Text: HF02241 Text: HF02243 Text: HF02200 - HF02299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 97B.41, subsection 2, Code Supplement 1 2 1995, is amended to read as follows: 1 3 2. "Accumulated contributions" means the total obtained as 1 4 of any date, by accumulating each individual contribution by 1 5 the memberat two percentwith interest plus interest 1 6 dividends as provided in section 97B.70, for all completed 1 7 calendar years and for any completed calendar year for which 1 8 the interest dividend has not been declared and for completed 1 9 months of partially completed calendar yearsat two percent1 10interest plus the interest dividend rate calculated for the1 11previous year, compoundedannually, from the end of the1 12calendar year in which such contribution was made to the first1 13day of the month of such dateas provided in section 97B.70. 1 14 Sec. 2. Section 97B.41, subsection 18, Code Supplement 1 15 1995, is amended to read as follows: 1 16 18. a. "Three-year average covered wage" means a member's 1 17 covered wages averaged for the highest three years of the 1 18 member's service, except as otherwise provided in this 1 19 subsection. The highest three years of a member's covered 1 20 wages shall be determined using calendar years. However, if a 1 21 member's final quarter of a year of employment does not occur 1 22 at the end of a calendar year, the department may determine 1 23 the wages for the third year by computing the average quarter 1 24 of all quarters from the member's highest calendar year of 1 25 covered wages not being used in the selection of the two 1 26 highest years and using the computed average quarter for each 1 27 quarter in the third year in which no wages have been reported 1 28 in combination with the final quarter or quarters of the 1 29 member's service to create a full year. However, the 1 30 department shall not use the member's final quarter of wages 1 31 if using that quarter would reduce the member's three-year 1 32 average covered wage. If the three-year average covered wage 1 33 of a member exceeds the highest maximum covered wages in 1 34 effect for a calendar year during the member's period of 1 35 service, the three-year average covered wage of the member 2 1 shall be reduced to the highest maximum covered wages in 2 2 effect during the member's period of service. 2 3 b. Notwithstanding any other provisions of this subsection 2 4 to the contrary, the three-year average covered wage shall be 2 5 computed as follows for the following members: 2 6 (1) For a member who retires during the calendar year 2 7 beginning January 1, 1997, and whose three-year average 2 8 covered wage at the time of retirement exceeds forty-eight 2 9 thousand dollars, the member's covered wages averaged for the 2 10 highest four years of the member's service or forty-eight 2 11 thousand dollars, whichever is greater. 2 12 (2) For a member who retires during the calendar year 2 13 beginning January 1, 1998, and whose three-year average 2 14 covered wage at the time of retirement exceeds fifty-two 2 15 thousand dollars, the member's covered wages averaged for the 2 16 highest five years of the member's service or fifty-two 2 17 thousand dollars, whichever is greater. 2 18 (3) For a member who retires during the calendar year 2 19 beginning January 1, 1999, and whose three-year average 2 20 covered wage at the time of retirement exceeds fifty-five 2 21 thousand dollars, the member's covered wages averaged for the 2 22 highest six years of the member's service or fifty-five 2 23 thousand dollars, whichever is greater. 2 24 (4) For a member who retires on or after January 1, 2000, 2 25 but before January 1, 2003, and whose three-year average 2 26 covered wage at the time of retirement exceeds fifty-five 2 27 thousand dollars, the member's covered wages averaged for the 2 28 highest seven years of the member's service or fifty-five 2 29 thousand dollars, whichever is greater. 2 30 For purposes of this paragraph, the highest years of the 2 31 member's service shall be determined using calendar years and 2 32 may be determined using one computed year calculated in the 2 33 manner and subject to the restrictions provided in paragraph 2 34 "a". 