Text: SF00344 Text: SF00346 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 12.8, unnumbered paragraph 3, Code 1 2 1997, is amended to read as follows: 1 3 The treasurer of state, with the approval of theinvestment1 4 board of trustees of the Iowa public employees' retirement 1 5 system, may conduct a program of lending securities in the 1 6 Iowa public employees' retirement system portfolio. When 1 7 securities are loaned as provided by this paragraph, the 1 8 treasurer shall act in the manner provided for investment of 1 9 moneys in the Iowa public employees' retirement fund under 1 10 section 97B.7. The treasurer of state shall report at least 1 11 annually to theinvestmentboard of trustees of the Iowa 1 12 public employees' retirement system on the program and shall 1 13 provide additional information on the program upon the request 1 14 of theinvestmentboard of trustees or the employees of the 1 15 Iowa public employees' retirement system division of the 1 16 department of personnel. 1 17 Sec. 2. Section 19A.1, subsection 3, paragraph c, Code 1 18 1997, is amended to read as follows: 1 19 c. Theinvestmentboard of trustees of the Iowa public 1 20 employees' retirement system created by section97B.897B.8A. 1 21 Sec. 3. Section 68B.35, subsection 2, paragraph e, Code 1 22 1997, is amended to read as follows: 1 23 e. Members of the banking board, the ethics and campaign 1 24 disclosure board, the credit union review board, the economic 1 25 development board, the employment appeal board, the 1 26 environmental protection commission, the health facilities 1 27 council, the Iowa business investment corporation board of 1 28 directors, the Iowa finance authority, the Iowa seed capital 1 29 corporation, the Iowa public employees' retirement system 1 30investmentboard of trustees, the lottery board, the natural 1 31 resource commission, the board of parole, the petroleum 1 32 underground storage tank fund board, the public employment 1 33 relations board, the state racing and gaming commission, the 1 34 state board of regents, the tax review board, the 1 35 transportation commission, the office of consumer advocate, 2 1 the utilities board, the Iowa telecommunications and 2 2 technology commission, and any full-time members of other 2 3 boards and commissions as defined under section 7E.4 who 2 4 receive an annual salary for their service on the board or 2 5 commission. 2 6 Sec. 4. Section 97B.1, Code 1997, is amended to read as 2 7 follows: 2 8 97B.1 SYSTEM CREATED – ORGANIZATIONAL DEFINITIONS. 2 9 1. The "Iowa Public Employees' Retirement System" is 2 10 created. The system is within the department of personnel, 2 11 subject to the administration of the board. 2 12 2. As used in this chapter unless the context requires 2 13 otherwise: 2 14 a. "Board" means theinvestmentboard of trustees created 2 15 by section97B.897B.8A. 2 16 b. "Department" means the department of personnel. 2 17 c. "Director" means the director of the department of 2 18 personnel. 2 19 d. "System" means the Iowa public employees' retirement 2 20 system. 2 21 Sec. 5. Section 97B.4, Code 1997, is amended to read as 2 22 follows: 2 23 97B.4 ADMINISTRATION OF SYSTEM – POWERS AND DUTIES – 2 24 IMMUNITY. 2 25 Thedepartmentboard, through the department and the chief 2 26 investment officer and chief benefits officer, shall 2 27 administer this chapter. The department, upon the approval of 2 28 the board, may adopt, amend, or rescind rules, employ persons, 2 29 execute contracts with outside parties, make expenditures, 2 30 require reports, make investigations, and take other action it 2 31 deems necessary for the administration of the system in 2 32 conformity with the requirements of this chapter, the 2 33 applicable provisions of the Internal Revenue Code, and all 2 34 other applicable federal and state laws. The rules shall be 2 35 effective upon compliance with chapter 17A. Not later than 3 1 the fifteenth day of December of each year, the department 3 2 shall submit to the governor a report covering the 3 3 administration and operation of this chapter during the 3 4 preceding fiscal year and shall make recommendations for 3 5 amendments to this chapter. The report shall include a 3 6 balance sheet of the moneys in the Iowa public employees' 3 7 retirement fund. 3 8 In the administration of the investment of moneys in the 3 9 fund and in making benefit recommendations, employees of the 3 10 department and members of the board may travel outside the 3 11 state for the purpose of meeting with investment and benefit 3 12 firms and consultants and attending conferences and meetings 3 13 to fulfill their fiduciary responsibilities. This travel is 3 14 not subject to section 421.38, subsection 2. 