Text: SSB03208                          Text: SSB03210
Text: SSB03200 - SSB03299               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

Senate Study Bill 3209

Bill Text

PAG LIN
  1  1                           DIVISION I
  1  2            PUBLIC SAFETY PEACE OFFICERS' RETIREMENT,
  1  3                 ACCIDENT, AND DISABILITY SYSTEM
  1  4    Section 1.  Section 97A.5, subsection 1, Code 1999, is
  1  5 amended to read as follows:
  1  6    1.  BOARD OF TRUSTEES.  A board of trustees of the Iowa
  1  7 department of public safety peace officers' retirement,
  1  8 accident, and disability system is created.  The general
  1  9 responsibility for the proper operation of the system is
  1 10 vested in the board of trustees.  The board of trustees is
  1 11 constituted as follows:  The commissioner of public safety,
  1 12 who is chairperson of the board, the treasurer of state, and
  1 13 an actively engaged member of the system, to be chosen by
  1 14 secret ballot by the actively engaged members of the system,
  1 15 and a retired member of the system, to be chosen by secret
  1 16 ballot by the retired members of the system.  Both members of
  1 17 the system shall serve for a term of two years.
  1 18    Sec. 2.  Section 97A.5, subsection 2, Code 1999, is amended
  1 19 to read as follows:
  1 20    2.  VOTING.  Each trustee shall be entitled to one vote on
  1 21 said board and two three concurring votes shall be necessary
  1 22 for a decision by the trustees on any question at any meeting
  1 23 of said board.
  1 24    Sec. 3.  Section 97A.6, subsection 2, Code 1999, is amended
  1 25 to read as follows:
  1 26    2.  Allowance on service retirement.
  1 27    a.  Upon retirement from service prior to July 1, 1990, a
  1 28 member shall receive a service retirement allowance which
  1 29 shall consist of a pension which equals fifty percent of the
  1 30 member's average final compensation.
  1 31    b.  Upon retirement from service on or after July 1, 1990,
  1 32 but before July 1, 1992, a member shall receive a service
  1 33 retirement allowance which shall consist of a pension which
  1 34 equals fifty-four percent of the member's average final
  1 35 compensation.
  2  1    c.  Commencing July 1, 1992, but before July 1, 2000, the
  2  2 board of trustees shall increase the percentage multiplier of
  2  3 the member's average final compensation by an additional two
  2  4 percent each July 1 until reaching sixty percent of the
  2  5 member's average final compensation.
  2  6    d.  Upon retirement from service on or after July 1, 2000,
  2  7 a member shall receive a service retirement allowance which
  2  8 shall consist of a pension which equals sixty and one-half
  2  9 percent of the member's average final compensation.
  2 10    d. e.  Commencing July 1, 1990, if the member has completed
  2 11 more than twenty-two years of creditable service, the service
  2 12 retirement allowance shall consist of a pension which equals
  2 13 the amount provided in paragraphs "b" and, "c", or "d", plus
  2 14 an additional percentage as set forth below:
  2 15    (1)  For a member who terminates service, other than by
  2 16 death or disability, on or after July 1, 1990, but before July
  2 17 1, 1991, and who does not withdraw the member's contributions
  2 18 pursuant to section 97A.16, upon the member's retirement there
  2 19 shall be added three-tenths percent of the member's average
  2 20 final compensation for each year of service over twenty-two
  2 21 years, excluding years of service after the member's fifty-
  2 22 fifth birthday.  However, this subparagraph does not apply to
  2 23 more than eight additional years of service.
  2 24    (2)  For a member who terminates service, other than by
  2 25 death or disability, on or after July 1, 1991, but before
  2 26 October 16, 1992, and who does not withdraw the member's
  2 27 contributions pursuant to section 97A.16, upon the member's
  2 28 retirement there shall be added six-tenths percent of the
  2 29 member's average final compensation for each year of service
  2 30 over twenty-two years, excluding years of service after the
  2 31 member's fifty-fifth birthday.  However, this subparagraph
  2 32 does not apply to more than eight additional years of service.
  2 33    (3)  For a member who terminates service, other than by
  2 34 death or disability, on or after October 16, 1992, but before
  2 35 July 1, 1996, and who does not withdraw the member's
  3  1 contributions pursuant to section 97A.16, upon the member's
  3  2 retirement there shall be added six-tenths percent of the
  3  3 member's average final compensation for each year of service
  3  4 over twenty-two years.  However, this subparagraph does not
  3  5 apply to more than eight additional years of service.
  3  6    (4)  For a member who terminates service, other than by
  3  7 death or disability, on or after July 1, 1996, but before July
  3  8 1, 1998, and who does not withdraw the member's contributions
  3  9 pursuant to section 97A.16, upon the member's retirement there
  3 10 shall be added one and one-half percent of the member's
  3 11 average final compensation for each year of service over
  3 12 twenty-two years.  However, this subparagraph does not apply
  3 13 to more than eight additional years of service.
  3 14    (5)  For a member who terminates service, other than by
  3 15 death or disability, on or after July 1, 1998, but before July
  3 16 1, 2000, and who does not withdraw the member's contributions
  3 17 pursuant to section 97A.16, upon the member's retirement there
  3 18 shall be added one and one-half percent of the member's
  3 19 average final compensation for each year of service over
  3 20 twenty-two years.  However, this subparagraph does not apply
  3 21 to more than ten additional years of service.
  3 22    (6)  For a member who terminates service, other than by
  3 23 death or disability, on or after July 1, 2000, and who does
  3 24 not withdraw the member's contributions pursuant to section
  3 25 97A.16, upon the member's retirement there shall be added two
  3 26 and three-fourths percent of the member's average final
  3 27 compensation for each year of service over twenty-two years.
  3 28 However, this subparagraph does not apply to more than ten
  3 29 additional years of service.
  3 30    Sec. 4.  Section 97A.6, subsection 8, paragraph b,
  3 31 unnumbered paragraph 1, Code 1999, is amended to read as
  3 32 follows:
  3 33    In lieu of the payment specified in paragraph "a", a
  3 34 beneficiary meeting the qualifications of paragraph "c" may
  3 35 elect to receive a monthly pension equal to one-twelfth of
  4  1 forty percent of the average final compensation of the member,
  4  2 but not less than an amount equal to twenty twenty-five
  4  3 percent of the monthly earnable compensation paid to an active
  4  4 member having the rank of senior patrol officer of the Iowa
  4  5 state patrol if the member was in service at the time of
  4  6 death.  For a member not in service at the time of death, the
  4  7 pension shall be reduced as provided in subsection 1,
  4  8 paragraph "b".
  4  9    Sec. 5.  Section 97A.6, subsection 14, paragraph a, Code
  4 10 1999, is amended to read as follows:
  4 11    a.  Effective July 1, 1980, and on each July 1 thereafter,
  4 12 the monthly pensions authorized in this section payable to
  4 13 retired members and to beneficiaries, except children of a
  4 14 deceased member, shall be adjusted as provided in this
  4 15 paragraph.  The monthly pension of each retired member and
  4 16 each beneficiary shall be adjusted by adding to that monthly
  4 17 pension an amount equal to the amounts determined in
  4 18 subparagraphs (1) and (2).  The adjusted monthly pension shall
  4 19 not be less than the amount which was paid at the time of the
  4 20 member's retirement or death.
  4 21    (1)  An amount equal to the following percentages of the
  4 22 difference between the monthly earnable compensation payable
  4 23 to an active member of the department, of the same rank and
  4 24 position on the salary scale as was held by the retired or
  4 25 deceased member at the time of the member's retirement or
  4 26 death, for July of the preceding year and the monthly earnable
  4 27 compensation payable to an active member of the department of
  4 28 the same rank and position on the salary scale for July of the
  4 29 year just beginning shall be added to the monthly pension of
  4 30 each retired member and each beneficiary as follows multiplied
  4 31 by the following applicable percentage:
  4 32    (1) (a)  Thirty Forty percent for members receiving a
  4 33 service retirement allowance and for beneficiaries receiving a
  4 34 pension under subsection 9 of this section.
  4 35    (2) (b)  Thirty Forty percent for members with five or more
  5  1 years of membership service who are receiving an ordinary
  5  2 disability retirement allowance.
  5  3    (3) (c)  Fifteen Twenty-four percent for members with less
  5  4 than five years of membership service who are receiving an
  5  5 ordinary disability retirement allowance, and for
  5  6 beneficiaries receiving a pension under subsection 8 of this
  5  7 section.
  5  8    (4) (d)  Thirty-three and one-third Forty percent for
  5  9 members receiving an accidental disability allowance.
  5 10    The adjusted monthly pension shall not be less than the
  5 11 amount which was paid at the time of the member's retirement
  5 12 or death.
