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House Amendment 5515

Amendment Text

PAG LIN
  1  1    Amend Senate File 2245, as amended, passed, and
  1  2 reprinted by the Senate, as follows:
  1  3    #1.  By striking everything after the enacting
  1  4 clause and inserting the following:  
  1  5                       "DIVISION I
  1  6    IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (IPERS)
  1  7    Section 1.  Section 97B.4, unnumbered paragraph 1,
  1  8 Code 1995, is amended to read as follows:
  1  9    The department, through the chief investment
  1 10 officer and chief benefits officer, shall administer
  1 11 this chapter.  The department may adopt, amend, or
  1 12 rescind rules, employ persons, execute contracts with
  1 13 outside parties, make expenditures, require reports,
  1 14 make investigations, and take other action it deems
  1 15 necessary for the administration of the system in
  1 16 conformity with the requirements of this chapter, the
  1 17 applicable provisions of the Internal Revenue Code,
  1 18 and all other applicable federal and state laws.  The
  1 19 rules shall be effective upon compliance with chapter
  1 20 17A.  Not later than the fifteenth day of December of
  1 21 each year, the department shall submit to the governor
  1 22 a report covering the administration and operation of
  1 23 this chapter during the preceding fiscal year and
  1 24 shall make recommendations for amendments to this
  1 25 chapter.  The report shall include a balance sheet of
  1 26 the moneys in the Iowa public employees' retirement
  1 27 fund.
  1 28    Sec. 2.  Section 97B.7, subsection 2, paragraph b,
  1 29 unnumbered paragraphs 1 through 3, Code 1995, are
  1 30 amended to read as follows:
  1 31    To invest the portion of the retirement fund which
  1 32 in the judgment of the department is not needed for
  1 33 current payment of benefits under this chapter.  The
  1 34 department shall execute the disposition and
  1 35 investment of moneys in the retirement fund in
  1 36 accordance with the investment policy and goal
  1 37 statement established by the investment board.  In
  1 38 establishing the investment policy of the fund and the
  1 39 investment of the fund, the department and investment
  1 40 board shall exercise the judgment and care, under the
  1 41 circumstances then prevailing, which persons of
  1 42 prudence, discretion, and intelligence exercise in the
  1 43 management of their own affairs, not for the purpose
  1 44 of speculation, but with regard to the permanent
  1 45 disposition of the funds, considering the probable
  1 46 income, as well as the probable safety, of their
  1 47 capital.  Within the limitations of the standard
  1 48 prescribed in this section, the treasurer of state,
  1 49 the department, and the board may acquire and retain
  1 50 every kind of property and every kind of investment
  2  1 which persons of prudence, discretion, and
  2  2 intelligence acquire or retain for their own account.
  2  3    The department and investment board shall give
  2  4 appropriate consideration to those facts and
  2  5 circumstances that the department and investment board
  2  6 know or should know are relevant to the particular
  2  7 investment or investment policy involved, including
  2  8 the role the investment plays in the total value of
  2  9 the retirement fund.
  2 10    For the purposes of this paragraph, appropriate
  2 11 consideration includes, but is not limited to, a
  2 12 determination by the department and investment board
  2 13 that the particular investment or investment policy is
  2 14 reasonably designed to further the purposes of the
  2 15 retirement system, taking into consideration the risk
  2 16 of loss and the opportunity for gain or other return
  2 17 associated with the investment or investment policy
  2 18 and consideration of the following factors as they
  2 19 relate to the retirement fund:
  2 20    Sec. 3.  Section 97B.7, subsection 2, paragraph b,
  2 21 unnumbered paragraph 5, Code 1995, is amended to read
  2 22 as follows:
  2 23    Except as provided in section 97B.4, if there is
  2 24 loss to the fund, the treasurer, the department, and
  2 25 the board are not personally liable, and the loss
  2 26 shall be charged against the retirement fund.  There
  2 27 is appropriated from the retirement fund the amount
  2 28 required to cover a loss.  Expenses incurred in the
  2 29 sale and purchase of securities belonging to the
  2 30 retirement fund shall be charged to the retirement
  2 31 fund, and there is appropriated from the retirement
  2 32 fund the amount required for the expenses incurred.
  2 33 Investment management expenses shall be charged to the
  2 34 investment income of the retirement fund, and there is
  2 35 appropriated from the retirement fund the amount
  2 36 required for the investment management expenses,
  2 37 subject to the limitations stated in this unnumbered
  2 38 paragraph.  The amount appropriated for a fiscal year
  2 39 under this unnumbered paragraph shall not exceed one-
  2 40 half four-tenths of one percent of the market value of
  2 41 the retirement fund.  The department shall report the
  2 42 investment management expenses for a fiscal year as a
  2 43 percent of the market value of the retirement fund in
  2 44 the annual report to the governor required in section
  2 45 97B.4.  A person who has signed a contract with the
  2 46 department for investment management purposes shall
  2 47 meet the requirements for doing business in Iowa
  2 48 sufficient to be subject to tax under rules of the
  2 49 department of revenue and finance.
  2 50    Sec. 4.  Section 97B.11, Code 1995, is amended to
  3  1 read as follows:
  3  2    97B.11  CONTRIBUTIONS BY EMPLOYER AND EMPLOYEE.
  3  3    Each employer shall deduct from the wages of each
  3  4 member of the system a contribution in the amount of
  3  5 three and seven-tenths percent of the covered wages
  3  6 paid by the employer, until the member's termination
  3  7 or retirement from employment, whichever is earlier.
  3  8 The contributions of the employer shall be in the
  3  9 amount of five and seventy-five hundredths percent of
  3 10 the covered wages of the member.
  3 11    If the total of the contributions to be deducted
  3 12 from the wages of a member and contributions picked up
  3 13 and paid by the employer shall not exceed one dollar
  3 14 for any calendar quarter, contributions shall not be
  3 15 deducted or paid concerning that member and the member
  3 16 shall not receive credit for membership service for
  3 17 that quarter.
  3 18    Sec. 5.  Section 97B.14, Code 1995, is amended to
  3 19 read as follows:
  3 20    97B.14  CONTRIBUTIONS FORWARDED.
  3 21    Contributions deducted from the wages of the member
  3 22 or under section 97B.11 prior to January 1, 1995,
  3 23 member contributions picked up by the employer under
  3 24 section 97B.11A beginning January 1, 1995, and the
  3 25 employer's contribution shall be forwarded to the
  3 26 department for recording and deposited with the
  3 27 treasurer of the state to the credit of the Iowa
  3 28 public employees' retirement fund.  Contributions
  3 29 shall be remitted monthly, if total contributions by
  3 30 both employee and employer amount to one hundred
  3 31 dollars or more each month, and shall be otherwise
  3 32 paid in such manner, at such times and under such
  3 33 conditions, either by copies of payrolls or other
  3 34 methods necessary or helpful in securing proper
  3 35 identification of the member, as may be prescribed by
  3 36 the department.
  3 37    Sec. 6.  Section 97B.15, Code 1995, is amended to
  3 38 read as follows:
  3 39    97B.15  RULES, POLICIES, AND PROCEDURES.
  3 40    The department may adopt rules under chapter 17A
  3 41 and establish procedures, not inconsistent with this
  3 42 chapter, which are necessary or appropriate to
  3 43 implement this chapter and shall adopt reasonable and
  3 44 proper rules to regulate and provide for the nature
  3 45 and extent of the proofs and evidence and the method
  3 46 of taking and furnishing the proofs and evidence in
  3 47 order to establish the right to benefits under this
  3 48 chapter.  The department may adopt rules, and take
  3 49 action based on the rules, to conform the requirements
  3 50 for receipt of retirement benefits under this chapter
  4  1 to the mandates of applicable federal statutes and
  4  2 regulations.
  4  3    Prior to the adoption of rules, the department may
  4  4 establish interim written policies and procedures, and
  4  5 take action based on the policies and procedures, to
  4  6 conform the requirements for receipt of retirement
  4  7 benefits under this chapter to the applicable
  4  8 requirements of federal law.
  4  9    Sec. 7.  Section 97B.17, unnumbered paragraph 1,
  4 10 Code 1995, is amended to read as follows:
  4 11    The department shall establish and maintain records
  4 12 of each member, including but not limited to, the
  4 13 amount of wages of each member, the contribution of
  4 14 each member with interest, and interest dividends
  4 15 credited.  The records may be maintained in paper,
  4 16 magnetic, or electronic form, including optical disk
  4 17 storage.  These records are the basis for the
  4 18 compilation of the retirement benefits provided under
  4 19 this chapter.  The following records maintained under
  4 20 this chapter containing personal identifiable
  4 21 information are not public records for the purposes of
  4 22 chapter 22:
  4 23    Sec. 8.  Section 97B.17, Code 1995, is amended by
  4 24 adding the following new unnumbered paragraph:
  4 25    NEW UNNUMBERED PARAGRAPH.  Notwithstanding any
  4 26 provisions of chapter 22 to the contrary, the
  4 27 department's records may be released to any political
  4 28 subdivision, instrumentality, or other agency of the
  4 29 state solely for use in a civil or criminal law
  4 30 enforcement activity pursuant to the requirements of
  4 31 this paragraph.  To obtain the records, the political
  4 32 subdivision, instrumentality, or agency shall, in
  4 33 writing, certify that the activity is authorized by
  4 34 law, provide a written description of the information
  4 35 desired, and describe the law enforcement activity for
  4 36 which the information is sought.  The department shall
  4 37 not be civilly or criminally liable for the release or
  4 38 rerelease of records in accordance with this
  4 39 paragraph.
  4 40    Sec. 9.  Section 97B.25, Code 1995, is amended to
  4 41 read as follows:
  4 42    97B.25  APPLICATIONS FOR BENEFITS.
  4 43    A representative designated by the chief benefits
  4 44 officer and referred to in this chapter as a
  4 45 retirement benefits specialist shall promptly examine
  4 46 applications for retirement benefits and on the basis
  4 47 of facts found shall determine whether or not the
  4 48 claim is valid and if valid, the month with respect to
  4 49 which benefits shall commence, the monthly benefit
  4 50 amount payable, and the maximum duration.  The
  5  1 retirement benefits specialist shall promptly notify
  5  2 the applicant and any other interested party of the
  5  3 decision and the reasons.  Unless the applicant or
  5  4 other interested party, within thirty calendar days
  5  5 after the notification was mailed to the applicant's
  5  6 or party's last known address, files an appeal as
  5  7 provided in section 97B.20A, the decision is final and
  5  8 benefits shall be paid or denied in accord with the
  5  9 decision.  A retirement application shall not be
  5 10 amended or revoked by the member once the first
  5 11 retirement allowance is paid.  A member's death during
  5 12 the first month of entitlement shall not invalidate an
  5 13 approved application.
  5 14    Sec. 10.  Section 97B.39, Code 1995, is amended to
  5 15 read as follows:
  5 16    97B.39  RIGHTS NOT TRANSFERABLE – NOT OR SUBJECT
  5 17 TO LEGAL PROCESS – EXCEPTIONS.
  5 18    The right of any person to any future payment under
  5 19 this chapter is not transferable or assignable, at law
  5 20 or in equity, and the moneys paid or payable or rights
  5 21 existing under this chapter are not subject to
  5 22 execution, levy, attachment, garnishment, or other
  5 23 legal process, or to the operation of any bankruptcy
  5 24 or insolvency law except for the purposes of enforcing
  5 25 child, spousal, or medical support obligations or
  5 26 marital property orders.  For the purposes of
  5 27 enforcing child, spousal, or medical support
  5 28 obligations, the garnishment or attachment of or the
  5 29 execution against compensation due a person under this
  5 30 chapter 97B shall not exceed the amount specified in
  5 31 15 U.S.C. } 1673(b).  The department shall comply with
  5 32 the provisions of a marital property order requiring
  5 33 the selection of a particular benefit option,
  5 34 designated beneficiary, or contingent annuitant if the
  5 35 selection is otherwise authorized by this chapter and
  5 36 the member has not received payment of the member's
  5 37 first retirement allowance.  However, a marital
  5 38 property order shall not require the payment of
  5 39 benefits to an alternative payee prior to the member's
  5 40 retirement, prior to the date the member elects to
  5 41 receive a lump sum distribution of accumulated
  5 42 contributions pursuant to section 97B.53, or in an
  5 43 amount that exceeds the benefits the member would
  5 44 otherwise be eligible to receive pursuant to this
  5 45 chapter.
  5 46    Sec. 11.  Section 97B.41, subsection 2, Code
  5 47 Supplement 1995, is amended to read as follows:
  5 48    2.  "Accumulated contributions" means the total
  5 49 obtained as of any date, by accumulating each
  5 50 individual contribution by the member at two percent
  6  1 with interest plus interest dividends as provided in
  6  2 section 97B.70, for all completed calendar years and
  6  3 for any completed calendar year for which the interest
  6  4 dividend has not been declared and for completed
  6  5 months of partially completed calendar years at two
  6  6 percent interest plus the interest dividend rate
  6  7 calculated for the previous year, compounded annually,
  6  8 from the end of the calendar year in which such
  6  9 contribution was made to the first day of the month of
  6 10 such date as provided in section 97B.70.
  6 11    Sec. 12.  Section 97B.41, subsection 8, paragraph
  6 12 b, subparagraph (6), Code Supplement 1995, is amended
  6 13 to read as follows:
  6 14    (6)  Employees hired for temporary employment of
  6 15 less than six months or one thousand and forty hours
  6 16 in a calendar year.  An employee who works for an
  6 17 employer for six or more months in a calendar year or
  6 18 who works for an employer for more than one thousand
  6 19 forty hours in a calendar year is not a temporary
  6 20 employee under this subparagraph.  Adjunct instructors
  6 21 are temporary employees for the purposes of this
  6 22 chapter.  As used in this section, unless the context
  6 23 otherwise requires, "adjunct instructors" means
  6 24 instructors employed by a community college or a
  6 25 university governed by the state board of regents
  6 26 without a continuing contract, whose teaching load
  6 27 does not exceed one-half time for two full semesters
  6 28 or three full quarters per calendar year.
  6 29    Sec. 13.  Section 97B.41, subsection 8, paragraph
  6 30 b, Code Supplement 1995, is amended by adding the
  6 31 following new subparagraph:
  6 32    NEW SUBPARAGRAPH.  (20)  Persons employed through
  6 33 any program described in section 15.225, subsection 1,
  6 34 and provided by the Iowa conservation corps.
  6 35    Sec. 14.  Section 97B.41, Code Supplement 1995, is
  6 36 amended by adding the following new subsection:
  6 37    NEW SUBSECTION.  10A.  "Internal Revenue Code"
  6 38 means the Internal Revenue Code as defined in section
  6 39 422.3.
  6 40    Sec. 15.  Section 97B.41, subsection 12, Code
  6 41 Supplement 1995, is amended to read as follows:
  6 42    12.  "Membership service" means service rendered by
  6 43 a member after July 4, 1953.  Years of membership
  6 44 service shall be counted to the complete quarter
  6 45 calendar year.  However, membership service for a
  6 46 calendar year shall not include more than four
  6 47 quarters.  In determining a member's period of
  6 48 membership service, the department shall combine all
  6 49 periods of service for which the member has made
  6 50 contributions.  If the department has not maintained
  7  1 the accumulated contribution account of the member for
  7  2 a period of service, as provided pursuant to section
  7  3 97B.53, subsection 6, the department shall credit the
  7  4 member for the service if the member submits
  7  5 satisfactory proof to the department that the member
  7  6 did make the contributions for the period of service
  7  7 and did not take a refund for the period of service.