3 15 The department, members of theinvestmentboard, and the 3 16 treasurer of state are not personally liable for actions or 3 17 omissions under this chapter that do not involve malicious or 3 18 wanton misconduct even if those actions or omissions violate 3 19 the standards established in section 97B.7. 3 20 Sec. 6. Section 97B.7, subsection 2, paragraphs b and d, 3 21 Code 1997, are amended to read as follows: 3 22 b. To invest the portion of the retirement fund which in 3 23 the judgment of the department is not needed for current 3 24 payment of benefits under this chapter. The department shall 3 25 execute the disposition and investment of moneys in the 3 26 retirement fund in accordance with the investment policy and 3 27 goal statement established by theinvestmentboard. In 3 28 establishing the investment policy of the fund and the 3 29 investment of the fund, the department andinvestmentboard 3 30 shall exercise the judgment and care, under the circumstances 3 31 then prevailing, which persons of prudence, discretion, and 3 32 intelligence exercise in the management of their own affairs, 3 33 not for the purpose of speculation, but with regard to the 3 34 permanent disposition of the funds, considering the probable 3 35 income, as well as the probable safety, of their capital. 4 1 Within the limitations of the standard prescribed in this 4 2 section, the treasurer of state, the department, and the board 4 3 may acquire and retain every kind of property and every kind 4 4 of investment which persons of prudence, discretion, and 4 5 intelligence acquire or retain for their own account. 4 6 The department andinvestmentboard shall give appropriate 4 7 consideration to those facts and circumstances that the 4 8 department andinvestmentboard know or should know are 4 9 relevant to the particular investment or investment policy 4 10 involved, including the role the investment plays in the total 4 11 value of the retirement fund. 4 12 For the purposes of this paragraph, appropriate con- 4 13 sideration includes, but is not limited to, a determination by 4 14 the department andinvestmentboard that the particular 4 15 investment or investment policy is reasonably designed to 4 16 further the purposes of the retirement system, taking into 4 17 consideration the risk of loss and the opportunity for gain or 4 18 other return associated with the investment or investment 4 19 policy and consideration of the following factors as they 4 20 relate to the retirement fund: 4 21 (1) The composition of the retirement fund with regard to 4 22 diversification. 4 23 (2) The liquidity and current return of the investments in 4 24 the fund relative to the anticipated cash flow requirements of 4 25 the retirement system. 4 26 (3) The projected return of the investments relative to 4 27 the funding objectives of the retirement system. 4 28 Consistent with this paragraph, investments made under this 4 29 paragraph shall be made in a manner that will enhance the 4 30 economy of this state, and in particular, will result in 4 31 increased employment of the residents of this state. 4 32 Investments of moneys in the fund are not subject to sections 4 33 73.15 through 73.21. 4 34 Except as provided in section 97B.4, if there is loss to 4 35 the fund, the treasurer, the department, and the board are not 5 1 personally liable, and the loss shall be charged against the 5 2 retirement fund. There is appropriated from the retirement 5 3 fund the amount required to cover a loss. Expenses incurred 5 4 in the sale and purchase of securities belonging to the 5 5 retirement fund shall be charged to the retirement fund, and 5 6 there is appropriated from the retirement fund the amount 5 7 required for the expenses incurred. Investment management 5 8 expenses shall be charged to the investment income of the 5 9 retirement fund, and there is appropriated from the retirement 5 10 fund the amount required for the investment management 5 11 expenses, subject to the limitations stated in this unnumbered 5 12 paragraph. The amount appropriated for a fiscal year under 5 13 this unnumbered paragraph shall not exceed four-tenths of one 5 14 percent of the market value of the retirement fund. The 5 15 department shall report the investment management expenses for 5 16 a fiscal year as a percent of the market value of the 5 17 retirement fund in the annual report to the governor required 5 18 in section 97B.4. A person who has signed a contract with the 5 19 department for investment management purposes shall meet the 5 20 requirements for doing business in Iowa sufficient to be 5 21 subject to tax under rules of the department of revenue and 5 22 finance. 