PURPOSE: This rule complies with provisions of Chapter 169, RSMo relating to the payments made of funds to the retirement system for reinstating and purchasing credit.

1. (1) Payments to reinstate or to purchase credit must be by check, bank draft or any other negotiable instrument payable to the Nonteacher School Employee Retirement System of Missouri at par.

   1. (A) Consistent with the Internal Revenue Code, the system will accept rollovers in payment for reinstatement and credit purchases provided the money is an “eligible rollover distribution” from one (1) of the following:

      1. 1. A 401(a) tax qualified plan (includ-

ing a Keogh plan which meets additional requirements pertaining to owner-employees);

1. 2. A 401(k) profit sharing plan;
2. 3. A 403(a) qualified annuity plan;
3. 4. A 408(a) individual retirement ac-

count (IRA) or a 408(b) individual retirement annuity, but only if the individual retirement account is a conduit or “holding account” IRA or annuity, containing amounts from a 401(a) qualified plan or a 403(a) annuity plan and does not contain any other types of funds: therefore, an IRA which is established and/or funded with other monies is not an eligible rollover distribution; or

1. 5. The member, if the amount was dis-

tributed to the member from a qualified plan, is rolled over by the member to the system within sixty (60) days of that distribution, and is accompanied by proof of rollover eligibility.

1. (B) If an “eligible rollover distribution” is used to reinstate or to purchase credit, the system will accept only an amount equal to or less than the balance due for the reinstatement or purchase.

1. (2) The board of trustees prior to July 1 each year shall establish a “purchase rate” of interest based upon the actuarially assumed annual rate of return on invested funds of the retirement system. The purchase rate shall apply to any amount due for reinstatement of credit or for the purchase of credit except as otherwise specified by law.
2. (3) Interest on an application to reinstate credit shall be charged from the date of refund to the member to the date of final payment to the system. Interest on an application to purchase credit shall be charged from the end of the school year in which each period of credit being purchased occurred to the date of final payment to the system. Interest shall be compounded as of each June 30 to the date of final payment.
3. (4) The total amount due at the date of application to reinstate credit or to purchase credit, including interest charges to that date, shall become the principal amount. If payment in full is made within the time period prescribed by law, the total amount of any payments made on the application will be credited to the member’s accumulated contributions.
4. (5) If payment to reinstate credit is not completed within the prescribed period, the reinstatement application will be canceled, the total amount paid will be refunded to the member, and no credit will be reinstated.
5. (6) If payment to purchase credit is not completed within the prescribed period, the amount paid will—a) be refunded to the member if proportional credit is not allowable, or b) be used to allow proportional credit where permissible, based on the relationship between the total principal due at application and the total of the payments applied to the principal, and the total amount paid will be credited to the member’s accumulated contributions. The member may again apply to purchase credit for the same period for which s/he previously applied but did not make payment, except in those instances specifically prescribed by law.
6. (7) If a member dies after having made partial payments but not payment in full to reinstate credit, the payments will be refunded to the member’s beneficiary. If a member retires on service retirement after having made partial payments but not payment in full, the payments will be refunded to the retiree. If a member retires on disability retirement before completing payment, the balance due with interest shall be deducted from the disability retirement allowance as provided by law.
7. (8) If a member dies before retirement or retires on service or disability retirement after having made partial payments but not payment in full to purchase credit, the partial payments will be refunded to the member’s beneficiary or the retiree if proportional credit is not allowable by law or by rule of the board of trustees. If proportional credit is allowable, the payments will be credited to the member’s accumulated contributions and proportional credit will be allowed.
8. (9) The purchase of creditable service provided by section 1 of Senate Bill 378 enacted 16 CSR 10-6

by the first session of the 88th General Assembly shall be administered as follows:

1. (A) Any member will be considered “within five (5) years of being eligible to retire with a retirement allowance” if that person would be eligible to begin receiving a full or reduced retirement allowance from the nonteacher school employee retirement system, by virtue of accrual of five (5) or fewer years of creditable service or the passage of five (5) or fewer calendar years;
2. (B) The salary to be used in calculating the purchase cost for any member who is not employed in a position covered by the nonteacher school employee retirement system at the date of election to purchase credit shall be the salary for the last full year of creditable service with the nonteacher school employee retirement system prior to the date of election;
3. (C) Credit purchased shall be used for all purposes except vesting;
4. (D) Interest shall be charged on the unpaid balance of the purchase cost from the date of election until payment is made in full;
5. (E) A purchase shall be made only in increments of one-tenth (1/10) year and may not exceed four-tenths (4/10) year. Multiple elections are allowed, and a member may again elect to purchase credit for the same amount for which s/he previously applied but for which payment in full was not made within the time allowed by law;
6. (F) If the total payments made within the time allowed by law are insufficient to purchase all the credit for which the member applied, proportional credit shall be allowed based upon the ratio between the amount due for the entire period for which election to purchase was made and the total amount of the payments applied to reduce the principal amount due, but only in increments of onetenth (1/10) year. The amount of partial payments not used to purchase credit or pay interest shall be refunded; and
7. (G) Election to purchase credit must be made on a form provided by the board of trustees.