  7  8 However, the department shall not implement the
  7  9 amendments to this subsection, as enacted in 1994 Iowa
  7 10 Acts, chapter 1183, unless and until the department
  7 11 determines that the most recent annual actuarial
  7 12 valuation of the retirement system indicates that the
  7 13 employer and employee contribution rates in effect
  7 14 under section 97B.11 can absorb the amendments to this
  7 15 subsection and to section 97B.53, subsections 3 and 7,
  7 16 section 97B.53, subsection 6, unnumbered paragraph 1,
  7 17 and section 97B.70, by enacting a new subsection 4,
  7 18 contained in 1994 Iowa Acts, chapter 1183, after
  7 19 meeting the other established priorities of the
  7 20 system.  Until the amendments are implemented, the
  7 21 department shall continue to implement the provisions
  7 22 of section 97B.41, subsection 12, Code Supplement
  7 23 1993.  As used in this subsection, unless the context
  7 24 otherwise requires, "other established priorities of
  7 25 the system" means that commencing January 1 following
  7 26 the most recent annual actuarial valuation of the
  7 27 system, the department has increased the covered wage
  7 28 limitation from the previous year by three thousand
  7 29 dollars, in accordance with section 97B.41, subsection
  7 30 20, paragraph "b", subparagraph (11), and that the
  7 31 department has implemented the amendments to section
  7 32 97B.66, unnumbered paragraphs 1 and 2, section 97B.72,
  7 33 unnumbered paragraphs 1 and 2, section 97B.72A,
  7 34 subsection 1, unnumbered paragraph 1, section 97B.73A,
  7 35 unnumbered paragraph 1, and section 97B.74, unnumbered
  7 36 paragraphs 1 and 2, contained in 1994 Iowa Acts,
  7 37 chapter 1183.
  7 38    Sec. 16.  Section 97B.41, Code Supplement 1995, is
  7 39 amended by adding the following new subsection:
  7 40    NEW SUBSECTION.  13A.  "Regular service" means
  7 41 service for an employer other than special service.
  7 42    Sec. 17.  Section 97B.41, Code Supplement 1995, is
  7 43 amended by adding the following new subsection:
  7 44    NEW SUBSECTION.  14A.  "Retirement" means that
  7 45 period of time beginning when a member who has filed
  7 46 an approved application for a retirement allowance has
  7 47 survived into at least the first day of the member's
  7 48 first month of entitlement and ending when the member
  7 49 dies.
  7 50    Sec. 18.  Section 97B.41, subsection 15, paragraphs
  8  1 a and b, Code Supplement 1995, are amended to read as
  8  2 follows:
  8  3    a.  Service in the armed forces of the United
  8  4 States, if the employee was employed by the employer
  8  5 immediately prior to entry into the armed forces, and
  8  6 if the employee was released from service and returns
  8  7 to covered employment with the employer within twelve
  8  8 months of the date on which the employee has the right
  8  9 of release from service or within a longer period as
  8 10 provided required by the applicable laws of the United
  8 11 States.
  8 12    b.  Leave of absence or vacation authorized by the
  8 13 employer for a period not exceeding twelve months.  A
  8 14 leave of absence authorized pursuant to the
  8 15 requirements of the federal Family and Medical Leave
  8 16 Act of 1993 is considered a leave of absence
  8 17 authorized by the employer.
  8 18    Sec. 19.  Section 97B.41, Code Supplement 1995, is
  8 19 amended by adding the following new subsection:
  8 20    NEW SUBSECTION.  16A.  "Special service" means
  8 21 service for an employer while employed in a protection
  8 22 occupation as provided in section 97B.49, subsection
  8 23 16, paragraph "a", and as a county sheriff, deputy
  8 24 sheriff, or airport fire fighter as provided in
  8 25 section 97B.49, subsection 16, paragraph "b".
  8 26    Sec. 20.  Section 97B.41, subsection 18, Code
  8 27 Supplement 1995, is amended to read as follows:
  8 28    18.  a.  "Three-year average covered wage" means a
  8 29 member's covered wages averaged for the highest three
  8 30 years of the member's service, except as otherwise
  8 31 provided in this subsection.  The highest three years
  8 32 of a member's covered wages shall be determined using
  8 33 calendar years.  However, if a member's final quarter
  8 34 of a year of employment does not occur at the end of a
  8 35 calendar year, the department may determine the wages
  8 36 for the third year by computing the average quarter of
  8 37 all quarters from the member's highest calendar year
  8 38 of covered wages not being used in the selection of
  8 39 the two highest years and using the computed average
  8 40 quarter for each quarter in the third year in which no
  8 41 wages have been reported in combination with the final
  8 42 quarter or quarters of the member's service to create
  8 43 a full year.  However, the department shall not use
  8 44 the member's final quarter of wages if using that
  8 45 quarter would reduce the member's three-year average
  8 46 covered wage.  If the three-year average covered wage
  8 47 of a member exceeds the highest maximum covered wages
  8 48 in effect for a calendar year during the member's
  8 49 period of service, the three-year average covered wage
  8 50 of the member shall be reduced to the highest maximum
  9  1 covered wages in effect during the member's period of
  9  2 service.
  9  3    b.  Notwithstanding any other provisions of this
  9  4 subsection to the contrary, the three-year average
  9  5 covered wage shall be computed as follows for the
  9  6 following members:
  9  7    (1)  For a member who retires during the calendar
  9  8 year beginning January 1, 1997, and whose three-year
  9  9 average covered wage at the time of retirement exceeds
  9 10 forty-eight thousand dollars, the member's covered
  9 11 wages averaged for the highest four years of the
  9 12 member's service or forty-eight thousand dollars,
  9 13 whichever is greater.
  9 14    (2)  For a member who retires during the calendar
  9 15 year beginning January 1, 1998, and whose three-year
  9 16 average covered wage at the time of retirement exceeds
  9 17 fifty-two thousand dollars, the member's covered wages
  9 18 averaged for the highest five years of the member's
  9 19 service or fifty-two thousand dollars, whichever is
  9 20 greater.
  9 21    (3)  For a member who retires during the calendar
  9 22 year beginning January 1, 1999, and whose three-year
  9 23 average covered wage at the time of retirement exceeds
  9 24 fifty-five thousand dollars, the member's covered
  9 25 wages averaged for the highest six years of the
  9 26 member's service or fifty-five thousand dollars,
  9 27 whichever is greater.
  9 28    (4)  For a member who retires on or after January
  9 29 1, 2000, but before January 1, 2003, and whose three-
  9 30 year average covered wage at the time of retirement
  9 31 exceeds fifty-five thousand dollars, the member's
  9 32 covered wages averaged for the highest seven years of
  9 33 the member's service or fifty-five thousand dollars,
  9 34 whichever is greater.
  9 35    For purposes of this paragraph, the highest years
  9 36 of the member's service shall be determined using
  9 37 calendar years and may be determined using one
  9 38 computed year calculated in the manner and subject to
  9 39 the restrictions provided in paragraph "a".
  9 40    Sec. 21.  Section 97B.41, subsection 20, paragraph
  9 41 b, subparagraph (11), unnumbered paragraphs 1 and 2,
  9 42 Code Supplement 1995, are amended by striking the
  9 43 unnumbered paragraphs and inserting in lieu thereof
  9 44 the following:
  9 45    (11)  For the calendar year beginning January 1,
  9 46 1991, wages not in excess of thirty-one thousand
  9 47 dollars.
  9 48    (11A)  For the calendar year beginning January 1,
  9 49 1992, wages not in excess of thirty-four thousand
  9 50 dollars.
 10  1    (11B)  For the calendar year beginning January 1,
 10  2 1993, wages not in excess of thirty-five thousand
 10  3 dollars.
 10  4    (11C)  For the calendar year beginning January 1,
 10  5 1994, wages not in excess of thirty-eight thousand
 10  6 dollars.
 10  7    (11D)  For the calendar year beginning January 1,
 10  8 1995, wages not in excess of forty-one thousand
 10  9 dollars.
 10 10    (11E)  For the calendar year beginning January 1,
 10 11 1996, wages not in excess of forty-four thousand
 10 12 dollars.
 10 13    (11F)  Commencing with the calendar year beginning
 10 14 January 1, 1997, and for each subsequent calendar
 10 15 year, wages not in excess of the amount permitted for
 10 16 that year under section 401(a)(17) of the Internal
 10 17 Revenue Code.
 10 18    Sec. 22.  Section 97B.41, subsection 20, paragraph
 10 19 b, subparagraph (11), unnumbered paragraph 3, Code
 10 20 Supplement 1995, is amended to read as follows:
 10 21    Notwithstanding any other provision of this chapter
 10 22 providing for the payment of the benefits provided in
 10 23 section 97B.49, subsection 16 or 17, the department
 10 24 shall establish the covered wages limitation which
 10 25 applies to members covered under section 97B.49,
 10 26 subsection 16 or 17, at the same level as is
 10 27 established under this subparagraph for other members
 10 28 of the system.
 10 29    Sec. 23.  Section 97B.42, unnumbered paragraph 1,
 10 30 Code 1995, is amended to read as follows:
 10 31    Each employee whose employment commences after July
 10 32 4, 1953, or who has not qualified for credit for prior
 10 33 service rendered prior to July 4, 1953, or any
 10 34 publicly elected official of the state or any of its
 10 35 political subdivisions shall become a member upon the
 10 36 first day in which such employee is employed.  The
 10 37 employee shall continue to be an active member so long
 10 38 as the employee continues in covered employment.  The
 10 39 employee shall cease to be an active member if the
 10 40 employee joins another retirement system in the state
 10 41 which is maintained in whole or in part by public
 10 42 contributions or payments and receives retirement
 10 43 credit for service in that other system for the same
 10 44 position previously covered under this chapter.  If an
 10 45 employee joins another publicly maintained retirement
 10 46 system and ceases to be an active member under this
 10 47 chapter, the employee may elect to leave the
 10 48 employee's accumulated contributions in the retirement
 10 49 fund or receive a refund of the employee's accumulated
 10 50 contributions in the manner provided for members who
 11  1 are terminating covered employment pursuant to section
 11  2 97B.53.  However, if an employee joins another
 11  3 publicly maintained retirement system and leaves the
 11  4 employee's accumulated contributions in the retirement
 11  5 fund, the employee shall not be eligible to receive
 11  6 retirement benefits until the employee has a bona fide
 11  7 retirement from employment with a covered employer as
 11  8 provided in section 97B.52A, or until the employee
 11  9 would otherwise be eligible to receive benefits upon
 11 10 attaining the age of seventy years as provided in
 11 11 section 97B.46.
 11 12    Sec. 24.  Section 97B.42, unnumbered paragraph 4,
 11 13 Code 1995, is amended to read as follows:
 11 14    Persons who are members of any other retirement
 11 15 system in the state which is maintained in whole or in
 11 16 part by public contributions other than persons who
 11 17 are covered under the provisions of chapter 97, Code
 11 18 1950, as amended by the Fifty-fourth General Assembly
 11 19 on the date of the repeal of said chapter, under the
 11 20 provisions of sections 97.50 through 97.53 shall not
 11 21 become members under this chapter while still actively
 11 22 participating in that other retirement system unless
 11 23 the persons do not receive retirement credit for
 11 24 service in that other system for the position to be
 11 25 covered under this chapter.
 11 26    Sec. 25.  Section 97B.42, unnumbered paragraph 5,
 11 27 Code 1995, is amended to read as follows:
 11 28    Nothing herein contained shall be construed to
 11 29 permit any person in public employment to be an active
 11 30 member of employer to make any public contributions or
 11 31 payments on behalf of an employee in the same position
 11 32 for the same period of time to both the Iowa public
 11 33 employees' retirement system and of any other
 11 34 retirement system in the state which is supported in
 11 35 whole or in part by public contributions or payments
 11 36 except as heretofore provided.
 11 37    Sec. 26.  Section 97B.42, Code 1995, is amended by
 11 38 adding the following new unnumbered paragraph:
 11 39    NEW UNNUMBERED PARAGRAPH.  For purposes of this
 11 40 section, a "retirement system in the state which is
 11 41 maintained in whole or in part by public contributions
 11 42 or payments" shall not include a deferred compensation
 11 43 plan established under section 509A.12 or a tax-
 11 44 sheltered annuity qualified under section 403(b) of
 11 45 the Internal Revenue Code.
 11 46    Sec. 27.  Section 97B.48, subsection 1, Code 1995,
 11 47 is amended to read as follows:
 11 48    1.  Retirement allowances shall be paid monthly,
 11 49 except that an allowance of less than six hundred
 11 50 dollars a year may, at the member's option, be paid as
 12  1 a lump sum in an actuarial equivalent amount equal to
 12  2 the sum of the member's and employer's accumulated
 12  3 contributions and the retirement dividends standing to
 12  4 the member's credit before December 31, 1966.  Receipt
 12  5 of the lump-sum payment by a member shall terminate
 12  6 any and all entitlement for the period of service
 12  7 covered of the member under this chapter.
 12  8    Sec. 28.  Section 97B.48A, subsection 1, Code 1995,
 12  9 is amended to read as follows:
 12 10    1.  If, after the first day of the month in which
 12 11 the member attains the age of fifty-five years and
 12 12 until the member's sixty-fifth birthday, a member who
 12 13 has not reached the member's sixty-fifth birthday and
 12 14 who has a bona fide retirement under this chapter is
 12 15 in regular full-time employment during a calendar
 12 16 year, the member's retirement allowance shall be
 12 17 suspended for as long as the member remains in
 12 18 employment for the remainder of that calendar year
 12 19 reduced by fifty cents for each dollar the member
 12 20 earns over the limit provided in this subsection.
 12 21 However, effective January 1, 1992, employment is not
 12 22 full-time employment until the member receives
 12 23 remuneration in an amount in excess of seven thousand
 12 24 four hundred forty dollars for a calendar year, or an
 12 25 amount equal to the amount of remuneration permitted
 12 26 for a calendar year for persons under sixty-five years
 12 27 of age before a reduction in federal Social Security
 12 28 retirement benefits is required, whichever is higher.
 12 29 Effective the first of the month in which a member
 12 30 attains the age of sixty-five years, a retired member
 12 31 may receive a retirement allowance without a reduction
 12 32 after return to covered employment regardless of the
 12 33 amount of remuneration received.
 12 34    If a member dies and the full amount of the
 12 35 reduction from retirement allowances required under
 12 36 this subsection has not been paid, the remaining
 12 37 amounts shall be deducted from the payments made, if
 12 38 any, to the member's designated beneficiary or
 12 39 contingent annuitant.  If the member has selected an
 12 40 option under which remaining payments are not required
 12 41 or the remaining payments are insufficient to satisfy
 12 42 the full amount of the reduction from retirement
 12 43 allowances required under this subsection, the amount
 12 44 still unpaid shall be a claim against the member's
 12 45 estate.
 12 46    Sec. 29.  Section 97B.48A, subsection 4, Code 1995,
 12 47 is amended to read as follows:
 12 48    4.  The department shall pay to the member the
 12 49 accumulated contributions of the member and to the
 12 50 employer the employer contributions, plus two percent
 13  1 interest plus interest dividends as provided in
 13  2 section 97B.70, for all completed calendar years,
 13  3 compounded annually as provided in section 97B.70, on
 13  4 the covered wages earned by a retired member that are
 13  5 not used in the recalculation of the retirement
 13  6 allowance of a member.
 13  7    Sec. 30.  Section 97B.49, subsection 4, Code
 13  8 Supplement 1995, is amended by adding the following
 13  9 new unnumbered paragraph:
 13 10    NEW UNNUMBERED PARAGRAPH.  Effective January 1,
 13 11 1997, for members who retired on or after July 1,
 13 12 1953, and before July 1, 1990, with at least ten years
 13 13 of prior and membership service, the minimum monthly
 13 14 benefit payable at the normal retirement date for
 13 15 prior and membership service shall be two hundred
 13 16 dollars.  The minimum monthly benefit payable shall be
 13 17 increased by ten dollars for each year of prior and
 13 18 membership service beyond ten years, up to a maximum
 13 19 of twenty additional years of prior and membership
 13 20 service.  If benefits commenced on an early retirement
 13 21 date, the amount of the benefit shall be reduced in
 13 22 accordance with section 97B.50.  If an optional
 13 23 allowance was selected under section 97B.51, the
 13 24 amount payable shall be the actuarial equivalent of
 13 25 the minimum benefit.
 13 26    Sec. 31.  Section 97B.49, subsection 5, paragraph
 13 27 b, Code Supplement 1995, is amended to read as
 13 28 follows:
 13 29    b.  For each active or inactive vested member
 13 30 retiring on or after July 1, 1990, with four or more
 13 31 complete years of service, a monthly benefit shall be
 13 32 computed which is equal to one-twelfth of an amount
 13 33 equal to fifty-two percent the applicable percentage
 13 34 multiplier of the three-year average covered wage
 13 35 multiplied by a fraction of years of service.  The
 13 36 applicable percentage multiplier shall be the
 13 37 following:
 13 38    (1)  For active or inactive vested members retiring
 13 39 on or after July 1, 1990, but before July 1, 1991,
 13 40 fifty-two percent.