  5 13    (2)  The following applicable amount determined as follows:
  5 14    (a)  Fifteen dollars where the member's retirement date was
  5 15 less than five years prior to the effective date of the
  5 16 adjustment.
  5 17    (b)  Twenty dollars where the member's retirement date was
  5 18 at least five years, but less than ten years, prior to the
  5 19 effective date of the adjustment.
  5 20    (c)  Twenty-five dollars where the member's retirement date
  5 21 was at least ten years, but less than fifteen years, prior to
  5 22 the effective date of the adjustment.
  5 23    (d)  Thirty dollars where the member's retirement date was
  5 24 at least fifteen years, but less than twenty years, prior to
  5 25 the effective date of the adjustment.
  5 26    (e)  Thirty-five dollars where the member's retirement date
  5 27 was at least twenty years prior to the effective date of the
  5 28 adjustment.
  5 29    The amount added to the monthly pension of a surviving
  5 30 spouse receiving a pension under subsection 12, paragraph "a",
  5 31 of this section shall be equal to one-half the amount that
  5 32 would have been added to the monthly pension of the retired
  5 33 member.
  5 34    As of the first of July of each year, the monthly pension
  5 35 payable to each surviving child under the provisions of
  6  1 subsections 8, 9, and 12 of this section shall be adjusted to
  6  2 equal six percent of the monthly earnable compensation payable
  6  3 on that July 1 to an active member having the rank of senior
  6  4 patrol officer of the Iowa state patrol.
  6  5    Sec. 6.  Section 97A.8, subsection 1, paragraph b, Code
  6  6 1999, is amended to read as follows:
  6  7    b.  On the basis of the rate of interest and of the
  6  8 mortality, interest, and other tables adopted by the board of
  6  9 trustees, the board of trustees, upon the advice of the
  6 10 actuary hired by the board for that purpose, shall make each
  6 11 valuation required by this chapter and shall immediately after
  6 12 making such valuation, determine the "normal contribution
  6 13 rate".  The normal contribution rate shall be the rate percent
  6 14 of the earnable compensation of all members obtained by
  6 15 deducting from the total liabilities of the fund the sum of
  6 16 the amount of the funds in hand to the credit of the fund and
  6 17 dividing the remainder by one percent of the present value of
  6 18 the prospective future compensation of all members as computed
  6 19 on the basis of the rate of interest and of mortality and
  6 20 service tables adopted by the board of trustees, all reduced
  6 21 by the employee contribution made pursuant to this subsection.
  6 22 However, the normal rate of contribution shall not be less
  6 23 than seventeen percent.  The normal rate of contribution shall
  6 24 be determined by the board of trustees after each valuation.
  6 25 To assist in determining the normal rate of contribution, the
  6 26 board of trustees may adopt a smoothing method for valuing the
  6 27 assets of the system.  The smoothing method is designed to
  6 28 reduce changes in the normal contribution rate which could
  6 29 result from fluctuations in the market value of the assets of
  6 30 the system.
  6 31    Sec. 7.  Section 97A.8, subsection 1, paragraph c,
  6 32 unnumbered paragraph 2, Code 1999, is amended by striking the
  6 33 unnumbered paragraph.
  6 34    Sec. 8.  PEACE OFFICERS RETIREMENT SYSTEM – LEGISLATIVE
  6 35 INTENT.  It is the intent of the general assembly that peace
  7  1 officer members of the retirement system be afforded a
  7  2 retirement benefit based upon ninety percent of a peace
  7  3 officer's earnable compensation at the time of a member's
  7  4 retirement after the peace officer has completed thirty years
  7  5 of service when the retirement system can afford it on an
  7  6 actuarially sound basis.  
  7  7                           DIVISION II
  7  8        IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (IPERS)
  7  9    Sec. 9.  Section 97B.1A, Code 1999, is amended by adding
  7 10 the following new subsection:
  7 11    NEW SUBSECTION.  2A.  "Accumulated employer contributions"
  7 12 means an amount equal to the total obtained as of any date, by
  7 13 accumulating each individual contribution by the employer for
  7 14 the member with interest plus interest dividends as provided
  7 15 in section 97B.70, for all completed calendar years and for
  7 16 any completed calendar year for which the interest dividend
  7 17 has not been declared and for completed months of partially
  7 18 completed calendar years, compounded as provided in section
  7 19 97B.70.
  7 20    Sec. 10.  Section 97B.1A, subsection 8, paragraph a,
  7 21 subparagraph (1), Code 1999, is amended to read as follows:
  7 22    (1)  Elective officials in positions for which the
  7 23 compensation is on a fee basis, elective officials of school
  7 24 districts, elective officials of townships, and elective
  7 25 officials of other political subdivisions who are in part-time
  7 26 positions.  An elective official covered under this chapter
  7 27 may terminate membership under this chapter by informing the
  7 28 department in writing of the expiration of the member's term
  7 29 of office or by informing the department of the member's
  7 30 intent to terminate membership for employment as an elective
  7 31 official and establishing that the member has a bona fide
  7 32 termination of employment from all employment covered under
  7 33 this chapter other than as an elective official and that the
  7 34 member has filed a completed application for benefits form
  7 35 with the department.  A county attorney is an employee for
  8  1 purposes of this chapter whether that county attorney is
  8  2 employed on a full-time or part-time basis.
  8  3    Sec. 11.  Section 97B.1A, subsection 8, paragraph a, Code
  8  4 1999, is amended by adding the following new subparagraph:
  8  5    NEW SUBPARAGRAPH.  (12)  Persons employed by a municipal
  8  6 water utility or waterworks that has established a pension and
  8  7 annuity retirement system for its employees pursuant to
  8  8 chapter 412.
  8  9    Sec. 12.  Section 97B.1A, subsection 8, paragraph b,
  8 10 subparagraph (3), Code 1999, is amended to read as follows:
  8 11    (3)  Employees hired for temporary employment of less than
  8 12 six consecutive months or one thousand forty hours in a
  8 13 calendar year.  An employee who works for an employer for six
  8 14 or more consecutive months in a calendar year or who works for
  8 15 an employer for more than one thousand forty hours in a
  8 16 calendar year is not a temporary employee under this
  8 17 subparagraph.  Adjunct instructors are temporary employees for
  8 18 the purposes of this chapter.  As used in this section, unless
  8 19 the context otherwise requires, "adjunct instructors" means
  8 20 instructors employed by a community college or a university
  8 21 governed by the state board of regents without a continuing
  8 22 contract, whose teaching load does not exceed one-half time
  8 23 for two full semesters or three full quarters per calendar
  8 24 year.
  8 25    Sec. 13.  Section 97B.1A, Code 1999, is amended by adding
  8 26 the following new subsection:
  8 27    NEW SUBSECTION.  14A.  "Member account" means the account
  8 28 established for each member and includes the member's
  8 29 accumulated contributions and the member's share of the
  8 30 accumulated employer contributions as provided in section
  8 31 97B.53.  "Member account" does not mean the supplemental
  8 32 account for active members.
  8 33    Sec. 14.  Section 97B.1A, Code 1999, is amended by adding
  8 34 the following new subsection:
  8 35    NEW SUBSECTION.  22A.  "Supplemental account for active
  9  1 members" or "supplemental account" means the account
  9  2 established for each active member under section 97B.49H.
  9  3    Sec. 15.  Section 97B.1A, subsection 24, paragraph a, Code
  9  4 1999, is amended to read as follows:
  9  5    24.  a.  "Three-year average covered wage" means, for a
  9  6 member who retires prior to July 1, 2003, a member's covered
  9  7 wages averaged for the highest three years of the member's
  9  8 service, except as otherwise provided in this subsection.  The
  9  9 highest three years of a member's covered wages shall be
  9 10 determined using calendar years.  However, if a member's final
  9 11 quarter of a year of employment does not occur at the end of a
  9 12 calendar year, the department may determine the wages for the
  9 13 third year by computing the average quarter of all quarters
  9 14 from the member's highest calendar year of covered wages not
  9 15 being used in the selection of the two highest years and using
  9 16 the computed average quarter for each quarter in the third
  9 17 year in which no wages have been reported in combination with
  9 18 the final quarter or quarters of the member's service to
  9 19 create a full year.  However, the department shall not use the
  9 20 member's final quarter of wages if using that quarter would
  9 21 reduce the member's three-year average covered wage.  If the
  9 22 three-year average covered wage of a member exceeds the
  9 23 highest maximum covered wages in effect for a calendar year
  9 24 during the member's period of service, the three-year average
  9 25 covered wage of the member shall be reduced to the highest
  9 26 maximum covered wages in effect during the member's period of
  9 27 service.  Notwithstanding any other provision of this
  9 28 paragraph to the contrary, a member's wages for the third year
  9 29 as computed by this paragraph shall not exceed, by more than
  9 30 three percent, the member's highest actual calendar year of
  9 31 covered wages for a member whose first month of entitlement is
  9 32 January 1999 or later.
