8 Colo. Code Regs. § 1502-1-5

Current through Register Vol. 48, No. 1, January 10, 2025

Rule 8 CCR 1502-1-5 - SERVICE CREDIT

Rule 5 describes the determination and recording of earned service credit, type of purchased service credit and methods of payment for purchased service credit. Unless otherwise indicated, for the purposes of Rule 5, the term "member" shall include DPS members and the term "retiree" shall include DPS retirees.

5.10Earned Service Credit

A. Employment Pattern of Less Than 12 Months

A member who is employed in a position in which the employment pattern covers at least 8 months but less than 12 months per year shall have service credit for each month based on:

(1) The ratio of actual salary received during a month to 80 times the federal minimum wage hourly rate in effect at the time of service, and

(2) The ratio of 12 months to 8 months service credit for a period of 12 consecutive months may not exceed one year, except as provided in Rule 5.10 B.

B. Combinations of Employment Patterns

Service credit for any combination of traditional, academic year or seasonal employment patterns occurring within one year will be calculated separately and combined for the annual total. Service credit for any period of 12 consecutive months may not exceed one year except for overlaps, which occur due to changes in employment patterns or overlapping employment contracts.

5.20Purchased Service Credit

Purchased service credit may qualify a member for earlier service retirement, earlier reduced service retirement or increased benefits.

A. Repayment of Refund

A member may purchase all or part of a period associated with a refunded member contribution account. Service credit purchased based on all or part of a period associated with a refunded member contribution account pursuant to 24-51-503, C.R.S. is considered purchased service credit not earned service credit. The purchase of service credit relating to a refunded member contribution account pursuant to 24-51-503, C.R.S., shall not count toward the ten year limit for purchases of service credit specified in 24-51-505(2)(c), C.R.S.

B. Sabbatical Leaves

(1) For periods of sabbatical leave granted before July 1, 1966, service credit is provided without payment. This provision does not apply to DPS members or retirees.

(2) A member may elect to make separate purchases of service credit associated with more than one period of sabbatical leave. A member may not purchase any service credit associated with less than the entire period of any one sabbatical leave.

C. Noncovered Employment

(1) A member may purchase all or part of a period of noncovered employment except as provided in 24-51-505, C.R.S.

(2) A member who earns less than full service credit for a period of covered employment and has concurrent noncovered employment may not purchase service credit for that period in excess of the credit needed to obtain full service credit for that period. A member who earns full service credit for a period of covered employment may not purchase credit for noncovered employment served during that period.

D. Portability

A member who has an active service credit purchase agreement and exercises portability pursuant to the provisions of Section 24-51-1747, C.R.S., may only continue to make payment on the service credit purchase agreement as long as the member selects the benefit structure under which the purchase is being completed. If the member does not choose the account for which the service credit purchase applies, then the purchase agreement will be terminated and all payments made under the purchase agreement will be returned to the member.

E. Outside Service Under the DPS Benefit Structure

(1) A DPS benefit structure retiree who used substantiated outside service to reach full service retirement eligibility may not purchase that same time under the PERA benefit structure.

(2) An inactive DPS member who has substantiated outside service may purchase that same time under the PERA benefit structure as long as the individual meets the requirements to be able to purchase that service under the PERA benefit structure. The amount of the substantiated outside service that can be used in the DPS benefit structure will be reduced by the amount of the purchase into the PERA benefit structure account.

5.25Service Credit Purchase Cost and Application

A. The cost to purchase one month of noncovered employment shall be a percentage of the member's Highest Average Salary as set forth in the Table appearing on the PERA website. Such percentage shall be determined by the age of the member at the time PERA receives the member's completed service credit purchase application.

B. To purchase service credit, the member must apply using the service credit purchase application form provided by PERA.

C. The completed service credit purchase application shall contain:

(1) Documentation of salary received by the member;

(2) Documentation of the member's dates of employment;

(3) Documentation of any other pension coverage including but not limited to a mandatory defined contribution plan for such employment.