 13 41    (2)  For active or inactive vested members retiring
 13 42 on or after July 1, 1991, but before July 1, 1992,
 13 43 fifty-four percent.
 13 44    (3)  For active or inactive vested members retiring
 13 45 on or after July 1, 1992, but before July 1, 1993,
 13 46 fifty-six percent.
 13 47    (4)  For active or inactive vested members retiring
 13 48 on or after July 1, 1993, but before July 1, 1994,
 13 49 fifty-seven and four-tenths percent.
 13 50    (5)  For active or inactive vested members retiring
 14  1 on or after July 1, 1994, sixty percent.
 14  2    The applicable percentage multiplier shall be
 14  3 subject to adjustments as provided in paragraph "e".
 14  4    Commencing July 1, 1991, the department shall
 14  5 increase the percentage multiplier of the three-year
 14  6 average covered wage by an additional two percent each
 14  7 July 1 until reaching sixty percent of the three-year
 14  8 average covered wage if the annual actuarial valuation
 14  9 of the retirement system indicates for that year that
 14 10 the cost of this increase in the percentage of the
 14 11 three-year average covered wage used in computing
 14 12 retirement benefits can be absorbed within the
 14 13 employer and employee contribution rates in effect
 14 14 under section 97B.11.  However, commencing July 1,
 14 15 1994, if the annual actuarial valuation of the
 14 16 retirement system indicates that the employer and
 14 17 employee contribution rates in effect under section
 14 18 97B.11 can absorb an increase in the percentage
 14 19 multiplier in excess of two percent, the department
 14 20 shall increase the percentage multiplier for that year
 14 21 beyond two percent to the extent which the increase
 14 22 can be absorbed by the contribution rates in effect,
 14 23 not to exceed a maximum percentage multiplier of sixty
 14 24 percent.  The increase in the percentage multiplier
 14 25 for a year applies only to the members retiring on or
 14 26 after July 1 of the respective year.
 14 27    If the annual actuarial valuation of the retirement
 14 28 system in any year indicates that the full cost of the
 14 29 increase provided under this paragraph cannot be
 14 30 absorbed within the employer and employee contribution
 14 31 rates in effect under section 97B.11, the department
 14 32 shall reduce the increase to a level which the
 14 33 department determines can be so absorbed.
 14 34    Notwithstanding any other provision of this chapter
 14 35 providing for the payment of the benefits provided in
 14 36 subsection 16 or 17, the department shall establish
 14 37 apply the percentage multiplier which applies to
 14 38 members covered under subsection 16 or 17 at the same
 14 39 level as is established under this subsection for
 14 40 other members of the system, including any
 14 41 modification in the percentage multiplier as provided
 14 42 in paragraph "e".
 14 43    By November 15, 1995, the department shall set
 14 44 aside from other moneys in the retirement fund three
 14 45 million eight hundred sixty thousand dollars.  The
 14 46 moneys set aside shall be from the funds generated by
 14 47 the employer and employee contributions in effect
 14 48 under section 97B.11 that exceed the amount necessary
 14 49 to fund the system's existing liabilities, as
 14 50 determined in the annual actuarial valuation of the
 15  1 system as of June 30, 1995.  If the annual actuarial
 15  2 valuation indicates that the amount of the employer
 15  3 and employee contributions in excess of the amount
 15  4 necessary to fund existing liabilities is less than
 15  5 three million eight hundred sixty thousand dollars,
 15  6 the department shall set aside all funds that are
 15  7 available.  The funds set aside shall not be used in
 15  8 determining the covered wage limitation pursuant to
 15  9 section 97B.41, subsection 20, paragraph "b",
 15 10 subparagraph (11), on January 1, 1996.  However, any
 15 11 funds set aside which are not specifically dedicated
 15 12 to a purpose by the Seventy-sixth General Assembly
 15 13 shall be used in determining the covered wage
 15 14 limitation thereafter.
 15 15    In accordance with sections 97D.1 and 97D.4, it is
 15 16 the intent of the general assembly that once the goal
 15 17 of sixty percent of the three-year average covered
 15 18 wage is attained for a percentage multiplier, the
 15 19 department shall submit to the public retirement
 15 20 systems committee a plan for future benefit
 15 21 enhancements.  This plan shall include, but is not
 15 22 limited to, continuation in the increase in the
 15 23 covered wage ceiling until reaching fifty-five
 15 24 thousand dollars for a calendar year, providing for
 15 25 annual adjustments in the annual dividends paid to
 15 26 retired members as provided in section 97B.49,
 15 27 subsection 13, and providing for the indexing of
 15 28 terminated vested members' earned benefits at a rate
 15 29 of three percent per year calculated from the date of
 15 30 termination from covered employment until the date of
 15 31 retirement.
 15 32    Sec. 32.  Section 97B.49, subsection 5, Code
 15 33 Supplement 1995, is amended by adding the following
 15 34 new paragraph:
 15 35    NEW PARAGRAPH.  e.  Notwithstanding any other
 15 36 provisions of this section to the contrary, for
 15 37 members retiring on or after July 1, 1997, and whose
 15 38 three-year average covered wage exceeds fifty-five
 15 39 thousand dollars, the monthly benefit shall be
 15 40 calculated by multiplying the sum of the following
 15 41 amounts by the fractions of years of service for that
 15 42 member.
 15 43    (1)  For the first fifty-five thousand dollars of
 15 44 the member's three-year average covered wage, one-
 15 45 twelfth of an amount equal to the applicable
 15 46 percentage multiplier otherwise provided in this
 15 47 subsection multiplied by fifty-five thousand dollars.
 15 48    (2)  For that portion of a member's three-year
 15 49 average covered wage that exceeds fifty-five thousand
 15 50 dollars but is less than or equal to sixty-five
 16  1 thousand dollars, one-twelfth of an amount equal to
 16  2 the applicable percentage multiplier otherwise
 16  3 provided in this subsection, reduced by ten percentage
 16  4 points, multiplied by that portion.
 16  5    (3)  For that portion of a member's three-year
 16  6 average covered wage that exceeds sixty-five thousand
 16  7 dollars but is less than or equal to seventy-five
 16  8 thousand dollars, one-twelfth of an amount equal to
 16  9 the applicable percentage multiplier otherwise
 16 10 provided in this subsection, reduced by fifteen
 16 11 percentage points, multiplied by that portion.
 16 12    (4)  For that portion of a member's three-year
 16 13 average covered wage that exceeds seventy-five
 16 14 thousand dollars but is less than or equal to eighty-
 16 15 five thousand dollars, one-twelfth of an amount equal
 16 16 to the applicable percentage multiplier otherwise
 16 17 provided in this subsection, reduced by twenty
 16 18 percentage points, multiplied by that portion.
 16 19    (5)  For that portion of a member's three-year
 16 20 average covered wage that exceeds eighty-five thousand
 16 21 dollars but is less than or equal to ninety-five
 16 22 thousand dollars, one-twelfth of an amount equal to
 16 23 the applicable percentage multiplier otherwise
 16 24 provided in this subsection, reduced by thirty
 16 25 percentage points, multiplied by that portion.
 16 26    (6)  For that portion of a member's three-year
 16 27 average covered wage that exceeds ninety-five thousand
 16 28 dollars, one-twelfth of an amount equal to the
 16 29 applicable percentage multiplier otherwise provided in
 16 30 this subsection, reduced by forty percentage points,
 16 31 multiplied by that portion.
 16 32    The covered wage categories referred to in
 16 33 subparagraphs (1) through (6) of this paragraph and
 16 34 the fifty-five thousand dollar amount otherwise
 16 35 specified in this paragraph shall be increased by the
 16 36 department for each fiscal year, beginning July 1,
 16 37 1998, by an amount that represents the increase in the
 16 38 consumer price index during the previous twelve-month
 16 39 period ending on June 30, as published annually in the
 16 40 federal register by the federal department of labor,
 16 41 bureau of labor statistics.
 16 42    Sec. 33.  Section 97B.49, subsection 13, Code
 16 43 Supplement 1995, is amended to read as follows:
 16 44    13.  a.  A member who retired from the system
 16 45 between January 1, 1976, and June 30, 1982, or a
 16 46 contingent annuitant or beneficiary of such a member,
 16 47 shall receive with the November 1994 1996 and the
 16 48 November 1995 1997 monthly benefit payments a
 16 49 retirement dividend equal to one two hundred eighty-
 16 50 one twenty-three percent of the monthly benefit
 17  1 payment the member received for the preceding June, or
 17  2 the most recently received benefit payment, whichever
 17  3 is greater.  The retirement dividend does not affect
 17  4 the amount of a monthly benefit payment.
 17  5    b.  Each member who retired from the system between
 17  6 July 4, 1953, and December 31, 1975, or a contingent
 17  7 annuitant or beneficiary of such a member, shall
 17  8 receive with the November 1994 1996 and the November
 17  9 1995 1997 monthly benefit payments a retirement
 17 10 dividend equal to two hundred thirty-six ninety-two
 17 11 percent of the monthly benefit payment the member
 17 12 received for the preceding June, or the most recently
 17 13 received benefit payment, whichever is greater.  The
 17 14 retirement dividend does not affect the amount of a
 17 15 monthly benefit payment.
 17 16    c.  Notwithstanding the determination of the amount
 17 17 of a retirement dividend under paragraph "a", "b",
 17 18 "d", or "f", a retirement dividend shall not be less
 17 19 than twenty-five dollars.
 17 20    d.  A member who retired from the system between
 17 21 July 1, 1982, and June 30, 1986, or a contingent
 17 22 annuitant or beneficiary of such a member, shall
 17 23 receive with the November 1994 1996 and the November
 17 24 1995 1997 monthly benefit payments a retirement
 17 25 dividend equal to forty-nine seventy-four percent of
 17 26 the monthly benefit payment the member received for
 17 27 the preceding June, or the most recently received
 17 28 benefit payment, whichever is greater.  The retirement
 17 29 dividend does not affect the amount of a monthly
 17 30 benefit payment.
 17 31    e.  If the member dies on or after July 1 of the
 17 32 dividend year but before the payment date, the full
 17 33 amount of the retirement dividend for that year shall
 17 34 be paid to the designated beneficiary to the member's
 17 35 account, upon notification of the member's death.  If
 17 36 there is no beneficiary designated by the member, the
 17 37 department shall pay the dividend to the member's
 17 38 estate.  The beneficiary, or the representative of the
 17 39 member's estate, must apply for the dividend within
 17 40 two years after the dividend is payable or the
 17 41 dividend is forfeited.
 17 42    f.  A member who retired from the system between
 17 43 July 1, 1986, and June 30, 1990, or a contingent
 17 44 annuitant or beneficiary of such a member, shall
 17 45 receive with the November 1996 and the November 1997
 17 46 monthly benefit payments a retirement dividend in an
 17 47 amount determined by the general assembly equal to
 17 48 twenty-four percent of the monthly benefit payment the
 17 49 member received for the preceding June, or the most
 17 50 recently received benefit payment, whichever is
 18  1 greater.  The retirement dividend does not affect the
 18  2 amount of a monthly benefit payment.
 18  3    Sec. 34.  Section 97B.49, subsection 16, paragraph
 18  4 e, Code Supplement 1995, is amended to read as
 18  5 follows:
 18  6    e.  Annually, the department of personnel shall
 18  7 actuarially determine the cost of the additional
 18  8 benefits provided for members covered under paragraph
 18  9 "a" and the cost of the additional benefits provided
 18 10 for members covered under paragraph "b" as percents of
 18 11 the covered wages of the employees covered by this
 18 12 subsection.  Sixty percent of the cost shall be paid
 18 13 by the employers of employees covered under this
 18 14 subsection and forty percent of the cost shall be paid
 18 15 by the employees.  The employer and employee
 18 16 contributions required under this paragraph are in
 18 17 addition to the contributions paid under section
 18 18 sections 97B.11 and 97B.11A.
 18 19    Sec. 35.  Section 97B.49, subsection 16, Code
 18 20 Supplement 1995, is amended by adding the following
 18 21 new paragraph:
 18 22    NEW PARAGRAPH.  m.  For the fiscal year commencing
 18 23 July 1, 1992, and each succeeding fiscal year, the
 18 24 department of public safety shall pay to the
 18 25 department of personnel from funds appropriated to the
 18 26 department of public safety, the amount necessary to
 18 27 pay the employer share of the cost of the additional
 18 28 benefits provided to a fire prevention inspector peace
 18 29 officer pursuant to paragraph "d", subparagraph (8).
 18 30    Sec. 36.  Section 97B.49, Code Supplement 1995, is
 18 31 amended by adding the following new subsection:
 18 32    NEW SUBSECTION.  17.  a.  An active or inactive
 18 33 vested member, who is or has been employed in both
 18 34 special service and regular service, who retires on or
 18 35 after July 1, 1996, with four or more completed years
 18 36 of service and at the time of retirement is at least
 18 37 fifty-five years of age, may elect to receive, in lieu
 18 38 of the receipt of any other benefits under this
 18 39 section, a combined monthly retirement allowance equal
 18 40 to the sum of the following:
 18 41    (1)  One-twelfth of an amount equal to the
 18 42 applicable percentage multiplier established in
 18 43 subsection 5 of the member's three-year average
 18 44 covered wage multiplied by a fraction of years of
 18 45 service.  The fraction of years of service for
 18 46 purposes of this subparagraph shall be the actual
 18 47 years of service, not to exceed twenty-two, earned in
 18 48 a position described in subsection 16, paragraph "b",
 18 49 for which special service contributions were made,
 18 50 divided by twenty-two.
 19  1    (2)  One-twelfth of an amount equal to the
 19  2 applicable percentage multiplier established in
 19  3 subsection 5 of the member's three-year average
 19  4 covered wage multiplied by a fraction of years of
 19  5 service.  The fraction of years of service for
 19  6 purposes of this subparagraph shall be the actual
 19  7 years of service, not to exceed twenty-five, earned in
 19  8 a position described in subsection 16, paragraph "a",
 19  9 for which special service contributions were made,
 19 10 divided by twenty-five.
 19 11    (3)  One-twelfth of an amount equal to the
 19 12 applicable percentage multiplier established in
 19 13 subsection 5 of the member's three-year average
 19 14 covered wage multiplied by a fraction of years of
 19 15 service.  The fraction of years of service for
 19 16 purposes of this subparagraph shall be the actual
 19 17 years of service, not to exceed thirty, for which
 19 18 regular service contributions were made, divided by
 19 19 thirty.  However, any otherwise applicable age
 19 20 reduction for early retirement shall apply to the
 19 21 calculation under this subparagraph.
 19 22    In calculating the fractions of years of service
 19 23 under subparagraphs (1) and (2), a member shall not
 19 24 receive special service credit for years of service
 19 25 for which the member and the member's employer did not
 19 26 make the required special service contributions to the
 19 27 department.
 19 28    b.  In calculating the combined monthly retirement
 19 29 allowance pursuant to paragraph "a", the sum of the
 19 30 fraction of years of service provided in paragraph
 19 31 "a", subparagraphs (1), (2), and (3), shall not exceed
 19 32 one.  If the sum of the fractions of years of service
 19 33 would exceed one, the department shall deduct years of
 19 34 service first from the calculation under paragraph
 19 35 "a", subparagraph (3), and then from the calculation
 19 36 under paragraph "a", subparagraph (2), if necessary,
 19 37 so that the sum of the fractions of years of service
 19 38 shall equal one.
 19 39    c.  In calculating the combined monthly retirement
 19 40 allowance pursuant to paragraph "a", for members
 19 41 retiring on or after July 1, 1997, whose three-year
 19 42 average covered wage exceeds fifty-five thousand
 19 43 dollars, each calculation under paragraph "a",
 19 44 subparagraphs (1), (2), and (3) of this subsection
 19 45 shall be subject to reduction, calculated in the
 19 46 manner provided in subsection 5, paragraph "e".
