Permissive service credit

[Ken Davis]

If a state teachers' retirement system offers an enhanced benefit in exchange for a voluntary contribution, but the years of creditable service are not changed, will 415(n) apply? For example, a person with 25 years service will normally receive a retirement benefit equal to 50% of compensation, but may increase the percentage to 60% with a voluntary lump-sum payment to TRS.

If 415(n) doesn't apply, does that mean the voluntary contribution will have to meet the DC plan limits of the lesser of $40K or 100% of compensation?

If 415(n) doesn't apply, does that mean that trustee-to-trustee transfers from 403(B) and 457(B) accounts may not be used to make the payment?

Thanks in advance for any replies.

Ken Davis

Univ. of South Alabama