Section 35IAC2-1-2. Prior service credit; prerequisites

   (a) Prior service credit shall be given to any member of the 1977 Police and Firefighters' Pension and Disability Fund (1977 Fund) providing the following conditions are met:

(1) As used in this section, "prior service" means any services or duties performed as a member of the 1977 Fund after April 30, 1977.

(2) The police officer or firefighter was a member of the 1977 Fund and had contributions withheld for membership.

(3) The city, town, or township to which the police officer or firefighter is transferred or has been hired by is a member of the 1977 Fund.

(4) The member repays, either in a lump sum or a series of payments determined by the 1977 Fund, the amount of contributions plus interest which was refunded to him. The interest is at a rate determined by the board and is calculated from the date of the withdrawal. The fund shall provide the eligible fund member with information with respect to the cost of such service.

  (b) Service may be purchased in one (1) month increments. The minimum service purchase is one (1) year for a member who elects to purchase service through installment payments.

  (c) Payments are subject to the terms and conditions of a finance agreement.

  (d) Any such purchase may be made via a direct cash payment, a direct rollover as allowed by statute, or a combination of both.

  (e) Any direct rollover may not exceed the actual cost of such service as established by the fund.

  (f) Payment may be made in a lump sum or in annual installments for a period not to exceed five (5) years. Any installment may bear interest at the actuarial assumed interest rate effective on the date of the first installment.

  (g) Any payments are subject to applicable Internal Revenue Service limits, and INPRS may deny an application or may limit any payments if the purchase would exceed those limitations.

  (h) In the event of a payment default under the terms of the finance agreement or the purchase is not completed, a partial service credit amount will be determined by INPRS. The partial service credit amount will be based on the payments made as of the date of payment default and the cost of the service. Partial service will be credited in monthly increments. The minimum amount of partial service credit will be one (1) month. The fund member is not eligible to make service purchase payments after the date of the payment default or the date of separation of employment.

  (i) In the event any annual payment is not timely made, allowing for a thirty (30) day grace period, the payment will be deemed in default under the terms of the finance agreement. The fund member is not eligible to make service purchase payments after the date of the payment default.

  (j) If the member does not choose periodic payments, a lump sum payment must be received within ninety (90) days of the member receiving the cost letter. In the event the lump sum payment is not timely made, allowing for a thirty (30) day grace period, the payment will be deemed in default under the terms of the finance agreement. The fund member is not eligible to make service purchase payments after the date of the payment default. (Board of Trustees of the Indiana Public Retirement System; 35 IAC 2-1-2; filed May 9, 1979; 11:31 a.m.: 2 IR 681; filed Sep 8, 1982, 2:05 p.m.: 5 IR 2110; filed May 7, 1998, 4:15 p.m.: 21 IR 3327; readopted filed Oct 31, 2001, 2:21 p.m.: 25 IR 898; adopted Nov 9, 2007: 20071205-IR-035070818ONA; adopted Dec 13, 2013: 20131225-IR-035130565ONA)