 19 47    Sec. 37.  Section 97B.50, subsection 2, Code 1995,
 19 48 is amended to read as follows:
 19 49    2.  a.  A vested member who retires from the system
 19 50 due to disability and commences receiving disability
 20  1 benefits pursuant to the federal Social Security Act,
 20  2 42 U.S.C. } 423 et seq., and who has not reached the
 20  3 normal retirement date, shall receive benefits under
 20  4 section 97B.49 and shall not have benefits reduced
 20  5 upon retirement as required under subsection 1
 20  6 regardless of whether the member has completed thirty
 20  7 or more years of membership service.  However, the
 20  8 benefits shall be suspended during any period in which
 20  9 the member returns to covered employment.  This
 20 10 section takes effect July 1, 1990, for a member
 20 11 meeting the requirements of this paragraph who retired
 20 12 from the system at any time after July 4, 1953.
 20 13 Eligible members are entitled to the receipt of
 20 14 retroactive adjustment payments back to July 1, 1990,
 20 15 notwithstanding the requirements of subsection 4.
 20 16    b.  A vested member who retires from the system due
 20 17 to disability and commences receiving disability
 20 18 benefits pursuant to the federal Railroad Retirement
 20 19 Act, 45 U.S.C. } 231 et seq., and who has not reached
 20 20 the normal retirement date, shall receive benefits
 20 21 under section 97B.49 and shall not have benefits
 20 22 reduced upon retirement as required under subsection 1
 20 23 regardless of whether the member has completed thirty
 20 24 or more years of membership service.  However, the
 20 25 benefits shall be suspended during any period in which
 20 26 the member returns to covered employment.  This
 20 27 section takes effect July 1, 1990, for a member
 20 28 meeting the requirements of this paragraph who retired
 20 29 from the system at any time since July 4, 1953.
 20 30 Eligible members are entitled to the receipt of
 20 31 retroactive adjustment payments back to July 1, 1990,
 20 32 notwithstanding the requirements of subsection 4.
 20 33    Sec. 38.  Section 97B.51, subsection 3, Code
 20 34 Supplement 1995, is amended to read as follows:
 20 35    3.  A member who had elected to take the option
 20 36 stated in subsection 1 of this section may, at any
 20 37 time prior to retirement, revoke such an election by
 20 38 written notice to the department.  A member shall not
 20 39 change or revoke an election once the first retirement
 20 40 allowance is paid.
 20 41    Sec. 39.  Section 97B.51, subsection 5, Code
 20 42 Supplement 1995, is amended to read as follows:
 20 43    5.  At retirement, a member may designate that upon
 20 44 the member's death, a specified amount of money shall
 20 45 be paid to a named beneficiary, and the member's
 20 46 monthly retirement allowance shall be reduced by an
 20 47 actuarially determined amount to provide for the lump
 20 48 sum payment.  The amount designated by the member must
 20 49 be in thousand dollar increments, and the and shall be
 20 50 limited to the amount of the member's accumulated
 21  1 contributions.  The amount designated shall not lower
 21  2 the monthly retirement allowance of the member by more
 21  3 than one-half the amount payable under section 97B.49,
 21  4 subsection 1 or 5.  A member may designate a different
 21  5 beneficiary if the original named beneficiary
 21  6 predeceases the member.
 21  7    Sec. 40.  Section 97B.51, subsection 6, Code
 21  8 Supplement 1995, is amended to read as follows:
 21  9    6.  A member may elect to receive a decreased
 21 10 retirement allowance during the member's lifetime with
 21 11 provision that in event of the member's death during
 21 12 the first one hundred twenty months of retirement,
 21 13 monthly payments of the member's decreased retirement
 21 14 allowance shall be made to the member's beneficiary
 21 15 until a combined total of one hundred twenty monthly
 21 16 payments have been made to the member and the member's
 21 17 beneficiary.  When the member designates multiple
 21 18 beneficiaries, the present value of the remaining
 21 19 payments shall be paid in a lump sum to each
 21 20 beneficiary, either in equal shares to the
 21 21 beneficiaries, or if the member specifies otherwise in
 21 22 a written request, in the specified proportion.  A
 21 23 member may designate a different beneficiary if the
 21 24 original named beneficiary predeceases the member.
 21 25    Sec. 41.  Section 97B.52, subsection 1, Code
 21 26 Supplement 1995, is amended to read as follows:
 21 27    1.  If a member dies prior to the member's first
 21 28 month of entitlement, the accumulated contributions of
 21 29 the member at the date of death plus the product of an
 21 30 amount equal to the highest year of covered wages of
 21 31 the deceased member and the number of years of
 21 32 membership service divided by thirty the applicable
 21 33 denominator shall be paid to the member's beneficiary
 21 34 in a lump sum payment.  However, a lump sum payment
 21 35 made to a beneficiary under this subsection due to the
 21 36 death of a member shall not be less than the amount
 21 37 that would have been payable on the death of the
 21 38 member on June 30, 1984, under this subsection as it
 21 39 appeared in the 1983 Code.
 21 40    As used in this subsection, "applicable
 21 41 denominator" means the following, based upon the type
 21 42 of membership service in which the member served
 21 43 either on the date of death, or if the member died
 21 44 after terminating service, on the date of the member's
 21 45 last termination of service:
 21 46    a.  For regular service, the applicable denominator
 21 47 is thirty.
 21 48    b.  For service in a protection occupation, as
 21 49 defined in section 97B.49, subsection 16, paragraph
 21 50 "d", the applicable denominator is twenty-five.
 22  1    c.  For service as a sheriff, deputy sheriff, or
 22  2 airport fire fighter, as provided in section 97B.49,
 22  3 subsection 16, paragraph "b", the applicable
 22  4 denominator is twenty-two.
 22  5    Effective July 1, 1978, a method of payment under
 22  6 this subsection filed with the department by a member
 22  7 does not apply.
 22  8    Sec. 42.  Section 97B.52, subsection 3, paragraph
 22  9 b, Code Supplement 1995, is amended to read as
 22 10 follows:
 22 11    b.  If a death benefit is due and payable, interest
 22 12 shall continue to accumulate through the month
 22 13 preceding the month in which payment is made to the
 22 14 designated beneficiary, heirs at law, or the estate
 22 15 unless the payment of the death benefit is delayed
 22 16 because of a dispute between alleged heirs, in which
 22 17 case the benefit due and payable shall be placed in a
 22 18 noninterest bearing escrow account until the
 22 19 beneficiary is determined in accordance with this
 22 20 section.  In order to receive the death benefit, the
 22 21 beneficiary, heirs at law, or the estate, or any other
 22 22 third-party payee, must apply to the department within
 22 23 two five years of the member's death.
 22 24    The department shall reinstate a designated
 22 25 beneficiary's right to receive a death benefit beyond
 22 26 the five-year limitation if the designated beneficiary
 22 27 was the member's spouse at the time of the member's
 22 28 death and the distribution is required or permitted
 22 29 pursuant to Internal Revenue Code section 401(a)(9)
 22 30 and the applicable treasury regulations.
 22 31    Sec. 43.  Section 97B.52, subsection 5, Code
 22 32 Supplement 1995, is amended to read as follows:
 22 33    5.  Following written notification to the
 22 34 department, a beneficiary of a deceased member may
 22 35 waive current and future rights to payments to which
 22 36 the beneficiary would otherwise be entitled under
 22 37 sections 97B.51 and this section.  Upon receipt of the
 22 38 waiver, the department shall pay to the estate of the
 22 39 deceased member the amount designated to be received
 22 40 by the that beneficiary to the member's other
 22 41 surviving beneficiary or beneficiaries or to the
 22 42 estate of the deceased member, as elected by the
 22 43 beneficiary in the waiver.  If the payments being
 22 44 waived are payable to the member's estate and an
 22 45 estate is not probated, the payments shall be paid to
 22 46 the deceased member's surviving spouse, or if there is
 22 47 no surviving spouse, to the member's heirs other than
 22 48 the beneficiary who waived the payments.
 22 49    Sec. 44.  Section 97B.52A, Code Supplement 1995, is
 22 50 amended by adding the following new subsection:
 23  1    NEW SUBSECTION.  3.  A member who terminates
 23  2 covered employment but maintains an employment
 23  3 relationship with an employer that made contributions
 23  4 to the system on the member's behalf does not have a
 23  5 bona fide retirement until all employment, including
 23  6 employment which is not covered by this chapter, with
 23  7 such employer is terminated for at least thirty days.
 23  8 In order to receive retirement benefits, the member
 23  9 must file a completed application for benefits form
 23 10 with the department before returning to any employment
 23 11 with the same employer.
 23 12    Sec. 45.  Section 97B.53, subsection 3, Code
 23 13 Supplement 1995, is amended to read as follows:
 23 14    3.  The accumulated contributions of a terminated,
 23 15 vested member shall be credited with interest,
 23 16 including interest dividends, in the manner provided
 23 17 in section 97B.70.  Interest and interest dividends
 23 18 shall be credited to the accumulated contributions of
 23 19 members who terminate service and subsequently become
 23 20 vested in accordance with section 97B.70.  However,
 23 21 the department shall not implement the amendments to
 23 22 this subsection or to subsection 6, unnumbered
 23 23 paragraph 1, or to subsection 7, as enacted in 1994
 23 24 Iowa Acts, chapter 1183, unless and until the
 23 25 department determines that the most recent annual
 23 26 actuarial valuation of the retirement system indicates
 23 27 that the employer and employee contribution rates in
 23 28 effect under section 97B.11 can absorb the amendments
 23 29 to these provisions of this section and the amendments
 23 30 to section 97B.41, subsection 12, and section 97B.70,
 23 31 by enacting a new subsection 4, contained in 1994 Iowa
 23 32 Acts, chapter 1183, after meeting the other
 23 33 established priorities of the system, as defined in
 23 34 section 97B.41, subsection 12.  Until the amendments
 23 35 are implemented, the department shall continue to
 23 36 implement the provisions of section 97B.53,
 23 37 subsections 3 and 7, and section 97B.53, subsection 6,
 23 38 unnumbered paragraph 1, 1993 Code of Iowa.
 23 39    Sec. 46.  Section 97B.53B, subsection 1, paragraph
 23 40 c, subparagraph (4), Code 1995, is amended to read as
 23 41 follows:
 23 42    (4)  A distribution Annual distributions of less
 23 43 than two hundred dollars of taxable income.
 23 44    Sec. 47.  Section 97B.66, unnumbered paragraph 1,
 23 45 Code Supplement 1995, is amended to read as follows:
 23 46    A vested or retired member who was a member of the
 23 47 teachers insurance and annuity association-college
 23 48 retirement equity fund at any time between July 1,
 23 49 1967 and June 30, 1971 and who became a member of the
 23 50 system on July 1, 1971, upon submitting verification
 24  1 of service and wages earned during the applicable
 24  2 period of service under the teachers insurance and
 24  3 annuity association-college retirement equity fund,
 24  4 may make employer and employee contributions to the
 24  5 system based upon the covered wages of the member and
 24  6 the covered wages and the contribution rates in effect
 24  7 for all or a portion of that period of service and
 24  8 receive credit for membership service under this
 24  9 system equivalent to the applicable period of
 24 10 membership service in the teachers insurance and
 24 11 annuity association-college retirement equity fund for
 24 12 which the contributions have been made.  In addition,
 24 13 a member making employer and employee contributions
 24 14 because of membership in the teachers insurance and
 24 15 annuity association-college retirement equity fund
 24 16 under this section who was a member of the system on
 24 17 June 30, 1967 and withdrew the member's accumulated
 24 18 contributions because of membership on July 1, 1967 in
 24 19 the teachers insurance and annuity association-college
 24 20 retirement equity fund, may make employee
 24 21 contributions to the system for all or a portion of
 24 22 the period of service under the system prior to July
 24 23 1, 1967.  A member making contributions pursuant to
 24 24 this section may make the contributions either for the
 24 25 entire applicable period of service, or, effective
 24 26 upon the date that the department determines that the
 24 27 amendments to this paragraph and unnumbered paragraph
 24 28 2 contained in 1994 Iowa Acts, chapter 1183, shall be
 24 29 implemented, for portions of the period of service,
 24 30 and if contributions are made for portions of the
 24 31 period of service, the contributions shall be in
 24 32 increments of one or more years, as long as the
 24 33 increments represent full years and not a portion of a
 24 34 year calendar quarters.  However, the department shall
 24 35 not implement the amendments to this paragraph or
 24 36 unnumbered paragraph 2, as enacted in 1994 Iowa Acts,
 24 37 chapter 1183, unless and until the department
 24 38 determines that the most recent annual actuarial
 24 39 valuation of the retirement system indicates that the
 24 40 employer and employee contribution rates in effect
 24 41 under section 97B.11 can absorb the amendments to this
 24 42 paragraph and unnumbered paragraph 2 and to section
 24 43 97B.72, unnumbered paragraphs 1 and 2, section
 24 44 97B.72A, subsection 1, unnumbered paragraph 1, section
 24 45 97B.73A, unnumbered paragraph 1, and section 97B.74,
 24 46 unnumbered paragraphs 1 and 2, contained in 1994 Iowa
 24 47 Acts, chapter 1183, after meeting the other
 24 48 established priority of the system.  Until the
 24 49 amendments are implemented, the department shall
 24 50 continue to implement the provisions of section
 25  1 97B.66, unnumbered paragraphs 1 and 2, Code Supplement
 25  2 1993.  As used in this section, unless the context
 25  3 otherwise requires, "other established priority of the
 25  4 system" means that commencing January 1 following the
 25  5 most recent annual actuarial valuation of the system,
 25  6 the department has increased the covered wage
 25  7 limitation from the previous year by three thousand
 25  8 dollars, in accordance with section 97B.41, subsection
 25  9 20, paragraph "b", subparagraph (11).
 25 10    Sec. 48.  Section 97B.66, unnumbered paragraph 2,
 25 11 Code Supplement 1995, is amended to read as follows:
 25 12    The contributions paid by the vested or retired
 25 13 member shall be equal to the accumulated contributions
 25 14 as defined in section 97B.41, subsection 2, by the
 25 15 member for the applicable period of service, and the
 25 16 employer contribution for the applicable period of
 25 17 service under the teachers insurance and annuity
 25 18 association-college retirement equity fund, that would
 25 19 have been or had been contributed by the vested or
 25 20 retired member and the employer, if applicable, plus
 25 21 interest on the contributions that would have accrued
 25 22 for the applicable period from the date the previous
 25 23 applicable period of service commenced under this
 25 24 system or from the date the service of the member in
 25 25 the teachers insurance and annuity association-college
 25 26 retirement equity fund commenced to the date of
 25 27 payment of the contributions by the member equal to
 25 28 two percent plus the interest dividend rate applicable
 25 29 for each year as provided in section 97B.70.
 25 30    Sec. 49.  Section 97B.66, unnumbered paragraph 3,
 25 31 Code Supplement 1995, is amended to read as follows:
 25 32    However, effective January 1, 1994, the department
 25 33 shall ensure that the member, in exercising an option
 25 34 provided in this section, does not exceed the amount
 25 35 of annual additions to a member's account permitted
 25 36 pursuant to section 415 of the federal Internal
 25 37 Revenue Code.
 25 38    Sec. 50.  Section 97B.68, subsection 1, Code 1995,
 25 39 is amended to read as follows:
 25 40    1.  Effective July 1, 1988 1996, a person who is a
 25 41 member of the federal civil service retirement program
 25 42 or the federal employee's retirement system is not
 25 43 eligible for membership in the Iowa public employees'
 25 44 retirement system for the same position, and this
 25 45 chapter does not apply to that employee.  An employee
 25 46 whose membership in the federal civil service
 25 47 retirement program or the federal employee's
 25 48 retirement system is subsequently terminated shall
 25 49 immediately notify the employee's employer and the
 25 50 department of personnel of that fact, and the employee
 26  1 shall become subject to this chapter on the date the
 26  2 notification is received by the department.