  9 33    Sec. 16.  Section 97B.1A, subsection 24, paragraph b,
  9 34 subparagraph (4), Code 1999, is amended to read as follows:
  9 35    (4)  For a member who retires on or after January 1, 2000,
 10  1 but before January 1, 2003 2001, and whose three-year average
 10  2 covered wage at the time of retirement exceeds fifty-five
 10  3 sixty-five thousand dollars, the member's covered wages
 10  4 averaged for the highest seven six years of the member's
 10  5 service or fifty-five sixty-five thousand dollars, whichever
 10  6 is greater.
 10  7    Sec. 17.  Section 97B.1A, subsection 24, paragraph b, Code
 10  8 1999, is amended by adding the following new subparagraph:
 10  9    NEW SUBPARAGRAPH.  (5)  For a member who retires on or
 10 10 after January 1, 2001, but before January 1, 2002, and whose
 10 11 three-year average covered wage at the time of retirement
 10 12 exceeds seventy-five thousand dollars, the member's covered
 10 13 wages averaged for the highest six years of the member's
 10 14 service or seventy-five thousand dollars, whichever is
 10 15 greater.
 10 16    Sec. 18.  Section 97B.1A, subsection 24, Code 1999, is
 10 17 amended by adding the following new paragraph:
 10 18    NEW PARAGRAPH.  c.  "Three-year average covered wage"
 10 19 means, for a member who retires on or after July 1, 2003, the
 10 20 greater of the member's covered wages averaged for a member's
 10 21 highest twelve consecutive quarters of service or the member's
 10 22 covered wages averaged for a member's highest three calendar
 10 23 years of service.  The department shall adopt rules to
 10 24 implement this paragraph in accordance with the requirements
 10 25 of this chapter and the federal Internal Revenue Code.
 10 26    Sec. 19.  Section 97B.1A, subsection 26, paragraph a, Code
 10 27 1999, is amended to read as follows:
 10 28    a.  (1)  "Wages" means all remuneration for employment,
 10 29 including the, but not limited to, any of the following:
 10 30    (a)  The cash value of remuneration paid in a medium other
 10 31 than cash, but not including the cash value of remuneration
 10 32 paid in a medium other than cash as wage equivalents not
 10 33 necessitated by the convenience of the employer.  The amount
 10 34 agreed upon by the employer and employee for remuneration paid
 10 35 in a medium other than cash fair market value of such wage
 11  1 equivalents shall be reported to the department by the
 11  2 employer and is conclusive of the value of the remuneration.
 11  3 "Wages" does not include special lump sum payments made as
 11  4 payment for accrued sick leave or accrued vacation or payments
 11  5 made as an incentive for early retirement or as payments made
 11  6 upon dismissal, severance, or a special bonus payment.
 11  7    (b)  The remuneration paid to an employee before employee-
 11  8 paid contributions are made to plans qualified under sections
 11  9 125, 129, 401, 403, 408, and 457 of the Internal Revenue Code.
 11 10    (c)  Wages for For an elected official means, other than a
 11 11 a member of the general assembly, the total compensation
 11 12 received by the elected official, whether paid in the form of
 11 13 per diem or annual salary received by an elected official,
 11 14 exclusive of expense and travel allowances.
 11 15    (d)  Wages for For a member of the general assembly, means
 11 16 the total compensation received by a member of the general
 11 17 assembly, whether paid in the form of per diem or annual
 11 18 salary, exclusive of expense and travel allowances paid to a
 11 19 member of the general assembly except as otherwise provided in
 11 20 this paragraph subparagraph subdivision.  Wages includes per
 11 21 diem payments paid to members of the general assembly during
 11 22 interim periods between sessions of the general assembly.
 11 23 Wages also includes daily allowances to members of the general
 11 24 assembly for nontravel expenses of office during a session of
 11 25 the general assembly, but does not include the portion of the
 11 26 daily allowance which exceeds the maximum established by law
 11 27 for members from Polk county.
 11 28    (e)  Payments for compensatory time earned that are
 11 29 received in lieu of taking regular work hours off.  However,
 11 30 "wages" does not include payments for compensatory time earned
 11 31 in excess of two hundred forty hours per year.
 11 32    (2)  "Wages" does not include any of the following:
 11 33    (a)  The cash value of wage equivalents necessitated by the
 11 34 convenience of the employer.
 11 35    (b)  Payments made for accrued sick leave or accrued
 12  1 vacation leave that are not being used to replace regular work
 12  2 hours, whether paid in a lump sum or in installments.
 12  3    (c)  Payments made as an incentive for early retirement or
 12  4 as payment made upon dismissal or severance from employment,
 12  5 or a special bonus payment intended as an early retirement
 12  6 incentive, whether paid in a lump sum or in installments.
 12  7    (d)  Employer-paid contributions to, and any distributions
 12  8 from, plans, programs, or arrangements qualified under section
 12  9 117, 120, 125, 129, 401, 403, 408, or 457 of the Internal
 12 10 Revenue Code.
 12 11    (e)  Employer-paid contributions for coverage under, or
 12 12 distributions from, an accident, health, or life insurance
 12 13 plan, program, or arrangement.
 12 14    (f)  Workers' compensation and unemployment compensation
 12 15 payments.
 12 16    (g)  Disability payments.
 12 17    (h)  Reimbursements of employee business expenses except
 12 18 for those expenses included as wages for a member of the
 12 19 general assembly.
 12 20    (i)  Payments for allowances made to an employee that are
 12 21 not included in an employee's federal taxable income except
 12 22 for those allowances included as wages for a member of the
 12 23 general assembly.
 12 24    (j)  Payments of damages, attorney fees, interest, and
 12 25 penalties made to satisfy a grievance or wage claim.
 12 26    (k)  Payments for services as an independent contractor.
 12 27    (l)  Payments made by an entity that is not an employer
 12 28 under this chapter.
 12 29    (m)  Payments made in lieu of any employer-paid group
 12 30 insurance coverage.
 12 31    (n)  Payments made for the difference between the costs of
 12 32 single and family insurance coverage.
 12 33    (o)  Payments made by an employer to reimburse employees
 12 34 for the cost of insurance coverage and for other fringe
 12 35 benefits or expenses.
 13  1    Sec. 20.  Section 97B.5, Code 1999, is amended to read as
 13  2 follows:
 13  3    97B.5  STAFF.
 13  4    Subject to other provisions of this chapter, the department
 13  5 may employ personnel as necessary for the administration of
 13  6 the system, including but not limited to a chief investment
 13  7 officer and a chief benefits officer.  The maximum number of
 13  8 full-time equivalent employees specified by the general
 13  9 assembly for the department for administration of the system
 13 10 for a fiscal year shall not be reduced by any authority other
 13 11 than the general assembly.  The staff shall be appointed
 13 12 pursuant to chapter 19A.  The department shall not appoint or
 13 13 employ a person who is an officer or committee member of a
 13 14 political party organization or who holds or is a candidate
 13 15 for an a partisan elective public office.  The department may
 13 16 employ attorneys and contract with attorneys and legal firms
 13 17 for the provision of legal counsel and advice in the
 13 18 administration of this chapter and chapter 97C.  The
 13 19 department may execute contracts with investment advisors,
 13 20 consultants, and managers outside state government in the
 13 21 administration of this chapter.  The department may delegate
 13 22 to any person such authority as it deems reasonable and proper
 13 23 for the effective administration of this chapter, and may bond
 13 24 any person handling moneys or signing checks under this
 13 25 chapter.
 13 26    Sec. 21.  Section 97B.9, unnumbered paragraph 1, Code 1999,
 13 27 is amended to read as follows:
 13 28    Contributions unpaid on the date on which they are due and
 13 29 payable as prescribed by the department, An employer shall
 13 30 bear be charged the greater of ten dollars per occurrence or
 13 31 interest at the combined interest and dividend rate required
 13 32 under section 97B.70 for the applicable calendar year,
 13 33 provided that the for contributions unpaid on the date on
 13 34 which they are due and payable as prescribed by the
 13 35 department.  The department may prescribe fair and reasonable
 14  1 regulations pursuant to adopt rules prescribing circumstances
 14  2 for which the interest or charge shall not accrue with respect
 14  3 to contributions required.  Interest or charges collected
 14  4 pursuant to this section shall be paid into the Iowa public
 14  5 employees' retirement fund.