2 35 Sec. 3. Section 97B.41, subsection 20, paragraph b, 3 1 subparagraph (11), unnumbered paragraphs 1 and 2, Code 3 2 Supplement 1995, are amended by striking the unnumbered 3 3 paragraphs and inserting in lieu thereof the following: 3 4 (11) For the calendar year beginning January 1, 1991, 3 5 wages not in excess of thirty-one thousand dollars. 3 6 (11A) For the calendar year beginning January 1, 1992, 3 7 wages not in excess of thirty-four thousand dollars. 3 8 (11B) For the calendar year beginning January 1, 1993, 3 9 wages not in excess of thirty-five thousand dollars. 3 10 (11C) For the calendar year beginning January 1, 1994, 3 11 wages not in excess of thirty-eight thousand dollars. 3 12 (11D) For the calendar year beginning January 1, 1995, 3 13 wages not in excess of forty-one thousand dollars. 3 14 (11E) For the calendar year beginning January 1, 1996, 3 15 wages not in excess of forty-four thousand dollars. 3 16 (11F) Commencing with the calendar year beginning January 3 17 1, 1997, and for each subsequent calendar year, wages not in 3 18 excess of the amount permitted for that year under section 3 19 401(a)(17) of the Internal Revenue Code. 3 20 Sec. 4. Section 97B.48A, subsection 4, Code 1995, is 3 21 amended to read as follows: 3 22 4. The department shall pay to the member the accumulated 3 23 contributions of the member and to the employer the employer 3 24 contributions, plustwo percentinterest plus interest 3 25 dividends as provided in section 97B.70, for all completed 3 26 calendar years, compoundedannuallyas provided in section 3 27 97B.70, on the covered wages earned by a retired member that 3 28 are not used in the recalculation of the retirement allowance 3 29 of a member. 3 30 Sec. 5. Section 97B.49, subsection 4, Code Supplement 3 31 1995, is amended by adding the following new unnumbered 3 32 paragraph: 3 33 NEW UNNUMBERED PARAGRAPH. Effective January 1, 1997, for 3 34 members who retired on or after July 1, 1953, and before July 3 35 1, 1990, with at least ten years of prior and membership 4 1 service, the minimum monthly benefit payable at the normal 4 2 retirement date for prior and membership service shall be two 4 3 hundred dollars. The minimum monthly benefit payable shall be 4 4 increased by ten dollars for each year of prior and membership 4 5 service beyond ten years, up to a maximum of twenty additional 4 6 years of prior and membership service. If benefits commenced 4 7 on an early retirement date, the amount of the benefit shall 4 8 be reduced in accordance with section 97B.50. If an optional 4 9 allowance was selected under section 97B.51, the amount 4 10 payable shall be the actuarial equivalent of the minimum 4 11 benefit. 4 12 Sec. 6. Section 97B.49, subsection 5, paragraph b, Code 4 13 Supplement 1995, is amended to read as follows: 4 14 b. For each active or inactive vested member retiring on 4 15 or after July 1, 1990, with four or more complete years of 4 16 service, a monthly benefit shall be computed which is equal to 4 17 one-twelfth of an amount equal tofifty-two percentthe 4 18 applicable percentage multiplier of the three-year average 4 19 covered wage multiplied by a fraction of years of service. 4 20 The applicable percentage multiplier shall be the following: 4 21 (1) For active or inactive vested members retiring on or 4 22 after July 1, 1990, but before July 1, 1991, fifty-two 4 23 percent. 4 24 (2) For active or inactive vested members retiring on or 4 25 after July 1, 1991, but before July 1, 1992, fifty-four 4 26 percent. 4 27 (3) For active or inactive vested members retiring on or 4 28 after July 1, 1992, but before July 1, 1993, fifty-six 4 29 percent. 4 30 (4) For active or inactive vested members retiring on or 4 31 after July 1, 1993, but before July 1, 1994, fifty-seven and 4 32 four-tenths percent. 4 33 (5) For active or inactive vested members retiring on or 4 34 after July 1, 1994, sixty percent. 4 35 The applicable percentage multiplier shall be subject to 5 1 adjustments as provided in paragraphs "e" and "f". 