(b)

1. (1) A member who purchases service shall receive credit for the purchased service if the actuarial equivalent of both the employee and employer contributions, as calculated by the system, are paid to the system.
2. (2) Service purchased at the actuarial cost shall be contributory.
3. (3) The requirement for service to be purchased at the actuarial cost shall not apply to free military service credit established with the system.

(d) A salary earned for service purchased at the actuarial cost:

1. (1) Shall not be used to calculate a member’s final average salary; and
2. (2) May be used to determine repaid refunds for service that is required to be reported within the refunded service.

(e)

1. (1) A member’s highest salary shall be used as the base year when calculating the actuarial cost for service being purchased by the member.
2. (2) A member’s base year shall be the member’s highest salary year unless the highest salary year is more than one hundred fifty percent (150%) greater than the next highest salary year.
3. (3) If a member’s highest salary year is more than one hundred fifty percent (150%) greater than the next highest salary year, the highest two (2) salary years shall be added together and divided by two (2) to determine the base year to be used for calculating the actuarial cost for service being purchased.
4. (4) If a member does not have enough full service years to determine a base year for the purchase formula, a full year salary shall be used to determine the base year.
5. (5) A full year salary shall be calculated by dividing each partial year’s service percentage into each partial year’s salary.