38-909. Redemption of prior service;
calculation
A. Each present active member of the plan who had previous service in this state as
an employee with an employer now covered by the plan or who had previous service with an
agency of the United States government, a state of the United States or a political
subdivision of a state of the United States as a full-time paid corrections officer or
full-time paid certified peace officer may elect to redeem any part of the prior service
by paying into the plan any amounts required under subsection B if the prior service is
not on account with any other retirement system.
B. Any present active member who elects to redeem any part of the prior service for
which the employee is deemed eligible by the board under this section shall pay into the
plan the amounts previously withdrawn by the member, if any, as a refund of the member's
accumulated contributions plus accumulated interest as determined by the board and the
additional amount, if any, computed by the plan's actuary that is necessary to equal the
increase in the actuarial present value of projected benefits resulting from the
redemption calculated using the actuarial methods and assumptions prescribed by the
plan's actuary.
C. The discount rate used by the actuary for the redemption calculation pursuant to
subsection B is an amount equal to the lesser of the assumed rate of return that is
prescribed by the board or an amount equal to the yield on a ten year treasury note as of
March 1 that is published by the federal reserve board plus two per cent. This discount
rate is effective beginning in the next fiscal year and shall be recalculated each year.
D. A member electing to redeem service pursuant to this section may pay for service
being redeemed in the form of a lump sum payment to the plan, a trustee-to-trustee
transfer or a direct rollover of an eligible distribution from a plan described in
section 402(c)(8)(B)(iii), (iv), (v) or (vi) of the internal revenue code or a rollover
of an eligible distribution from an individual retirement account or annuity described in
section 408(a) or (b) of the internal revenue code.
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