 26  3    Sec. 51.  Section 97B.68, Code 1995, is amended by
 26  4 adding the following new subsection:
 26  5    NEW SUBSECTION.  3.  Effective July 1, 1996, an
 26  6 employee who participates in the federal civil service
 26  7 retirement program or the federal employee's
 26  8 retirement system may be covered under this chapter if
 26  9 otherwise eligible.  The employee shall not be covered
 26 10 under this chapter, however, unless the employee is
 26 11 not credited for service in the federal civil service
 26 12 retirement system or the federal employee's retirement
 26 13 system for the position to be covered under this
 26 14 chapter.  This subsection shall not be construed to
 26 15 permit any employer to contribute on behalf of an
 26 16 employee for the same position and the same period of
 26 17 service to both the Iowa public employees' retirement
 26 18 system and either the federal civil service retirement
 26 19 program or the federal employee's retirement system.
 26 20    Sec. 52.  Section 97B.70, Code Supplement 1995, is
 26 21 amended to read as follows:
 26 22    97B.70  INTEREST AND DIVIDENDS TO MEMBERS.
 26 23    1.  Interest For calendar years prior to January 1,
 26 24 1997, interest at two percent per annum and interest
 26 25 dividends declared by the department shall be credited
 26 26 to the member's contributions and the employer's
 26 27 contributions to become part of the accumulated
 26 28 contributions thereby.
 26 29    1. a.  The average rate of interest earned shall be
 26 30 determined upon the following basis:
 26 31    a. (1)  Investment income shall include interest
 26 32 and cash dividends on stock.
 26 33    b. (2)  Investment income shall be accounted for on
 26 34 an accrual basis.
 26 35    c. (3)  Capital gains and losses, realized or
 26 36 unrealized, shall not be included in investment
 26 37 income.
 26 38    d. (4)  Mean assets shall include fixed income
 26 39 investments valued at cost or on an amortized basis,
 26 40 and common stocks at market values or cost, whichever
 26 41 is lower.
 26 42    e. (5)  The average rate of earned interest shall
 26 43 be the quotient of the investment income and the mean
 26 44 assets of the retirement fund.
 26 45    2. b.  The interest dividend shall be determined
 26 46 within sixty days after the end of each calendar year
 26 47 as follows:
 26 48    The dividend rate for a calendar year shall be the
 26 49 excess of the average rate of interest earned for the
 26 50 year over the statutory two percent rate plus twenty-
 27  1 five hundredths of one percent.  The average rate of
 27  2 interest earned and the interest dividend rate in
 27  3 percent shall be calculated to the nearest one
 27  4 hundredth, that is, to two decimal places.  Interest
 27  5 and interest dividends calculated pursuant to this
 27  6 subsection shall be compounded annually.
 27  7    2.  For calendar years beginning January 1, 1997, a
 27  8 per annum interest rate at one percent above the
 27  9 interest rate on one-year certificates of deposit
 27 10 shall be credited to the member's contributions and
 27 11 the employer's contributions to become part of the
 27 12 accumulated contributions.  For purposes of this
 27 13 subsection, the interest rate on one-year certificates
 27 14 of deposit shall be determined by the department based
 27 15 on the average rate for such certificates of deposit
 27 16 as of the first business day of each year as published
 27 17 in a publication of general acceptance in the business
 27 18 community.  The per annum interest rate shall be
 27 19 credited on a quarterly basis by applying one-quarter
 27 20 of the annual interest rate to the sum of the
 27 21 accumulated contributions as of the end of the
 27 22 previous calendar quarter.
 27 23    3.  Interest and interest dividends shall be
 27 24 credited to the contributions of active members and
 27 25 inactive vested members until the first of the month
 27 26 coinciding with or next following the member's
 27 27 retirement date.
 27 28    4.  Effective upon the date that the department
 27 29 determines that this subsection shall be implemented,
 27 30 interest Interest and interest dividends shall be
 27 31 credited to the contributions of a person who leaves
 27 32 the contributions in the retirement fund upon
 27 33 termination from covered employment prior to achieving
 27 34 vested status, but who subsequently achieves vested
 27 35 status.  The interest and interest dividends shall be
 27 36 credited to the contributions commencing either upon
 27 37 the date that the department determines that this
 27 38 subsection shall be implemented, or the date on which
 27 39 the person becomes a vested member, whichever is
 27 40 later.  Interest and interest dividends shall cease
 27 41 upon the first of the month coinciding with or next
 27 42 following the person's retirement date.  If the
 27 43 department no longer maintains the accumulated
 27 44 contribution account of the person pursuant to section
 27 45 97B.53, but the person submits satisfactory proof to
 27 46 the department that the person did make the
 27 47 contributions, the department shall credit interest
 27 48 and interest dividends in the manner provided in this
 27 49 subsection.  However, the department shall not
 27 50 implement this subsection, unless and until the
 28  1 department determines that the most recent annual
 28  2 actuarial valuation of the retirement system indicates
 28  3 that the employer and employee contribution rates in
 28  4 effect under section 97B.11 can absorb the enactment
 28  5 of this subsection and the amendments to section
 28  6 97B.41, subsection 12, section 97B.53, subsections 3
 28  7 and 7, and section 97B.53, subsection 6, unnumbered
 28  8 paragraph 1, contained in 1994 Iowa Acts, chapter
 28  9 1183, after meeting the other established priorities
 28 10 of the system, as defined in section 97B.41,
 28 11 subsection 12.
 28 12    Sec. 53.  Section 97B.72, unnumbered paragraphs 1
 28 13 and 2, Code Supplement 1995, are amended to read as
 28 14 follows:
 28 15    Persons who are members of the Seventy-first
 28 16 General Assembly or a succeeding general assembly who
 28 17 submit proof to the department of membership in the
 28 18 general assembly during any period beginning July 4,
 28 19 1953, may make contributions to the system for all or
 28 20 a portion of the period of service in the general
 28 21 assembly, and receive credit for the applicable period
 28 22 for which contributions are made.  The contributions
 28 23 made by the member shall be equal to the accumulated
 28 24 contributions as defined in section 97B.41, subsection
 28 25 2, which would have been made if the member of the
 28 26 general assembly had been a member of the system
 28 27 during the applicable period.  The proof of membership
 28 28 in the general assembly and payment of accumulated
 28 29 contributions shall be transmitted to the department.
 28 30 A member making contributions pursuant to this section
 28 31 may make the contributions either for the entire
 28 32 applicable period of service, or, effective upon the
 28 33 date that the department determines that the
 28 34 amendments to this paragraph and unnumbered paragraph
 28 35 2 contained in 1994 Iowa Acts, chapter 1183, shall be
 28 36 implemented, for portions of the period of service,
 28 37 and if contributions are made for portions of the
 28 38 period of service, the contributions shall be in
 28 39 increments of one or more years, as long as the
 28 40 increments represent full years and not a portion of a
 28 41 year calendar quarters.  However, the department shall
 28 42 not implement the amendments to this paragraph or
 28 43 unnumbered paragraph 2, as enacted in 1994 Iowa Acts,
 28 44 chapter 1183, unless and until the department
 28 45 determines that the most recent annual actuarial
 28 46 valuation of the retirement system indicates that the
 28 47 employer and employee contribution rates in effect
 28 48 under section 97B.11 can absorb the amendments to this
 28 49 paragraph and unnumbered paragraph 2 and to section
 28 50 97B.66, unnumbered paragraphs 1 and 2, section
 29  1 97B.72A, subsection 1, unnumbered paragraph 1, section
 29  2 97B.73A, unnumbered paragraph 1, and section 97B.74,
 29  3 unnumbered paragraphs 1 and 2, contained in 1994 Iowa
 29  4 Acts, chapter 1183, after meeting the other
 29  5 established priority of the system, as defined in
 29  6 section 97B.66.  Until the amendments are implemented,
 29  7 the department shall continue to implement the
 29  8 provisions of section 97B.72, unnumbered paragraphs 1
 29  9 and 2, Code Supplement 1993.
 29 10    There is appropriated from moneys available to the
 29 11 general assembly under section 2.12 an amount
 29 12 sufficient to pay the contributions of the employer
 29 13 based on the period of service for which the members
 29 14 have paid accumulated contributions in an amount equal
 29 15 to the contributions which would have been made if the
 29 16 members of the general assembly who made employee
 29 17 contributions had been members of the system during
 29 18 the applicable period of service in the general
 29 19 assembly plus two percent interest plus and interest
 29 20 dividends at the rate provided in section 97B.70 for
 29 21 all completed calendar years, and for any completed
 29 22 calendar year for which the interest dividend has not
 29 23 been declared and for completed months of partially
 29 24 completed calendar years at two percent interest plus
 29 25 the interest dividend rate calculated for the previous
 29 26 year, compounded annually, from the end of the
 29 27 calendar year in which contribution was made to the
 29 28 first day of the month of such date as provided in
 29 29 section 97B.70.
 29 30    Sec. 54.  Section 97B.72, unnumbered paragraph 3,
 29 31 Code Supplement 1995, is amended to read as follows:
 29 32    However, effective January 1, 1994, the department
 29 33 shall ensure that the member, in exercising an option
 29 34 provided in this section, does not exceed the amount
 29 35 of annual additions to a member's account permitted
 29 36 pursuant to section 415 of the federal Internal
 29 37 Revenue Code.
 29 38    Sec. 55.  Section 97B.72A, subsection 1, Code
 29 39 Supplement 1995, is amended to read as follows:
 29 40    1.  An active or A vested or retired member of the
 29 41 system who was a member of the general assembly prior
 29 42 to July 1, 1988, may make contributions to the system
 29 43 for all or a portion of the period of service in the
 29 44 general assembly.  The contributions made by the
 29 45 member shall be equal to the accumulated contributions
 29 46 as defined in section 97B.41, subsection 2, which
 29 47 would have been made if the member of the general
 29 48 assembly had been a member of the system during the
 29 49 applicable period of service in the general assembly.
 29 50 A member making contributions pursuant to this section
 30  1 may make the contributions either for the entire
 30  2 applicable period of service, or for portions of the
 30  3 period of service, and, effective upon the date that
 30  4 the department determines that the amendments to this
 30  5 paragraph contained in 1994 Iowa Acts, chapter 1183,
 30  6 shall be implemented, if contributions are made for
 30  7 portions of the period of service, the contributions
 30  8 shall be in increments of one or more years, as long
 30  9 as the increments represent full years and not a
 30 10 portion of a year calendar quarters.  The member of
 30 11 the system shall submit proof to the department of
 30 12 membership in the general assembly.  The department
 30 13 shall credit the member with the period of membership
 30 14 service for which contributions are made.  However,
 30 15 the department shall not implement the amendments to
 30 16 this paragraph, as enacted in 1994 Iowa Acts, chapter
 30 17 1183, unless and until the department determines that
 30 18 the most recent annual actuarial valuation of the
 30 19 retirement system indicates that the employer and
 30 20 employee contribution rates in effect under section
 30 21 97B.11 can absorb the amendments to this paragraph and
 30 22 to section 97B.66, unnumbered paragraphs 1 and 2,
 30 23 section 97B.72, unnumbered paragraphs 1 and 2, section
 30 24 97B.73A, unnumbered paragraph 1, and section 97B.74,
 30 25 unnumbered paragraphs 1 and 2, contained in 1994 Iowa
 30 26 Acts, chapter 1183, after meeting the other
 30 27 established priority of the system, as defined in
 30 28 section 97B.66.  Until the amendments are implemented,
 30 29 the department shall continue to implement the
 30 30 provisions of section 97B.72A, subsection 1,
 30 31 unnumbered paragraph 1, Code Supplement 1993.
 30 32    There is appropriated from the general fund of the
 30 33 state to the department an amount sufficient to pay
 30 34 the contributions of the employer based on the period
 30 35 of service of members of the general assembly for
 30 36 which the member paid accumulated contributions under
 30 37 this section.  The amount appropriated is equal to the
 30 38 employer contributions which would have been made if
 30 39 the members of the system who made employee
 30 40 contributions had been members of the system during
 30 41 the period for which they made employee contributions
 30 42 plus two percent interest plus the interest dividend
 30 43 rate applicable at the rate provided in section 97B.70
 30 44 for each year compounded annually as provided in
 30 45 section 97B.70.
 30 46    Sec. 56.  Section 97B.72A, subsection 2, Code
 30 47 Supplement 1995, is amended to read as follows:
 30 48    2.  Effective January 1, 1994, however However, the
 30 49 department shall ensure that the member, in exercising
 30 50 an option provided in this section, does not exceed
 31  1 the amount of annual additions to a member's account
 31  2 permitted pursuant to section 415 of the federal
 31  3 Internal Revenue Code.
 31  4    Sec. 57.  Section 97B.73, unnumbered paragraph 1,
 31  5 Code 1995, is amended to read as follows:
 31  6    A vested or retired member who was in public
 31  7 employment comparable to employment covered under this
 31  8 chapter in another state or in the federal government,
 31  9 or who was a member of another public retirement
 31 10 system in this state, including but not limited to the
 31 11 teachers insurance annuity association-college
 31 12 retirement equities fund, but who was not retired
 31 13 under that system, upon submitting verification of
 31 14 membership and service in the other public system to
 31 15 the department, including proof that the member has no
 31 16 further claim upon a retirement benefit from that
 31 17 other public system, may make employer and employee
 31 18 contributions to the system either for the entire
 31 19 period of service in the other public system, or for
 31 20 partial service in the other public system in
 31 21 increments of one or more years, as long as the
 31 22 increments represent full years and not a portion of a
 31 23 year calendar quarters.  The member may also make one
 31 24 lump sum contribution to the system which represents
 31 25 the entire period of service in the other public
 31 26 system, even if the period of time exceeds one year or
 31 27 includes a portion of a year.  If the member wishes to
 31 28 transfer only a portion of the service value of
 31 29 another public system to this system and the other
 31 30 public system allows a partial withdrawal of a
 31 31 member's system credits, the member shall receive
 31 32 credit for membership service in this system
 31 33 equivalent to the number of years period of service
 31 34 transferred from the other public system.  The
 31 35 contribution payable shall be based upon the member's
 31 36 covered wages for the most recent full calendar year
 31 37 at the applicable rates in effect for that calendar
 31 38 year under sections 97B.11 and 97B.49 and multiplied
 31 39 by the member's years of service in other public
 31 40 employment.  If the member's most recent covered wages
 31 41 were earned prior to the most recent calendar year,
 31 42 the member's covered wages shall be adjusted by the
 31 43 department by an inflation factor to reflect changes
 31 44 in the economy since the covered wages were earned.
 31 45    Sec. 58.  Section 97B.73, unnumbered paragraph 6,
 31 46 Code 1995, is amended to read as follows:
 31 47    However, effective January 1, 1994, the department
 31 48 shall ensure that the member, in exercising an option
 31 49 provided in this section, does not exceed the amount
 31 50 of annual additions to a member's account permitted
 32  1 pursuant to section 415 of the federal Internal
 32  2 Revenue Code.
 32  3    Sec. 59.  Section 97B.73A, unnumbered paragraph 1,
 32  4 Code Supplement 1995, is amended to read as follows:
 32  5    A part-time county attorney may elect in writing to
 32  6 the department to make employee contributions to the
 32  7 system for the county attorney's previous service as a
 32  8 county attorney and receive credit for membership
 32  9 service in the system for the applicable period of
 32 10 service as a part-time county attorney for which
 32 11 employee contributions are made.  The contributions
 32 12 paid by the member shall be equal to the accumulated
 32 13 contributions, as defined in section 97B.41,
 32 14 subsection 2, for the applicable period of membership
 32 15 service.  A member making contributions pursuant to
 32 16 this section may make the contributions either for the
 32 17 entire applicable period of service, or, effective
 32 18 upon the date that the department determines that the
 32 19 amendments to this paragraph contained in 1994 Iowa
 32 20 Acts, chapter 1183, shall be implemented, for portions
 32 21 of the period of service, and if contributions are
 32 22 made for portions of the period of service, the
 32 23 contributions shall be in increments of one or more
 32 24 years, as long as the increments represent full years
 32 25 and not a portion of a year calendar quarters.  A
 32 26 member who elects to make contributions under this
 32 27 section shall notify the applicable county board of
 32 28 supervisors of the member's election, and the county
 32 29 board of supervisors shall pay to the department the
 32 30 employer contributions that would have been
 32 31 contributed by the employer under section 97B.11 plus
 32 32 interest on the contributions that would have accrued
 32 33 if the county attorney had been a member of the system
 32 34 for the applicable period of service.  However, the
 32 35 department shall not implement the amendments to this
 32 36 paragraph, as enacted in 1994 Iowa Acts, chapter 1183,
 32 37 unless and until the department determines that the
 32 38 most recent annual actuarial valuation of the
 32 39 retirement system indicates that the employer and
 32 40 employee contribution rates in effect under section
 32 41 97B.11 can absorb the amendments to this paragraph and
 32 42 to section 97B.66, unnumbered paragraphs 1 and 2,
 32 43 section 97B.72, unnumbered paragraphs 1 and 2, section
 32 44 97B.72A, subsection 1, unnumbered paragraph 1, and
 32 45 section 97B.74, unnumbered paragraphs 1 and 2,
 32 46 contained in 1994 Iowa Acts, chapter 1183, after
 32 47 meeting the other established priority of the system,
 32 48 as defined in section 97B.66.  Until the amendments
 32 49 are implemented, the department shall continue to
 32 50 implement the provisions of section 97B.73A,
 33  1 unnumbered paragraph 1, Code Supplement 1993.