5 2Commencing July 1, 1991, the department shall increase the5 3percentage multiplier of the three-year average covered wage5 4by an additional two percent each July 1 until reaching sixty5 5percent of the three-year average covered wage if the annual5 6actuarial valuation of the retirement system indicates for5 7that year that the cost of this increase in the percentage of5 8the three-year average covered wage used in computing5 9retirement benefits can be absorbed within the employer and5 10employee contribution rates in effect under section 97B.11.5 11However, commencing July 1, 1994, if the annual actuarial5 12valuation of the retirement system indicates that the employer5 13and employee contribution rates in effect under section 97B.115 14can absorb an increase in the percentage multiplier in excess5 15of two percent, the department shall increase the percentage5 16multiplier for that year beyond two percent to the extent5 17which the increase can be absorbed by the contribution rates5 18in effect, not to exceed a maximum percentage multiplier of5 19sixty percent. The increase in the percentage multiplier for5 20a year applies only to the members retiring on or after July 15 21of the respective year.5 22If the annual actuarial valuation of the retirement system5 23in any year indicates that the full cost of the increase5 24provided under this paragraph cannot be absorbed within the5 25employer and employee contribution rates in effect under5 26section 97B.11, the department shall reduce the increase to a5 27level which the department determines can be so absorbed.5 28 Notwithstanding any other provision of this chapter 5 29 providing for the payment of the benefits provided in 5 30 subsection 16, the department shallestablishapply the 5 31 percentage multiplier which applies to members covered under 5 32 subsection 16 at the same level as is established under this 5 33 subsection for other members of the system, including any 5 34 modification in the percentage multiplier as provided in 5 35 paragraph "f", except that any modification in the percentage 6 1 multiplier as provided in paragraph "e" shall not apply. 6 2By November 15, 1995, the department shall set aside from6 3other moneys in the retirement fund three million eight6 4hundred sixty thousand dollars. The moneys set aside shall be6 5from the funds generated by the employer and employee6 6contributions in effect under section 97B.11 that exceed the6 7amount necessary to fund the system's existing liabilities, as6 8determined in the annual actuarial valuation of the system as6 9of June 30, 1995. If the annual actuarial valuation indicates6 10that the amount of the employer and employee contributions in6 11excess of the amount necessary to fund existing liabilities is6 12less than three million eight hundred sixty thousand dollars,6 13the department shall set aside all funds that are available.6 14The funds set aside shall not be used in determining the6 15covered wage limitation pursuant to section 97B.41, subsection6 1620, paragraph "b", subparagraph (11), on January 1, 1996.6 17However, any funds set aside which are not specifically6 18dedicated to a purpose by the Seventy-sixth General Assembly6 19shall be used in determining the covered wage limitation6 20thereafter.6 21In accordance with sections 97D.1 and 97D.4, it is the6 22intent of the general assembly that once the goal of sixty6 23percent of the three-year average covered wage is attained for6 24a percentage multiplier, the department shall submit to the6 25public retirement systems committee a plan for future benefit6 26enhancements. This plan shall include, but is not limited to,6 27continuation in the increase in the covered wage ceiling until6 28reaching fifty-five thousand dollars for a calendar year,6 29providing for annual adjustments in the annual dividends paid6 30to retired members as provided in section 97B.49, subsection6 3113, and providing for the indexing of terminated vested6 32members' earned benefits at a rate of three percent per year6 33calculated from the date of termination from covered6 34employment until the date of retirement.6 35 Sec. 7. Section 97B.49, subsection 5, Code Supplement 7 1 1995, is amended by adding the following new paragraph: 7 2 NEW PARAGRAPH. e. For each active or inactive vested 7 3 member retiring on or after July 1, 1996, with more than 7 4 thirty years of membership service, the percentage multiplier 7 5 of the three-year average covered wage used under subsections 7 6 5 and 15 to calculate the monthly retirement allowance shall 7 7 be increased by one-fourth of one percentage point for each 7 8 additional calendar quarter of membership service beyond 7 9 thirty years of service, not to exceed a total of five 7 10 additional percentage points. 