Section R2-8-517. Purchasing Service Credit by Distributed Roll- over Contribution

A.      An eligible member may purchase service credit with a distri- bution from a prior employer’s eligible plan that has already been distributed to the member if the rollover purchase is com- pleted within 60 days of the date of distribution to the member, as required by IRC §§ 402(c)(3)(A), 403(b)(8)(B), and 457(e)(16)(B). The 60-day time limitation is exclusive of any other time limitations prescribed in this Article, and the ASRS shall not extend the 60-day period. Eligible plans are:

1.        A  pension,  profit  sharing,  or  other   qualified  plan described in IRC § 401(a) and (k);

2.        A qualified annuity plan described in IRC § 403(a);

3.        A deferred compensation plan described in IRC § 457 and maintained by a state of the United States, or a politi- cal subdivision, agency, or instrumentality of a state of the United States; and

4.        A tax deferred annuity described in IRC § 403(b).

B.       By the due date specified on the SP invoice, the member shall ensure that the ASRS receives the completed Service Purchase Payment Request form described in R2-8-502(D)(2).

C.      When the ASRS receives the completed Service Purchase Pay- ment Request form and upon the member’s request, the ASRS shall provide a Certification by Eligible Plan Rollover Contri- bution form and Rollover Contribution form.

D.      The information requested on the Certification by Eligible Plan Rollover Contribution form includes:

1.        The member’s dated signature;

2.        Member’s full name;

3.        Member’s Social Security number;

4.        Member’s mailing address;

5.        Certification by the plan administrator that the plan is one of the plans described in subsection (A);

6.        Certification by the plan administrator that:

a.         If the plan is described in either IRC § 401(a) or 403(a), the plan has received a determination letter from the Internal Revenue Service indicating that the plan is qualified under either IRC § 401(a) or 403(a);

b.        If the plan is described in either IRC § 401(a) or 403(a), but has not received a determination letter from the Internal Revenue Service, the plan satisfies the requirements of IRC § 401(a) or 403(a) or is intended to satisfy the requirements of IRC § 401(a) or 403(a) and the plan administrator is not aware of any plan provision or any other reason that would disqualify the plan; or

c.         If the plan is a deferred compensation plan described in IRC § 457 or an annuity contract described in IRC

§ 403(b), the plan or annuity satisfies the applicable requirements of IRC § 457 or 403(b) and the plan administrator is not aware of any plan provision or any other reason that would cause the plan or annu- ity to not satisfy the applicable provisions of IRC § 457 or 403(b);

7.        Certification by the plan administrator that the plan per- mits a direct rollover of an eligible rollover distribution to a defined benefit plan;

8.        The full name, title, and signature of the plan administra- tor;

9.        The plan administrator’s business address and telephone number; and

10.     Date of the signature of the plan administrator.

E.       The information requested on the Rollover Contribution form includes:

1.        The member’s Social Security number;

2.        The member’s full name;

3.        The member’s mailing address;

4.        The member’s daytime telephone number;

5.        The member’s signature certifying that:

a.         The member has read the statements on the Rollover Contribution form regarding requirements for a roll- over contribution, understands all the statements, and believes the statements, certifications, and any documents attached to the form to be true and cor- rect to the best of the member’s knowledge and belief; and

b.        The member understands that:

i.         The ASRS assumes no responsibility for ensur- ing that the member makes a timely rollover contribution to the ASRS or that the amount rolled over constitutes a valid rollover contribu- tion;

ii.        The member accepts full responsibility for ensuring that the rollover contribution is an eli- gible rollover contribution before making the contribution to the ASRS;

iii.      If the ASRS accepts the rollover contribution and it is later determined that the contribution was an invalid rollover contribution, the ASRS will distribute the invalid contribution directly to the member; and

iv.       Any invalid rollover contributions returned to the member may decrease the member’s bene- fits and the Internal Revenue Service and state taxing authorities may require the member to pay taxes, penalties, and interest on the returned contributions; and

6.        The date the member signed the form.

F.       The member shall ensure that the ASRS receives the Certifica- tion by Eligible Plan Rollover Contribution form signed and dated by the plan administrator, the Rollover Contribution form signed and dated by the member, and a copy of the distri- bution statement showing the:

1.        Date of the distribution;

2.        Amount of the distribution; and

3.        Amount of taxes withheld, if any.

G.      The ASRS shall provide the member with written notification regarding the eligibility of the rollover.

H.      The member shall make payment by:

1.        The distribution check from the eligible plan made pay- able to the member and endorsed by the member to make it payable to the ASRS; or

2.        Direct payment by the member by check or money order to the ASRS, after the eligible plan distribution is depos- ited to the member’s personal financial account.

I.        Except as provided in subsection (J), unless the ASRS receives the check from the plan within 90 days of the issue date on the SP invoice, the ASRS shall cancel the request to purchase ser- vice credit as specified in R2-8-502(C).

J.        At the written request of the member, the ASRS shall provide an extension of 60 days in which the check may be received by the ASRS from the plan under subsection (I), if:

1.        The member has followed the procedure under this Arti- cle for requesting to purchase service credit,

2.        The member has responded to the ASRS correspondence within the time-frame set forth in this Article,

3.        The eligible plan has not provided to the member with the check to pay for the requested service credit purchase within 90 days of the date of the SP invoice, and

4.        The member makes the written request for extension before expiration of the 90 days.

K.      The member shall ensure that the ASRS receives a check, made payable to the ASRS, for an amount that does not exceed the amount specified in the written notification identified in subsection (G).

L.       If the payment from the eligible plan exceeds the amount spec- ified in the written notification identified in subsection (G) the ASRS shall return the entire payment to the member.

Historical Note

New Section made by final rulemaking at 11 A.A.R. 2640, effective June 30, 2005 (Supp. 05-2). Amended by final rulemaking at 12 A.A.R. 4667, effective December 5, 2006 (Supp. 06-4).