permissive service credit
(3) Permissive service credit For purposes of this subsection— (A) In general The term “permissive service credit” means service credit— (i) recognized by the governmental plan for purposes of calculating a participant’s benefit under the plan, (ii) which such participant has not received under such governmental plan, and (iii) which such participant may receive only by making a voluntary additional contribution, in an amount determined under such governmental plan, which does not exceed the amount necessary to fund the benefit attributable to such service credit. Such term may include service credit for periods for which there is no performance of service, and, notwithstanding clause (ii), may include service credited in order to provide an increased benefit for service credit which a participant is receiving under the plan. (B) Limitation on nonqualified service credit A plan shall fail to meet the requirements of this section if— (i) more than 5 years of nonqualified service credit are taken into account for purposes of this subsection, or (ii) any nonqualified service credit is taken into account under this subsection before the employee has at least 5 years of participation under the plan. (C) Nonqualified service credit For purposes of subparagraph (B), the term “nonqualified service credit” means permissive service credit other than that allowed with respect to— (i) service (including parental, medical, sabbatical, and similar leave) as an employee of the Government of the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than military service or service for credit which was obtained as a result of a repayment described in subsection (k)(3)), (ii) service (including parental, medical, sabbatical, and similar leave) as an employee (other than as an employee described in clause (i)) of an educational organization described in section 170(b)(1)(A)(ii) which is a public, private, or sectarian school which provides elementary or secondary education (through grade 12), or a comparable level of education, as determined under the applicable law of the jurisdiction in which the service was performed, (iii) service as an employee of an association of employees who are described in clause (i), or (iv) military service (other than qualified military service under section 414(u) ) recognized by such governmental plan. In the case of service described in clause (i), (ii), or (iii), such service will be nonqualified service if recognition of such service would cause a participant to receive a retirement benefit for the same service under more than one plan. (D) Special rules for trustee-to-trustee transfers In the case of a trustee-to-trustee transfer to which section 403(b)(13)(A) or 457(e)(17)(A) applies (without regard to whether the transfer is made between plans maintained by the same employer)— (i) the limitations of subparagraph (B) shall not apply in determining whether the transfer is for the purchase of permissive service credit, and (ii) the distribution rules applicable under this title to the defined benefit governmental plan to which any amounts are so transferred shall apply to such amounts and any benefits attributable to such amounts.