 33  2    Sec. 60.  Section 97B.73A, unnumbered paragraph 3,
 33  3 Code Supplement 1995, is amended to read as follows:
 33  4    However, effective January 1, 1994, the department
 33  5 shall ensure that the member, in exercising an option
 33  6 provided in this section, does not exceed the amount
 33  7 of annual additions to a member's account permitted
 33  8 pursuant to section 415 of the federal Internal
 33  9 Revenue Code.
 33 10    Sec. 61.  Section 97B.74, unnumbered paragraphs 1
 33 11 and 2, Code Supplement 1995, are amended to read as
 33 12 follows:
 33 13    An active, A vested, or retired member who was a
 33 14 member of the system at any time on or after July 4,
 33 15 1953, and who received a refund of the member's
 33 16 contributions for that period of membership service,
 33 17 may elect in writing to the department to make
 33 18 contributions to the system for all or a portion of
 33 19 the period of membership service for which a refund of
 33 20 contributions was made, and receive credit for the
 33 21 period of membership service for which contributions
 33 22 are made.  The contributions repaid by the member for
 33 23 such service shall be equal to the accumulated
 33 24 contributions, as defined in section 97B.41,
 33 25 subsection 2, received by the member for the
 33 26 applicable period of membership service plus interest
 33 27 on the accumulated contributions for the applicable
 33 28 period from the date of receipt by the member to the
 33 29 date of repayment equal to two percent plus at the
 33 30 interest dividend rate provided in section 97B.70
 33 31 applicable for each year compounded annually as
 33 32 provided in section 97B.70.
 33 33    An active member must have at least one quarter's
 33 34 reportable wages on file and have membership service,
 33 35 including that period of membership service for which
 33 36 a refund of contributions was made, sufficient to give
 33 37 the member vested status.  A member making
 33 38 contributions pursuant to this section may make the
 33 39 contributions either for the entire applicable period
 33 40 of service, or, effective upon the date that the
 33 41 department determines that the amendments to this
 33 42 paragraph and unnumbered paragraph 1 contained in 1994
 33 43 Iowa Acts, chapter 1183, shall be implemented, for
 33 44 portions of the period of service, and if
 33 45 contributions are made for portions of the period of
 33 46 service, the contributions shall be in increments of
 33 47 one or more years, as long as the increments represent
 33 48 full years and not a portion of a year calendar
 33 49 quarters.  However, the department shall not implement
 33 50 the amendments to this paragraph or unnumbered
 34  1 paragraph 1, as enacted in 1994 Iowa Acts, chapter
 34  2 1183, unless and until the department determines that
 34  3 the most recent annual actuarial valuation of the
 34  4 retirement system indicates that the employer and
 34  5 employee contribution rates in effect under section
 34  6 97B.11 can absorb the amendments to this paragraph and
 34  7 to unnumbered paragraph 1 and to section 97B.66,
 34  8 unnumbered paragraphs 1 and 2, section 97B.72,
 34  9 unnumbered paragraphs 1 and 2, section 97B.72A,
 34 10 subsection 1, unnumbered paragraph 1, and section
 34 11 97B.73A, unnumbered paragraph 1, contained in 1994
 34 12 Iowa Acts, chapter 1183, after meeting the other
 34 13 established priority of the system, as defined in
 34 14 section 97B.66.  Until the amendments are implemented,
 34 15 the department shall continue to implement the
 34 16 provisions of section 97B.74, unnumbered paragraphs 1
 34 17 and 2, Code Supplement 1993.
 34 18    Sec. 62.  Section 97B.74, unnumbered paragraph 4,
 34 19 Code Supplement 1995, is amended by striking the
 34 20 unnumbered paragraph.
 34 21    Sec. 63.  Section 97B.80, unnumbered paragraph 1,
 34 22 Code 1995, is amended to read as follows:
 34 23    Effective July 1, 1992, a vested or retired member,
 34 24 who at any time served on active duty in the armed
 34 25 forces of the United States, upon submitting
 34 26 verification of the dates of the active duty service,
 34 27 may make employer and employee contributions to the
 34 28 system based upon the member's covered wages for the
 34 29 most recent full calendar year in which the member had
 34 30 reportable wages at the applicable rates in effect for
 34 31 that year under sections 97B.11 and 97B.49, for all or
 34 32 a portion of the period of time of the active duty
 34 33 service, in increments of no greater than one year and
 34 34 not less than one or more calendar quarter quarters,
 34 35 and receive credit for membership service and prior
 34 36 service for the period of time for which the
 34 37 contributions are made.  However, the member may not
 34 38 make contributions in an increment of less than one
 34 39 year more than once.  The member may also make one
 34 40 lump sum contribution to the system which represents
 34 41 the period of time of the active duty service, even if
 34 42 the period of time exceeds one year.  If the member's
 34 43 most recent covered wages were earned prior to the
 34 44 most recent calendar year, the member's covered wages
 34 45 shall be adjusted by the department by an inflation
 34 46 factor to reflect changes in the economy.  The
 34 47 department shall adjust benefits for a six-month
 34 48 period prior to the date the member pays contributions
 34 49 under this section if the member is receiving a
 34 50 retirement allowance at the time the contribution
 35  1 payment is made.  Verification of active duty service
 35  2 and payment of contributions shall be made to the
 35  3 department.  However, a member is not eligible to make
 35  4 contributions under this section if the member is
 35  5 receiving, is eligible to receive, or may in the
 35  6 future be eligible to receive retirement pay from the
 35  7 United States government for active duty in the armed
 35  8 forces, except for retirement pay granted by the
 35  9 United States government under retired pay for
 35 10 nonregular service (10 U.S.C. } 1331, et seq.).  A
 35 11 member receiving retired pay for nonregular service
 35 12 who makes contributions under this section shall
 35 13 provide information required by the department
 35 14 documenting time periods covered under retired pay for
 35 15 nonregular service.
 35 16    Sec. 64.  Section 97B.80, unnumbered paragraph 3,
 35 17 Code 1995, is amended to read as follows:
 35 18    However, effective January 1, 1994, the department
 35 19 shall ensure that the member, in exercising an option
 35 20 provided in this section, does not exceed the amount
 35 21 of annual additions to a member's account permitted
 35 22 pursuant to section 415 of the federal Internal
 35 23 Revenue Code.
 35 24    Sec. 65.  DEVELOPMENT OF PROPOSAL FOR ESTABLISHING
 35 25 A DEFINED CONTRIBUTION OPTION – IOWA PUBLIC
 35 26 EMPLOYEES' RETIREMENT SYSTEM – REPORT.  The Iowa
 35 27 public employees' retirement system division, in
 35 28 consultation with the public retirement systems
 35 29 committee established in section 97D.4, shall develop
 35 30 a proposal concerning various alternatives for
 35 31 establishing a defined contribution option for members
 35 32 of the Iowa public employees' retirement system.  On
 35 33 or before September 1, 1997, the Iowa public
 35 34 employees' retirement system division shall file a
 35 35 report with the legislative service bureau, for
 35 36 distribution to the public retirement systems
 35 37 committee, which contains a proposal, or proposals,
 35 38 for establishing a defined contribution option.  The
 35 39 report shall also contain actuarial information
 35 40 concerning the costs of the proposal or proposals.  
 35 41                       DIVISION II
 35 42    TEACHERS' PENSION AND ANNUITY RETIREMENT SYSTEMS
 35 43    Sec. 66.  Section 12B.10, subsection 6, Code 1995,
 35 44 is amended by adding the following new paragraph e and
 35 45 relettering the subsequent paragraphs:
 35 46    NEW PARAGRAPH.  e.  A pension and annuity
 35 47 retirement system governed by chapter 294.
 35 48    Sec. 67.  Section 12B.10A, subsection 6, Code 1995,
 35 49 is amended by adding the following new paragraph e and
 35 50 relettering the subsequent paragraphs:
 36  1    NEW PARAGRAPH.  e.  A pension and annuity
 36  2 retirement system governed by chapter 294.
 36  3    Sec. 68.  Section 12B.10B, subsection 3, Code 1995,
 36  4 is amended by adding the following new paragraph e and
 36  5 relettering the subsequent paragraphs:
 36  6    NEW PARAGRAPH.  e.  A pension and annuity
 36  7 retirement system governed by chapter 294.
 36  8    Sec. 69.  Section 12B.10C, Code 1995, is amended by
 36  9 adding the following new subsection 4 and renumbering
 36 10 the subsequent subsections:
 36 11    NEW SUBSECTION.  4.  A pension and annuity
 36 12 retirement system governed by chapter 294.
 36 13    Sec. 70.  NEW SECTION.  294.10B  RIGHTS NOT
 36 14 TRANSFERABLE – NOT SUBJECT TO LEGAL PROCESS.
 36 15    The right of any person to any future payment under
 36 16 a pension and annuity retirement system established in
 36 17 this chapter shall not be transferable or assignable,
 36 18 at law or in equity, and shall not be subject to
 36 19 execution, levy, attachment, garnishment, or other
 36 20 legal process, or to the operation of any bankruptcy
 36 21 or insolvency law, except for the purposes of
 36 22 enforcing child, spousal, or medical support
 36 23 obligations, or marital property orders.  For the
 36 24 purposes of enforcing child, spousal, or medical
 36 25 support obligations, the garnishment or attachment of
 36 26 or the execution against benefits due a person under
 36 27 such a retirement system shall not exceed the amount
 36 28 specified in 15 U.S.C. } 1673(b).  
 36 29                      DIVISION III
 36 30        PUBLIC SAFETY PEACE OFFICERS' RETIREMENT,
 36 31             ACCIDENT, AND DISABILITY SYSTEM
 36 32    Sec. 71.  Section 97A.5, subsection 9, Code 1995,
 36 33 is amended to read as follows:
 36 34    9.  DUTIES OF COMMISSIONER OF INSURANCE ACTUARY.
 36 35 The state commissioner of insurance actuary hired by
 36 36 the board of trustees shall be the technical advisor
 36 37 of the board of trustees on matters regarding the
 36 38 operation of the funds created by the provisions of
 36 39 this chapter and shall perform such other duties as
 36 40 are required in connection therewith.
 36 41    Sec. 72.  Section 97A.5, subsections 10 through 12,
 36 42 Code 1995, are amended to read as follows:
 36 43    10.  TABLES – RATES.  Immediately after the
 36 44 establishment of this system, the state commissioner
 36 45 of insurance The actuary hired by the board of
 36 46 trustees shall make such investigation of anticipated
 36 47 interest earnings and of the mortality, service, and
 36 48 compensation experience of the members of the system
 36 49 as the actuary shall recommend and the board of
 36 50 trustees shall authorize recommends, and on the basis
 37  1 of such the investigation, the actuary shall recommend
 37  2 for adoption by the board of trustees such shall adopt
 37  3 the tables and such the rates as are required in
 37  4 subsection 11 of this section.  The board of trustees
 37  5 shall adopt the rate of interest and tables, and
 37  6 certify rates of contributions to be used by the
 37  7 system.
 37  8    11.  ACTUARIAL INVESTIGATION.  In the year 1952,
 37  9 and at At least once in each two-year period
 37 10 thereafter, the state commissioner of insurance the
 37 11 actuary hired by the board of trustees shall make an
 37 12 actuarial investigation in the mortality, service, and
 37 13 compensation experience of the members and
 37 14 beneficiaries of the system, and the interest and
 37 15 other earnings on the moneys and other assets of the
 37 16 system, and shall make a valuation of the assets and
 37 17 liabilities of the funds of the system, and taking
 37 18 into account the results of such the investigation and
 37 19 valuation, the board of trustees shall:
 37 20    a.  Adopt for the system such interest rate,
 37 21 mortality and other tables as shall be deemed
 37 22 necessary;
 37 23    b.  Certify the rates of contribution payable by
 37 24 the state of Iowa in accordance with section 97A.8.
 37 25    12.  VALUATION.  On the basis of such the rate of
 37 26 interest and such tables as adopted by the board of
 37 27 trustees shall adopt, the state commissioner of
 37 28 insurance the actuary hired by the board of trustees
 37 29 shall make an annual valuation of the assets and
 37 30 liabilities of the funds of the system created by this
 37 31 chapter.
 37 32    Sec. 73.  Section 97A.5, Code 1995, is amended by
 37 33 adding the following new subsections:
 37 34    NEW SUBSECTION.  14.  INVESTMENT CONTRACTS.  The
 37 35 board of trustees may execute contracts and agreements
 37 36 with investment advisors, consultants, and investment
 37 37 management and benefit consultant firms in the
 37 38 administration of the funds established in section
 37 39 97A.8.
 37 40    NEW SUBSECTION.  15.  LIABILITY.  The department,
 37 41 the board of trustees, and the treasurer of state are
 37 42 not personally liable for claims based upon an act or
 37 43 omission of the person performed in the discharge of
 37 44 the person's duties under this chapter, even if those
 37 45 actions or omissions violate the standards established
 37 46 in section 97A.7, except for acts or omissions which
 37 47 involve malicious or wanton misconduct.
 37 48    Sec. 74.  Section 97A.6, subsection 1, paragraph a,
 37 49 Code 1995, is amended to read as follows:
 37 50    a.  Any member in service may retire upon the
 38  1 member's written application to the board of trustees,
 38  2 setting forth at what time, not less than thirty nor
 38  3 more than ninety days subsequent to the execution and
 38  4 filing therefor, the member desires to be retired,
 38  5 provided, that the said member at the time so
 38  6 specified for retirement shall have attained the age
 38  7 of fifty-five and shall have completed twenty-two
 38  8 years or more of creditable service, and
 38  9 notwithstanding that, during such period of
 38 10 notification, the member may have separated from the
 38 11 service.  However, a member may retire at fifty years
 38 12 of age and receive a reduced retirement allowance
 38 13 pursuant to subsection 2A.
 38 14    Sec. 75.  Section 97A.6, subsection 2, paragraph d,
 38 15 subparagraph (3), Code 1995, is amended to read as
 38 16 follows:
 38 17    (3)  For a member who terminates service, other
 38 18 than by death or disability, on or after October 16,
 38 19 1992, but before July 1, 1996, and who does not
 38 20 withdraw the member's contributions pursuant to
 38 21 section 97A.16, upon the member's retirement there
 38 22 shall be added six-tenths percent of the member's
 38 23 average final compensation for each year of service
 38 24 over twenty-two years.  However, this subparagraph
 38 25 does not apply to more than eight additional years of
 38 26 service.
 38 27    Sec. 76.  Section 97A.6, subsection 2, paragraph d,
 38 28 Code 1995, is amended by adding the following new
 38 29 subparagraph:
 38 30    NEW SUBPARAGRAPH.  (4)  For a member who terminates
 38 31 service, other than by death or disability, on or
 38 32 after July 1, 1996, and who does not withdraw the
 38 33 member's contributions pursuant to section 97A.16,
 38 34 upon the member's retirement there shall be added one
 38 35 and one-half percent of the member's average final
 38 36 compensation for each year of service over twenty-two
 38 37 years.  However, this subparagraph does not apply to
 38 38 more than eight additional years of service.
