§88-322  Conversion of previous creditedservice.  (a)  Class C members who are in service on June 30, 2006, andmake the election to become class H members pursuant to section 88-321(a),shall have the option to convert some or all of their class C credited service,as of June 30, 2006, to class H credited service by paying the full actuarialcost of the conversion as of December 31, 2008, in the manner provided insubsection (d).  The option to convert class C credited service to class Hcredited service shall also apply:

(1)  To forfeited credit for previous servicethat a member is eligible to have restored as of June 30, 2006; and

(2)  To membership service credit that a member iseligible to claim under section 88-272(4) to (6) as of June 30, 2006;

provided that the member shall claim the forfeitedservice credit and the membership service credit by the date established by theboard at a meeting held pursuant to chapter 92.

(b)  All class A and class B credited serviceof class A or class B members who make the election to become class H memberspursuant to section 88-321(a) shall be converted to class H credited service. The cost of the conversion of class A or class B credited service shall be themember's accumulated contributions as of the date of conversion.  Verifiedmembership service credit paid for pursuant to section 88-59 under anirrevocable payroll authorization entered into prior to July 1, 2006, shall becredited as class H credited service.  Class A and class B members who are inservice on June 30, 2006, and make the election to become class H memberspursuant to section 88-321(a) shall have the option to convert some or all oftheir class C credited service, as of June 30, 2006, to class H creditedservice by paying, in the manner provided in subsection (d), the full actuarialcost of the conversion as of December 31, 2008.  The option to convert class Ccredited service to class H credited service shall also apply:

(1)  To forfeited credit for previous service that amember is eligible to have restored as of June 30, 2006; and

(2)  To membership service credit that a member iseligible to claim under section 88-272(4) to (6) as of June 30, 2006;

provided that the member shall claim the forfeitedservice credit and the membership service credit by the date established by theboard at a meeting held pursuant to chapter 92.

(c)  The election to convert class C creditedservice to class H credited service shall be made by filing a form with thesystem not later than one hundred eighty days after publication of the noticerequired by subsection (e).  The board may, by action taken at a meeting heldpursuant to chapter 92, extend the deadline for making the election.

(d)  The board may permit the cost ofconversion of class C credited service to class H credited service pursuant tosubsection (a) or (b) to be paid by the member in any one of the followingmethods at the member's option:

(1)  By after-tax deductions from the member'scompensation.  An irrevocable payroll authorization filed by the member for aperiod not to exceed one hundred twenty months shall remain in effect until thecompletion of the payroll payments or termination of employment, whichever isearlier.  The amount of the deductions shall be in an amount sufficient to amortizethe actuarial cost of the conversion, together with interest at the rate ofeight per cent a year, in level bi-monthly payments over the period specifiedin the irrevocable authorization.  Service credited will be proportional on thebasis of whole months.  For example, a member electing to convert one hundredtwenty months of service over sixty months and terminating after thirty andone-half months of deductions pursuant to this subsection, will have convertedsixty months of class C service to class H service; or

(2)  By lump sum payment.

The deductions from compensation or lump sumpayment shall be paid to the system and shall be credited to the member'sindividual account and become part of the member's accumulated contributions.  Thedeductions from compensation shall commence, and any lump sum payment shall bepaid to the system, within one hundred eighty days after the deadline formaking the election to convert class C credited service to class H creditedservice.  If a member is absent from the state while in the military service ofthe United States during the one hundred eighty-day period after the deadlinefor making the election, the deductions from the member's compensation shallcommence, and any lump sum payment shall be made by the member, within onehundred eighty days after the member's return to the member's regularemployment with the State or county; provided that any extension, pursuant tosubsection (c), of the deadline for making the election to convert class Ccredited service to class H credited service shall not extend the time for thedeductions from the member's compensation to commence or for the member to makeany lump sum payment unless the extension pursuant to subsection (c) isapplicable to all members eligible to make the election.  A member's electionto convert class C credited service to class H credited service shall be deemedrevoked as to any service for which payments by deductions from compensation donot commence, or for which the lump sum payment is not made, within the timerequired by this subsection.

(e)  The option to convert class C creditedservice to class H credited service pursuant to this section shall beapplicable only to the extent that the conversion may be achieved withoutaffecting the eligibility of the system as a qualified plan under section 401(a)of the Internal Revenue Code of 1986, as amended, or the eligibility of theemployer pick up under section 414(h)(2) of the Internal Revenue Code of 1986,as amended.  If the trustees determine that the conditions of the foregoingsentence are satisfied, the system shall publish a statewide notice that class Hmembers who are eligible to convert class C credited service to class Hcredited service under this section, subject to the provisions of this section,may convert class C credited service to class H credited service.

(f)  The actuarial cost of converting amember's class C credited service to class H credited service under subsections(a) and (b) shall be based on the member's actual age in full years as of December31, 2008, and on the member's monthly base salary or monthly basic rate of payas of December 31, 2008, exclusive of overtime, differentials, supplementarypayments, bonuses, and salary supplements, but including elective salary reductioncontributions under Sections 125, 403(b), and 457(b) of the Internal RevenueCode of 1986, as amended. [L 2004, c 179, pt of §1; am L 2005, c 58, §24; am L2006, c 169, §34; am L 2007, c 215, §22; am L 2008, c 41, §9; am L 2009, c 121,§6]