# Title 71 — Retirement Board

## Article 71-05 — Highway Patrol Retirement System

## Chapter 71-05-04 — Service Credit

### § 71-05-04-01. Service credit - General rule.

A member receives credit for each month a contribution is made.
History: Effective October 1, 1991; amended effective July 1, 1998.
General Authority: NDCC 39-03.1-06
Law Implemented: NDCC 39-03.1-11
### § 71-05-04-02. Military credit.

Eligible service credit may be granted as it pertains to the North Dakota highway patrol retirement
system as established in chapter 71-02-11.
History: Effective October 1, 1991.
General Authority: NDCC 39-03.1-06
Law Implemented: 38 USC 2021-2026
### § 71-05-04-03. Repurchase of service credit and purchase of additional service credit.

To purchase additional credit or repurchase past service, a contributor must notify the public
employees retirement system, in writing, of the service for which the person wishes to receive credit. In
addition to the written request, the following information must be submitted, if applicable:
1. Documentation of military service by submitting a DD214 or NGB22.
2. Certification of approval by the member's employer of any leave of absence and length of that
leave.
History: Effective October 1, 1991; amended effective June 1, 1996; April 1, 2002; May 1, 2004.
General Authority: NDCC 39-03.1-06, 39-03.1-10.1, 39-03.1-14.1
Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
### § 71-05-04-03.1. Purchase of additional years of service.

Repealed effective May 1, 2004.
### § 71-05-04-04. Payment.

The total dollar amount for repurchase or purchase may be paid in a lump sum or on a monthly,
quarterly, semiannual, or annual basis. Payments may be subject to contribution limitations established

under 26 U.S.C. 415. Payments must begin within ninety days of the date the written cost confirmation
is prepared. If the installment method is used, the following conditions apply:
1. Simple interest at the actuarial rate of return must accrue monthly on the unpaid balance.
Interest is calculated from the fifteenth of each month.
2. The installment schedule may extend while the member is employed by the participating
employer but for no longer than a fifteen-year time period.
3. Installment payments may be made by a payroll deduction where available. However, it is the
responsibility of the contributor to initiate and terminate the payroll deduction.
4. Payments are due by the fifteenth of the month to be credited for the month.
5. Payments may only be received from a contributor until the fifteenth of the month following the
month of the member's termination date with a participating employer.
6. Payments must be greater or equal to fifty dollars per month, large enough to pay the current
interest plus a portion of the principal and an amount necessary to complete the payment
contract within the fifteen-year time period.
History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004; July 1, 2006; July 1,
2010.
General Authority: NDCC 39-03.1-06, 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
### § 71-05-04-04.1. Costs.

The cost to repurchase service credit must be calculated by applying actuarial factors to the
amount of the retirement and retiree health insurance credit being purchased by the contributor or
member of an alternative retirement system. The contributor's current age, average salary as
calculated under subsection 2 of North Dakota Century Code section 39-03.1-11, and current credited
service on record with the North Dakota public employees retirement system in the month in which the
contributor's written request is received must be used in the cost calculation. The amount of retirement
and retiree health insurance credit benefits being purchased must be calculated using the benefit
formulas in place at the time the written request is received from the contributor. When calculating the
cost, enhancements to the benefit formula must be considered to be in place at the time the law is
signed by the governor.
The retirement board must adopt actuarial assumptions necessary to determine the actuarial
factors for the cost calculation. The assumptions must be reviewed concurrently with the assumptions
for the retirement program.
Upon receipt of the written request from the contributor, a written cost confirmation must be
prepared and mailed to the individual. The cost stated in the confirmation letter is valid for a period of
ninety days from the date of the letter unless the contributor terminates employment with the employer.
If the contributor terminates employment, then the cost stated in the confirmation letter is valid only until
the earlier of the end of the ninety-day period or the fifteenth day of the month following the month of
termination.
History: Effective June 1, 1996; amended effective May 1, 2004; July 1, 2006.
General Authority: NDCC 39-03.1-06, 39-03.1-10.1, 39-03.1-14.1
Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1

### § 71-05-04-05. Delinquent payment.

If a payment to be made pursuant to section 71-05-04-04 is not received within thirty days of the
due date, the public employees retirement system shall send a letter to the contributor or member of an
alternative retirement system advising the person of the delinquency. If no payment is received within
sixty days after the due date, the account must be closed. Payments received on a closed account
must be returned to the member. The member may submit written documentation as to the cause for
the delinquency to the executive director for review and to request that the purchase contract be
reestablished without a new calculation.
History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004.
General Authority: NDCC 39-03.1-06, 39-03.1-10.1, 39-03.1-14.1
Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
### § 71-05-04-06. Crediting purchased or repurchased service.

For each month the system receives a payment toward a purchase contract, the member will earn
a proportion of service credit.
History: Effective October 1, 1991; amended effective June 1, 1996; May 1, 2004; July 1, 2010.
General Authority: NDCC 39-03.1-06, 39-03.1-10.1, 39-03.1-14.1
Law Implemented: NDCC 39-03.1-08.1, 39-03.1-10.1, 39-03.1-14.1
### § 71-05-04-07. Cancellation of credits.

If a member terminates service and receives a return of the member's accumulated contributions,
service credit for the years of such contributions must be canceled.
History: Effective October 1, 1991.
General Authority: NDCC 39-03.1-06
Law Implemented: NDCC 39-03.1-10.1, 39-03.1-14.1
### § 71-05-04-08. Conversion of sick leave.