7 11 Sec. 8. Section 97B.49, subsection 5, Code Supplement 7 12 1995, is amended by adding the following new paragraph: 7 13 NEW PARAGRAPH. f. Notwithstanding any other provisions of 7 14 this section to the contrary, for members retiring on or after 7 15 July 1, 1997, and whose three-year average covered wage 7 16 exceeds fifty-five thousand dollars, the monthly benefit shall 7 17 be calculated by multiplying the sum of the following amounts 7 18 by the fractions of years of service for that member. 7 19 (1) For the first fifty-five thousand dollars of the 7 20 member's three-year average covered wage, one-twelfth of an 7 21 amount equal to the applicable percentage multiplier otherwise 7 22 provided in this subsection multiplied by fifty-five thousand 7 23 dollars. 7 24 (2) For that portion of a member's three-year average 7 25 covered wage that exceeds fifty-five thousand dollars but is 7 26 less than or equal to sixty-five thousand dollars, one-twelfth 7 27 of an amount equal to the applicable percentage multiplier 7 28 otherwise provided in this subsection, reduced by ten 7 29 percentage points, multiplied by that portion. 7 30 (3) For that portion of a member's three-year average 7 31 covered wage that exceeds sixty-five thousand dollars but is 7 32 less than or equal to seventy-five thousand dollars, one- 7 33 twelfth of an amount equal to the applicable percentage 7 34 multiplier otherwise provided in this subsection, reduced by 7 35 fifteen percentage points, multiplied by that portion. 8 1 (4) For that portion of a member's three-year average 8 2 covered wage that exceeds seventy-five thousand dollars but is 8 3 less than or equal to eighty-five thousand dollars, one- 8 4 twelfth of an amount equal to the applicable percentage 8 5 multiplier otherwise provided in this subsection, reduced by 8 6 twenty percentage points, multiplied by that portion. 8 7 (5) For that portion of a member's three-year average 8 8 covered wage that exceeds eighty-five thousand dollars but is 8 9 less than or equal to ninety-five thousand dollars, one- 8 10 twelfth of an amount equal to the applicable percentage 8 11 multiplier otherwise provided in this subsection, reduced by 8 12 thirty percentage points, multiplied by that portion. 8 13 (6) For that portion of a member's three-year average 8 14 covered wage that exceeds ninety-five thousand dollars, one- 8 15 twelfth of an amount equal to the applicable percentage 8 16 multiplier otherwise provided in this subsection, reduced by 8 17 forty percentage points, multiplied by that portion. 8 18 The covered wage categories referred to in subparagraphs 8 19 (1) through (6) of this paragraph and the fifty-five thousand 8 20 dollar amount otherwise specified in this paragraph shall be 8 21 increased by the department for each calendar year, beginning 8 22 January 1, 1998, by an amount that represents the percentage 8 23 increase in the consumer price index during the previous 8 24 calendar year, as published annually in the federal register 8 25 by the federal department of labor, bureau of labor 8 26 statistics. 8 27 Sec. 9. Section 97B.49, subsection 13, Code Supplement 8 28 1995, is amended to read as follows: 8 29 13. a. A member who retired from the system between 8 30 January 1, 1976, and June 30, 1982, or a contingent annuitant 8 31 or beneficiary of such a member, shall receive with the 8 32 November1994 and the November 19951996 monthly benefit 8 33paymentspayment a retirement dividend equal toonetwo 8 34 hundredeighty-onetwenty-three percent of the monthly benefit 8 35 payment the member received for the preceding June, or the 9 1 most recently received benefit payment, whichever is greater. 9 2 The retirement dividend does not affect the amount of a 9 3 monthly benefit payment. 9 4 b. Each member who retired from the system between July 4, 9 5 1953, and December 31, 1975, or a contingent annuitant or 9 6 beneficiary of such a member, shall receive with the November 9 71994 and the November 19951996 monthly benefitpayments9 8 payment a retirement dividend equal to two hundredthirty-six9 9 ninety-two percent of the monthly benefit payment the member 9 10 received for the preceding June, or the most recently received 9 11 benefit payment, whichever is greater. The retirement 9 12 dividend does not affect the amount of a monthly benefit 9 13 payment. 