session employee shall be returned to the employee without interest within four (4) months of receipt of the written request.
(iv)	A member of the System who did not initially elect to participate as a member of the System pursuant to subparagraph (e) of this paragraph shall be able to acquire service performed as a temporary legislative session employee for periods of service performed prior to the date upon which the person became a member of the System if:
a.	the member files an election with the System not later than December 31, 2000, to purchase the prior service; and
b.	the member makes payment to the System of the actuarial cost of the service credit pursuant to subsection A of Section 913.5 of this title.  The provisions of Section 913.5 of this title shall be applicable to the purchase of the service credit, including the provisions for determining service credit in the event of incomplete payment due to cessation of payments, death, termination of employment or retirement, but the payment may extend for a period not to exceed ninety-six (96) months;
(15)  “Entry date” means the date on which an eligible employer joins the System.  The first entry date pursuant to Section 901 et seq. of this title shall be January 1, 1964;
(16)  “Executive Director” means the managing officer of the System employed by the Board under Section 901 et seq. of this title;
(17)  “Federal Internal Revenue Code” means the federal Internal Revenue Code of 1954 or 1986, as amended and as applicable to a governmental plan as in effect on July 1, 1999;
(18)  “Final average compensation” means the average annual compensation, including amounts deferred under deferred compensation agreements entered into between a member and a participating employer, up to, but not exceeding the maximum compensation levels as provided in paragraph (9) of this section received during the highest three (3) of the last ten (10) years of participating service immediately preceding retirement or termination of employment.  Provided, no member shall retire with a final average compensation unless the member has made the required contributions on such compensation, as defined by the Board of Trustees;
(19)  “Fiscal year” means the period commencing July 1 of any year and ending June 30 of the next year.  The fiscal year is the plan year for purposes of the federal Internal Revenue Code; however, the calendar year is the limitation year for purposes of Section 415 of the federal Internal Revenue Code;
(20)  “Fund” means the Oklahoma Public Employees Retirement Fund as created by Section 901 et seq. of this title;
(21)  “Leave of absence” means a period of absence from employment without pay, authorized and approved by the employer and acknowledged to the Board, and which after the effective date does not exceed two (2) years;
(22)  “Member” means an eligible employee or elected official who is in the System and is making the required employee or elected official contributions, or any former employee or elected official who shall have made the required contributions to the System and shall have not received a refund or withdrawal;
(23)  “Military service” means service in the Armed Forces of the United States by an honorably discharged person during the following time periods, as reflected on such person’s Defense Department Form 214, not to exceed five (5) years for combined participating and/or prior service, as follows:
(a)	during the following periods, including the beginning and ending dates, and only for the periods served, from:
(i)	April 6, 1917, to November 11, 1918, commonly referred to as World War I,
(ii)	September 16, 1940, to December 7, 1941, as a member of the 45th Division,
(iii)	December 7, 1941, to December 31, 1946, commonly referred to as World War II,
(iv)	June 27, 1950, to January 31, 1955, commonly referred to as the Korean Conflict or the Korean War,
(v)	February 28, 1961, to May 7, 1975, commonly referred to as the Vietnam era, except that:
a.	for the period from February 28, 1961, to August 4, 1964, military service shall only include service in the Republic of Vietnam during that period, and
b.	for purposes of determining eligibility for education and training benefits, such period shall end on December 31, 1976, or
(vi)	August 1, 1990, to December 31, 1991, commonly referred to as the Gulf War, the Persian Gulf War, or Operation Desert Storm, but excluding any person who served on active duty for training only, unless discharged from such active duty for a service-connected disability;
(b)	during the following periods, including the beginning dates, and only for the periods served, from:
(i)	September 11, 2001 to a date to be determined or  cessation of the Operation of Enduring Freedom; or
(ii)	March 19, 2003 to a date to be determined or the cessation of Operation Iraqi Freedom.
To qualify for the service specified in divisions (i) and (ii) of this subparagraph, the service must be based on the criteria for the awarding of the Afghanistan Campaign Medal or the Iraq Campaign Medal;
(c)	during a period of war or combat military operation other than a conflict, war or era listed in subparagraph subparagraphs (a) and (b) of this paragraph, beginning on the date of Congressional authorization, Congressional resolution, or Executive Order of the President of the United States, for the use of the Armed Forces of the United States in a war or combat military operation, if such war or combat military operation lasted for a period of ninety (90) days or more, for a person who served, and only for the period served, in the area of responsibility of the war or combat military operation, but excluding a person who served on active duty for training only, unless discharged from such active duty for a service-connected disability, and provided that the burden of proof of military service during this period shall be with the member, who must present appropriate documentation establishing such service.
