PERAC Memo #52 - 1998: Correct Salary for Military Buyback
Correct Salary for Military Buyback
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PERAC Memo #52/1998 addresses the CRAB-affirmed decision in Templeton v. Plymouth County Retirement Board, which establishes that a member who took a refund upon leaving service and later returned does not regain prior membership rights, even after buying back that prior creditable service. Consequently, when such a member elects to purchase military service credit under Chapter 71 of the Acts of 1996, boards must calculate the buyback cost using the salary earned when the member most recently re-established membership, not the earlier salary from before the refund. Boards should apply this salary standard going forward in all military buyback calculations involving members who previously took refunds.
Full Text
PERAC MEMO #52/1998 M E M O R A N D U M TO: All Retirement Boards FROM: Robert F. Stalnaker, Executive Director RE: Correct Salary for Military Buyback DATE: November 2, 1998 The Contributory Retirement Appeal Board has affirmed the decision of the Division of Administrative Law Appeals in the case of Templeton v. Plymouth County Retirement Board , CR-97-307. This decision is now final and this memorandum replaces all previous correspondence on this subject. The Administrative Magistrate has ruled that when a member leaves active service and takes a refund of their accumulated deductions, if they later return and voluntarily buy back their creditable service, they are not entitled to the restoration of their prior rights and benefits. As a result, when a member returns to service after taking a refund and chooses to purchase their military service under Chapter 71 of the Acts of 1996, the retirement board must use the salary earned by the applicant when they last became a member of a system. In the Templeton case, Mr. John Templeton worked from 1973 to 1987 for the Town of Marshfield and was a member of the Plymouth County Retirement System. In 1987, he terminated his employment and took a refund of his accumulated deductions. In 1990, he began to work for the Marshfield Fire Department and again became a member of the Plymouth County Retirement System. Mr. Templeton bought back his prior creditable service. When Mr. Templeton sought to purchase his military service in 1996, the correct salary for the purchase was the salary earned in 1990, when he last became a member of the retirement system. Mr. Templeton was not able to use the 1973 salary because by taking a refund of his accumulated deductions, he lost the prior rights and benefits of his 1973 service. If you have questions, please contact this office.