To convert unused sick leave to service credit, the member shall submit an application to the office
of the amount of unused sick leave to be converted, and the member's employer must confirm the
member's unused balance of accumulated sick leave as of the date the member terminates
employment. For a member transferring from one participating employer to another participating
employer without terminating eligible employment, the public employees retirement system shall record
unused sick leave of a participating member if the new employer certifies that it will not transfer that
leave. The certification must include documentation from the previous employer detailing the number of
hours of sick leave. The public employees retirement system must receive the certification within sixty
days after the member leaves employment with the former employer.
One month of service credit must be awarded for each one hundred seventy-three and three-tenths
hours of unused accumulated sick leave. The cost to convert unused sick leave into service credit must
be paid with after tax employee contributions.
1. Aftertax payments may be accepted from the member as early as six months prior to
termination if the following requirements are met:
a. A notice of termination or application for monthly benefits form is on file with the public
employees retirement system.
b. A written certification by the member's employer, as to the member's unused balance of
accumulated sick leave as of the date the member wishes to begin payment, is on file
with the public employees retirement system.

c. At termination, the sick leave conversion payment must be recalculated using the
member's unused balance of accumulated sick leave, confirmed by the member's
employer, and the member's final average salary as of the date of calculation.
d. If there is a difference between the sick leave conversion payment amount and the
amount the member has paid, any overpayment must be refunded to the member and
any underpayment must be collected from the member by the fifteenth of the month
following the month of the member's date of termination.
e. The member's record must be updated with the additional service credit once payment is
made in full and the member has terminated employment.
2. Pretax rollover or transfer payments may be accepted from the member as early as sixty days
prior to termination if the following requirements are met:
a. A notice of termination or application for monthly benefits form is on file with the public
employees retirement system.
b. A written certification by the member's employer, as to the member's projected unused
balance of accumulated sick leave no sooner than sixty days prior to the date of
termination, is on file with the public employees retirement system. This certification must
also include a certification by the employer of the projected salaries to be reported to the
public employees retirement system during the final months of employment.
c. At termination, the sick leave conversion payment must be recalculated using the
member's unused balance of accumulated sick leave confirmed by the member's
employer, and the member's final average salary as of the date of calculation. If there is a
difference between the sick leave balance or conversion payment amount and the
amount the member has paid, then only the amount of sick leave available as of the
termination date will be added to the member's record. The member account balance will
be credited with the full amount of funds from the rollover or transfer.
d. If an underpayment has occurred, then the remaining amount must be collected from the
member by the fifteenth of the month following the month of the member's date of
termination.
e. The retiree health credit portion must be paid as a personal aftertax payment.
3. The member's record must be updated with the additional service credit once payment is
made and the member has terminated employment.
History: Effective June 1, 1996; amended effective April 1, 2002; May 1, 2004; July 1, 2006; April 1,
2008; January 1, 2025.
General Authority: NDCC 39-03.1-06
Law Implemented: NDCC 39-03.1-30
### § 71-05-04-09. Employer purchase of service credit or sick leave program.

An employer may elect to purchase up to five years of service credit for an employee and purchase
an employee's unused sick leave that meets the requirements of section 71-02-03-08. Before offering a
purchase program to its employees the employer must create a program and document the program in
writing and submit a copy to the public employees retirement system. The governing authority of the
employer shall also submit to the executive director of the public employees retirement system a letter
indicating:
1. The program meets all the requirements of the North Dakota Century Code.

2. The program meets all applicable federal requirements.
3. The employer agrees to remit to the public employees retirement system a lump sum payment
of the cost of the purchase upon being billed.
4. The employer has not given the employee the option of a cash payment in lieu of the
employer purchase.
5. The employer shall clearly specify who is eligible for the program and indicate if the program is
intended to be permanent or will be for a specific time period only.
6. The employer agrees that all purchases for service credit will be based upon actuarial cost as
determined by the public employees retirement system. The employer also agrees that all
purchases will be completed no later than the fifteenth day of the month following the month of
the employee's termination or sixty days from the date the employer and employee agree to
the purchase, whichever comes first.
7. The employer agrees that in offering such a program the employer will direct each employee
interested in the program to first apply to the employer's authorized agent who will then certify
the eligibility of the member, the amount of service credit to be purchased, and send such
certification to the public employees retirement system. The employer also agrees that the
employer's authorized agent will coordinate the program, authorize all purchases in writing to
the public employees retirement system, and be the focal point for communications between
the public employees retirement system, the employer, and the employee.
8. The employer agrees that for each employee certified to be eligible to have service credit
purchased, the employer will first obtain from the employee authorization for the public
employees retirement system to share confidential information with the employer.
9. The employer certifies that in offering the program, the employer is making it available to all
employees or a specified class of employees on a nondiscriminatory basis.
10. The employer agrees to provide information and policies pertaining to the employer purchase
program pursuant to North Dakota Century Code section 39-03.1-28.
When an employer files the above letter with the public employees retirement system, it may offer the
program to its employees. An employer may terminate this program at any time upon the governing
authority of the employer sending to the executive director of the public employees retirement system a
letter indicating when the program is to be canceled.
History: Effective May 1, 2004; amended effective July 1, 2006; April 1, 2008; July 1, 2010.
General Authority: NDCC 39-03.1-06
Law Implemented: NDCC 39-03.1-10.2