1. (10) The following conditions apply when individuals are reemployed by a district pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), and its successors:

   1. (A) When the system is notified by either a district or a member of a period covered by USERRA, the system will obtain confirmation from the district of the period covered and the compensation that would apply;
   2. (B) A period covered by USERRA will not be a break in service for purpose of termination of membership and will count toward vesting, but not toward benefit calculation unless the member elects to pay required contributions as provided in this regulation;
   3. (C) A member may elect, on a form provided by the retirement system, within five

2. (5) years of reemployment to pay the system the employee contributions the member would have made, using the contribution rates and salary that would have applied during the period, as required by USERRA;

   1. (D) Where the member has elected to pay employee contributions under USERRA, the district reemploying the member is required under federal and state law to pay the contributions the employer would have paid, using the contribution rates and salary that would have applied during the period and interest on the contributions at the assumed rate of return on invested funds of the system;
   2. (E) The employer shall pay the employer contributions and interest no later than the end of the school year following the year in which the employee files an election to make the employee contributions;
   3. (F) Payment of employee contributions may be made over the period from the date of election to five (5) years after reemployment;
   4. (G) If the member fails to complete payment of the employee contributions during the period allowed, proportional credit shall be allowed based on the ratio between the amount due for the entire period and the total amount of the payments made, and the employer contributions and interest shall be adjusted accordingly; and
   5. (H) The maximum creditable service that may be allowed pursuant to USERRA is five
3. (5) years.
4. (11) Members electing to reinstate or purchase credit may make payments in any amount and at any time during the period allowed for payment.
5. (12) Once a member has made application to reinstate credit no additional application to reinstate credit may be made until the period for payment under the initial application has expired. Once a member has made application to purchase credit no additional application to purchase the same type of credit may be made until the period for payment under the initial application has expired or payment in full is made.
6. (13) Applications to reinstate or purchase credit must be made on forms provided by the board of trustees.
7. (14) Members applying to reinstate or purchase credit must provide reliable documentation adequate to prove each element required to qualify for the reinstatement or purchase for which the member applies. Where the credit being purchased is based on a period of employment or a period of service covered by a retirement system, the documentation must include confirmation by the employer or retirement system of the relevant facts.
8. (15) Unless a different amount is required by law, members must have accrued at least one
9. (1) year of membership service credit for employment in a position covered by the retirement system in order to apply to purchase service credit.
10. (16) A member may not receive credit exceeding one (1) year relating to any school year, except as a result of the purchase of credit authorized by section 169.577, RSMo.
11. (17) Unless otherwise required by law, if the total payments made within the time allowed to purchase credit is insufficient to purchase all the credit for which the member applied, proportional credit shall be allowed based on the ratio between the amount due for the entire period for which the member applied and the total amount of the payments applied to reduce the principal amount due.
12. (18) A member eligible to purchase credit for service in the armed forces may purchase one
13. (1) year of credit for each twelve (12)-month period of service in the armed forces. For periods of service in the armed forces of less than twelve (12) months the member shall receive proportional credit computed to the nearest tenth of a year: provided that if the member entered active duty in the armed forces no later than the date on which his/her services were to have begun under an employment agreement with a district included in the retirement system, and the total period of active duty that year would have entitled him/her to a year of credit had that service been rendered with the district, the member shall be eligible to purchase a full year of credit.

14. (19) The following provisions apply with respect to a purchase of credit for maternity/paternity leave pursuant to section 169.655, RSMo:

    1. (A) The leave must be due to a birth, legal adoption, or terminated pregnancy by or of the member or the member’s spouse;
    2. (B) Confirmation must be provided from the district which granted the leave that the leave was maternity/paternity leave; and
    3. (C) Confirmation must be provided from the district which granted the leave of the beginning and ending dates of the leave. AUTHORITY: section 169.610, RSMo 1994.* Original rule filed June 15, 1994, effective Nov. 30, 1994. Amended: Filed June 14, 1995, effective Dec. 30, 1995. Amended: Filed Aug. 15, 1996, effective Feb. 28, 1997. Amended: Filed Oct. 24, 1996, effective April 30, 1997.

*Original authority 1965, amended 1977.