1. (a) A member of the fund who is also a member of the teachers' defined contribution plan may purchase and claim years of service credit in the fund subject to the following requirements:

   1. (1) The member has at least one (1) year of credited service in the fund.

   2. (2) The member has at least ten (10) years combined in:

      1. (A) credited service in a covered position in the fund; and

      2. (B) years of participation in a covered position in the plan;

         before the member may claim the years of service credit.

   3. (3) Before the member retires, the member must make the following contributions to the fund:

      1. (A) Contributions that are equal to the product of the following:

         1. (i) The member's salary at the time the member makes a contribution for the service credit.
         2. (ii) A percentage rate, as determined by the actuary of the fund, based on the age of the member at the time the member makes a contribution for service credit and computed to result in a contribution amount that approximates the actuarial present value of the benefit attributable to the service credit purchased.
         3. (iii) The number of years of service credit that the member intends to purchase.
      2. (B) Contributions for any accrued interest, at a rate determined by the actuary of the fund, for the period from the member's initial membership in the fund to the date payment is made by the member.

2. (b) A member who:

   1. (1) terminates employment before becoming eligible to receive a monthly allowance; or

   2. (2) receives a monthly allowance for the same service from another tax supported public employee retirement plan other than under the federal Social Security Act;

      may withdraw the personal contributions made under this section plus accumulated interest after submitting an application for a refund to the fund in the manner prescribed by the board.

3. (c) The following apply to the purchase of service credit under this section:

   1. (1) The board may allow a member to make periodic payments of the contributions required for the purchase of service credit in the fund.
   2. (2) A member may elect to make a transfer of the vested portion of the member's annuity savings account balance attributable to participation in the public employees' defined contribution plan to purchase service credit in the fund.
   3. (3) The board may deny an application for the purchase of service credit in the fund if the purchase would exceed the limitations under Section 415 of the Internal Revenue Code.
   4. (4) A member may not claim the service credit for the purpose of determining eligibility or computing benefits unless the member has made all the payments required for the purchase of the service credit.

4. (d) To the extent permitted by the Internal Revenue Code and applicable regulations, the fund may accept, on behalf of a fund member who is purchasing service credit under this section, a rollover of a distribution from any of the following:

   1. (1) A qualified plan described in Section 401(a) or 403(a) of the Internal Revenue Code.
   2. (2) An annuity contract or account described in Section 403(b) of the Internal Revenue Code.
   3. (3) An eligible plan that is maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or a political subdivision of a state under Section 457(b) of the Internal Revenue Code.
   4. (4) An individual retirement account or annuity described in Section 408(a) or 408(b) of the Internal Revenue Code.

5. (e) To the extent permitted by the Internal Revenue Code and applicable regulations, the fund may accept, on behalf of a member who is purchasing service credit under this section, a trustee to trustee transfer from any of the following:

   1. (1) An annuity contract or account described in Section 403(b) of the Internal Revenue Code.
   2. (2) An eligible deferred compensation plan under Section 457(b) of the Internal Revenue Code.
6. (f) The member's employer may pay all or a part of the member's contributions required for purchase of service credit under this section. In that event, the actuary shall determine the amortization, and subsections (b), (c)(1), (c)(4), and (d) do not apply.

As added by P.L.104-2026, SEC.18.