S.F. 2098 Section 1. Section 97B.1A, subsection 8, paragraph b, 1 Code Supplement 2011, is amended by adding the following new 2 subparagraph: 3 NEW SUBPARAGRAPH . (10) Retired members. 4 Sec. 2. Section 97B.1A, subsection 26, paragraph b, 5 subparagraph (3), Code Supplement 2011, is amended to read as 6 follows: 7 (3) Effective July 1, 1992, “covered wages” does not 8 include wages to a member on or after the effective date of 9 the member’s retirement, except as otherwise permitted by the 10 system’s administrative rules , unless the member is reemployed, 11 as provided under section 97B.48A . 12 Sec. 3. NEW SECTION . 97B.11B Additional contributions. 13 Notwithstanding any provision of this chapter to the 14 contrary, an employer of an eligible retired member shall make 15 contributions to the system in an amount equal to the amount 16 the employer would have contributed for that eligible retired 17 member pursuant to section 97B.11 if the eligible retired 18 member was not excluded from coverage under this chapter. 19 Contributions made pursuant to this section shall not be 20 refunded to the retired member. For purposes of this section, 21 an “eligible retired member” is a retired member who would 22 otherwise be covered under this chapter if the retired member 23 was not excluded from the definition of employee as provided in 24 section 97B.1A, subsection 8. 25 Sec. 4. Section 97B.48A, subsections 1, 2, and 4, Code 2011, 26 are amended to read as follows: 27 1. a. If a retired member who has not reached the 28 retired member’s sixty-fifth birthday and who has a bona 29 fide retirement under this chapter is in regular full-time 30 employment with a covered employer during a calendar year, 31 the retired member’s retirement allowance shall be reduced 32 by fifty cents for each dollar the retired member earns over 33 the limit provided in this subsection . However, employment 34 is not full-time employment with a covered employer until the 35 -1- LSB 5252XS (2) 84 ec/sc 1/ 4

S.F. 2098 retired member receives remuneration in an amount in excess of 1 thirty thousand dollars for a calendar year, or an amount equal 2 to the amount of remuneration permitted for a calendar year 3 for persons under sixty-five years of age before a reduction 4 in federal social security retirement benefits is required, 5 whichever is higher. Effective the first of the month in which 6 a retired member attains the age of sixty-five years, a retired 7 member may receive a retirement allowance without a reduction 8 after return to covered employment with a covered employer 9 regardless of the amount of remuneration received. 10 b. If a retired member dies and the full amount of the 11 reduction from retirement allowances required under this 12 subsection has not been paid, the remaining amounts shall 13 be deducted from the payments made, if any, to the retired 14 member’s designated beneficiary or contingent annuitant. 15 If the retired member has selected an option under which 16 remaining payments are not required or the remaining payments 17 are insufficient to satisfy the full amount of the reduction 18 from retirement allowances required under this subsection , 19 the amount still unpaid shall be a claim against the member’s 20 estate. 21 c. For purposes of this subsection and not for purposes of 22 determining a retiree’s covered wages, remuneration paid on 23 and after July 1, 2007, includes noncovered contributions to a 24 defined contribution plan qualified under Internal Revenue Code 25 section 401(a), a tax-deferred annuity qualified under Internal 26 Revenue Code section 403(b), an eligible deferred compensation 27 plan qualified under Internal Revenue Code section 457, or any 28 other tax qualified or nonqualified investment vehicle, that 29 is provided by an employer to a retiree who has been or will 30 be reemployed in covered regular full-time employment with a 31 covered employer . 32 2. Effective January 1, 1991, a retired member of any age 33 may receive a retirement allowance after return to covered 34 employment with a covered employer , regardless of the amount 35 -2- LSB 5252XS (2) 84 ec/sc 2/ 4

S.F. 2098 of remuneration received, if the covered employment consists 1 of holding an elective office. 2 4. The system shall pay to the a retired member the 3 accumulated contributions of the retired member and all of 4 the employer contributions made prior to July 1, 2012 , plus 5 interest plus interest dividends as provided in section 97B.70 , 6 for all completed calendar years, compounded as provided in 7 section 97B.70 , on the covered wages earned by a retired member 8 prior to July 1, 2012, that are not used in the calculation 9 or recalculation of the retirement allowance of a member. A 10 payment of contributions to a retired member pursuant to this 11 subsection shall be considered a retirement payment and not a 12 refund and the retired member shall not be eligible to buy back 13 the period of reemployment service. 14 Sec. 5. Section 97B.52A, subsection 1, paragraph c, Code 15 2011, is amended by adding the following new subparagraph: 16 NEW SUBPARAGRAPH . (3) For purposes of this paragraph “c” , 17 “covered employment” means employment by a retired member with 18 a covered employer that would be covered employment under 19 this chapter if the retired member was not excluded from 20 the definition of employee as provided in section 97B.1A, 21 subsection 8. 22 EXPLANATION 23 This bill provides that retired members under the Iowa 24 public employees’ retirement system (IPERS) are excluded from 25 the definition of employee for purposes of IPERS. By excluding 26 retired members from the definition of employee, a retired 27 member returning to employment with an IPERS-covered employer 28 shall not become a member of the system for that employment 29 and shall not make contributions to the system or be granted 30 membership service for that employment. Under current law, a 31 retired member who returns to employment with an IPERS-covered 32 employer can be considered an employee for purposes of IPERS 33 coverage. 34 New Code section 97B.11B provides that an employer of a 35 -3- LSB 5252XS (2) 84 ec/sc 3/ 4

S.F. 2098 retired member shall make employer contributions to the system 1 for that member in an amount equal to what the employer would 2 have been required to contribute if the retired member was not 3 excluded from the definition of employee as provided in this 4 bill. Contributions made pursuant to this Code section shall 5 not be refunded to the retired member. 6 Code section 97B.48A, concerning reemployment, is amended 7 to provide that current requirements applicable to retired 8 reemployed members apply to retired members who return to 9 full-time employment with an IPERS-covered employer. The 10 provision allowing the refund of accumulated contributions made 11 on behalf of retired reemployed members is amended to provide 12 that only employer contributions made prior to July 1, 2012, 13 can be refunded. 14 Code section 97B.52A, concerning bona fide retirement, is 15 amended to provide that covered employment for purposes of 16 determining a bona fide retirement for a retired member means 17 employment that would have been covered employment under IPERS 18 if the retired member was not excluded from the definition of 19 employee as provided in the bill. 20 -4- LSB 5252XS (2) 84 ec/sc 4/ 4