Sec. 4. (a) As used in this section, "out-of-state service" means service in any state in a comparable position that would be creditable service if performed in Indiana. The term includes comparable service performed:

(1) on a United States military installation;

(2) in a federal prison; or

(3) at an educational facility operated or supervised by the Bureau of Indian Affairs.

(b) In computing the service credit for a member who began teaching in Indiana before July 1, 1981, and who has served as a public school teacher out of state, the board may include the greater of:

(1) eight (8) years of out-of-state service rendered before July 1, 1981; or

(2) one (1) year of out-of-state service rendered before July 1, 1981, for every four (4) years of in-state service.

(c) In addition, a member may purchase and claim out-of-state service credit that has not been claimed under subsection (b) subject to the limitations of subsections (d) and (e) if the member satisfies the following requirements:

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

(2) Before the member retires, the member makes contributions to the fund that meet the following requirements:

(A) The contributions are equal to the product of the following:

(i) For service credit purchased before January 1, 1994, the member's salary when the member first became a member of the fund. For service credit purchased after December 31, 1993, the member's salary at the time the member actually makes a contribution for the service credit.

(ii) For service credit purchased before January 1, 1994, normal cost, as determined by the actuary of the fund. For purposes of this section, "normal cost" means the value of the annual amount required to fund the prospective benefits promised an employee for the work the employee has performed. For service credit purchased after December 31, 1993, a percentage rate, as determined by the actuary of the fund, based on the age of the member at the time the member actually 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.

(iii) The number of years of out-of-state service the member intends to purchase.

(B) The contributions are for any accrued interest, at a rate determined by the actuary for the fund, for the period from the member's initial membership in the fund to the date payment is made by the member.

(3) The member has received verification from the fund that the out-of-state service is, as of that date, valid.

(d) Out-of-state years that qualify a member for retirement in an out-of-state system or in a federal retirement system may not be granted under this section.

(e) After April 1, 1965, at least ten (10) years of in-state service is required before a member may claim any out-of-state service credits.

(f) A member who:

(1) terminates employment before satisfying the eligibility requirements necessary to receive a monthly allowance; or

(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 the contributory plan plus accumulated interest after submitting a properly completed application for a refund to the fund.

(g) The following apply to the purchase of service credit under this section after July 1, 1998:

(1) The board may allow a member to make periodic payments of the contributions required for the purchase of the service credit. The board shall determine the length of the period during which the payments must be made.

(2) The board may deny an application for the purchase of service credit if the purchase would exceed the limitations under Section 415 of the Internal Revenue Code.

(3) A member may not claim the service credit for purposes of determining eligibility or computing benefits unless the member has made all payments required for the purchase of the service credit.

(h) Contributions received after July 1, 1993, for the purchase of service credit under this section must be applied against the unfunded accrued liability of the fund.

[Pre-2006 Education Finance Recodification Citation: 21-6.1-4-4.5.]

As added by P.L.2-2006, SEC.28. Amended by P.L.8-2015, SEC.7.