1. (a)

   1. (1)

      1. (A) In accordance with Acts 1999, No. 865, rehabilitation service corporations that have acquired the status of a corporation authorized by Acts 1999, No. 880, and other local units of government as specifically defined in various sections of the Arkansas Code, may elect to participate in the Arkansas Public Employees’ Retirement System.
      2. (B) Provided, however, an entity shall not be allowed to participate if such participation would jeopardize the tax-qualified status of the plan under the Internal Revenue Code.
   2. (2) Said election must be made by a majority vote of the governing body of each entity, or if there is no governing body, the election shall be made by the executive head of the entity.
   3. (3) The entity shall certify the results of the election to the Executive Director of the Arkansas Public Employees’ Retirement System within ten (10) days after the vote.
   4. (4) Requests for participation shall be presented to the Board of Trustees of the Arkansas Public Employees’ Retirement System for final approval.
   5. (5) In the event the board determines there are qualification issues that must be resolved before final approval, the board shall request a review by the system’s actuary, the Office of the Attorney General, or other sources as are needed.
   6. (6) Pending review for Internal Revenue Service compliance, the effective date of coverage shall be the first day of the calendar month next following receipt of the certification or the July 1 next following the receipt, as determined by the election.
2. (b) Employers electing to participate under this section shall be placed in the local government division and the employer contribution rate shall be the rate for that division.

3. (c) Subject to the limitations contained in Section 415 of the Internal Revenue Code, prior service may be purchased by persons employed by these participating entities in accordance with the standard purchase provisions as follows:

   1. (1) The person is a participating employee covered under the system at the time of the purchase;
   2. (2) The purchase does not jeopardize the tax-qualified status of the plan;
   3. (3) The person furnishes proof, in a form required by the system, of the service and compensation received;

   4. (4)

      1. (A) The person pays, or causes to be paid:

4. (i) All employee contributions at the rate and on the compensation that would have been paid had he or she been a member during that time;

   1. (ii) All employer contributions based on the employer normal cost from the most recently completed regular annual actuarial valuation and the compensation that would have been paid had he or she been a member during that time; and

      1. (iii) Regular interest (as defined by 24 CAR § 1-408) on the employee and employer contributions.
      2. (B) The interest shall be computed from the date the service was rendered to the date the payment is received by the system.
      3. (C) The person may purchase all of the service or any portion thereof in multiples of one (1) year; and
   2. (5) The payment of funds shall be made in one (1) lump sum.

Codification Notes: Section 415 of the Internal Revenue Code is codified at 26 U.S.C. § 415. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "309 – 1999 (5) – Local Government Unit Participation"