If the member chooses to purchase service credit for prior eligible service not in the members account, can the member roll over funds to pay for the cost?
Yes. The State Retirement and Pension System (SRPS) is a 401(a) Qualified Defined Benefit Plan. As such, for the purchase of previous allowable service SRPS may accept a Trustee-to-Trustee Transfer from a Traditional IRA, or an Eligible Employer Plan which includes a plan qualified under section 401(a) of the Internal Revenue Code, including a 401(k) plan, profit sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; a section 403(a) annuity plan; a section 403(b) tax sheltered annuity; and an eligible section 457(b) plan maintained by a governmental employer (governmental 457 plan). The rolled over funds cannot be more than the cost of the purchase. • How does purchasing additional service impact the retirement benefit? It impacts the retirement benefit in two possible ways. It can make the member eligible for a benefit or reduce any applicable early service retirement reduction. Secondly, it increases the members retirement benefit.
Related Questions
- If the member chooses to purchase service credit for prior eligible service not in the members account, can the member roll over funds to pay for the cost?
- Under what circumstances are former Plan E members permitted to purchase credit for service prior to LACERA membership?
- Who is eligible to roll over pre-tax funds to purchase service credit or redeposit previously withdrawn contributions?
