38-937. Termination of employer's participation; prefunding plan termination
A. The board may terminate the participation of a participating employer in the prefunding plan if any of the following applies:
1. The board determines that all obligations of a participating employer to pay required pension contributions in accordance with the terms of the applicable defined pension plan of the participating employer have been satisfied in full by payment or by defeasance with no remaining risk regarding the amounts to be paid or the value of the assets held in the prefunding plan.
2. A participating employer elects to cease to participate in the prefunding plan.
3. The board finds that the participating employer has failed to satisfy the terms and conditions required by this article, by board rules or by the contract between the governing body of the participating employer and the board.
4. The prefunding plan is terminated by the board or the prefunding plan otherwise terminates.
B. If the board terminates the participation of a participating employer in the prefunding plan as described in subsection A, paragraph 1, 2 or 3 of this section, any assets attributable to that participating employer's transfers into the prefunding plan, including any earnings on such assets, after the payment of any obligation of that participating employer owed to the prefunding plan for reasonable administrative costs, shall be transferred to the system to pay the participating employer's required pension contributions under the applicable defined benefit pension. Any remaining monies in excess of the amount necessary to satisfy the participating employer's required pension contributions shall be transferred to the participating employer only if both of the following apply:
1. The transfer does not jeopardize the tax-exempt status of the prefunding plan's income.
2. The transfer complies with the requirements under the applicable governmental accounting standards.
C. If the prefunding plan is terminated as described in subsection A, paragraph 4 of this section, the assets attributable to a participating employer's transfers into the prefunding plan, including any earnings on such assets, after the payment of any obligation of that participating employer owed to the prefunding plan for reasonable administrative costs, shall be transferred to the system to pay the participating employer's required pension contributions. Any remaining monies in excess of the amount necessary to satisfy the participating employer's required pension contributions shall be transferred to the participating employer if the transfer complies with subsection B, paragraphs 1 and 2 of this section.