9 14 c. Notwithstanding the determination of the amount of a 9 15 retirement dividend under paragraph "a", "b", "d", or "f", a 9 16 retirement dividend shall not be less than twenty-five 9 17 dollars. 9 18 d. A member who retired from the system between July 1, 9 19 1982, and June 30, 1986, or a contingent annuitant or 9 20 beneficiary of such a member, shall receive with the November 9 211994 and the November 19951996 monthly benefitpayments9 22 payment a retirement dividend equal toforty-nineseventy-four 9 23 percent of the monthly benefit payment the member received for 9 24 the preceding June, or the most recently received benefit 9 25 payment, whichever is greater. The retirement dividend does 9 26 not affect the amount of a monthly benefit payment. 9 27 e. If the member dies on or after July 1 of the dividend 9 28 year but before the payment date, the full amount of the 9 29 retirement dividend for that year shall be paidto the9 30designated beneficiaryto the member's account, upon 9 31 notification of the member's death.If there is no9 32beneficiary designated by the member, the department shall pay9 33the dividend to the member's estate. The beneficiary, or the9 34representative of the member's estate, must apply for the9 35dividend within two years after the dividend is payable or the10 1dividend is forfeited.10 2 f. A member who retired from the system between July 1, 10 3 1986, and June 30, 1990, or a contingent annuitant or 10 4 beneficiary of such a member, shall receive with the November 10 5 1996and the November 1997monthly benefitpaymentspayment a 10 6 retirement dividendin an amount determined by the general10 7assemblyequal to twenty-four percent of the monthly benefit 10 8 payment the member received for the preceding June, or the 10 9 most recently received benefit payment, whichever is greater. 10 10 The retirement dividend does not affect the amount of a 10 11 monthly benefit payment. 10 12 Sec. 10. Section 97B.49, subsection 15, paragraph b, Code 10 13 Supplement 1995, is amended to read as follows: 10 14 b. For each active or inactive vested member retiring on 10 15 or after July 1, 1990, and before July 1, 1996, who is at 10 16 least fifty-five years of age and for which the sum of the 10 17 number of years of membership service and prior service and 10 18 the member's age in years as of the member's last birthday 10 19 equals or exceeds ninety-two, a monthly benefit shall be 10 20 computed which is equal to one-twelfth of the same percentage 10 21 of the three-year average covered wage of the member as is 10 22 provided in subsection 5. 10 23 Sec. 11. Section 97B.49, subsection 15, Code Supplement 10 24 1995, is amended by adding the following new paragraph: 10 25 NEW PARAGRAPH. c. For each active or inactive vested 10 26 member retiring on or after July 1, 1996, who is at least 10 27 fifty-five years of age and for which the sum of the number of 10 28 years of membership service and prior service and the member's 10 29 age in years as of the member's last birthday equals or 10 30 exceeds eighty-five, a monthly benefit shall be computed which 10 31 is equal to one-twelfth of the same percentage of the three- 10 32 year average covered wage of the member as is provided in 10 33 subsection 5, multiplied by a fraction of years of service as 10 34 is provided in subsection 5. 10 35 Sec. 12. Section 97B.66, unnumbered paragraph 2, Code 11 1 Supplement 1995, is amended to read as follows: 11 2 The contributions paid by the vested or retired member 11 3 shall be equal to the accumulated contributions as defined in 11 4 section 97B.41, subsection 2, by the member for the applicable 11 5 period of service, and the employer contribution for the 11 6 applicable period of service under the teachers insurance and 11 7 annuity association-college retirement equity fund, that would 11 8 have been or had been contributed by the vested or retired 11 9 member and the employer, if applicable, plus interest on the 11 10 contributions that would have accrued for the applicable 11 11 period from the date the previous applicable period of service 11 12 commenced under this system or from the date the service of 11 13 the member in the teachers insurance and annuity association- 11 14 college retirement equity fund commenced to the date of 11 15 payment of the contributions by the memberequal to two11 16percent plus the interest dividend rate applicable for each11 17yearas provided in section 97B.70. 