 14  6    Sec. 22.  Section 97B.9, subsection 4, Code 1999, is
 14  7 amended to read as follows:
 14  8    4.  Regardless of any potentially applicable statute of
 14  9 limitations, if the department finds that the employer or
 14 10 employee or employer, or both, have erroneously underpaid
 14 11 contributions, the employer shall pay the employer's share of
 14 12 contributions and interest and the interest assessed to the
 14 13 employee's share of contributions department shall notify the
 14 14 employer and employee in writing of the total amount of the
 14 15 underpayment, including interest, and the employer's and
 14 16 employee's share of the underpayment.  The department shall
 14 17 collect from the employer the total amount of the
 14 18 underpayment, including the employer's share, the employee's
 14 19 share, and the interest assessed to both shares of the
 14 20 underpayment, regardless of whether the employee has
 14 21 reimbursed the employer for the employee's share of the
 14 22 underpayment.  The employee shall be obligated to pay only the
 14 23 employee's share of the underpaid contributions, without
 14 24 interest, to the employer, who shall then remit them to the
 14 25 department.  The employer may collect the employee's share of
 14 26 underpaid contributions from the employee or the employee's
 14 27 estate.  The employer may collect the employee's share through
 14 28 a deduction from the employee's wages, or by maintaining a
 14 29 legal action against the employee or the employee's estate.
 14 30 For purposes of section 1526 of the federal Taxpayer Relief
 14 31 Act of 1997, eligible participants, as defined by section
 14 32 1526, may make payments of contributions under this section
 14 33 without regard to the limitations of section 415(c)(1) of the
 14 34 federal Internal Revenue Code.
 14 35    Sec. 23.  Section 97B.11, unnumbered paragraph 2, Code
 15  1 1999, is amended by striking the unnumbered paragraph.
 15  2    Sec. 24.  NEW SECTION.  97B.14A  WAGE REPORTING.
 15  3    An employer shall report wages of employees covered by this
 15  4 chapter to the department in a manner and form as prescribed
 15  5 by the department.  If the wages reported by an employer
 15  6 appear to be a distortion of the normal wage progression
 15  7 pattern for an employee, the department may request that the
 15  8 employer provide documentation indicating that the wages were
 15  9 not misreported for the purposes of causing an increase in the
 15 10 retirement allowance or other payments authorized to be made
 15 11 by this chapter.  If the department determines that the wages
 15 12 of an employee were misreported, the employer shall prepare
 15 13 and file wage adjustments allocating the wages to the proper
 15 14 wage reporting period.
 15 15    Sec. 25.  Section 97B.17, subsection 2, Code 1999, is
 15 16 amended to read as follows:
 15 17    2.  Records specifying amounts accumulated in members'
 15 18 active accounts and supplemental accounts.
 15 19    Sec. 26.  Section 97B.25, Code 1999, is amended to read as
 15 20 follows:
 15 21    97B.25  APPLICATIONS FOR BENEFITS.
 15 22    A representative designated by the chief benefits officer
 15 23 and referred to in this chapter as a retirement benefits
 15 24 specialist officer shall promptly examine applications for
 15 25 retirement benefits and on the basis of facts found shall
 15 26 determine whether or not the claim is valid.  If the claim is
 15 27 valid, the retirement benefits specialist officer shall send a
 15 28 notification to the member stating the option the member has
 15 29 selected pursuant to sections 97B.49A through 97B.49G, as
 15 30 applicable, or section 97B.51, the month with respect to which
 15 31 benefits shall commence, and the monthly benefit amount
 15 32 payable.  If the claim is invalid, the retirement benefits
 15 33 specialist officer shall promptly notify the applicant and any
 15 34 other interested party of the decision and the reasons A
 15 35 retirement application shall not be amended or revoked by the
 16  1 member once the first retirement allowance is paid.  A
 16  2 member's death during the first month of entitlement shall not
 16  3 invalidate an approved application.
 16  4    Sec. 27.  Section 97B.42A, Code 1999, is amended by adding
 16  5 the following new subsection:
 16  6    NEW SUBSECTION.  3A.  A person who is employed in a
 16  7 position as an employee as defined in section 97B.1A,
 16  8 subsection 8, paragraph "a", subparagraph (12), on July 1,
 16  9 2000, and who has not elected out of coverage under this
 16 10 chapter prior to that date, shall begin coverage under the
 16 11 system on July 1, 2000, unless, on or before August 31, 2000,
 16 12 the person files an application with appropriate documentation
 16 13 to elect coverage under an alternative pension and annuity
 16 14 retirement system established pursuant to chapter 412.  If a
 16 15 person elects coverage under the alternative pension and
 16 16 annuity retirement system, the period of time from July 1,
 16 17 2000, until the date the person's election of coverage is
 16 18 effective shall not constitute service for purposes of
 16 19 coverage under this chapter and a wage adjustment shall be
 16 20 processed for the person based on any contributions collected
 16 21 pursuant to this chapter during that period of time and shall
 16 22 be credited pursuant to section 97B.10.  A decision to elect
 16 23 coverage under an alternative pension and annuity retirement
 16 24 system established pursuant to chapter 412 under this
 16 25 subsection is irrevocable upon approval from the department.
 16 26    A person who becomes a member of the Iowa public employees'
 16 27 retirement system pursuant to this subsection, and who has one
 16 28 or more years of covered wages, may purchase credit, pursuant
 16 29 to section 97B.73, for one or more quarters of service prior
 16 30 to August 1, 2000, in which the person was employed in a
 16 31 position as described by section 97B.1A, subsection 8,
 16 32 paragraph "a", subparagraph (12), but was not a member of the
 16 33 system.
 16 34    Sec. 28.  Section 97B.42A, subsection 4, Code 1999, is
 16 35 amended to read as follows:
 17  1    4.  A person who becomes a member of the system pursuant to
 17  2 subsection 3, or who is a member of the system, and who has
 17  3 one or more years of covered wages, may purchase credit,
 17  4 pursuant to section 97B.73, for one or more quarters of
 17  5 service prior to January 1, 1999, in which the person was
 17  6 employed in a position as described in section 97B.1A,
 17  7 subsection 8, paragraph "a", but was not a member of the
 17  8 system.
 17  9    Sec. 29.  Section 97B.44, Code 1999, is amended to read as
 17 10 follows:
 17 11    97B.44  BENEFICIARY.
 17 12    Each member shall designate on a form to be furnished by
 17 13 the department a beneficiary for death benefits payable under
 17 14 this chapter on the death of the member.  The designation may
 17 15 be changed from time to time by the member by filing a new
 17 16 designation with the department.  A designation or change in
 17 17 designation made by a member on or after July 1, 2000, shall
 17 18 contain the written consent of the member's spouse, if
 17 19 applicable.  The designation of a beneficiary is not
 17 20 applicable if the member receives a refund of all
 17 21 contributions of the member.  If a member who has received a
 17 22 refund of contributions returns to employment, the member
 17 23 shall file a new designation with the department.
 17 24    If a member has not designated a beneficiary on a form
 17 25 furnished by the department, or if there are no surviving
 17 26 designated beneficiaries of a member, death benefits payable
 17 27 under this chapter shall be paid to the member's estate.
 17 28    Sec. 30.  Section 97B.48, subsection 1, Code 1999, is
 17 29 amended to read as follows:
 17 30    1.  Retirement allowances shall be paid monthly, except
 17 31 that an allowance of less than six hundred dollars a year may,
 17 32 at the member's option, be paid as a lump sum in an amount
 17 33 equal to the sum of the member's and employer's accumulated
 17 34 contributions and the retirement dividends standing to the
 17 35 member's credit before December 31, 1966.  Receipt of the
 18  1 lump-sum payment by a member shall terminate any and all
 18  2 entitlement for the period of service covered of the member
 18  3 under this chapter and the member shall not be eligible to buy
 18  4 back the period of service.
 18  5    Sec. 31.  Section 97B.48A, subsection 1, unnumbered
 18  6 paragraph 1, Code 1999, is amended to read as follows:
 18  7    If a member who has not reached the member's sixty-fifth
 18  8 birthday and who has a bona fide retirement under this chapter
 18  9 is in regular full-time employment during a calendar year, the
 18 10 member's retirement allowance shall be reduced by fifty cents
 18 11 for each dollar the member earns over the limit provided in
 18 12 this subsection.  However, employment is not full-time
 18 13 employment until the member receives remuneration in an amount
 18 14 in excess of twelve fourteen thousand dollars for a calendar
 18 15 year, or an amount equal to the amount of remuneration
 18 16 permitted for a calendar year for persons under sixty-five
 18 17 years of age before a reduction in federal social security
 18 18 retirement benefits is required, whichever is higher.
