| (a) The system may accept the funds described in subsections
(b) and (c) of this section, subject to the restrictions of this section.
(b) If permitted under and subject to the provisions
of federal law, the system may accept an eligible rollover distribution
from another eligible retirement plan in payment of all or a portion
of any deposit a member is permitted under applicable law to make
with the system for service credit.
(1) An "eligible rollover distribution" is any distribution
of all or any portion of the balance to the credit of the member from
an eligible retirement plan. An eligible rollover distribution does
not include the following:
(A) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the member or the joint lives (or
joint life expectancies) of the member and the member's designated
beneficiary, or for a specified period of ten years or more;
(B) any distribution to the extent such distribution
is required under Internal Revenue Code §401(a)(9);
(C) any distribution which is made upon hardship of
the member; or
(D) the portion of any distribution that is not includible
in gross income.
(2) An "eligible retirement plan" is any program defined
in Internal Revenue Code §401(a)(31) and §402(c)(8)(B),
from which the member has a right to an eligible rollover distribution,
as follows:
(A) an individual retirement account under Internal
Revenue Code §408(a);
(B) an individual retirement annuity under Internal
Revenue Code §408(b) (other than an endowment contract);
(C) a qualified trust;
(D) an annuity plan under Internal Revenue Code §403(a);
(E) an eligible deferred compensation plan under Internal
Revenue Code §457(b) which is maintained by an eligible employer
under Internal Revenue Code §457(e)(1)(A); and
(F) an annuity contract under Internal Revenue Code §403(b).
(c) If permitted under and subject to the provisions
of federal law, the system may accept a direct trustee-to-trustee
transfer of funds from a plan described under §403(b) or §457(b)
of the Internal Revenue Code in payment of all or a portion of any
deposit a member is permitted to make with the system for service
credit.
(d) In order to authorize the rollover or transfer
of funds described in this section, a member shall provide or cause
to be provided to the system information sufficient for the system
to reasonably conclude that the contribution is a valid rollover or
direct trustee-to-trustee transfer as permitted under federal tax
law. If the system later determines that a contribution was an invalid
rollover or direct trustee-to-trustee transfer or otherwise not permitted
under federal tax law, the system may take any action appropriate
or required by the Internal Revenue Code or regulations issued thereunder,
including return of the invalid contribution and, if applicable, any
earnings attributed thereto to the member within a reasonable time
after the determination and cancellation of any credit purchased with
the returned amounts.
(e) The system shall construe and administer this section
in a manner such that the plan will be considered a qualified plan
under §401(a) of the Internal Revenue Code of 1986, (United States
Code, Title 26, §401).
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