19-20-409. Transfer of service credits and contributions from public employees' retirement system. (1) (a) An active member may at any time before retirement file a written application with the teachers' retirement system to transfer all of the member's service credit then on account with the public employees' retirement system to the teachers' retirement system if the following requirements are met:

(i) the member is eligible to withdraw from the public employees' retirement system; and

(ii) member and employer contributions are directly transferred from the public employees' retirement system to the teachers' retirement system as provided in subsections (1)(b) and (1)(c).

(b) The public employees' retirement system shall transfer employer contributions to the teachers' retirement system in an amount equal to 72% of the amount of member contributions and accrued interest to be transferred as provided in subsection (1)(c).

(c) The public employees' retirement system shall transfer member contributions to the teachers' retirement system in an amount equal to the total amount of the member's contributions then on account with the public employees' retirement system, plus all interest accrued on the member contributions from the date of deposit until the date the transfer is received by the teachers' retirement system. Interest must be based on the interest tables in use by the public employees' retirement system.

(d) (i) On completion of the transfer, the teachers' retirement system shall credit the member with creditable service equal to the service credit that had been on account with the public employees' retirement system, subject to limitation as provided in 19-20-401(9).

(ii) The transferred service credit must count toward vesting in a benefit with the teachers' retirement system. If, at the time of retirement, the member does not have sufficient years of membership service with the teachers' retirement system to calculate the members' average final compensation under plan terms, compensation must be credited to the period of transferred service credit necessary to calculate the member's average final compensation as provided in 19-20-805(4).

(iii) A member who transfers service from the public employees' retirement system in the teachers' retirement system must have completed 5 years of membership service in the teachers' retirement system to be eligible to receive creditable service pursuant to 19-20-402, 19-20-403, 19-20-404, 19-20-408, 19-20-410, or 19-20-426.

(2) (a) The beneficiary of a member of the teachers' retirement system who dies while an active member and while also having service credit on account with the public employees' retirement system may apply to have the deceased member's service transferred from the public employees' retirement system to the teachers' retirement system if the following requirements are met:

(i) the member had not previously retired under either retirement system;

(ii) the member was not vested in a benefit with either retirement system at the time of death;

(iii) the member's creditable service following transfer will entitle the beneficiary to receive a survivor benefit from the teachers' retirement system in the form of a monthly benefit payable for the beneficiary's lifetime;

(iv) at least one eligible beneficiary will elect the lifetime benefit;

(v) each beneficiary entitled to payment on behalf of the deceased member from either retirement system prior to transfer must be an individual and must also be a beneficiary entitled to payment on behalf of the deceased member from the other retirement system; and

(vi) the transfer of service credit from the public employees' retirement system must constitute a full withdrawal of the deceased member's service credit from the public employees' retirement system.

(b) Member and employer contributions must be transferred directly from the public employees' retirement system to the teachers' retirement system as provided in subsections (1)(b) and (1)(c).

(c) (i) On completion of the transfer, the teachers' retirement system shall credit the member with creditable service equal to the service credit that had been on account with the public employees' retirement system.

(ii) If the member does not have sufficient years of membership service with the teachers' retirement system to calculate the member's average final compensation under plan terms, compensation must be credited to the period of transferred service credit necessary to calculate the member's average final compensation as provided in 19-20-805(4).

(3) (a) If the teachers' retirement system determines that an individual's membership was erroneously classified and reported to the public employees' retirement system, the public employees' retirement system shall transfer to the teachers' retirement system the member's accumulated contributions and service, together with employer contributions plus interest.

(b) For the period of time that the employer contributions are held by the public employees' retirement system, interest paid on employer contributions transferred under this subsection (3) must be calculated at the short-term investment pool rate earned by the board of investments in the fiscal year preceding the transfer request.

(c) Any employee and employer contributions due as calculated in 19-20-602, 19-20-605, 19-20-608, and 19-20-609, plus interest, are the liability of the employee and the employer where the error occurred.

(4) A member who participated in the public employees' retirement system defined contribution plan provided for in Title 19, chapter 3, part 21, may purchase creditable service for the time spent as a participant in the defined contribution plan if:

(a) the member is vested in the teachers' retirement system and has completed at least 1 full year of active membership in the teachers' retirement system following the member's public employees' retirement system service;

(b) for each full year or portion of a year to be purchased pursuant to this subsection (4), the member contributes the actuarial cost of the service based on the most recent valuation of the system; and

(c) the member has withdrawn the member's money in the member's public employees' retirement system defined contribution plan account or has rolled over the amount required to purchase service in accordance with this subsection (4).

(5) Creditable service purchased under subsection (4) must be determined according to the laws and rules governing service credit in the public employees' retirement system.