2023 Indiana Code › Title 36. Local Government › Article 8. Public Safety › Chapter 8. 1977 Police Officers' and Firefighters' Pension and Disability Fund › 36-8-8-18. Credit for Service Prior to Participation in 1977 Fund; Rollover Distributions; Trustee to Trustee Transfers

Sec. 18. (a) Except as provided in subsection (b), if a unit or an airport authority becomes a participant in the 1977 fund, credit for prior service by police officers (including prior service as a full-time, fully paid town marshal, full-time, fully paid deputy town marshal, full-time, fully paid conservancy district marshal, or full-time, fully paid deputy conservancy district marshal by a police officer employed by a metropolitan board of police commissioners) or by firefighters before the date of participation may be given by the system board only if:
(1) the amount necessary to fund the police officer's or firefighter's prior service liability is contributed to the 1977 fund under an agreement that specifies how much the unit or the airport authority is to contribute, if any, and how much the police officer or firefighter is to contribute, if any; and
(2) the amount that the police officers or firefighters would have contributed if they had been members of the 1977 fund during their prior service is paid to the 1977 fund under an agreement that specifies how much the unit or the airport authority is to contribute, if any, and how much the police officer or firefighter is to contribute, if any.
If the requirements of subdivisions (1) and (2) are not met, a fund member is entitled to credit only for years of service after the date of participation. Contributions under subdivisions (1) and (2) must be paid in a lump sum or in installments over a period of not more than thirty (30) years, the amount and period to be determined by the system board. The periods determined by the system board under subdivisions (1) and (2) for any installment payments may differ between the unit or the airport authority and the police officers or firefighters and between subdivisions (1) and (2).
(b) If a unit becomes a participant in the 1977 fund under section 3(c) of this chapter, if an airport authority becomes a participant in the 1977 fund under section 3(e) of this chapter, or if a firefighter becomes a member of the 1977 fund under section 7(g) of this chapter, credit for prior service before the date of participation or membership shall be given by the system board as follows:
(1) For a member who will accrue twenty (20) years of service credit in the 1977 fund by the time the member reaches the earliest retirement age under the fund at the time of the member's date of participation in the 1977 fund and who participated in PERF as a police officer, a firefighter, or an emergency medical technician, the member will be given credit in the 1977 fund for one-third (1/3) of the member's years of participation in PERF as a police officer, a firefighter, or an emergency medical technician.
(2) For a member who will accrue twenty (20) years of service credit in the 1977 fund by the time the member reaches the earliest retirement age under the fund at the time of the member's date of participation in the 1977 fund and who did not participate in a pension plan as a police officer, a firefighter, or an emergency medical technician, the member will be given credit in the 1977 fund for one-third (1/3) of the member's years of prior service with the unit as a police officer, a firefighter, or an emergency medical technician only if:
(A) The amount necessary to fund the member's prior service liability is contributed to the 1977 fund under an agreement that specifies how much the unit or the airport authority is to contribute, if any, and how much the member is to contribute, if any. Contributions must be paid in a lump sum or in installments as provided in clause (C). The amount of contributions must be based on the actual salary earned by a first class patrolman or a first class firefighter at the time the unit or the airport authority becomes a participant in the 1977 fund, or the police officer or firefighter becomes a member of the 1977 fund, or if no such salary designation exists, the actual salary earned by the police officer or firefighter.
(B) The amount the police officer or firefighter would have contributed if the police officer or firefighter had been a member of the 1977 fund during the police officer's or firefighter's prior service must be fully paid under an agreement that specifies how much the unit or the airport authority is to pay, if any, and how much the member is to pay, if any. Contributions must be paid in a lump sum or in installments as provided in clause (C). The amount of contributions must be based on the police officer's or firefighter's actual salary earned during that period before service can be credited under this section.
(C) Any amortization schedule for contributions paid under clause (A) and contributions to be paid under clause (B) must include interest at a rate determined by the system board. The board shall determine the term of any amortization schedule authorized under clauses (A) and (B), not to exceed ten (10) years. The terms of the various amortization schedules authorized under clauses (A) and (B) may differ.