D. The Association shall have the authority to determine the adequacy of the documentation described in Rule 5.25 C.

E. Absent complete documentation, no purchase agreement shall be issued.

F. Once complete documentation has been received by the Association, the Association shall issue a service credit purchase agreement which will include the cost to purchase service credit based upon the age of the member at the time the Association receives the member's completed service credit purchase application. Failure to comply with all terms and conditions of the service credit purchase agreement will result in a breach of the agreement and the member will not be allowed to purchase service credit based on said agreement. The member's cost for any subsequent service credit purchase agreement based upon this documentation shall be recalculated and determined based upon the member's age and Highest Average Salary when a subsequent agreement is issued.

5.26Service Credit Purchase Based Upon Foreign Employment

The same documentation required under Rule 5.25 shall be required of members who seek to purchase service credit based upon previous employment with a foreign employer subject to the Internal Revenue Code and the Internal Revenue Service Rules and Regulations. If such documentation is in a language other than English, the member, at the member's own cost, shall provide a certified translation of the documentation.

A. The salary received in foreign currency shall be converted to U.S. dollars at the exchange rate in effect for the time the foreign currency was earned.

B. The resulting U.S. dollars will be compared to the U.S. minimum wage to determine the amount of service credit that can be purchased pursuant to 24-51-505(2), C.R.S.

5.30Payments for Purchased Service Credit

Lump-sum payments and installment payments must be completed during membership.

A. Lump-Sum Payments

A lump-sum payment is the first installment payment specified in 24-51-506(2)(b), C.R.S. Failure to make a lump sum payment pursuant to the terms of the service credit purchase agreement on or before its due date shall result in cancellation of the service credit purchase agreement.

B. Installment Payments

(1) Installment payments must be made via Automated Clearing House (ACH) deduction from the member's checking or savings account or other financial account.

(2) A service credit purchase agreement shall be canceled and payments made shall be returned to the member if more than three monthly installment payments become delinquent.

(3) The Association shall notify a member of delinquency in payments.

(4) A member may cancel a service credit purchase agreement at any time prior to completion of installment payments. All payments made shall be refunded without interest to the member upon receipt of the request for cancellation.

(5) The period over which installment payments may be made shall not exceed 120 months or a period equal to twice the total amount of service credit to be purchased, whichever is less.

(6) Installment payments shall be made monthly in amounts not less than the monthly payment amount required to complete payment of the purchase over the specified term of the installment agreement.

(7) Monthly payment amounts in excess of the required monthly installment payment will not relieve the requirement for any future monthly installment payments pursuant to the service credit purchase agreement. Such extra payments will shorten the term of the agreement unless the member specifies in writing that the extra payments are to be used to reduce the amount of each remaining future monthly payment.

5.35Purchase of Service Credit Relating to a Refunded Member Contribution Account

The one percent of the member's Highest Average Salary associated with the cost to purchase forfeited service credit pursuant to 24-51-503(4), C.R.S. and any associated interest payment attributable thereto shall be allocated to the annual increase reserve as soon as administratively practical upon completion of the service credit purchase agreement and shall not be part of the member contribution account and never refundable to the member.

5.40Interest Rate

The interest rate shall be the actuarial investment assumption rate as set by the Board in effect during the period for which interest is charged.

8 CCR 1502-1-5

38 CR 23, December 10, 2015, effective 1/1/2016

39 CR 23, December 10, 2016, effective 1/1/2017

40 CR 04, February 25, 2017, effective 4/1/2017

40 CR 24, December 25, 2017, effective 2/1/2018

41 CR 14, July 25, 2018, effective 9/1/2018

41 CR 20, October 25, 2018, effective 1/1/2019

42 CR 20, October 25, 2019, effective 1/1/2020

43 CR 21, November 10, 2020, effective 1/1/2021

44 CR 20, October 25, 2021, effective 1/1/2022