Montana Code 19-20-414. Payment methods for purchase of service credit
19-20-414. Payment methods for purchase of service credit. (1) An active or vested member who is eligible to purchase service under this chapter may at any time before retirement apply to purchase the service credit by making payment as provided in this section.
Terms Used In Montana Code 19-20-414
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- board: means the retirement system's governing board provided for in 2-15-1010. See Montana Code 19-20-101
- Individual: means a human being. See Montana Code 19-20-101
- Internal Revenue Code: has the meaning provided in 15-30-2101. See Montana Code 19-20-101
- Member: means a person who has an individual account in the annuity savings account. See Montana Code 19-20-101
- plan: means the teachers' retirement system of the state of Montana provided for in 19-20-102. See Montana Code 19-20-101
- Service: means the performance of duties that would entitle the person to active membership in the retirement system under the provisions of 19-20-302. See Montana Code 19-20-101
- Vested: means that a member has been credited with at least 5 full years of membership service upon which contributions have been made and has a right to a future retirement benefit. See Montana Code 19-20-101
(2)Subject to subsection (3), service credit may be purchased by one or a combination of the following methods:
(a)a lump-sum payment;
(b)installment payments;
(c)direct rollover of eligible distributions from a retirement plan in section 402(c)(8)(B)(iii) or 402(c)(8)(B)(iv) of the Internal Revenue Code;
(d)rollover of a distribution from an individual retirement account or annuity described in section 408(a) or 408(b) of the Internal Revenue Code that is eligible to be rolled over and would otherwise be included in gross income;
(e)a direct trustee-to-trustee transfer from a governmental 457(b) deferred compensation plan or a 403(b) tax-sheltered annuity for permissive service credit, as defined in section 415(n) of the Internal Revenue Code.
(3)(a) The total amount transferred or rolled over to the retirement system pursuant to subsection (2) may not exceed the amount due to purchase the service.
(b)If, in the case of a transfer, the transferred account includes both tax-deferred and taxed amounts, the transferring agency shall identify the member’s tax-deferred and taxed amounts at the time the transfer is made.
(4)To the extent permitted by section 401(a)(31) of the Internal Revenue Code and as limited by this section, the board shall accept a direct rollover of eligible distributions from another eligible retirement plan.
(5)If the member dies before having completed the payment required to purchase the service that the member had applied to purchase, the member’s surviving spouse may, subject to the rules and regulations of the Internal Revenue Code, apply to complete the member’s service purchase as provided in this section. The surviving spouse must apply to complete the payments and pay the balance due to the system prior to the distribution of benefits.