19-2-704. (Temporary) Purchasing service credits allowed. (1) Subject to the rules promulgated by the board, an eligible member may elect to contribute amounts in addition to the mandatory employee contributions required by the retirement system in which the member participates for the purpose of purchasing service credits as provided by the statutes governing the retirement system.
     (2) A member eligible to qualify service under the provisions of 19-3-509, 19-3-511, 19-6-802, 19-7-802, 19-8-902, 19-9-405, and 19-13-404 may, at any time prior to retirement, elect to transfer all or a portion of the member's accumulated contributions on deposit in a pension trust fund from which service is being transferred to the pension trust fund of another plan in which service is being credited. The transfer of contributions may include both taxed contributions and tax-deferred contributions and interest. However, if less than all of the accumulated contributions on deposit in a pension trust fund is being transferred, the transfer of taxed and tax-deferred amounts must be made on a proportionate basis, with the remainder refunded to the member. The transferring agency shall identify at the time of the transfer the taxed and tax-deferred amounts being transferred.
     (3) Subject to any statutory provision establishing stricter limitations, only active or vested inactive members are eligible to purchase, qualify, or transfer service credits, membership service, or contributions. (Effective on occurrence of contingency)
     19-2-704. (Effective on occurrence of contingency) . Purchasing service credits allowed -- payroll deduction. (1) Subject to the rules promulgated by the board, an eligible member may elect to contribute amounts in addition to the mandatory employee contributions required by the retirement system in which the member participates for the purpose of purchasing service credits as provided by the statutes governing the retirement system.
     (2) Subject to any statutory provision establishing stricter limitations, only active or vested inactive members are eligible to purchase, qualify, or transfer service credits, membership service, or contributions.
     (3) A member who wishes to redeposit amounts withdrawn under 19-2-602 or who is eligible to purchase service as provided by the statutes governing the retirement system to which the member belongs may make a lump-sum payment, installment payments, or a combination of a lump-sum payment and installment payments.
     (4) Installment payments must be paid directly to the board, unless the member makes payments by irrevocable payroll deduction. The minimum installment period for payments made directly to the board is 3 months, and the maximum installment period is 5 years.
     (5) To elect installment payments by irrevocable payroll deduction, the member shall file with the board and the member's employer a binding, irrevocable, written application and authorization for payroll deductions. The application and authorization:
     (a) must be executed by the member and the member's employer;
     (b) must specify the dollar amount of each deduction and the number of deductions to be made, subject to any maximum amounts or duration established by state or federal law;
     (c) must provide that the deductions are to be made over a period of time of no less than 3 months and no more than 5 years in duration;
     (d) may not give the member the option of receiving the deduction amounts directly instead of having them paid by the employer to the board; and
     (e) must specify that the contributions being picked up, although designated as employee contributions, are being paid by the employer directly to the board in lieu of contributions paid directly by the employee.
     (6) If the board notifies the employer that a proper written application and authorization has been received by the board, the employer shall initiate the payroll deduction as follows:
     (a) An employer shall pick up the member's elective contributions made pursuant to a payroll deduction authorization. The contributions picked up by the employer must be paid from the same source as is used to pay compensation to the member and must be included as part of the member's earned compensation before the deduction is made.
     (b) Employee contributions, even though designated as employee contributions for state law purposes, are paid by the member's employer in lieu of contributions paid directly by the member to the board.
     (c) The member may not choose to receive the contributed amounts directly instead of having them paid by the employer to the board.
     (d) The effective date of the employer pickup and payment pursuant to this section is the date on which the employee contribution is first deducted from the employee's compensation. However, the effective date may not be prior to the date that the member properly completes the written application and authorization for payroll deductions and files it with the board. The pickup may not apply to any contributions made before the effective date or to any contributions related to compensation earned for services rendered before the effective date.
     (e) A contract for installment payments initiated before July 1, 1999, may be made only if the member executes a written application and authorization for payroll deductions pursuant to this section. If the member does not execute a written application and authorization for payroll deductions pursuant to this section, the installment contract payments agreed to by the member must be paid by the member directly to the board.
     (f) A member may make more than one binding, irrevocable payroll deduction authorization as long as a subsequent deduction authorization does not amend a previous binding, irrevocable authorization. A member may not prepay an amount under a binding, irrevocable payroll deduction.
     (7) If a member terminates service or dies before completing all payments required by a payroll deduction authorization made pursuant to this section, the deduction authorization expires and the board shall prorate the service credit based on the amount paid as of the date of termination unless further payment is made as provided in this subsection. In the case of a termination, the member may make a lump-sum payment for the balance of the service subject to the limitations of section 415 of the Internal Revenue Code. In the case of death of the member, the payment may be made from the member's estate subject to the limitations of section 415 of the Internal Revenue Code.

     History: En. 68-1903 by Sec. 24, Ch. 323, L. 1973; amd. Sec. 4, Ch. 132, L. 1977; R.C.M. 1947, 68-1903; amd. Sec. 24, Ch. 265, L. 1993; Sec. , MCA 1991; redes. by Sec. 238, Ch. 265, L. 1993; amd. Sec. 8, Ch. 412, L. 1995; amd. Sec. 8, Ch. 370, L. 1997; amd. Sec. 7, Ch. 58, L. 1999.