5 23 d. To sell any securities or other property in the trust 5 24 fund and reinvest the proceeds in accordance with the 5 25 direction of the department when such action may be deemed 5 26 advisable by the department for the protection of the trust 5 27 fund or the preservation of the value of the investment. Such 5 28 sale of securities or other property of the trust fund shall 5 29 only be made after advice from theinvestmentboard in the 5 30 manner and to the extent provided in this chapter in regard to 5 31 the purchase of investments. 5 32 Sec. 7. NEW SECTION. 97B.8A BOARD OF TRUSTEES. 5 33 1. BOARD ESTABLISHED. A board is established to be known 5 34 as the "Board of Trustees of the Iowa Public Employees' 5 35 Retirement System", referred to in this chapter as the 6 1 "board", whose duties are to establish policy for the 6 2 department in matters relating to the administration of the 6 3 system, including the investment of the trust funds and the 6 4 disbursement of benefits provided to members of the system. 6 5 2. REVIEW. 6 6 a. At least annually the board shall review the investment 6 7 policies and procedures used by the department under section 6 8 97B.7, subsection 2, paragraph "b", and shall hold a public 6 9 meeting on the investment policies and investment performance 6 10 of the fund. Following its review and the public meeting, the 6 11 board shall establish an investment policy and goal statement 6 12 which shall direct the investment activities of the 6 13 department. The development of the investment policy and goal 6 14 statement and its subsequent execution shall be performed 6 15 cooperatively between the board and the department. 6 16 b. At least every two years, the board shall review the 6 17 benefits provided to members under chapter 97B and shall hold 6 18 a public meeting on the benefits provided to members under 6 19 this chapter. Following its review and public meeting, the 6 20 board shall make recommendations to the general assembly 6 21 concerning the benefits provided under this chapter. 6 22 3. MEMBERSHIP. 6 23 a. The board consists of nine members. Six of the members 6 24 shall be appointed by the governor. One member shall be an 6 25 executive of a domestic life insurance company, an executive 6 26 of a state or national bank operating within the state of 6 27 Iowa, or an executive of an industrial corporation located 6 28 within the state of Iowa; one, not a member of the system, who 6 29 is a member of a county board of supervisors or local school 6 30 board; and four shall be members of the system, one of whom is 6 31 an active member who is an employee of a school district, area 6 32 education agency, or merged area, one of whom is an active 6 33 member who is not employed in a position described under 6 34 section 97B.49, subsection 16, and is not an employee of a 6 35 school district, area education agency, or merged area, one of 7 1 whom is employed in a position described under section 97B.49, 7 2 subsection 16, and one of whom is a retired member of the 7 3 system. The president of the senate, after consultation with 7 4 the majority leader and the minority leader of the senate, 7 5 shall appoint one member from the membership of the senate and 7 6 the speaker of the house of representatives, after 7 7 consultation with the majority leader and the minority leader 7 8 of the house of representatives, shall appoint one member from 7 9 the membership of the house. The following members are ex 7 10 officio, voting members of the board: the member who is a 7 11 member of a county board of supervisors or local school board; 7 12 the active member who is an employee of a school district, 7 13 area education agency, or merged area; the active member who 7 14 is not employed in a position described under section 97B.49, 7 15 subsection 16, and is not an employee of a school district, 7 16 area education agency, or merged area; and the active member 7 17 who is employed in a position described under section 97B.49, 7 18 subsection 16. The director of the department of personnel 7 19 and the two legislative members are ex officio, nonvoting 7 20 members of the board. Four voting members of the board shall 7 21 constitute a quorum. 