 18 19 Effective the first of the month in which a member attains the
 18 20 age of sixty-five years, a retired member may receive a
 18 21 retirement allowance without a reduction after return to
 18 22 covered employment regardless of the amount of remuneration
 18 23 received.
 18 24    Sec. 32.  Section 97B.48A, subsection 3, Code 1999, is
 18 25 amended to read as follows:
 18 26    3.  Upon a retirement after reemployment, a retired member
 18 27 may have the retired member's retirement allowance
 18 28 redetermined under this section or section 97B.48, sections
 18 29 97B.49A through 97B.49H, section 97B.50, or section 97B.51,
 18 30 whichever is applicable, based upon the addition of credit for
 18 31 the years of membership service of the employee after
 18 32 reemployment, the covered wage during reemployment, and the
 18 33 age of the employee after reemployment.  The member shall
 18 34 receive a single retirement allowance calculated from both
 18 35 periods of membership service, one based on the initial
 19  1 retirement and one based on the second retirement following
 19  2 reemployment.  If the total years of membership service and
 19  3 prior service of a member who has been reemployed equals or
 19  4 exceeds thirty, the years of membership service on which the
 19  5 original retirement allowance was based may be reduced by a
 19  6 fraction of the years of service equal to the number of years
 19  7 by which the total years of membership service and prior
 19  8 service exceeds thirty divided by thirty, if this reduction in
 19  9 years of service will increase the total retirement allowance
 19 10 of the member.  The additional retirement allowance calculated
 19 11 for the period of reemployment shall be added to the
 19 12 retirement allowance calculated for the initial period of
 19 13 membership service and prior service, adjusted as provided in
 19 14 this subsection.  The retirement allowance calculated for the
 19 15 initial period of membership service and prior service shall
 19 16 not be adjusted for any other factor than years of service.
 19 17 The retired member shall not receive a retirement allowance
 19 18 based upon more than a total of thirty years of service.
 19 19 Effective July 1, 1998, a redetermination of a retirement
 19 20 allowance as authorized by this subsection for a retired
 19 21 member whose combined service exceeds the applicable years of
 19 22 service for that member as provided in sections 97B.49A
 19 23 through 97B.49G shall have the determination of the member's
 19 24 reemployment benefit based upon the percentage multiplier as
 19 25 determined for that member as provided in sections 97B.49A
 19 26 through 97B.49G.
 19 27    Sec. 33.  Section 97B.48A, subsection 4, Code 1999, is
 19 28 amended to read as follows:
 19 29    4.  The department shall pay to the member the accumulated
 19 30 contributions of the member and all of the employer
 19 31 contributions, plus interest plus interest dividends as
 19 32 provided in section 97B.70, for all completed calendar years,
 19 33 compounded as provided in section 97B.70, on the covered wages
 19 34 earned by a retired member that are not used in the
 19 35 recalculation of the retirement allowance of a member.  A
 20  1 payment of contributions to a member pursuant to this
 20  2 subsection shall be considered a retirement payment and not a
 20  3 refund and the member shall not be eligible to buy back the
 20  4 period of reemployment service.
 20  5    Sec. 34.  Section 97B.49B, subsection 1, paragraph d, Code
 20  6 1999, is amended by adding the following new subparagraph:
 20  7    NEW SUBPARAGRAPH.  (7)  An employee covered by the merit
 20  8 system as provided in chapter 19A whose primary duty is
 20  9 providing airport security and who carries or is licensed to
 20 10 carry a firearm while performing those duties.
 20 11    Sec. 35.  Section 97B.49F, subsection 1, paragraph b,
 20 12 subparagraph (2), subparagraph subdivision (a), Code 1999, is
 20 13 amended to read as follows:
 20 14    (a)  The percentage representing eighty percent of the
 20 15 percentage increase in the consumer price index published in
 20 16 the federal register by the federal department of labor,
 20 17 bureau of labor statistics, that reflects the percentage
 20 18 increase in the consumer price index for the twelve-month
 20 19 period ending June 30 of the year that the dividend is to be
 20 20 paid.
 20 21    Sec. 36.  Section 97B.49F, subsection 1, paragraph c, Code
 20 22 1999, is amended to read as follows:
 20 23    c.  If a member eligible to receive a cost-of-living
 20 24 dividend dies before November 1 of a year, a cost-of-living
 20 25 dividend shall not be payable in November of that year in the
 20 26 name of the member.  If a member dies on or after November 1,
 20 27 but before payment of a dividend is made in that month, the
 20 28 full amount of the retirement dividend for that year shall be
 20 29 paid in the member's name upon notification of the member's
 20 30 death.
 20 31    Sec. 37.  Section 97B.49F, subsection 2, paragraph a, Code
 20 32 1999, is amended to read as follows:
 20 33    a.  Commencing January 1, 1999, all members who retired on
 20 34 or after July 1, 1990, and who have been retired for at least
 20 35 one year as of the date the dividend is payable, or a
 21  1 beneficiary or contingent annuitant of such a member who
 21  2 receives a monthly benefit, shall be eligible to receive a
 21  3 favorable experience dividend, payable on the last business
 21  4 day in January of each year pursuant to the requirements of
 21  5 this subsection.  If the member, beneficiary, or contingent
 21  6 annuitant eligible to receive a favorable experience dividend
 21  7 dies before January 1 of a year, a favorable experience
 21  8 dividend shall not be payable in January of that year in the
 21  9 name of the member, beneficiary, or contingent annuitant.
 21 10 However, if the member, beneficiary, or contingent annuitant
 21 11 dies on or after January 1 but before the dividend is paid in
 21 12 that month, the full amount of the dividend payable in that
 21 13 month shall be paid in the name of the applicable member,
 21 14 beneficiary, or contingent annuitant, upon notification of
 21 15 death.
 21 16    Sec. 38.  Section 97B.49F, subsection 2, paragraph c, Code
 21 17 1999, is amended by adding the following new subparagraph:
 21 18    NEW SUBPARAGRAPH.  (3A)  Notwithstanding the provisions of
 21 19 this paragraph to the contrary, moneys credited to the reserve
 21 20 account in any applicable year shall not exceed an amount
 21 21 which, if credited to the reserve account, would exceed an
 21 22 amount that the system's actuary determines is sufficient to
 21 23 pay the maximum favorable experience dividend for each of the
 21 24 next following ten years, based on reasonable actuarial
 21 25 assumptions.
 21 26    Sec. 39.  Section 97B.49F, subsection 2, paragraph d, Code
 21 27 1999, is amended to read as follows:
 21 28    d.  The favorable experience dividend is calculated by
 21 29 multiplying the total of the monthly benefit payments of
 21 30 retirement allowance payable to the retiree, beneficiary, or
 21 31 contingent annuitant for the previous calendar year December
 21 32 by twelve, and then multiplying that amount by the number of
 21 33 complete years the member has been retired or would have been
 21 34 retired if living as of the date the dividend is payable, and
 21 35 by the applicable percentage.  For purposes of this paragraph,
 22  1 the applicable percentage is the percentage, not to exceed
 22  2 three percent, that the department determines shall be applied
 22  3 in calculating the favorable experience dividend if the
 22  4 department determines that the reserve account is sufficiently
 22  5 funded to make a distribution.  In making its determination,
 22  6 the department shall consider, but not be limited to, the
 22  7 amounts credited to the reserve account, the distributions
 22  8 from the reserve account made in previous years, the
 22  9 likelihood of future credits to and distributions from the
 22 10 reserve account, and the distributions paid under subsection
 22 11 1.
 22 12    Sec. 40.  Section 97B.49G, Code 1999, is amended by adding
 22 13 the following new subsection:
 22 14    NEW SUBSECTION.  12.  PROBATION AND PAROLE OFFICERS III –
 22 15 JULY 1994 - JULY 1998.  The department shall establish and
 22 16 maintain additional contribution accounts for employees of
 22 17 judicial district departments of correctional services who
 22 18 were employed as parole officers III and probation officers
 22 19 III during any portion of the period from July 1, 1994,
 22 20 through June 30, 1998.  A probation officer III or parole
 22 21 officer III who made contributions to the retirement fund
 22 22 during the period from July 1, 1994, through June 30, 1998, as
 22 23 a member of a protection occupation shall have credited to an
 22 24 additional contribution account for that probation or parole
 22 25 officer an amount equal to the contributions made to the
 22 26 retirement fund in excess of 3.7 percent of the probation or
 22 27 parole officer's covered wages paid from July 1, 1994, through
 22 28 June 30, 1998, plus interest at the applicable statutory
 22 29 interest rates established in this chapter.  Moneys deposited
 22 30 in an additional contribution account established pursuant to
 22 31 this section shall be payable in a lump sum to the probation
 22 32 or parole officer at retirement or upon request for a refund
 22 33 of moneys in the account.  If the probation or parole officer
 22 34 dies prior to receipt of moneys in the account, the
 22 35 beneficiary designated by that probation or parole officer
 23  1 shall receive a lump sum payment of moneys in the account.
