Ariz. Admin. Code § 2-8-514

Current through Register Vol. 30, No. 25, June 21, 2024

Section R2-8-514 - Purchasing Service Credit by Direct Rollover or Trustee-to-Trustee Transfer

A. An Eligible Member may purchase Service Credit by Direct Rollover or Trustee-to-Trustee Transfer pursuant to this Article.

B. By the due date specified by the method of payment the Eligible Member elected, the Eligible Member shall ensure that the ASRS receives the payment for the service purchase and a completed Direct Rollover/ Transfer Certification to Purchase Service Credit form.

C. An Eligible Member who chooses to purchase Service Credit shall provide the following to the ASRS:

1. The name of the financial institution or plan;

2. Whether the Eligible Member is choosing to rollover/transfer the entire balance of their account and if not, the amount of the rollover/transfer;

3. Acknowledgement of the following information:

a. After-tax funds are only acceptable from 401(a) and 403(b) plans and must be listed separately from the portion that is pretax on the payment as after-tax amounts. This information must be provided to the ASRS with the payment.

b. The only fund types that the ASRS accepts are:

i. 401(a);

ii. 401(k) pre-tax only;

iii. 403(b);

iv. Governmental 457 pre-tax only;

v. 403(a) pre-tax only;

vi. 408 Traditional IRA pre-tax only;

vii. 408(k) SEP IRA pre-tax only;

viii. 408(p) Simple IRA pre-tax only and only if the Eligible Member participated for at least 2 years in this plan;

c. The ASRS shall not accept the following fund types:

i. Roth funds;

ii. Funds already distributed to the Eligible Member from a retirement plan listed in subsection (3)(b);

iii. Inherited IRA;

iv. Coverdale Education Savings Account funds;

v. Hardship distributions;

vi. Funds not includable in gross income;

vii. Funds required under § 401(a)(9) of the IRC because the Eligible Member have attained age 701/2;

viii. One of a series of substantially equal periodic payments made at least annually for the Eligible Member's life;

ix. One of a series of substantially equal periodic payments made for 10 years or more;

x. After-tax contributions from any plan other than a 401(a) or 403(b) qualified plan;

d. The funds must be sent as a Direct Rollover from a plan listed in subsection (3)(b) and issued to the ASRS for the benefit of the Eligible Member. If the payment is issued to anyone other than the ASRS, including the Eligible Member, then within 60 days of the plan issuing the payment, the Eligible Member must place the payment into a plan specified in subsection (3)(b) to be reissued directly to the ASRS.

e. It is the Eligible Member's responsibility to contact the administrator of the plan from which the Direct Rollover will be made and have it initiated. The Eligible Member must also ensure all rollovers are completed by the due date. If the ASRS does not receive payment by the due date, the invoice will expire and the payment will be returned to the Eligible Member.

f. If the ASRS accepts a rollover and later determines that it was not eligible, the ASRS will distribute the invalid payment directly to the Eligible Member. Any taxes, penalties, and interest that the IRS, any taxing authority, or financial institution may assess against the Eligible Member due to an invalid payment are solely the Eligible Member's responsibility.

g. The plan from which the Eligible Member is rolling over funds must be solely in the Eligible Member's name. The Eligible Member may be a spousal beneficiary of a deceased person or an alternate payee on the plan from which the Eligible Member is rolling over funds.

D. An Eligible Member who chooses to purchase Service Credit pursuant to this section shall submit a Direct Rollover/Transfer Certification to Purchase Service Credit form that includes:

1. The Eligible Member's full name;

2. The last 4 digits of the Eligible Member's Social Security number;

3. The Eligible Member's signature certifying that the Eligible Member understands the requirements, limitations, and entitlements for the rollover/transfer that is being used to purchase Service Credit, and has read and understands the Direct Rollover/Transfer Certification to Purchase Service Credit form and any accompanying instructions and information ;

4. The Authorized Representative's name and title;

5. The Authorized Representative's telephone number; and

6. Certification by the Authorized Representative's dated signature that:

a. The plan is either:

i. A qualified pension, profit sharing, or 401(k) plan described in IRC § 401(a), or a qualified annuity plan described in IRC § 403(a);

ii. A deferred compensation plan described in IRC § 457(b) maintained by a state of the United States, a political subdivision of a state of the United States, or an agency or instrumentality of a state of the United States;

iii. An annuity contract described in IRC § 403(b); or

iv. An IRA described in A.R.S. § 38-747(H)(3);

b. The rollover/transfer specified on the form from which the pre-tax funds are being rolled over or transferred is intended to satisfy the requirements of the applicable section of the IRC;

c. The Authorized Representative is not aware of any plan provision or any other reason that would cause the plan/IRA not to satisfy the applicable section of the IRC; and

d. The funds will be sent to the ASRS as a direct plan rollover, IRA rollover, or a Trustee-to-Trustee Transfer.

E. The Eligible Member shall contact the Plan Administrator to have the funds distributed and transferred to the ASRS. Unless the ASRS receives a check for the correct amount from the plan and all documents required by this Article by the due date specified by the method of payment the Eligible Member elected, the ASRS shall cancel the request to purchase Service Credit.

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F . The Eligible Member shall ensure that the ASRS receives a check from the plan, made payable to the ASRS, for an amount that does not exceed the amount specified on the SP Invoice.

G . If the payment from the eligible plan exceeds the amount specified on the SP Invoice, the ASRS shall return the entire payment to the Eligible Member.

Ariz. Admin. Code § R2-8-514

New Section made by final rulemaking at 11 A.A.R. 2640, effective June 30, 2005 (Supp. 05-2). Amended by final rulemaking at 12 A.A.R. 4667, effective December 5, 2006 (Supp. 06-4). Amended by final rulemaking at 25 A.A.R. 303, effective 3/18/2019.