7 22 b. The members who are an executive of a domestic life 7 23 insurance company, an executive of a state or national bank 7 24 operating within the state of Iowa, or an executive of an 7 25 industrial corporation located within the state of Iowa, a 7 26 member of a county board of supervisors or school board, and 7 27 the member who is a retired member of the system, shall be 7 28 paid their actual expenses incurred in performance of their 7 29 duties and shall receive a per diem as specified in section 7 30 7E.6 for each day of service not exceeding forty days per 7 31 year. Legislative members shall be paid the per diem 7 32 specified in section 2.10, subsection 6, for each day of 7 33 service, and their actual expenses incurred in the performance 7 34 of their duties. The per diem and expenses of the legislative 7 35 members shall be paid from funds appropriated under section 8 1 2.12. The following members shall be paid their actual 8 2 expenses incurred in the performance of their duties as 8 3 members of the board and the performance of their duties as 8 4 members of the board shall not affect their salaries, 8 5 vacations, or leaves of absence for sickness or injury: the 8 6 director of the department of personnel; the active member who 8 7 is an employee of a school district, area education agency, or 8 8 merged area; the active member who is not employed in a 8 9 position described under section 97B.49, subsection 16, and is 8 10 not an employee of a school district, area education agency, 8 11 or merged area; and the active member who is employed in a 8 12 position described under section 97B.49, subsection 16. The 8 13 appointive terms of the members appointed by the governor are 8 14 for a period of six years beginning and ending as provided in 8 15 section 69.19. A vacancy in the membership of the board shall 8 16 be filled in the same manner as the original appointment. 8 17 Gubernatorial appointees to the board are subject to 8 18 confirmation by the senate. 8 19 4. ADMINISTRATIVE AUTHORITY. The authority of the 8 20 department to carry out its duties as provided by this chapter 8 21 are, notwithstanding provisions of this chapter to the 8 22 contrary, subject to the approval of the board. 8 23 Sec. 8. Section 473.11, subsection 2, unnumbered paragraph 8 24 1, Code 1997, is amended to read as follows: 8 25 The treasurer of state shall be the custodian of the energy 8 26 conservation trust and shall invest the moneys in the trust, 8 27 in consultation with the energy fund disbursement council 8 28 established in subsection 3 and theinvestmentboard of 8 29 trustees of the Iowa public employees' retirement system, in 8 30 accordance with the following guidelines: 8 31 Sec. 9. BOARD TRANSITION – EFFECTIVE DATE. 8 32 1. Notwithstanding provisions of section 97B.8A, as 8 33 enacted in this Act, to the contrary, the initial board of 8 34 trustees of the Iowa public employees' retirement system shall 8 35 consist of the following members, who shall serve the 9 1 following terms: 9 2 a. The governor shall select one of the members of the 9 3 investment board established under section 97B.8, Code 1997, 9 4 who is an executive of a domestic life insurance company, an 9 5 executive of a state or national bank operating within the 9 6 state of Iowa, or an executive of an industrial corporation 9 7 located within the state of Iowa, to appoint to serve on the 9 8 initial board of trustees for a term which shall commence on 9 9 July 1, 1997, and expire on the same date as the member's term 9 10 would have expired on the investment board in accordance with 9 11 section 97B.8, Code 1997. The members' terms on the 9 12 investment board established under section 97B.8, Code 1997, 9 13 shall cease on July 1, 1997. 9 14 b. The governor shall appoint to the initial board of 9 15 trustees one member, not a member of the system, who is a 9 16 member of a county board of supervisors or local school board 9 17 and one member who is an active member of the system and is 9 18 employed in a position described under section 97B.49, 9 19 subsection 16. The terms of these two members appointed under 9 20 this paragraph shall commence on July 1, 1997, and the 9 21 governor, in making the appointments, shall select the date of 9 22 expiration of the terms in accordance with this paragraph. 