11 18 Sec. 13. Section 97B.70, Code Supplement 1995, is amended 11 19 to read as follows: 11 20 97B.70 INTEREST AND DIVIDENDS TO MEMBERS. 11 21 1.InterestFor calendar years prior to January 1, 1997, 11 22 interest at two percent per annum and interest dividends 11 23 declared by the department shall be credited to the member's 11 24 contributions and the employer's contributions to become part 11 25 of the accumulated contributions thereby. 11 261.a. The average rate of interest earned shall be 11 27 determined upon the following basis: 11 28a.(1) Investment income shall include interest and cash 11 29 dividends on stock. 11 30b.(2) Investment income shall be accounted for on an 11 31 accrual basis. 11 32c.(3) Capital gains and losses, realized or unrealized, 11 33 shall not be included in investment income. 11 34d.(4) Mean assets shall include fixed income investments 11 35 valued at cost or on an amortized basis, and common stocks at 12 1 market values or cost, whichever is lower. 12 2e.(5) The average rate of earned interest shall be the 12 3 quotient of the investment income and the mean assets of the 12 4 retirement fund. 12 52.b. The interest dividend shall be determined within 12 6 sixty days after the end of each calendar year as follows: 12 7 The dividend rate for a calendar year shall be the excess 12 8 of the average rate of interest earned for the year over the 12 9 statutory two percent rate plus twenty-five hundredths of one 12 10 percent. The average rate of interest earned and the interest 12 11 dividend rate in percent shall be calculated to the nearest 12 12 one hundredth, that is, to two decimal places. Interest and 12 13 interest dividends calculated pursuant to this subsection 12 14 shall be compounded annually. 12 15 2. For calendar years beginning January 1, 1997, a per 12 16 annum interest rate at one percent above the interest rate on 12 17 one-year certificates of deposit shall be credited to the 12 18 member's contributions and the employer's contributions to 12 19 become part of the accumulated contributions. For purposes of 12 20 this subsection, the interest rate on one-year certificates of 12 21 deposit shall be determined by the department based on the 12 22 average rate for such certificates of deposit as of January 10 12 23 of each year as published in a publication of general 12 24 acceptance in the business community. The per annum interest 12 25 rate shall be credited on a quarterly basis by applying one- 12 26 quarter of the annual interest rate to the sum of the 12 27 accumulated contributions as of the end of the previous 12 28 calendar quarter. 12 29 3. Interest and interest dividends shall be credited to 12 30 the contributions of active members and inactive vested 12 31 members until the first of the month coinciding with or next 12 32 following the member's retirement date. 12 33 4. Effective upon the date that the department determines 12 34 that this subsection shall be implemented, interest and 12 35 interest dividends shall be credited to the contributions of a 13 1 person who leaves the contributions in the retirement fund 13 2 upon termination from covered employment prior to achieving 13 3 vested status, but who subsequently achieves vested status. 13 4 The interest and interest dividends shall be credited to the 13 5 contributions commencing either upon the date that the 13 6 department determines that this subsection shall be 13 7 implemented, or the date on which the person becomes a vested 13 8 member, whichever is later. Interest and interest dividends 13 9 shall cease upon the first of the month coinciding with or 13 10 next following the person's retirement date. If the 13 11 department no longer maintains the accumulated contribution 13 12 account of the person pursuant to section 97B.53, but the 13 13 person submits satisfactory proof to the department that the 13 14 person did make the contributions, the department shall credit 13 15 interest and interest dividends in the manner provided in this 13 16 subsection. However, the department shall not implement this 13 17 subsection, unless and until the department determines that 13 18 the most recent annual actuarial valuation of the retirement 13 19 system indicates that the employer and employee contribution 13 20 rates in effect under section 97B.11 can absorb the enactment 13 21 of this subsection and the amendments to section 97B.41, 13 22 subsection 12, section 97B.53, subsections 3 and 7, and 13 23 section 97B.53, subsection 6, unnumbered paragraph 1, 13 24 contained in 1994 Iowa Acts, chapter 1183, after meeting the 13 25 other established priorities of the system, as defined in 13 26 section 97B.41, subsection 12. 