An eligible member under this paragraph shall include only those persons who shall have served during the times or in the areas prescribed in this paragraph, and only if such person provides appropriate documentation in such time and manner as required by the System to establish such military service prescribed in this paragraph, or for service pursuant to subdivision a of division (v) of subparagraph (a) of this paragraph those persons who were awarded service medals, as authorized by the United States Department of Defense as reflected in the veteran’s Defense Department Form 214, related to the Vietnam Conflict for service prior to August 5, 1964;
(24)  “Normal retirement date” means the date on which a member may retire with full retirement benefits as provided in Section 901 et seq. of this title, such date being whichever occurs first:
(a)	the first day of the month coinciding with or following a member’s sixty-second birthday,
(b)	for any person who initially became a member prior to July 1, 1992, the first day of the month coinciding with or following the date at which the sum of a member’s age and number of years of credited service total eighty (80); such a normal retirement date will also apply to any person who became a member of the sending system as defined in Section 901 et seq. of this title, prior to July 1, 1992, regardless of whether there were breaks in service after July 1, 1992,
(c)	for any person who became a member after June 30, 1992, the first day of the month coinciding with or following the date at which the sum of a member’s age and number of years of credited service total ninety (90),
(d)	in addition to subparagraphs (a), (b) and (c) of this paragraph, the first day of the month coinciding with or following a member’s completion of at least twenty (20) years of full-time-equivalent employment as:
(i)	a correctional or probation and parole officer with the Department of Corrections and at the time of retirement, the member was a correctional or probation and parole officer with the Department of Corrections, or
(ii)	a correctional officer, probation and parole officer or fugitive apprehension agent with the Department of Corrections who is in such position on June 30, 2004, or who is hired after June 30, 2004, and who receives a promotion or change in job classification after June 30, 2004, to another position in the Department of Corrections, so long as such officer or agent has at least five (5) years of service as a correctional officer, probation and parole officer or fugitive apprehension agent with the Department, has twenty (20) years of full-time-equivalent employment with the Department and was employed by the Department at the time of retirement, or
(iii)	a firefighter with the Oklahoma Military Department either employed for the first time on or after July 1, 2002, or who was employed prior to July 1, 2002, in such position and who makes the election authorized by division (2) of subparagraph b of paragraph (8) of subsection A of Section 915 of this title and at the time of retirement, the member was a firefighter with the Oklahoma Military Department, and such member has at least twenty (20) years of credited service upon which the two and one-half percent (2 1/2%) multiplier will be used in calculating the retirement benefit,
(e)	for those fugitive apprehension agents who retire on or after July 1, 2002, the first day of the month coinciding with or following a member’s completion of at least twenty (20) years of full-time-equivalent employment as a fugitive apprehension agent with the Department of Corrections and at the time of retirement, the member was a fugitive apprehension agent with the Department of Corrections, or
(f)	for any member who was continuously employed by an entity or institution within The Oklahoma State System of Higher Education and whose initial employment with such entity or institution was prior to July 1, 1992, and who without a break in service of more than thirty (30) days became employed by an employer participating in the Oklahoma Public Employees Retirement System, the first day of the month coinciding with or following the date at which the sum of the member’s age and number of years of credited service total eighty (80);
(25)  “Participating employer” means an eligible employer who has agreed to make contributions to the System on behalf of its employees;
(26)  “Participating service” means the period of employment after the entry date for which credit is granted a member;
(27)  “Prior service” means the period of employment of a member by an eligible employer prior to the member’s entry date for which credit is granted a member under Section 901 et seq. of this title;
(28)  “Retirant” means a member who has retired under the System;
(29)  “Retirement benefit” means a monthly income with benefits accruing from the first day of the month coinciding with or following retirement and ending on the last day of the month in which death occurs or the actuarial equivalent thereof paid in such manner as specified by the member pursuant to Section 901 et seq. of this title or as otherwise allowed to be paid at the discretion of the Board;
(30)  “Retirement coordinator” means the individual designated by each participating employer through whom System transactions and communication shall be directed;
(31)  “Social Security” means the old-age survivors and disability section of the Federal Social Security Act;
(32)  “Total disability” means a physical or mental disability accepted for disability benefits by the Federal Social Security System;
(33)  “Service-connected disability benefits” means military service benefits which are for a service-connected disability rated at twenty percent (20%) or more by the Veterans Administration or the Armed Forces of the United States;
(34)  “Elected official” means a person elected to a state office in the legislative or executive branch of state government or a person elected to a county office for a definite number of years and shall include an individual who is appointed to fill the unexpired term of an elected state official;
(35)  “Elected service” means the period of service as an elected official; and
(36)  “Limitation year” means the year used in applying the limitations of Section 415 of the Internal Revenue Code of 1986, which year shall be the calendar year.
SECTION 6.  This act shall become effective November 1, 2009.

52-1-583	ARE	1/21/2009 2:52:20 PM