(a) Election to become tier one employee. A participant who is a tier two employee may elect to transfer and become a tier one employee, subject to all provisions of this title applicable to tier one employees.
(b) Election date. The election shall be made by the fifth anniversary of the date of hire for an employee hired on or before December 31, 2016.
(c) No elections after December 31, 2016. A participant who is hired after December 31, 2016 and elects to become a tier two employee may not make an election under this section to transfer and become a tier one employee.
(d) Election form and manner. The election shall be made in the form and manner required by the Personnel Officer. The transfer shall take effect at the beginning of the next pay period following receipt by the Personnel Officer of the employee's completed election form.
(e) Election regarding service. A participant who makes an election under this section shall also make an election regarding treatment of the participant's service as a tier two employee. The participant may elect to take:
(1) a full tier one retirement benefit as provided in subsection (f); or
(2) an actuarial reduction of a full tier one retirement benefit as provided in subsection (g).
(f) Repayment of contributions.
(1) A participant who elects a full tier one retirement benefit under subsection (e)(1) shall repay the employee contributions that were not made while the participant was a tier two employee. The amount of the repayment shall be determined as of the date of transfer from tier two to tier one and be equal to 4% of the participant's annual basic pay on the date of transfer multiplied by the number of years of service as a tier two employee on the date of transfer, computed to the nearest one-twelfth of a year.
(2) The participant may elect to make the repayment by making a lump sum payment or by making installment payments through payroll deductions, including 6% interest per year on the unpaid balance, for a period not to exceed five years.
(3) The election as to method of repayment shall be made at the time the participant elects to transfer from tier two to tier one.
(4) The participant shall complete all repayments by the date of termination of employment. If not repaid in full, any retirement benefit to which the participant is entitled shall be reduced by an amount actuarially equivalent to the remaining unpaid employee contributions, plus interest from the date of transfer to the actual date of retirement at the rate of 6% per year.
(5) The actuarially equivalent amount of the remaining unpaid employee contributions shall be determined based on the following factors:
(i) an actuarially assumed rate of interest of 6% per year, less a 2.1% actuarial adjustment for cost-of-living; and
(ii) the 1983 Group Annuity Mortality Table (blended 50% male and 50% female).
(g) Actuarial reduction.
(1) A participant who elects to take an actuarial reduction under subsection (e)(2) shall receive a reduced retirement benefit, with the reduction equal to the actuarially equivalent amount of the employee contributions that were not made while the participant was a tier two employee.
(2) The employee contributions shall be calculated as 4% of the participant's annual basic pay on the date of transfer multiplied by the number of years of service as a tier two employee on the date of transfer, computed to the nearest one-twelfth of a year, plus interest from the date of transfer to the actual date of retirement at the rate of 6% per year.
(3) The actuarially equivalent amount of the employee contributions shall be determined based on the following factors:
(i) an actuarially assumed rate of interest of 6% per year, less a 2.1% actuarial adjustment for cost-of-living; and
(ii) the 1983 Group Annuity Mortality Table (blended 50% male and 50% female).
(h) Transfer irrevocable. Notwithstanding any other provision of this title, an election made by a tier two employee to transfer and become a tier one employee under this section is irrevocable and may not be changed.
(1985 Code, Art. 7, § 3-204) (Bill No. 90-01; Bill No. 86-16)