9 23 The terms of the members appointed under this paragraph shall 9 24 expire on the dates that the terms of the two members not 9 25 selected pursuant to paragraph "a" would have expired under 9 26 the investment board in accordance with section 97B.8, Code 9 27 1997. 9 28 c. The members of the investment board established under 9 29 section 97B.8, Code 1997, who serve as an active member who is 9 30 an employee of a school district, area education agency, or 9 31 merged area, an active member who is not an employee of a 9 32 school district, area education agency or merged area, and a 9 33 retired member of the system, shall cease membership on the 9 34 investment board and commence membership on the initial board 9 35 of trustees on July 1, 1997. The terms of these members on 10 1 the initial board of trustees shall expire on the same date as 10 2 their terms would have expired on the investment board in 10 3 accordance with section 97B.8, Code 1997. 10 4 d. The members of the investment board established under 10 5 section 97B.8, Code 1997, who are legislative members shall 10 6 cease membership on the investment board and commence 10 7 membership on the initial board of trustees on July 1, 1997. 10 8 The terms of these members shall expire at the pleasure of the 10 9 appointing authorities as provided in section 97B.8A, as 10 10 enacted in this Act. 10 11 e. The director of the department of personnel shall cease 10 12 membership on the investment board established under section 10 13 97B.8, Code 1997, and commence membership on the initial board 10 14 of trustees on July 1, 1997. The director of the department 10 15 of personnel shall serve on the board of trustees as provided 10 16 in section 97B.8A, as enacted in this Act. 10 17 2. Initial appointments by the governor under subsection 10 18 1, paragraphs "a" and "b", are subject to confirmation by the 10 19 senate. If a vacancy occurs as to a member listed in 10 20 subsection 1, paragraphs "a" through "c", prior to the 10 21 expiration of a term as provided in this section, the governor 10 22 shall appoint a member to serve the remainder of the term so 10 23 that the membership requirements of section 97B.8A, as enacted 10 24 in this Act, are fulfilled, and the appointment shall be 10 25 subject to confirmation by the senate. Upon the expiration of 10 26 a term established in this section, a member shall be 10 27 appointed in the manner and for a term of service as specified 10 28 in section 97B.8A, as enacted in this Act. Except as 10 29 otherwise provided in this section, the initial board of 10 30 trustees shall be subject to the requirements of section 10 31 97B.8A, as enacted in this Act. 10 32 3. In order to provide for the appointments to the initial 10 33 board of trustees, this section of this Act, being deemed of 10 34 immediate importance, takes effect upon enactment. 10 35 Sec. 10. Section 97B.8, Code 1997, is repealed. 11 1 EXPLANATION 11 2 This bill provides that the department of personnel shall 11 3 administer the Iowa public employees' retirement system 11 4 (IPERS), subject to the approval of a board of trustees. 11 5 Currently, the department of personnel administers IPERS 11 6 without specific approval of a board of trustees except for 11 7 some investment matters which are determined by the current 11 8 investment board. The current investment board is repealed 11 9 and a new board of trustees is created that has the authority 11 10 of the current investment board as well as the authority to 11 11 make recommendations concerning benefits provided under 11 12 chapter 97B. Of the current members of the investment board, 11 13 two of the members are replaced with a member who, not an 11 14 IPERS member, is on a county board of supervisors or a school 11 15 board, and a member who is covered under section 97B.49, 11 16 subsection 16, which includes members of a protection 11 17 occupation, sheriffs, deputy sheriffs, or airport fire 11 18 fighters. The governor shall select the two members to be 11 19 replaced from among the members who are executives of a 11 20 domestic life insurance company, a state or national bank 11 21 operating in-state, and an industrial corporation located 11 22 within the state. The bill establishes an initial board of 11 23 trustees to complete the current terms of the investment 11 24 board, and the section establishing the initial board is 11 25 effective upon enactment. 11 26 LSB 2631XS 77 11 27 ec/jj/8
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