(a) The system is a governmental plan within the meaning
of §414(d) of the Internal Revenue Code of 1986, as amended from
time to time (the "Internal Revenue Code").
(b) The rights of members to benefits accrued, to the
extent funded, will become vested to the extent required by, and upon
the events set forth in, Treasury Regulation §1.401-6(a)(1).
(c) The term "employee," as defined in §851.001(8)
of the Act, shall be limited to common law employees of a municipality,
and shall exclude leased employees within the meaning of Internal
Revenue Code §414(n).
(d) With respect to §851.002 of the Act, and notwithstanding
any provision of the system to the contrary, reversions will be permitted
only to the extent allowed under the Internal Revenue Code and any
related guidance thereunder, including, but not limited to, a contribution
made because of a good faith mistake of fact that is returned within
one year of the date the contribution was made as permitted under
Revenue Ruling 91-4, or as permitted by subsequent guidance.
(e) Repayments of previously paid out benefits, including
the reestablishment of credit under §853.003 of the Act, shall
comply with Internal Revenue Code §415(k)(3) and any Treasury
Regulations thereunder. For purchases of permissive service credit
that are described in Internal Revenue Code §415(n), including
any such purchases under Chapter 853 of the Act, the provisions of
Internal Revenue Code §415(n) and any Treasury Regulations thereunder
shall apply, including the provisions of Internal Revenue Code §415(n)(3)(B)
that, except as provided in Internal Revenue Code §415(n)(3)(D):
(1) no more than five years of nonqualified service
credit within the meaning of Internal Revenue Code §415(n)(3)(C)
may be taken into account under Internal Revenue Code §415(n);
and
(2) no nonqualified service credit within the meaning
of Internal Revenue Code §415(n)(3)(C) may be taken into account
under Internal Revenue Code §415(n) before a member has at least
five years of participation in the system.
(f) Notwithstanding any provision of the system to
the contrary, the system shall comply with Internal Revenue Code §401(a)(31)(B)
and applicable Treasury Regulations thereunder.
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