Missouri Code of State Regulations
Title 16 - RETIREMENT SYSTEMS
Division 10 - The Public School Retirement System of Missouri
Chapter 4 - Membership and Creditable Service
Section 16 CSR 10-4.012 - Payment for Reinstatement and Credit Purchases

(1) Payments to reinstate or to purchase credit shall be made in a manner acceptable to the Public School Retirement System of Missouri.

(2) Consistent with the Internal Revenue Code, the system may accept rollovers and in-service trustee-to-trustee transfers in payment for reinstatement and credit purchases provided that acceptance of any funds from any authorized plan or account will not jeopardize the tax-qualified status of the retirement system and the money is from one of the following:

(3) The retirement system will accept, pursuant to sections (1) or (2) above, only the amount of funds equal to or less than the balance due, including interest, if any, required for the reinstatement or purchase for which the member applied.

(4) Prior to July 1 each year, the board of trustees shall establish a "purchase rate" of interest based upon the actuarially assumed annual rate of return on invested funds of the retirement system. The purchase rate shall apply to any amount due for reinstatement of credit or for the purchase of credit except as otherwise specified by law or by this rule.

(5) A purchase shall be effected by the member paying to the retirement system the amount the member would have contributed and the amount the employer would have contributed had such member been an employee for the number of years for which the member is electing to purchase credit, and had the member's compensation during such period been the highest annual salary rate on record with the retirement system on the date of election to purchase credit. The contribution rate used in determining the amount to be paid shall be the contribution rate in effect on the date of election to purchase credit.

(6) A reinstatement shall be effected by the member paying to the retirement system with interest the total amount of accumulated contributions withdrawn by the member or refunded to the member with respect to the service being reinstated. A member may reinstate less than the total service previously forfeited. If a member is retired on disability before completing such payments, the balance due with interest may be deducted from the member's disability retirement allowance.

(7) The total amount of any payments made on an application for purchase or reinstatement that buys a minimum of one-one-hundred thousandth (0.00001) or more of credit shall be credited to the member's accumulated contributions no later than the close of the school year in which payment is made in full or upon termination of membership.

(8) If payment to reinstate or purchase credit for which the member applies is not completed within the period established by law, or prior to termination of membership with the retirement system, the amount paid will be- a) used to allow proportional credit where permissible, based on the relationship between the total principal due at application and the total of the payments applied to the principal, and the total amount paid will be credited to the member's accumulated contributions; or b) refunded to the member if proportional credit is not allowable. Unless proportional credit is not allowed, only payments purchasing less than the first one-one-hundred thousandth (0.00001) year of credit will be refunded. No other refunds will be permitted except as specifically stated in this regulation.

(9) If a member dies before retirement or retires on service or disability retirement after having made partial payments but not payment in full to reinstate or purchase credit, the partial payments will be refunded to the member's beneficiary or the retiree if proportional credit is not allowable by law or by rule of the board of trustees. If proportional credit is allowable, the payments will be credited to the member's accumulated contributions and proportional credit will be allowed. If a member retires on disability retirement before completing payment for a reinstatement of credit only, the balance due with interest shall be deducted from the disability retirement allowance as provided by law. Only payments purchasing less than first one-one-hundred thousandth (0.00001) year of credit will be refunded.

(10) For all elections to purchase credit received by the retirement system on or after January 1, 2006, the member shall receive credit based on the amount paid by the member for such credit and received by the retirement system by the close of business on June 30 of each year.

(11) In lieu of charging the member interest on elections to purchase credit received on or after January 1, 2006, the amount to be paid by the member for any remaining credit the member has elected to purchase, but has not paid for by September 30 of each calendar year, shall be recalculated on the following October 1 using the contribution rate in effect on July 1 of that same calendar year and the highest salary of record for the member as of that July 1.

(12) For all elections to purchase credit received by the retirement system prior to January 1, 2006, the retirement system shall determine the cost of such purchase using the calculation method in effect for elections to purchase credit received by the retirement system on or after January 1, 2006, provided that the member shall have a one (1) time, irrevocable option to continue to have the cost of such purchase be determined using the calculation method in effect at the time of such election to purchase such credit. To be effective, such option must be elected by the member on a form approved by the retirement system and such form must be received by the retirement system by the close of business on June 30, 2006.

(13) The retirement system may limit the amount of credit purchased by a member in any year if allowing such purchase would jeopardize the retirement system's tax-qualified status under Title 26 of the United States Code.