PERAC Memo #14 - 1997: 10% Buy-Back for Veterans with Prior Service
10% Buy-Back for Veterans with Prior Service
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PERAC Memo #14/1997 revises prior guidance on the Chapter 71 (1996) 10% military service buy-back for veterans who took a refund and later re-entered membership. The Commission now holds that members who repurchase their prior service may buy back military service based on 10% of their salary at initial entry into the system, rather than 10% of salary at re-entry, and are entitled to a refund of the difference if they were overcharged. Boards must identify affected members who overpaid under the prior rule and issue refunds, while members who have not yet completed repurchase of prior service must finish that buy-back before qualifying for the earlier-salary military service rate.
Full Text
PERAC Memo #14/1997 M E M O R A N D U M TO:All Retirement Boards FROM:John J. McGlynn, Executive Director RE:10% Buy-Back for Veterans with Prior Service DATE:March 18, 1997 Please be advised that at its February 28, 1997 meeting the Commission voted to revisit the position previously taken with respect to the annual salary to be used in calculating the buy-back for certain veterans under chapter 71 of the acts of 1996. By memorandum dated January 13, 1997 we had advised boards “that members who take a refund of their accumulated total deductions and then return to membership service would be required to purchase their military service based upon ten percent of their compensation when they re-enter service even if they re-purchase their prior service.” The Commission has now determined that members upon repurchase of their prior service are entitled to purchase creditable service for their military service based upon ten percent of their salary when they first entered the retirement system. Members in such circumstance who have been required to purchase their military service at ten percent of their salary when they re-entered service are entitled to a refund of the difference between such amount and ten percent of their salary when they initially entered the retirement system. Members who have not bought back their prior service would still be required to purchase military service at ten percent of their compensation when they re-entered the retirement system. Members who are in the process of buying back their earlier membership service but who have not yet completed such buy-back, must complete the buy-back before being entitled to purchase their military service at ten percent of their earlier compensation. If you have any questions, please contact this office. JJM/ds