 38 39    Sec. 77.  Section 97A.6, subsection 10, Code 1995,
 38 40 is amended to read as follows:
 38 41    10.  OPTIONAL ALLOWANCE.  With the provision that
 38 42 no optional selection shall be effective in case a
 38 43 beneficiary dies within thirty days after retirement,
 38 44 in which event such a beneficiary shall be considered
 38 45 as an active member at the time of death, until the
 38 46 first payment on account of any benefit becomes
 38 47 normally due, any beneficiary may elect to receive the
 38 48 beneficiary's benefit in a retirement allowance
 38 49 payable throughout life, or may elect to receive the
 38 50 actuarial equivalent at that time of the beneficiary's
 39  1 retirement allowance in a lesser retirement allowance
 39  2 payable throughout life with the provision that an
 39  3 amount in money not exceeding the amount of the
 39  4 beneficiary's accumulated contributions shall be
 39  5 immediately paid in cash to such member or some other
 39  6 benefit or benefits shall be paid either to the member
 39  7 or to such person or persons as the member shall
 39  8 nominate, provided such cash payment or other benefit
 39  9 or benefits, together with the lesser retirement
 39 10 allowance, shall be certified by the state
 39 11 commissioner of insurance actuary to be of equivalent
 39 12 actuarial value to the member's retirement allowance
 39 13 and shall be approved by the board of trustees;
 39 14 provided, that a cash payment to such member or
 39 15 beneficiary at the time of retirement of an amount not
 39 16 exceeding fifty percent of the member's or
 39 17 beneficiary's accumulated contributions shall be made
 39 18 by the board of trustees upon said member's or
 39 19 beneficiary's election.
 39 20    Sec. 78.  Section 97A.6, subsection 12, unnumbered
 39 21 paragraph 1, Code 1995, is amended to read as follows:
 39 22    Pension to surviving spouse and children of
 39 23 deceased pensioned members.  In the event of the death
 39 24 of any member receiving a retirement allowance under
 39 25 the provisions of subsections 2, 2A, 4, or 6 of this
 39 26 section there shall be paid a pension:
 39 27    Sec. 79.  Section 97A.6, subsection 12, paragraph
 39 28 a, Code 1995, is amended to read as follows:
 39 29    a.  To the member's surviving spouse, equal to one-
 39 30 half the amount received by the deceased beneficiary,
 39 31 but in no instance less than an amount equal to twenty
 39 32 twenty-five percent of the monthly earnable
 39 33 compensation paid to an active member having the rank
 39 34 of senior patrol officer of the Iowa highway safety
 39 35 patrol, and in addition a monthly pension equal to the
 39 36 monthly pension payable under subsection 9, paragraph
 39 37 "c," of this section for each child under eighteen
 39 38 years of age or twenty-two years of age if applicable;
 39 39 or
 39 40    Sec. 80.  Section 97A.6, subsection 14, paragraph
 39 41 a, subparagraphs (1), (2), and (3), Code 1995, are
 39 42 amended to read as follows:
 39 43    (1)  Twenty-five Thirty percent for members
 39 44 receiving a service retirement allowance and for
 39 45 beneficiaries receiving a pension under subsection 9
 39 46 of this section.  However, effective July 1, 1990, for
 39 47 members who retired before that date, thirty percent
 39 48 shall be the applicable percentage for members and
 39 49 beneficiaries under this subparagraph.
 39 50    (2)  Twenty-five Thirty percent for members with
 40  1 five or more years of membership service who are
 40  2 receiving an ordinary disability retirement allowance.
 40  3 However, effective July 1, 1990, for members who
 40  4 retired before that date, thirty percent shall be the
 40  5 applicable percentage for members under this
 40  6 subparagraph.
 40  7    (3)  Twelve and one-half Fifteen percent for
 40  8 members with less than five years of membership
 40  9 service who are receiving an ordinary disability
 40 10 retirement allowance, and for beneficiaries receiving
 40 11 a pension under subsection 8 of this section.
 40 12 However, effective July 1, 1990, for members who
 40 13 retired before that date, fifteen percent shall be the
 40 14 applicable percentage for members and beneficiaries
 40 15 under this subparagraph.
 40 16    Sec. 81.  Section 97A.6, subsection 14, paragraph
 40 17 d, Code 1995, is amended to read as follows:
 40 18    d.  A retired member eligible for benefits under
 40 19 the provisions of subsection 1 is not eligible for the
 40 20 annual readjustment of pensions provided in this
 40 21 subsection unless the member served at least twenty-
 40 22 two years and attained the age of fifty-five years
 40 23 prior to the member's termination of employment.
 40 24    Sec. 82.  Section 97A.6, Code 1995, is amended by
 40 25 adding the following new subsection:
 40 26    NEW SUBSECTION.  2A.  EARLY RETIREMENT BENEFITS.
 40 27    a.  Notwithstanding the calculation of the service
 40 28 retirement allowance under subsection 2, beginning
 40 29 July 1, 1996, a member who has completed twenty-two
 40 30 years or more of creditable service and is at least
 40 31 fifty years of age, but less than fifty-five years of
 40 32 age, who has otherwise completed the requirements for
 40 33 retirement under subsection 1, may retire and receive
 40 34 a reduced service retirement allowance pursuant to
 40 35 this subsection.  The service retirement allowance for
 40 36 a member less than fifty-five years of age shall be
 40 37 calculated in the manner prescribed in subsection 2,
 40 38 except that the percentage multiplier of the member's
 40 39 average final compensation used in the determination
 40 40 of the service retirement allowance shall be reduced
 40 41 by the board of trustees pursuant to paragraph "b".
 40 42    b.  On July 1, 1996, and on each July 1 thereafter,
 40 43 the board of trustees shall determine for the
 40 44 respective fiscal year the percent by which the
 40 45 percentage multiplier under subsection 2 shall be
 40 46 reduced for each month that a member's retirement date
 40 47 precedes the member's fifty-fifth birthday.  The board
 40 48 of trustees shall make this determination based upon
 40 49 the most recent actuarial valuation of the system, the
 40 50 calculation of the acturial cost for each month of
 41  1 retirement of a member prior to age fifty-five, and
 41  2 the premise that the provision of a service retirement
 41  3 allowance to a member who is less than fifty-five
 41  4 years of age will not result in any increase in cost
 41  5 to the system.
 41  6    Sec. 83.  Section 97A.7, subsection 2, Code 1995,
 41  7 is amended to read as follows:
 41  8    2.  The several funds created by this chapter may
 41  9 be invested in:
 41 10    a.  Bonds or other evidences of indebtedness
 41 11 issued, assumed, or guaranteed by the United States of
 41 12 America, or by any agency or instrumentality thereof.
 41 13    b.  In savings accounts or time deposits in Iowa
 41 14 banks approved as depositories by the executive
 41 15 council.
 41 16    c.  In any investments authorized for the Iowa
 41 17 public employees' retirement system in section 97B.7,
 41 18 subsection 2, paragraph "b".
 41 19    Sec. 84.  Section 97A.8, subsection 1, paragraph b,
 41 20 Code 1995, is amended to read as follows:
 41 21    b.  On the basis of the rate of interest and of the
 41 22 mortality, interest, and other tables adopted by the
 41 23 board of trustees, the state commissioner of insurance
 41 24 board of trustees, upon the advice of the actuary
 41 25 hired by the board for that purpose, shall make each
 41 26 valuation required by this chapter and shall
 41 27 immediately after making such valuation, determine the
 41 28 "normal contribution rate".  The normal contribution
 41 29 rate shall be the rate percent of the earnable
 41 30 compensation of all members obtained by deducting from
 41 31 the total liabilities of the fund the sum of the
 41 32 amount of the funds in hand to the credit of the fund
 41 33 and dividing the remainder by one percent of the
 41 34 present value of the prospective future compensation
 41 35 of all members as computed on the basis of the rate of
 41 36 interest and of mortality and service tables adopted
 41 37 by the board of trustees, all reduced by the employee
 41 38 contribution made pursuant to this subsection.
 41 39 However, the normal rate of contribution shall not be
 41 40 less than seventeen percent.  The normal rate of
 41 41 contribution shall be determined by the state
 41 42 commissioner of insurance board of trustees after each
 41 43 valuation.
 41 44    Sec. 85.  Section 97A.8, subsection 1, paragraph c,
 41 45 unnumbered paragraph 3, Code 1995, is amended by
 41 46 striking the unnumbered paragraph.
 41 47    Sec. 86.  Section 97A.8, subsection 1, paragraph f,
 41 48 subparagraph (8), Code 1995, is amended to read as
 41 49 follows:
 41 50    (8)  Notwithstanding any other provision of this
 42  1 chapter, beginning July 1, 1996, and each fiscal year
 42  2 thereafter, the member's contribution rate shall be
 42  3 equivalent to the member's contribution rate provided
 42  4 under section 411.8, subsection 1, paragraph "f", for
 42  5 the statewide fire and police retirement system for
 42  6 the applicable fiscal year an amount equal to the
 42  7 member's contribution rate times each member's
 42  8 compensation shall be paid to the pension accumulation
 42  9 fund from the earnable compensation of the member.
 42 10 For the purposes of this subparagraph, the member's
 42 11 contribution rate shall be nine and thirty-five
 42 12 hundredths percent.  However, the system shall
 42 13 increase the member's contribution rate as necessary
 42 14 to cover any increase in cost to the system resulting
 42 15 from statutory changes which are enacted by any
 42 16 session of the general assembly meeting after January
 42 17 1, 1995, if the increase cannot be absorbed within the
 42 18 contribution rates otherwise established pursuant to
 42 19 this paragraph, but subject to a maximum employee
 42 20 contribution rate of eleven and three-tenths percent.
 42 21 After the employee contribution reaches eleven and
 42 22 three-tenths percent, sixty percent of the additional
 42 23 cost of such statutory changes shall be paid by the
 42 24 employer under paragraph "c" and forty percent of the
 42 25 additional cost shall be paid by employees under this
 42 26 paragraph.
 42 27    Sec. 87.  Section 97A.8, subsection 3, Code 1995,
 42 28 is amended to read as follows:
 42 29    3.  EXPENSE FUND.  The expense fund shall be the
 42 30 fund to which shall be credited all money provided by
 42 31 the state of Iowa to pay the administration expenses
 42 32 of the system and from which shall be paid all the
 42 33 expenses necessary in connection with the
 42 34 administration and operation of the system.
 42 35 Biennially the board of trustees shall estimate the
 42 36 amount of money necessary to be paid into the expense
 42 37 fund during the ensuing biennium to provide for the
 42 38 expense of operation of the system.  Investment
 42 39 management expenses shall be charged to the investment
 42 40 income of the system and there is appropriated from
 42 41 the system an amount required for the investment
 42 42 management expenses.  The board of trustees shall
 42 43 report the investment management expenses for the
 42 44 fiscal year as a percent of the market value of the
 42 45 system.
 42 46    For purposes of this subsection, investment
 42 47 management expenses are limited to the following:
 42 48    a.  Fees for investment advisors, consultants, and
 42 49 investment management and benefit consultant firms
 42 50 hired by the board of trustees in administering this
 43  1 chapter.
 43  2    b.  Fees and costs for safekeeping fund assets.
 43  3    c.  Costs for performance and compliance
 43  4 monitoring, and accounting for fund investments.
 43  5    d.  Any other costs necessary to prudently invest
 43  6 or protect the assets of the fund.
 43  7    Sec. 88.  Section 97A.12, Code 1995, is amended to
 43  8 read as follows:
 43  9    97A.12  EXEMPTION FROM EXECUTION AND OTHER PROCESS
 43 10 OR ASSIGNMENT.
 43 11    The right of any person to a pension, annuity, or
 43 12 retirement allowance, to the return of contributions,
 43 13 the pension, annuity, or retirement allowance itself,
 43 14 any optional benefit or death benefit, any other right
 43 15 accrued or accruing to any person under this chapter,
 43 16 and the moneys in the various funds created under this
 43 17 chapter, are not subject to execution, garnishment,
 43 18 attachment, or any other process whatsoever, and are
 43 19 unassignable except for the purposes of enforcing
 43 20 child, spousal, or medical support obligations or
 43 21 marital property orders, or as in this chapter
 43 22 otherwise specifically provided in this chapter.  For
 43 23 the purposes of enforcing child, spousal, or medical
 43 24 support obligations, the garnishment or attachment of
 43 25 or the execution against compensation due a person
 43 26 under this chapter shall not exceed the amount
 43 27 specified in 15 U.S.C. } 1673(b).
 43 28    Sec. 89.  NEW SECTION.  97A.17  OPTIONAL TRANSFERS
 43 29 WITH CHAPTER 411.
 43 30    1.  For purposes of this section unless the context
 43 31 otherwise requires:
 43 32    a.  "Average accrued benefit" means the average of
 43 33 the amounts representing the present value of the
 43 34 accrued benefit earned by the member determined by the
 43 35 former system and the present value of the accrued
 43 36 benefit earned by the member determined by the current
 43 37 system.
 43 38    b.  "Current system" means the eligible retirement
 43 39 system in which a person has commenced employment
 43 40 covered by the system after having terminated
 43 41 employment covered by the former system.
 43 42    c.  "Eligible retirement system" means the system
 43 43 created under this chapter and the statewide fire and
 43 44 police retirement system established in chapter 411.
 43 45    d.  "Former system" means the eligible retirement
 43 46 system in which a person has terminated employment
 43 47 covered by the system prior to commencing employment
 43 48 covered by the current system.
 43 49    2.  Commencing July 1, 1996, a vested member of an
 43 50 eligible retirement system who terminates employment
 44  1 covered by one eligible retirement system and, within
 44  2 sixty days, commences employment covered by the other
 44  3 eligible retirement system may elect to transfer the
 44  4 average accrued benefit earned from the former system
 44  5 to the current system.  The member shall file an
 44  6 application with the current system for transfer of
 44  7 the average accrued benefit within ninety days of the
 44  8 commencement of employment with the current system.
 44  9    3.  Notwithstanding subsection 2, a vested member
 44 10 whose employment with the current system commenced
 44 11 prior to July 1, 1996, may elect to transfer the
 44 12 average accrued benefit earned under the former system
 44 13 to the current system by filing an application with
 44 14 the current system for transfer of the average accrued
 44 15 benefit on or before July 1, 1997.
 44 16    4.  Upon receipt of an application for transfer of
 44 17 the average accrued benefit, the current system shall
 44 18 calculate the average accrued benefit and the former
 44 19 system shall transfer to the current system assets in
 44 20 an amount equal to the average accrued benefit.  Once
 44 21 the transfer of the average accrued benefit is
 44 22 completed, the member's service under the former
 44 23 system shall be treated as membership service under
 44 24 the current system for purposes of this chapter and
 44 25 chapter 411.  
 44 26                       DIVISION IV
 44 27       STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM
 44 28    Sec. 90.  Section 400.8, subsection 1, Code 1995,
 44 29 is amended to read as follows:
 44 30    1.  The commission, when necessary under the rules,
 44 31 including minimum and maximum age limits, which shall
 44 32 be prescribed and published in advance by the
 44 33 commission and posted in the city hall, shall hold
 44 34 examinations for the purpose of determining the
 44 35 qualifications of applicants for positions under civil
 44 36 service, other than promotions, which examinations
 44 37 shall be practical in character and shall relate to
 44 38 matters which will fairly test the mental and physical
 44 39 ability of the applicant to discharge the duties of
 44 40 the position to which the applicant seeks appointment.
 44 41 The physical examination of applicants for appointment
 44 42 to the positions of police officer, police matron, or
 44 43 fire fighter shall be held in accordance with medical
 44 44 protocols established by the board of trustees of the
 44 45 fire and police retirement system established by
 44 46 section 411.5.  The board of trustees may change the
 44 47 medical protocols at any time the board so determines.
 44 48 The commission shall conduct a medical examination of
 44 49 an applicant for the position of police officer,
 44 50 police matron, or fire fighter after a conditional
 45  1 offer of employment has been made to the applicant.
 45  2 An applicant shall not be discriminated against on the
 45  3 basis of height, weight, sex, or race in determining
 45  4 physical or mental ability of the applicant.
 45  5 Reasonable rules relating to strength, agility, and
 45  6 general health of applicants shall be prescribed.  The
 45  7 costs of the physical examination required under this
 45  8 subsection shall be paid from the trust and agency
 45  9 fund of the city.