 23  2 The payment of moneys from the account created in this
 23  3 subsection shall not be annuitized.  A probation officer III
 23  4 or parole officer III for which an account is established
 23  5 under this subsection shall not receive credit for eligible
 23  6 service as a member of a protection occupation for that
 23  7 service.
 23  8    Sec. 41.  Section 97B.49H, subsection 5, paragraph c, Code
 23  9 1999, is amended to read as follows:
 23 10    c.  Upon retirement, the member shall elect to receive in a
 23 11 lump sum payment or in an annuity, in addition to any other
 23 12 payment provided by this chapter, all amounts credited to the
 23 13 member's supplemental account.  The annuity provided under
 23 14 this section shall be payable in the same form, at the same
 23 15 time, and to the same persons, including beneficiaries and
 23 16 contingent annuitants, that the member elects for the payments
 23 17 under the other provisions of this chapter providing for the
 23 18 monthly payment of allowances.  The amount of an annuity
 23 19 provided under this section, including amounts payable to
 23 20 beneficiaries and contingent annuitants, shall be calculated
 23 21 using the amount credited to the member's supplemental account
 23 22 as of the date of retirement, and the assumptions underlying
 23 23 the actuarial tables used to calculate optional allowances
 23 24 under section 97B.51.
 23 25    Sec. 42.  Section 97B.50, subsection 2, Code 1999, is
 23 26 amended to read as follows:
 23 27    2.  a.  A vested member who retires from the system due to
 23 28 disability and commences receiving disability benefits
 23 29 pursuant to the federal Social Security Act, 42 U.S.C. } 423
 23 30 et seq., and who has not reached the normal retirement date,
 23 31 shall receive benefits as selected under sections 97B.49A
 23 32 through 97B.49G, as applicable section 97B.51, and shall not
 23 33 have benefits reduced upon retirement as required under
 23 34 subsection 1 regardless of whether the member has completed
 23 35 thirty or more years of membership service.  However, the
 24  1 benefits shall be suspended during any period in which the
 24  2 member returns to covered employment.  This section takes
 24  3 effect July 1, 1990, for a member meeting the requirements of
 24  4 this paragraph who retired from the system at any time after
 24  5 July 4, 1953.  Eligible members retiring on or after July 1,
 24  6 2000, are entitled to the receipt of retroactive adjustment
 24  7 payments back to July 1, 1990 for no more than twelve months
 24  8 immediately preceding the month in which written notice of
 24  9 retirement due to disability was submitted to the department,
 24 10 notwithstanding the requirements of subsection 4.
 24 11    b.  A vested member who retires from the system due to
 24 12 disability and commences receiving disability benefits
 24 13 pursuant to the federal Railroad Retirement Act, 45 U.S.C. }
 24 14 231 et seq., and who has not reached the normal retirement
 24 15 date, shall receive benefits as selected under sections
 24 16 97B.49A through 97B.49G, as applicable section 97B.51, and
 24 17 shall not have benefits reduced upon retirement as required
 24 18 under subsection 1 regardless of whether the member has
 24 19 completed thirty or more years of membership service.
 24 20 However, the benefits shall be suspended during any period in
 24 21 which the member returns to covered employment.  This section
 24 22 takes effect July 1, 1990, for a member meeting the
 24 23 requirements of this paragraph who retired from the system at
 24 24 any time since July 4, 1953.  Eligible members retiring on or
 24 25 after July 1, 2000, are entitled to the receipt of retroactive
 24 26 adjustment payments back to July 1, 1990 for no more than
 24 27 twelve months immediately preceding the month in which written
 24 28 notice of retirement due to disability was submitted to the
 24 29 department, notwithstanding the requirements of subsection 4.
 24 30    Sec. 43.  NEW SECTION.  97B.50A  DISABILITY BENEFITS FOR
 24 31 SPECIAL SERVICE MEMBERS.
 24 32    1.  DEFINITIONS.  For purposes of this section, unless the
 24 33 context otherwise provides:
 24 34    a.  "Member" means a vested member who is classified as a
 24 35 special service member under section 97B.1A, subsection 22, at
 25  1 the time of the alleged disability.  "Member" does not mean a
 25  2 volunteer fire fighter.
 25  3    b.  "Net disability retirement allowance" means the amount
 25  4 determined by subtracting the amount paid during the previous
 25  5 calendar year by the member for health insurance or similar
 25  6 health care coverage for the member and the member's
 25  7 dependents from the amount of the member's disability
 25  8 retirement allowance, including any dividends and
 25  9 distributions from supplemental accounts, paid for that year
 25 10 pursuant to this section.
 25 11    c.  "Reemployment comparison amount" means an amount equal
 25 12 to the current covered wages of an active special service
 25 13 member at the same position on the salary scale within the
 25 14 rank or position the member held at the time the member
 25 15 received a disability retirement allowance pursuant to this
 25 16 section.  If the rank or position held by the member at the
 25 17 time of retirement pursuant to this section is abolished, the
 25 18 amount shall be computed by the department as though the rank
 25 19 or position had not been abolished and salary increases had
 25 20 been granted on the same basis as granted to other ranks or
 25 21 positions by the former employer of the member.  The
 25 22 reemployment comparison amount shall not be less than the
 25 23 three-year average covered wage of the member, based on all
 25 24 regular and special service covered under this chapter.
 25 25    2.  IN-SERVICE DISABILITY RETIREMENT ALLOWANCE.
 25 26    a.  A member who is injured in the performance of the
 25 27 member's duties, and otherwise meets the requirements of this
 25 28 subsection shall receive an in-service disability retirement
 25 29 allowance under this subsection, in lieu of a monthly
 25 30 retirement allowance as provided in section 97B.49A, 97B.49B,
 25 31 97B.49C, 97B.49D, or 97B.49G, as applicable.
 25 32    b.  Upon application of a member, a member who has become
 25 33 totally and permanently incapacitated for duty in the member's
 25 34 special service occupation as the natural and proximate result
 25 35 of an injury, disease, or exposure occurring or aggravated
 26  1 while in the actual performance of duty at some definite place
 26  2 and time shall be eligible to retire under this subsection,
 26  3 provided that the medical board, as established by this
 26  4 section, shall certify that the member is mentally or
 26  5 physically incapacitated for further performance of duty, that
 26  6 the incapacity is likely to be permanent, and that the member
 26  7 should be retired.  The department shall make the final
 26  8 determination, based on the medical evidence received, of a
 26  9 member's total and permanent disability.  However, if a
 26 10 person's special service membership in the system first
 26 11 commenced on or after July 1, 2000, the member shall not be
 26 12 eligible for benefits with respect to a disability which would
 26 13 not exist, but for a medical condition that was known to exist
 26 14 on the date that membership commenced.  A member who is denied
 26 15 a benefit under this subsection, by reason of a finding by the
 26 16 department that the member is not mentally or physically
 26 17 incapacitated for the further performance of duty, shall be
 26 18 entitled to be restored to active service in the same or
 26 19 comparable special service occupation position held by the
 26 20 member immediately prior to the application for disability
 26 21 benefits.
 26 22    c.  Disease under this subsection shall mean heart disease
 26 23 or any disease of the lungs or respiratory tract and shall be
 26 24 presumed to have been contracted while on active duty as a
 26 25 result of strain, exposure, or the inhalation of noxious
 26 26 fumes, poison, or gases.  However, if a person's special
 26 27 service membership in the system first commenced on or after
 26 28 July 1, 2000, and the heart disease or disease of the lungs or
 26 29 respiratory tract would not exist, but for a medical condition
 26 30 that was known to exist on the date that special service
 26 31 membership commenced, the presumption established in this
 26 32 paragraph shall not apply.
 26 33    d.  Upon retirement for an in-service disability as
 26 34 provided by this subsection, a member shall receive the
 26 35 greater of a monthly in-service disability retirement
 27  1 allowance calculated under this subsection or a monthly
 27  2 retirement allowance as provided in section 97B.49A, 97B.49B,
 27  3 97B.49C, 97B.49D, or 97B.49G, as applicable.  The monthly in-
 27  4 service disability allowance calculated under this subsection
 27  5 shall consist of an allowance equal to one-twelfth of sixty
 27  6 percent of the member's three-year average covered wage or its
 27  7 actuarial equivalent as provided under section 97B.51.
 27  8    3.  ORDINARY DISABILITY RETIREMENT ALLOWANCE.