(3) For a member who will not accrue twenty (20) years of service credit in the 1977 fund by the time the member reaches the earliest retirement age under the fund at the time of the member's date of participation in the 1977 fund, credit for such prior service shall be given only if:
(A) The amount necessary to fund the member's prior service liability is contributed to the 1977 fund under an agreement that specifies how much the unit or the airport authority is to contribute, if any, and how much the member is to contribute, if any. Contributions must be paid in a lump sum or in installments as provided in clause (C). The amount of contributions must be based on the actual salary earned by a first class patrolman or a first class firefighter at the time the unit or the airport authority becomes a participant in the 1977 fund, or the police officer or firefighter becomes a member of the 1977 fund, or if no such salary designation exists, the actual salary earned by the police officer or firefighter. The limit on credit for prior service does not apply to a firefighter if the firefighter was a member of the 1937 fund or 1977 fund whose participation was terminated due to the creation of a new fire protection district under IC 36-8-11-5 and who subsequently became a member of the 1977 fund. A firefighter who was a member of or reentered the 1937 fund or 1977 fund whose participation was terminated due to the creation of a new fire protection district under IC 36-8-11-5 is entitled to full credit for prior service in an amount equal to the firefighter's years of service before becoming a member of or reentering the 1977 fund. Service may only be credited for time as a full-time, fully paid police officer, firefighter, or emergency medical technician under section 7(g) of this chapter.
(B) The amount the police officer or firefighter would have contributed if the police officer or firefighter had been a member of the 1977 fund during the police officer's or firefighter's prior service must be fully paid under an agreement that specifies how much the unit or the airport authority is to pay and how much the member is to pay. Contributions must be paid in a lump sum or in installments as provided in clause (C). The amount of contributions must be based on the police officer's or firefighter's actual salary earned during that period before service can be credited under this section.
(C) Any amortization schedule for contributions paid under clause (A) and contributions to be paid under clause (B) must include interest at a rate determined by the system board. The board shall determine the term of any amortization schedule authorized under clauses (A) and (B), not to exceed ten (10) years. The terms of the various amortization schedules authorized under clauses (A) and (B) may differ.
(4) If, at the time a unit or an airport authority entered the 1977 fund, a fund member received the maximum prior service credit allowed by subdivision (3) and, at a later date, the earliest retirement age was lowered, the unit or the airport authority or the fund member, or both the unit or airport authority and the fund member, may contribute to the 1977 fund on the fund member's behalf an additional amount that is determined in the same manner as under subdivision (3) with respect to the additional prior service, if any, available as a result of the lower retirement age. If the additional amount described in this subdivision is paid in accordance with the requirements of subdivision (3), the fund member shall receive the additional service credit necessary for the fund member to retire at the lower earliest retirement age.
(c) This subsection applies to a unit that:
(1) becomes a participant in the 1977 fund under section 3(c) of this chapter; and
(2) is a fire protection district created under IC 36-8-11 that includes a township or a municipality that had a 1937 fund.
A firefighter who continues uninterrupted service with a unit covered by this subsection and who participated in the township or municipality 1937 fund is entitled to receive service credit for such service in the 1977 fund. However, credit for such service is limited to the amount accrued by the firefighter in the 1937 fund or the amount necessary to allow the firefighter to accrue twenty (20) years of service credit in the 1977 fund by the time the firefighter becomes fifty-two (52) years of age, whichever is less.
(d) A unit to which subsection (c) applies shall contribute into the 1977 fund the amount necessary to fund the amount of past service determined in accordance with subsection (c), amortized over a period not to exceed ten (10) years with interest at a rate determined by the system board.
(e) If the township or municipality has accumulated money in its 1937 fund, any amount accumulated that exceeds the present value of all projected future benefits from the 1937 plan shall be paid by the township or municipality to the unit for the sole purpose of making the contributions determined in subsection (d).
(f) To the extent permitted by the Internal Revenue Code and the applicable regulations, the 1977 fund may accept, on behalf of a fund member who is purchasing permissive service credit under this chapter, a rollover of a distribution from any of the following:
(1) A qualified plan described in Section 401(a) or Section 403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b) of the Internal Revenue Code.
(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 political subdivision of a state under Section 457(b) of the Internal Revenue Code.
(4) An individual retirement account or annuity described in Section 408(a) or Section 408(b) of the Internal Revenue Code.
(g) To the extent permitted by the Internal Revenue Code and the applicable regulations, the 1977 fund may accept, on behalf of a fund member who is purchasing permissive service credit under this chapter, a trustee to trustee transfer from any of the following:
(1) An annuity contract or account described in Section 403(b) of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section 457(b) of the Internal Revenue Code.
[Pre-Local Government Recodification Citations: 19-1-17.8-16 part; 19-1-36.5-16 part.]
As added by Acts 1981, P.L.309, SEC.59. Amended by P.L.313-1989, SEC.2; P.L.4-1990, SEC.19; P.L.149-1992, SEC.1; P.L.101-1998, SEC.2; P.L.49-1998, SEC.9; P.L.61-2002, SEC.17; P.L.148-2007, SEC.2; P.L.13-2011, SEC.20; P.L.35-2012, SEC.136; P.L.130-2015, SEC.3; P.L.111-2015, SEC.7; P.L.43-2018, SEC.1; P.L.102-2023, SEC.10; P.L.122-2023, SEC.30; P.L.170-2023, SEC.12.