13 27 Sec. 14. Section 97B.72, unnumbered paragraph 2, Code 13 28 Supplement 1995, is amended to read as follows: 13 29 There is appropriated from moneys available to the general 13 30 assembly under section 2.12 an amount sufficient to pay the 13 31 contributions of the employer based on the period of service 13 32 for which the members have paid accumulated contributions in 13 33 an amount equal to the contributions which would have been 13 34 made if the members of the general assembly who made employee 13 35 contributions had been members of the system during the 14 1 applicable period of service in the general assembly plustwo14 2percentinterestplusand interest dividends at the rate 14 3 provided in section 97B.70 for all completed calendar years, 14 4 and for any completed calendar year for which the interest 14 5 dividend has not been declared and for completed months of 14 6 partially completed calendar yearsat two percent interest14 7plus the interest dividend rate calculated for the previous14 8year, compoundedannually, from the end of the calendar year14 9in which contribution was made to the first day of the month14 10of such dateas provided in section 97B.70. 14 11 Sec. 15. Section 97B.72A, subsection 1, unnumbered 14 12 paragraph 2, Code Supplement 1995, is amended to read as 14 13 follows: 14 14 There is appropriated from the general fund of the state to 14 15 the department an amount sufficient to pay the contributions 14 16 of the employer based on the period of service of members of 14 17 the general assembly for which the member paid accumulated 14 18 contributions under this section. The amount appropriated is 14 19 equal to the employer contributions which would have been made 14 20 if the members of the system who made employee contributions 14 21 had been members of the system during the period for which 14 22 they made employee contributions plustwo percentinterest 14 23plus the interest dividend rate applicableat the rate 14 24 provided in section 97B.70 for each year compoundedannually14 25 as provided in section 97B.70. 14 26 Sec. 16. Section 97B.74, unnumbered paragraph 1, Code 14 27 Supplement 1995, is amended to read as follows: 14 28 An active, vested, or retired member who was a member of 14 29 the system at any time on or after July 4, 1953, and who 14 30 received a refund of the member's contributions for that 14 31 period of membership service, may elect in writing to the 14 32 department to make contributions to the system for all or a 14 33 portion of the period of membership service for which a refund 14 34 of contributions was made, and receive credit for the period 14 35 of membership service for which contributions are made. The 15 1 contributions repaid by the member for such service shall be 15 2 equal to the accumulated contributions, as defined in section 15 3 97B.41, subsection 2, received by the member for the 15 4 applicable period of membership service plus interest on the 15 5 accumulated contributions for the applicable period from the 15 6 date of receipt by the member to the date of repaymentequal15 7to two percent plusat the interestdividendrate provided in 15 8 section 97B.70 applicable for each year compoundedannuallyas 15 9 provided in section 97B.70. 15 10 EXPLANATION 15 11 This bill provides numerous changes to the Iowa public 15 12 employees' retirement system (IPERS). This bill may include a 15 13 state mandate as defined in section 25B.3. The state mandate 15 14 funding requirement in section 25B.2, however, does not apply 15 15 to public employee retirement systems. 15 16 Section 97B.41, concerning definitions, is amended. 