 27  9    a.  A member who otherwise meets the requirements of this
 27 10 subsection shall receive an ordinary disability retirement
 27 11 allowance under this subsection, in lieu of a monthly
 27 12 retirement allowance as provided in section 97B.49A, 97B.49B,
 27 13 97B.49C, 97B.49D, or 97B.49G, as applicable.
 27 14    b.  Upon application of a member, a member who has become
 27 15 totally and permanently incapacitated for duty in the member's
 27 16 special service occupation shall be eligible to retire under
 27 17 this subsection, provided that the medical board, as
 27 18 established by this section, shall certify that the member is
 27 19 mentally or physically incapacitated for further performance
 27 20 of duty, that the incapacity is likely to be permanent, and
 27 21 that the member should be retired.  The department shall make
 27 22 the final determination, based on the medical evidence
 27 23 received, of a member's total and permanent disability.
 27 24 However, if a person's special service membership in the
 27 25 system first commenced on or after July 1, 2000, the member
 27 26 shall not be eligible for benefits with respect to a
 27 27 disability which would not exist, but for a medical condition
 27 28 that was known to exist on the date that special service
 27 29 membership commenced.  A member who is denied a benefit under
 27 30 this subsection, by reason of a finding by the department that
 27 31 the member is not mentally or physically incapacitated for the
 27 32 further performance of duty, shall be entitled to be restored
 27 33 to active service in the same or comparable special service
 27 34 occupation position held by the member immediately prior to
 27 35 the application for disability benefits.
 28  1    c.  Upon retirement for an ordinary disability as provided
 28  2 by this subsection, a member shall receive the greater of a
 28  3 monthly ordinary disability retirement allowance calculated
 28  4 under this subsection or a monthly retirement allowance as
 28  5 provided in section 97B.49A, 97B.49B, 97B.49C, 97B.49D, or
 28  6 97B.49G, as applicable.  The monthly ordinary disability
 28  7 allowance calculated under this subsection shall consist of an
 28  8 allowance equal to one-twelfth of fifty percent of the
 28  9 member's three-year average covered wage or its actuarial
 28 10 equivalent as provided under section 97B.51.
 28 11    4.  WAIVER OF ALLOWANCE.  A member receiving a disability
 28 12 retirement allowance under this section may file an
 28 13 application to receive benefits pursuant to section 97B.50,
 28 14 subsection 2, in lieu of receiving a disability retirement
 28 15 allowance under this section, if the member becomes eligible
 28 16 for benefits under section 97B.50, subsection 2.  An
 28 17 application to receive benefits pursuant to section 97B.50,
 28 18 subsection 2, shall be filed with the department within sixty
 28 19 days after the member becomes eligible for benefits pursuant
 28 20 to that section or the member shall be ineligible to elect
 28 21 coverage under that section.  On the first of the month
 28 22 following the month in which a member's application is
 28 23 approved by the department, the member's election of coverage
 28 24 under section 97B.50, subsection 2, shall become effective and
 28 25 the member's eligibility to receive a disability retirement
 28 26 allowance pursuant to this section shall cease.  Benefits
 28 27 payable pursuant to section 97B.50, subsection 2, shall be
 28 28 calculated using the option choice the member selected for
 28 29 payment of a disability retirement allowance pursuant to this
 28 30 section.  An application to elect coverage under section
 28 31 97B.50, subsection 2, is irrevocable upon approval by the
 28 32 department.
 28 33    5.  OFFSET TO ALLOWANCE.  Notwithstanding any provisions to
 28 34 the contrary in state law, or any applicable contract or
 28 35 policy, any amounts which may be paid or payable by the
 29  1 employer under any workers' compensation, unemployment
 29  2 compensation, or other law to a member, and any disability
 29  3 payments the member receives pursuant to the federal Social
 29  4 Security Act, 42 U.S.C. } 423 et seq., shall be offset against
 29  5 and payable in lieu of any retirement allowance payable
 29  6 pursuant to this section on account of the same disability.
 29  7    6.  REEXAMINATION OF MEMBERS RETIRED ON ACCOUNT OF
 29  8 DISABILITY.
 29  9    a.  Once each year during the first five years following
 29 10 the retirement of a member under this section, and once in
 29 11 every three-year period thereafter, the department may, and
 29 12 upon the member's application shall, require any member
 29 13 receiving an in-service or ordinary disability retirement
 29 14 allowance who has not yet attained the age of fifty-five years
 29 15 to undergo a medical examination as arranged by the medical
 29 16 board as established by this section.  The examination shall
 29 17 be made by the medical board or by an additional physician or
 29 18 physicians designated by the medical board.  If any member
 29 19 receiving an in-service or ordinary disability retirement
 29 20 allowance who has not attained the age of fifty-five years
 29 21 refuses to submit to the medical examination, the allowance
 29 22 may be discontinued until the member's withdrawal of the
 29 23 refusal, and should the member's refusal continue for one
 29 24 year, all rights in and to the member's disability retirement
 29 25 allowance shall be revoked by the department.
 29 26    b.  If a member is determined under paragraph "a" to be no
 29 27 longer eligible for in-service or ordinary disability
 29 28 benefits, all benefits paid under this section shall cease.
 29 29 The member shall be eligible to receive benefits calculated
 29 30 under section 97B.49B or 97B.49C, as applicable, when the
 29 31 member reaches age fifty-five.
 29 32    7.  REEMPLOYMENT.
 29 33    a.  If a member receiving a disability retirement allowance
 29 34 is returned to covered employment, the member's disability
 29 35 retirement allowance shall cease, the member shall again
 30  1 become an active member, and shall contribute thereafter at
 30  2 the same rate payable by similarly classified members.  If a
 30  3 member receiving a disability retirement allowance returns to
 30  4 special service employment, then the period of time the member
 30  5 received a disability retirement allowance shall constitute
 30  6 eligible service as defined in section 97B.49B, subsection 1,
 30  7 or section 97B.49C, subsection 1, as applicable.  Upon
 30  8 subsequent retirement, the member's retirement allowance shall
 30  9 be calculated as provided in section 97B.48A.
 30 10    b.  (1)  If a member receiving a disability retirement
 30 11 allowance is engaged in a gainful occupation that is not
 30 12 covered employment, the member's disability retirement
 30 13 allowance shall be reduced, if applicable, as provided in this
 30 14 paragraph.
 30 15    (2)  If the member is engaged in a gainful occupation
 30 16 paying more than the difference between the member's net
 30 17 disability retirement allowance and one and one-half times the
 30 18 reemployment comparison amount for that member, then the
 30 19 amount of the member's disability retirement allowance shall
 30 20 be reduced to an amount such that the member's net disability
 30 21 retirement allowance plus the amount earned by the member
 30 22 shall equal one and one-half times the reemployment comparison
 30 23 amount for that member.
 30 24    (3)  The member shall submit sufficient documentation to
 30 25 the system to permit the system to determine the member's net
 30 26 disability retirement allowance and earnings from a gainful
 30 27 occupation that is not covered employment for the applicable
 30 28 year.
 30 29    (4)  This paragraph does not apply to a member who is at
 30 30 least fifty-five years of age and would have completed a
 30 31 sufficient number of years of service if the member had
 30 32 remained in active special service employment.  For purposes
 30 33 of this subparagraph, a sufficient number of years of service
 30 34 shall be twenty-five for a special service member as described
 30 35 in section 97B.49B or twenty-two for a special service member
 31  1 as described in section 97B.49C.
 31  2    8.  DEATH BENEFITS.  A member who is receiving an in-
 31  3 service or ordinary disability retirement allowance under this
 31  4 section shall be treated as having elected a lifetime monthly
 31  5 retirement allowance with death benefits payable under section
 31  6 97B.52, subsection 2, unless the member elects an optional
 31  7 form of benefit provided under section 97B.51, which shall be
 31  8 actuarially equivalent to the lifetime monthly retirement
 31  9 allowance provided under this section.
 31 10    9.  MEDICAL BOARD.  The system shall designate a medical
 31 11 board to be composed of three physicians from the university
 31 12 of Iowa hospitals and clinics who shall arrange for and pass
 31 13 upon the medical examinations required under this section and
 31 14 shall report in writing to the department the conclusions and
 31 15 recommendations upon all matters duly referred to the medical
 31 16 board.  Each report of a medical examination under this
 31 17 section shall include the medical board's findings as to the
 31 18 extent of the member's physical or mental impairment.  Except
 31 19 as required by this section, each report shall be confidential
 31 20 and shall be maintained in accordance with the federal
 31 21 Americans with Disabilities Act, and any other state or
 31 22 federal law containing requirements for confidentiality of
 31 23 medical records.
