§88-322 Conversion of previous credited service. (a) Class C members who are in service on June 30, 2006, and make 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 actuarial cost of the conversion as of June 30, 2006, in the manner provided in subsection (d). The option to convert class C credited service to class H credited service shall also apply:
(1) To forfeited credit for previous service that a member is eligible to have restored as of June 30, 2006; and
(2) To membership service credit that a member is eligible to claim under section 88‑272(4) to (6) as of June 30, 2006;
provided that the member shall claim the forfeited service credit and the membership service credit by the date established by the board at a meeting held pursuant to chapter 92.
(b) All class A and class B credited service of class A or class B members who make the election to become class H members pursuant 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 the member's accumulated contributions as of the date of conversion. Verified membership service credit paid for pursuant to section 88‑59 under an irrevocable payroll authorization entered into prior to July 1, 2006, shall be credited as class H credited service. Class A and class B members who are in service on June 30, 2006, and make 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, in the manner provided in subsection (d), the full actuarial cost of the conversion as of June 30, 2006. The option to convert class C credited service to class H credited service shall also apply:
(1) To forfeited credit for previous service that a member is eligible to have restored as of June 30, 2006; and
(2) To membership service credit that a member is eligible to claim under section 88-272(4) to (6) as of June 30, 2006;
provided that the member shall claim the forfeited service credit and the membership service credit by the date established by the board at a meeting held pursuant to chapter 92.
(c) The election to convert class C credited service to class H credited service shall be made by filing a form with the system not later than one hundred eighty days after publication of the notice required by subsection (e). The board may, by action taken at a meeting held pursuant to chapter 92, extend the deadline for making the election.
(d) The board may permit the cost of conversion of class C credited service to class H credited service pursuant to subsection (a) or (b) to be paid by the member in any one of the following methods at the member's option:
(1) By deductions from the member's compensation pursuant to section 414(h)(2) of the Internal Revenue Code of 1986, as amended, under the employer pick up plan under section 88-326. An irrevocable payroll authorization filed by the member for a period not to exceed one hundred twenty months shall remain in effect until the completion of the payroll payments or termination of employment, whichever is earlier. The amount of the deductions shall be in an amount sufficient to amortize the actuarial cost of the conversion, together with interest at the rate of eight per cent a year, in level bi-monthly payments over the period specified in the irrevocable authorization. Service credited will be proportional on the basis of whole months. For example, a member electing to convert one hundred twenty months of service over sixty months and terminating after thirty and one-half months of deductions pursuant to this subsection, will have converted sixty months of class C service to class H service; or
(2) By lump sum payment.
If the deductions from compensation do not commence, or if the lump sum payment is not paid to the system, within one hundred eighty days after the deadline for making the election to convert class C credited service to class H credited service, the election shall be deemed revoked. The deductions from compensation or lump sum payment shall be paid to the system and shall be credited to the member's individual account and become part of the member's accumulated contributions.
(e) The option to convert class C credited service to class H credited service pursuant to this section shall be applicable only to the extent that the conversion may be achieved without affecting 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 the employer 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 foregoing sentence are satisfied, the system shall publish a statewide notice that class H members who are eligible to convert class C credited service to class H credited 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 a member'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 June 30, 2006, and on the member's monthly base salary or monthly basic rate of pay as of June 30, 2006, exclusive of overtime, differentials, supplementary payments, bonuses, and salary supplements, but including elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended. [L 2004, c 179, pt of §1; am L 2005, c 58, §24; am L 2006, c 169, §34]