15 17 Subsection 18, concerning the definition of three-year 15 18 average covered wage is amended to provide that, for certain 15 19 members who retire between January 1, 1997, and December 31, 15 20 2003, the member's three-year average covered wage shall be 15 21 determined on the member's wages from four to seven years if 15 22 the member's three-year average covered wage exceeds a certain 15 23 dollar amount for the year the member decides to retire. 15 24 Subsection 20, concerning the definition of covered wages, 15 25 provides that, beginning January 1, 1997, the covered wage 15 26 limitation is eliminated subject to the amount permitted under 15 27 the Internal Revenue Code. Currently, the covered wage 15 28 limitation for 1996 is $44,000 and current law provides that 15 29 this amount will increase by $3,000 a year up to a maximum of 15 30 $55,000, provided that the actuarial valuation of the system 15 31 indicates that the increase can be absorbed within existing 15 32 contribution rates. 15 33 Section 97B.49, subsection 4, is amended to provide, 15 34 beginning January 1, 1997, that the minimum monthly benefit 15 35 for members who retired between July 1, 1953, and July 1, 16 1 1990, with at least 10 years of service is $200. For each 16 2 year of service from 10 to 30 years of total service, the 16 3 minimum benefit shall increase by $10 per year of additional 16 4 service. 16 5 Section 97B.49, subsection 5, paragraph "b", is amended to 16 6 reflect the history of the increase in the percentage 16 7 multiplier up to the current 60 percent. The section reflects 16 8 that vested members retiring on or after July 1, 1994, get a 16 9 monthly retirement allowance based on 60 percent of the 16 10 member's three-year average covered wage. The paragraph is 16 11 also amended to provide that the increase in the percentage 16 12 multiplier for years of service as provided in section 97B.49, 16 13 subsection 5, new paragraph "e", in this bill shall not apply 16 14 to members covered under subsection 16, which applies to 16 15 protection occupations, sheriffs, deputies, and airport fire 16 16 fighters. However, these members are subject to the reduction 16 17 in the percentage multiplier if the member's three-year 16 18 average covered wage exceeds certain income levels. 16 19 Section 97B.49, subsection 5, is amended by adding new 16 20 paragraph "e" which provides that a member retiring after July 16 21 1, 1996, gets an additional one-fourth of one percent added to 16 22 the applicable percentage multiplier for each quarter year of 16 23 service beyond 30 years, up to a maximum of an additional 5 16 24 percentage points. 16 25 Section 97B.49, subsection 13, concerning retirement 16 26 dividends, is amended to provide for the payment of a 16 27 retirement dividend based on a percentage of a member's 16 28 monthly retirement allowance for certain retirees in November 16 29 1996. Members who retired between July 4, 1953, and December 16 30 31, 1975, receive a dividend of 292 percent of the monthly 16 31 benefit, members who retired between January 1, 1976, and June 16 32 30, 1982, receive a dividend of 223 percent of the monthly 16 33 benefit, members who retired between July 1, 1982, and June 16 34 30, 1986, receive a dividend of 74 percent of the monthly 16 35 benefit, and members who retired between July 1, 1986, and 17 1 June 30, 1990, receive a dividend of 24 percent of the monthly 17 2 benefit. 17 3 Section 97B.49, subsection 15, is amended to provide that a 17 4 member retiring on or after July 1, 1996, is eligible for 17 5 normal retirement without penalty based upon a rule of 85 17 6 where the combination of a member's age and years of service 17 7 equals or exceeds 85, and the member is at least 55 years of 17 8 age. Currently, the law provides for a rule of 92. 17 9 Section 97B.70 is amended to provide that, effective for 17 10 years beginning January 1997, the interest credited to the 17 11 member's and the employer's contributions for purposes of 17 12 determining the accumulated contributions shall be equal to 1 17 13 percent higher than the interest rate for one year 17 14 certificates of deposit as of January of each year. This 17 15 section also provides that interest shall be credited on a 17 16 quarterly basis. 17 17 LSB 3748YH 76 17 18 ec/cf/24.1
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