PURCHASE OF PRIOR SERVICE CREDIT

SJ-MC tit. 3, div. II, ch. 3.28, pt. 22

in effect

San José Municipal Code § 3.28.2500 Prior service credit.

3.28.2500 - Prior service credit. A. Subject to the conditions, limitations and requirements set forth in this Part 22, a member of this system may purchase service credit in this system for eligible prior service. Notwithstanding the foregoing, Part 22 is not applicable to tier 2 members. B. For the purposes of this part, "eligible prior service" means service performed by the member as an employee of the city but for which the member was ineligible for service credit in this system at the time such service was performed and the service was in one of the following categories: 1. Service performed in a part-time position for which the member would have received service credit had the employment been on a full-time basis; or 2. Service pursuant to the emergency employment act; or 3. Service pursuant to the comprehensive employment and training act; or 4. Service performed on or after January 1, 1986, pursuant to an employment contract with the city. Eligible prior service does not include service performed as an independent contractor. C. In the event there is any dispute regarding a member's eligibility to purchase prior service credit, the amount of eligible prior service, the contributions and interest to be paid for the purchase of credit, or the amount of service to be credited to a member, the board shall determine the issue based on the relevant information presented to the board. (Ords. 25732, 29120.)

San José Municipal Code § 3.28.2510 Eligibility requirements.

3.28.2510 - Eligibility requirements. In order to purchase credit for eligible prior service, the member must satisfy all of the following conditions: A. The member must file a written election to purchase credit for eligible prior service in accordance with Section 3.28.2540. B. The member must pay into the retirement fund contributions for the prior service credit as provided in Section 3.28.2520, plus interest on the unpaid balance of all such contributions from the effective date of the member's election to the date the contributions are fully paid into the retirement fund. The interest rate shall be the actuarial assumed interest rate, as adopted by the board, which is in effect on the effective date of the election. C. The member must be a member of this system who is making contributions to the retirement fund and is performing federated city service at all of the following times: on November 24, 1998, at the time of filing the written election and at all times during the contribution period. (Ord. 25732.)

San José Municipal Code § 3.28.2520 Contributions for purchase of prior service credit.

3.28.2520 - Contributions for purchase of prior service credit. A. A member (other than a tier 2 member) may elect to purchase credit for all or a portion of the member's eligible prior service. B. For each year of eligible prior service the member elects to purchase, the member shall contribute to the retirement fund: 1. An amount equal to the total contribution rate (city plus member) in effect as of the date the member files the election to purchase credit, multiplied by the member's compensation earnable as of the date of such election; or 2. In the case of a member who will retire within one year of the date of the election to purchase eligible prior service, an amount equal to the total contribution rate (city plus member) in effect as of the date the member files the election to purchase credit, multiplied by the member's final compensation calculated as if the member retired as of the date of such election. C. Notwithstanding Subsection B. above, in the case of a member who served as a council assistant from November 2, 1996, through June 25, 1997, and who elects to purchase credit for eligible prior service for that period of time or any portion thereof, the city shall pay the portion of the required contributions that is equivalent to the product of: 1. The city's contribution rate in effect as of the date the member files the election to purchase credit; 2. The number of years of service during the period from November 2, 1996, through June 25, 1997, the member elects to purchase; and 3. The member's compensation, as described in paragraph B.1. or 2., as applicable. The member shall contribute the difference between the required contributions calculated in accordance with Subsection B. and the amount contributed by the city pursuant to this Subsection C. D. The contribution for any portion of a year of eligible prior service shall be prorated. E. Subject to any limits on annual contributions imposed by Section 415 of the Internal Revenue Code of 1986, as amended, any member who elects to purchase credit for eligible prior service may pay the contributions and interest specified in this section: 1. In one lump sum within sixty days from and after the date said member files his or her written election to purchase credit; or 2. In monthly or biweekly installments paid over a period of time not to exceed eight years; or 3. A combination of a lump sum and installments. (Ords. 25732, 29120.)

San José Municipal Code § 3.28.2530 Service credit.

3.28.2530 - Service credit. A. Except as provided in Subsection C. below, if a member other than a tier 2 member elects to purchase credit for eligible prior service and pay the contributions and interest specified in this part and subsequently does pay such contributions and interest, the member shall become entitled to credit under this system for all the eligible prior service for which such contributions and interest are paid. B. If a member elects to purchase credit for eligible prior service and pay the contributions and interest specified in this part but fails to complete the required payments because of death before retirement, retirement, or other separation from city service, the member shall be credited with the amount of service which is determined by the board to be attributable to the contributions and interest paid as of the date of the member's death, retirement, or other separation from city service. C. If the calculation of contributions for the purchase of eligible prior service was based on the member's final compensation (as described in Section 3.28.2520B.2.), but the member fails to retire within one year of the date of the election, then the prior service credited to the member shall be reduced to the amount of service credit which the member would have purchased had the calculation been based on the member's compensation earnable as of the date of the election (as described in Section 3.28.2520B.1.). (Ords. 25732, 29120.)

San José Municipal Code § 3.28.2540 Election to purchase prior service credit.

3.28.2540 - Election to purchase prior service credit. A. The secretary of the retirement board shall cause written notice to be personally delivered or mailed to each member who has eligible prior service, informing such member of his or her rights under this part. If mailed, such notice shall be mailed to the member at the latest address as shown in the records of the human resources department of the city. B. If the member wishes to purchase credit for eligible prior service, the member shall file a written notice of election to do so with the secretary of the retirement board. C. If the member elects to pay the contributions and interest in installments, or if the member elects to make the lump sum payment by payroll deduction, the member shall execute a binding irrevocable payroll authorization form authorizing the payment of the required contributions and interest by payroll deductions. The payroll authorization form shall be filed with the director of finance. D. If a member does not file the notice of election or the payroll authorization form, or elects to pay required contributions in a manner or at a time or times not authorized by this part, that member shall be deemed to have elected not to purchase credit for eligible prior service and shall be deemed to have elected not to have the prior service credited to him or her. E. The election to purchase credit for eligible prior service through payroll deductions and the authorization to make contributions by payroll deductions shall be irrevocable. During the time the irrevocable election is in effect, no direct payments from the member to the retirement fund shall be made by the member or accepted by this system. (Ord. 25732.)

Source: City of San José, Municipal Code (Municode Library, library.municode.com)URL: https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT3PE_IIREPL_CH3.281975FEEMREPL_PT22PUPRSECRFetched: 11/1/2026