(1) Service credit purchases may be made by a lump-sum payment, by installment payments, by a trustee-to-trustee transfer or a direct rollover of an eligible rollover distribution from a plan described in section 402 (c)(8)(B)(iii) to (vi) of the federal "Internal Revenue Code of 1986", as amended, including but not limited to the voluntary investment program established pursuant to part 14 of this article and the deferred compensation plan established pursuant to part 16 of this article, or by a rollover of a distribution from an individual retirement account or annuity described in section 408 (a) or 408 (b) of such code that is eligible to be rolled over and would otherwise be included in gross income. Service credit purchases shall be initiated and payment received in full during membership. (2) Installment payments for service credit purchases are subject to the following provisions: (a) Repealed. (b) The first installment payment shall be paid to the association on the date required by the service credit purchase agreement, and all subsequent payments are due on the tenth calendar day of each month thereafter. Failure to make timely installment payments shall cause the service credit purchase agreement to be canceled, and all payments received will be returned to the member. (c) Purchased service credit shall be credited to the member upon completion of all installment payments due. (3) Installment payments and interest shall be credited to the member contribution account. After installment payments are completed, they may not be withdrawn except with a refund pursuant to the provisions of section 24-51-405. (4) Upon the death of a member prior to completion of the service credit purchase, any installment payments made up to the date of death shall be refunded to the person eligible to receive survivor benefits, or a single payment shall be made to such person. (5) Any moneys a member pays for the purchase of service credit shall qualify for income tax deferral to the extent allowed by federal law.
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