A member may purchase credit for periods of service with the Water and Power Employees' Retirement Plan (WPERP) on the terms and conditions set forth below, except that periods of noncontributory WPERP service may not be purchased.
(a) Contributions Must Be Transferred. A member may not purchase credit for periods of service with WPERP so long as his or her contributions remain on deposit with WPERP unless he or she authorizes a transfer of his or her WPERP contributions to the Retirement Plan, to be credited towards payment pursuant to this section.
(b) Treatment of Purchased Service. Service purchased under this section shall be treated the same as LACERS service for purposes of establishing the minimum ten (10) years of continuous service required to qualify for retirement under Subsection 4.1055(a), the minimum five (5) years of continuous service required to qualify for retirement under Subsection 4.1056(a), or the minimum ten (10) years of continuous service required to qualify for disability retirement under Subsection 4.1058(a), except that WPERP service purchased under WPERP's Other Governmental Service (OGS) program shall not be treated the same as LACERS service for the aforementioned purposes. WPERP service purchased under WPERP's OGS program when purchased with the Retirement Plan shall only count as service credit for purposes of calculating the member's service retirement allowance or disability retirement allowance, as applicable. Service purchased under this section shall not count as service or service credit for the purpose of qualifying for any benefits provided in Chapter 11 of Division 4 of this Code.
(c) Written Agreement and Cost of Purchase. A member electing to purchase WPERP service under this section shall enter into a written agreement with the Retirement System. Such agreement shall specify the amount to be paid for the purchase of this service. The cost to purchase service shall be determined as follows:
The member's contribution rate shall be combined with the "City Contribution Rate" (as defined in Subsection (e) of Section 4.1067) to establish the total percent of the member's compensation, at the time of purchase, that is to be paid for the total length of the period of service that the member agrees to purchase. Compensation as used in this subsection shall refer to the member's compensation earnable, as defined in Subsection 4.1051(a), at the time of purchase.
As an example, assuming the member's compensation at the time of purchase is $100,000.00 per year, the member's contribution rate is ten percent (10%), the City Contribution Rate is twenty percent (20%), and the period of service to be purchased is two (2) years, the cost would be determined as follows:
The ten percent (10%) member contribution rate plus the twenty percent (20%) City Contribution Rate results in a total contribution rate of thirty percent (30%). Thus, to purchase two (2) years of service would cost the member a total of $60,000.00 (thirty percent (30%) of the member's $100,000.00 compensation for each year of service purchased).
(d) Method of Purchase.
(1) The member shall transfer any contributions he or she has on deposit with WPERP as payment towards his or her purchase cost.
(2) The member may elect to pay on an after-tax basis in a lump sum or in biweekly installments through payroll deduction, subject to any applicable Internal Revenue Code restrictions.
(3) The Board may establish rules to allow members to pay for purchases via rollovers of funds.
(4) Should the member elect to purchase the buy back service credit through payroll deduction, annual interest at a rate determined by the Board and set at the commencement of the agreement shall be charged. The Board may establish a minimum biweekly payroll deduction.
(e) Execution of the Agreement. A member entering into a purchase agreement shall complete all payments prior to the effective date of retirement in order to receive full credit for the service purchased. In the event the member elects to retire prior to completing payment under the purchase agreement, the member may receive prorated credit for that portion of the service for which payments have already been made and forfeit the remainder of service covered by the agreement; or the member may make a lump sum payment sufficient to complete the total payment covered by the agreement. Additionally, a member who elects to terminate an after-tax agreement prior to its completion, or at the time of retirement, may elect to receive a cash refund of the purchase contributions and interest payable upon the earlier of death, termination of employment or retirement, or to receive prorated service at retirement.
(f) Member's Death. In the event that a member who has entered into a purchase agreement dies prior to retirement, the funds paid for this purchase shall be considered to be a part of the member's accumulated contributions and shall be refunded accordingly, with interest thereon computed at the rate applicable to regular member contributions.
(g) Limits on Purchase. In the event part or all of the purchased service credit at the time of retirement would cause the member's service retirement allowance to exceed seventy-five percent (75%) of final compensation, the purchase cost attributable to any excess service credit that may not be used in the retirement formula, including interest thereon, shall be refunded or may be applied by the member to purchase a larger annuity if doing so does not cause the retirement allowance to exceed any federal limitations that may apply.
(h) Administration. The administration of this section shall be under the exclusive management and control of the Board of Administration. Said Board shall have, and is hereby granted, full power and authority to adopt and enforce all such rules and regulations as it may deem necessary for the carrying out of the provisions of this section. The Board of Administration shall have the right to construe this section, to interpret any provision thereof, to make rules and regulations relating to this section, and to determine any factual questions arising in connection with this section's operation after such investigation or hearing as the Board may deem appropriate. Any decision made by the Board under the provisions of this section shall be conclusive and binding on all parties concerned.
SECTION HISTORY
Added by Ord. No. 182,824, Eff. 12-19-13.