 45 10    Sec. 91.  Section 411.5, Code 1995, is amended by
 45 11 adding the following new subsection:
 45 12    NEW SUBSECTION.  13.  VOLUNTARY BENEFIT PROGRAMS.
 45 13 The board of trustees shall be responsible for the
 45 14 administration of the voluntary benefit programs
 45 15 established under section 411.40.  The board may take
 45 16 any necessary action, including the adoption of rules,
 45 17 for purposes of administering the programs.
 45 18    Sec. 92.  Section 411.6, subsection 7, paragraph a,
 45 19 unnumbered paragraph 1, Code 1995, is amended to read
 45 20 as follows:
 45 21    Should any beneficiary for either ordinary or
 45 22 accidental disability, except a beneficiary who is
 45 23 fifty-five years of age or over and would have
 45 24 completed twenty-two years of service if the
 45 25 beneficiary had remained in active service, be engaged
 45 26 in a gainful occupation paying more than the
 45 27 difference between the member's retirement allowance
 45 28 and one and one-half times the earnable compensation
 45 29 of an active member at the same position on the salary
 45 30 scale within the member's rank as the member held at
 45 31 retirement, then the amount of the member's retirement
 45 32 allowance shall be reduced to an amount which together
 45 33 with the amount earned by the member shall equal one
 45 34 and one-half times the amount of the current earnable
 45 35 compensation of an active member at the same position
 45 36 on the salary scale within the member's rank as the
 45 37 member held at retirement.  Should the member's
 45 38 earning capacity be later changed, the amount of the
 45 39 member's retirement allowance may be further modified,
 45 40 provided, that the new retirement allowance shall not
 45 41 exceed the amount of the retirement allowance adjusted
 45 42 by annual readjustments of pensions pursuant to
 45 43 subsection 12 of this section nor an amount which,
 45 44 when added to the amount earned by the beneficiary,
 45 45 equals one and one-half times the amount of the
 45 46 earnable compensation of an active member at the same
 45 47 position on the salary scale within the member's rank
 45 48 as the member held at retirement.  A beneficiary
 45 49 restored to active service at a salary less than the
 45 50 average final compensation upon the basis of which the
 46  1 member was retired at age fifty-five or greater, shall
 46  2 not again become a member of the retirement system and
 46  3 shall have the member's retirement allowance suspended
 46  4 while in active service.  If the rank or position held
 46  5 by the retired member is subsequently abolished,
 46  6 adjustments to the allowable limit on the amount of
 46  7 income which can be earned in a gainful occupation
 46  8 shall be computed in the same manner as provided in
 46  9 subsection 12, paragraph "c", of this section for
 46 10 readjustment of pensions when a rank or position has
 46 11 been abolished by the board of trustees as though such
 46 12 rank or position had not been abolished and salary
 46 13 increases had been granted to such rank or position on
 46 14 the same basis as increases granted to other ranks and
 46 15 positions in the department.
 46 16    Sec. 93.  Section 411.6, subsection 12, paragraphs
 46 17 a through c, Code 1995, are amended by striking the
 46 18 paragraphs and inserting in lieu thereof the
 46 19 following:
 46 20    a.  On each July 1, the monthly pensions authorized
 46 21 in this section payable to retired members and to
 46 22 beneficiaries shall be adjusted as provided in this
 46 23 subsection.  An amount equal to the sum of one and
 46 24 one-half percent of the monthly pension of each
 46 25 retired member and beneficiary and the applicable
 46 26 incremental amount shall be added to the monthly
 46 27 pension of each retired member and beneficiary.  The
 46 28 board of trustees shall report to the general assembly
 46 29 every six years, by September 15 of that year,
 46 30 beginning with September 15, 2001, on whether the
 46 31 provisions of this subsection continue to provide an
 46 32 equitable method for the annual readjustment of
 46 33 pensions payable under this chapter.
 46 34    b.  For purposes of this subsection, "applicable
 46 35 incremental amount" means the following amount for
 46 36 members receiving a pension under subsection 2, 4, or
 46 37 6 and for beneficiaries receiving a pension under
 46 38 subsection 11:
 46 39    (1)  Fifteen dollars where the member's retirement
 46 40 date was less than five years prior to the effective
 46 41 date of the increase.
 46 42    (2)  Twenty dollars where the member's retirement
 46 43 date was at least five years, but less than ten years,
 46 44 prior to the effective date of the increase.
 46 45    (3)  Twenty-five dollars where the member's
 46 46 retirement date was at least ten years, but less than
 46 47 fifteen years, prior to the effective date of the
 46 48 increase.
 46 49    (4)  Thirty dollars where the member's retirement
 46 50 date was at least fifteen years, but less than twenty
 47  1 years, prior to the effective date of the increase.
 47  2    (5)  Thirty-five dollars where the member's
 47  3 retirement date was at least twenty years prior to the
 47  4 effective date of the increase.
 47  5    c.  For beneficiaries receiving a pension under
 47  6 subsection 8 or 9, the applicable incremental amount
 47  7 shall be determined as set forth in paragraph "b",
 47  8 except that the date of the member's death shall be
 47  9 substituted for the member's retirement date.
 47 10    Sec. 94.  Section 411.6, subsection 12, Code 1995,
 47 11 is amended by adding the following new paragraph:
 47 12    NEW PARAGRAPH.  e.  A retired member eligible for
 47 13 benefits under this section and otherwise eligible for
 47 14 the readjustment of benefits provided in this
 47 15 subsection is not eligible for the readjustment unless
 47 16 the member was retired on or before the effective date
 47 17 of the readjustment.
 47 18    Sec. 95.  Section 411.13, Code 1995, is amended to
 47 19 read as follows:
 47 20    411.13  EXEMPTION FROM EXECUTION AND OTHER PROCESS,
 47 21 OR ASSIGNMENT – EXCEPTIONS.
 47 22    The right of any person to a pension, annuity, or
 47 23 retirement allowance, to the return of contributions,
 47 24 the pension, annuity, or retirement allowance itself,
 47 25 any optional benefit or death benefit, any other right
 47 26 accrued or accruing to any person under this chapter,
 47 27 and the moneys in the fire and police retirement fund
 47 28 created under this chapter, are not subject to
 47 29 execution, garnishment, attachment, or any other
 47 30 process whatsoever, and are unassignable except for
 47 31 the purposes of enforcing child, spousal, or medical
 47 32 support obligations or marital property orders, or as
 47 33 in this chapter otherwise specifically provided in
 47 34 this chapter.  For the purposes of enforcing child,
 47 35 spousal, or medical support obligations, the
 47 36 garnishment or attachment of or the execution against
 47 37 compensation due a person under this chapter shall not
 47 38 exceed the amount specified in 15 U.S.C. } 1673(b).
 47 39    Sec. 96.  NEW SECTION.  411.31  OPTIONAL TRANSFERS
 47 40 WITH CHAPTER 97A.
 47 41    1.  For purposes of this section, unless the
 47 42 context otherwise requires:
 47 43    a.  "Average accrued benefit" means the average of
 47 44 the amounts representing the present value of the
 47 45 accrued benefit earned by the member determined by the
 47 46 former system and the present value of the accrued
 47 47 benefit earned by the member determined by the current
 47 48 system.
 47 49    b.  "Current system" means the eligible retirement
 47 50 system in which a person has commenced employment
 48  1 covered by the system after having terminated
 48  2 employment covered by the former system.
 48  3    c.  "Eligible retirement system" means the system
 48  4 created under this chapter and the Iowa department of
 48  5 public safety peace officers' retirement, accident,
 48  6 and disability system established in chapter 97A.
 48  7    d.  "Former system" means the eligible retirement
 48  8 system in which a person has terminated employment
 48  9 covered by the system prior to commencing employment
 48 10 covered by the current system.
 48 11    2.  Commencing July 1, 1996, a vested member of an
 48 12 eligible retirement system who terminates employment
 48 13 covered by one eligible retirement system and, within
 48 14 sixty days, commences employment covered by the other
 48 15 eligible retirement system may elect to transfer the
 48 16 average accrued benefit earned from the former system
 48 17 to the current system.  The member shall file an
 48 18 application with the current system for transfer of
 48 19 the average accrued benefit within ninety days of the
 48 20 commencement of employment with the current system.
 48 21    3.  Notwithstanding subsection 2, a vested member
 48 22 whose employment with the current system commenced
 48 23 prior to July 1, 1996, may elect to transfer the
 48 24 average accrued benefit earned under the former system
 48 25 to the current system by filing an application with
 48 26 the current system for transfer of the average accrued
 48 27 benefit on or before July 1, 1997.
 48 28    4.  Upon receipt of an application for transfer of
 48 29 the average accrued benefit, the current system shall
 48 30 calculate the average accrued benefit and the former
 48 31 system shall transfer to the current system assets in
 48 32 an amount equal to the average accrued benefit.  Once
 48 33 the transfer of the average accrued benefit is
 48 34 completed, the member's service under the former
 48 35 system shall be treated as membership service under
 48 36 the current system for purposes of this chapter and
 48 37 chapter 97A.
 48 38    Sec. 97.  Section 411.37, subsection 2, Code 1995,
 48 39 is amended to read as follows:
 48 40    2.  The board shall include in the transition plan
 48 41 or other transition documents, provisions to
 48 42 facilitate continuity under sections 411.20, 411.21,
 48 43 and 411.30 and a recommendation for an equitable
 48 44 process for determining earnable compensation changes
 48 45 when calculating adjustments to pensions under section
 48 46 411.6, subsection 12, to be submitted to the general
 48 47 assembly meeting in 1991.
 48 48    Sec. 98.  Section 411.38, subsection 1, paragraph
 48 49 b, unnumbered paragraph 1, Code 1995, is amended to
 48 50 read as follows:
 49  1    Transfer from each terminated city fire or police
 49  2 retirement system to the statewide system amounts
 49  3 sufficient to cover the accrued liabilities of that
 49  4 terminated system as determined by the actuary of the
 49  5 statewide system.  The actuary of the statewide system
 49  6 shall redetermine the accrued liabilities of the
 49  7 terminated systems as necessary to take into account
 49  8 additional amounts payable by the city which are
 49  9 attributable to errors or omissions which occurred
 49 10 prior to January 1, 1992, or to matters pending as of
 49 11 January 1, 1992.  If the actuary of the statewide
 49 12 system determines that the assets transferred by a
 49 13 terminated system are insufficient to fully fund the
 49 14 accrued liabilities of the terminated system as
 49 15 determined by the actuary as of January 1, 1992, the
 49 16 participating city shall pay to the statewide system
 49 17 an amount equal to the unfunded liability plus
 49 18 interest for the period beginning January 1, 1992, and
 49 19 ending with the date of payment or the date of entry
 49 20 into an amortization agreement pursuant to this
 49 21 section.  Interest on the unfunded liability shall be
 49 22 computed at a rate equal to the greater of the
 49 23 actuarial interest rate assumption on investments of
 49 24 the moneys in the fund or the actual investment
 49 25 earnings of the fund for the applicable calendar year.
 49 26 The participating city may enter into an agreement
 49 27 with the statewide system to make additional annual
 49 28 contributions sufficient to amortize the unfunded
 49 29 accrued liability of the terminated system.  The terms
 49 30 of an amortization agreement shall be based upon the
 49 31 recommendation of the actuary of the statewide system,
 49 32 and the agreement shall do each of the following:
 49 33    Sec. 99.  NEW SECTION.  411.40  VOLUNTARY BENEFIT
 49 34 PROGRAMS.
 49 35    The board of trustees may establish voluntary
 49 36 benefit programs for members subject to the following
 49 37 conditions:
 49 38    1.  The voluntary benefit programs may provide
 49 39 benefits including, but not limited to, retiree health
 49 40 benefits, long-term care, and life insurance.
 49 41    2.  Participation in the voluntary benefit programs
 49 42 by members shall be voluntary.
 49 43    3.  Contributions to the voluntary benefit programs
 49 44 shall be paid entirely by each participating member by
 49 45 means of payroll deduction.  Cities employing members
 49 46 participating in voluntary benefit programs shall
 49 47 forward the amounts deducted to the board of trustees
 49 48 for deposit in the voluntary benefit fund.
 49 49    4.  The voluntary benefit programs and the
 49 50 voluntary benefit fund shall be administered under the
 50  1 direction of the board of trustees for the exclusive
 50  2 benefit of members paying contributions as provided in
 50  3 subsection 3.
 50  4    5.  The assets of the voluntary benefit programs
 50  5 shall be credited to the voluntary benefit fund, which
 50  6 is hereby created.  The voluntary benefit fund shall
 50  7 include contributions deposited in accordance with
 50  8 subsection 3, and any interest and earnings on the
 50  9 contributions.  The board of trustees shall annually
 50 10 establish an investment policy to govern the
 50 11 investment and reinvestment of the assets in the
 50 12 voluntary benefit fund.  The voluntary benefit fund
 50 13 created under this section and the fire and police
 50 14 retirement fund created under section 411.8 shall not
 50 15 be used to subsidize any portion of the liabilities of
 50 16 the other fund.
 50 17    6.  The board of trustees shall include in its
 50 18 annual budget the amount of money necessary during the
 50 19 following year to provide for the expense of operation
 50 20 of the voluntary benefit programs.  The operating
 50 21 expenses shall be paid from the voluntary benefit fund
 50 22 under the direction of the board of trustees.  
 50 23                       DIVISION V
 50 24               JUDICIAL RETIREMENT SYSTEM
 50 25    Sec. 100.  Section 602.9111, Code 1995, is amended
 50 26 to read as follows:
 50 27    602.9111  INVESTMENT OF FUND.
 50 28    So much of the judicial retirement fund as may not
 50 29 be necessary to be kept on hand for the making of
 50 30 disbursements under this article shall be invested by
 50 31 the treasurer of state in bonds or other evidences of
 50 32 indebtedness issued, assumed, or guaranteed by the
 50 33 United States of America, or by any agency or
 50 34 instrumentality thereof or in any investments
 50 35 authorized for the Iowa public employees' retirement
 50 36 system in section 97B.7, subsection 2, paragraph "b",
 50 37 and the earnings therefrom shall be credited to said
 50 38 the fund.  The treasurer of state may execute
 50 39 contracts and agreements with investment advisors,
 50 40 consultants, and investment management and benefit
 50 41 consultant firms in the administration of the judicial
 50 42 retirement fund.
 50 43    Investment management expenses shall be charged to
 50 44 the investment income of the fund and there is
 50 45 appropriated from the fund an amount required for the
 50 46 investment management expenses.  The court
 50 47 administrator shall report the investment management
 50 48 expenses for the fiscal year as a percent of the
 50 49 market value of the system.
 50 50    For purposes of this section, investment management
 51  1 expenses are limited to the following:
 51  2    a.  Fees for investment advisors, consultants, and
 51  3 investment management and benefit consultant firms
 51  4 hired by the treasurer of state in administering the
 51  5 fund.
 51  6    b.  Fees and costs for safekeeping fund assets.
 51  7    c.  Costs for performance and compliance
 51  8 monitoring, and accounting for fund investments.
 51  9    d.  Any other costs necessary to prudently invest
 51 10 or protect the assets of the fund.  The state court
 51 11 administrator and the treasurer of state, and their
 51 12 employees, are not personally liable for claims based
 51 13 upon an act or omission of the person performed in the
 51 14 discharge of the person's duties concerning the
 51 15 judicial retirement fund, except for acts or omissions
 51 16 which involve malicious or wanton misconduct.  
 51 17                       DIVISION IV
 51 18         EFFECTIVE AND APPLICABILITY PROVISIONS
 51 19    Sec. 101.  EFFECTIVE AND RETROACTIVE APPLICABILITY
 51 20 DATES.
 51 21    1.  The section of this Act which amends section
 51 22 97B.49, subsection 16, by enacting a new paragraph
 51 23 "m", being deemed of immediate importance, takes
 51 24 effect upon enactment and applies retroactively to
 51 25 July 1, 1992.
 51 26    2.  The section of this Act which amends section
 51 27 411.6, subsection 12, paragraphs "a" through "c",
 51 28 takes effect July 1, 1997." 
 51 29 
 51 30 
 51 31                              
 51 32 COMMITTEE ON STATE GOVERNMENT
 51 33 MARTIN of Scott, Chairperson
 51 34 SF 2245.315 76
 51 35 ec/cf
     

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