 31 24    10.  LIABILITY OF THIRD PARTIES – SUBROGATION.
 31 25    a.  If a member receives an injury for which benefits are
 31 26 payable under this section, and if the injury is caused under
 31 27 circumstances creating a legal liability for damages against a
 31 28 third party other than the system, the member or the member's
 31 29 legal representative may maintain an action for damages
 31 30 against the third party.  If a member or a member's legal
 31 31 representative commences such an action, the plaintiff member
 31 32 or representative shall serve a copy of the original notice
 31 33 upon the system not less than ten days before the trial of the
 31 34 action, but a failure to serve the notice does not prejudice
 31 35 the rights of the system, and the following rights and duties
 32  1 ensue:
 32  2    (1)  The system shall be indemnified out of the recovery of
 32  3 damages to the extent of benefit payments made by the system,
 32  4 with legal interest, except that the plaintiff member's
 32  5 attorney fees may be first allowed by the district court.
 32  6    (2)  The system has a lien on the damage claim against the
 32  7 third party and on any judgment on the damage claim for
 32  8 benefits for which the system is liable.  In order to continue
 32  9 and preserve the lien, the system shall file a notice of the
 32 10 lien within thirty days after receiving a copy of the original
 32 11 notice in the office of the clerk of the district court in
 32 12 which the action is filed.
 32 13    b.  If a member fails to bring an action for damages
 32 14 against a third party within thirty days after the system
 32 15 requests the member in writing to do so, the system is
 32 16 subrogated to the rights of the member and may maintain the
 32 17 action against the third party, and may recover damages for
 32 18 the injury to the same extent that the member may recover
 32 19 damages for the injury.  If the system recovers damages in the
 32 20 action, the court shall enter judgment for distribution of the
 32 21 recovery as follows:
 32 22    (1)  A sum sufficient to repay the system for the amount of
 32 23 such benefits actually paid by the system up to the time of
 32 24 the entering of the judgment.
 32 25    (2)  A sum sufficient to pay the system the present worth,
 32 26 computed at the interest rate provided in section 535.3 for
 32 27 court judgments and decrees, of the future payments of such
 32 28 benefits, for which the system is liable, but the sum is not a
 32 29 final adjudication of the future payment which the member is
 32 30 entitled to receive.
 32 31    (3)  Any balance shall be paid to the member.
 32 32    c.  Before a settlement is effective between the system and
 32 33 a third party who is liable for any injury, the member must
 32 34 consent in writing to the settlement; and if the settlement is
 32 35 between the member and a third party, the system must consent
 33  1 in writing to the settlement; or on refusal to consent, in
 33  2 either case, the district court in the county in which either
 33  3 the employer of the member or the system is located must
 33  4 consent in writing to the settlement.
 33  5    d.  For purposes of subrogation under this section, a
 33  6 payment made to an injured member or the member's legal
 33  7 representative, by or on behalf of a third party or the third
 33  8 party's principal or agent, who is liable for, connected with,
 33  9 or involved in causing the injury to the member, shall be
 33 10 considered paid as damages because the injury was caused under
 33 11 circumstances creating a legal liability against the third
 33 12 party, whether the payment is made under a covenant not to
 33 13 sue, compromise settlement, denial of liability, or is
 33 14 otherwise made.
 33 15    11.  DOCUMENT SUBMISSIONS.  A member retired under this
 33 16 section, in order to be eligible for continued receipt of
 33 17 retirement benefits, shall submit to the department any
 33 18 documentation the department may reasonably request which will
 33 19 provide information needed to determine payments to the member
 33 20 under this section.
 33 21    12.  ADDITIONAL CONTRIBUTIONS.  The expenses incurred in
 33 22 the administration of this section by the system shall be paid
 33 23 through additional contributions as determined pursuant to
 33 24 section 97B.49B, subsection 3, or section 97B.49C, subsection
 33 25 3, as applicable.
 33 26    13.  APPLICABILITY – RETROACTIVITY.
 33 27    a.  This section applies to a member who becomes disabled
 33 28 on or after July 1, 2000, and also applies to a member who
 33 29 becomes disabled prior to July 1, 2000, if the member has not
 33 30 terminated special service employment as of June 30, 2000.
 33 31    b.  To qualify for benefits under this section, a member
 33 32 must file a completed application with the department within
 33 33 one year of the member's termination of employment.  A member
 33 34 eligible for a disability retirement allowance under this
 33 35 section is entitled to receipt of retroactive adjustment
 34  1 payments for no more than six months immediately preceding the
 34  2 month in which the completed application for receipt of a
 34  3 disability retirement allowance under this section is
 34  4 approved.
 34  5    14.  RULES.  The department shall adopt rules pursuant to
 34  6 chapter 17A specifying the application procedure for members
 34  7 pursuant to this section.
 34  8    Sec. 44.  Section 97B.51, Code 1999, is amended by striking
 34  9 the section and inserting in lieu thereof the following:
 34 10    97B.51  ALLOWANCE UPON RETIREMENT.
 34 11    1.  Each member has the right prior to the member's
 34 12 retirement date to elect to have the member's retirement
 34 13 allowance payable under one of the options set forth in this
 34 14 section.  The amount of the optional retirement allowance
 34 15 selected in paragraph "a", "c", "d", or "e", shall be the
 34 16 actuarial equivalent of the amount of the retirement allowance
 34 17 otherwise payable to the member as determined by the system in
 34 18 consultation with the system's actuary.  The member shall make
 34 19 an election by written request to the department and the
 34 20 election is subject to the approval of the department.  If the
 34 21 member is married, election of an option under this section
 34 22 requires the written acknowledgment of the member's spouse.
 34 23 The member may select one of the following options:
 34 24    a.  At retirement, a member may designate that upon the
 34 25 member's death, a specified amount of money shall be paid to a
 34 26 named beneficiary, and the member's monthly retirement
 34 27 allowance shall be reduced by an actuarially determined amount
 34 28 to provide for the lump sum payment.  The amount designated by
 34 29 the member must be in thousand dollar increments and shall be
 34 30 limited to the amount of the member's accumulated
 34 31 contributions.  The amount designated shall not lower the
 34 32 monthly retirement allowance of the member by more than one-
 34 33 half the amount payable as provided in paragraph "b".  A
 34 34 member may designate a different beneficiary at any time,
 34 35 except as limited by an order that has been accepted by the
 35  1 department as complying with the requirements of section
 35  2 97B.39.
 35  3    b.  A member may elect a retirement allowance otherwise
 35  4 payable to the member upon retirement under the retirement
 35  5 system pursuant to this chapter, to include the applicable
 35  6 provisions of sections 97B.49A through 97B.49G, and a death
 35  7 benefit as provided in section 97B.52, subsection 2.
 35  8    c.  A member may elect an increased retirement allowance
 35  9 during the member's lifetime with no death benefit after the
 35 10 member's retirement date.
 35 11    d.  (1)  A member may elect to receive a decreased
 35 12 retirement allowance during the member's lifetime and have the
 35 13 decreased retirement allowance, or a designated fraction
 35 14 thereof, continued after the member's death to another person,
 35 15 called a contingent annuitant, during the lifetime of the
 35 16 contingent annuitant.  The member cannot change the contingent
 35 17 annuitant after the member's retirement.  In case of the
 35 18 election of a contingent annuitant, no death benefits, as
 35 19 might otherwise be provided by this chapter, will be payable
 35 20 upon the death of either the member or the contingent
 35 21 annuitant after the member's retirement.
 35 22    (2)  In lieu of a benefit as calculated under subparagraph
 35 23 (1), a member may elect to receive a decreased retirement
 35 24 allowance during the member's lifetime and have the decreased
 35 25 retirement allowance, or a designated fraction thereof,
 35 26 continued after the member's death to another person, called a
 35 27 contingent annuitant, during the lifetime of the contingent
 35 28 annuitant, as determined by this subparagraph.  In addition,
 35 29 if the contingent annuitant dies prior to the death of the
 35 30 member, the member shall receive a retirement allowance
 35 31 beginning with the first month following the death of the
 35 32 contingent annuitant as if the member had selected the option
 35 33 provided by paragraph "b" at the time of the member's first
 35 34 retirement.  The member cannot change the contingent annuitant
 35 35 after the member's retirement.  If a contingent annuitant
 36  1 receives a decreased retirement allowance under this
 36  2 subparagraph following the death of the member, no death
 36  3 benefits, as might otherwise be provided by this chapter, will
 36  4 be payable upon the death of the contingent annuitant.
 36  5    e.  A member may elect to receive a decreased retirement
 36  6 allowance during the member's lifetime with provision that in
 36  7 event of the member's death during the first one hundred
 36  8 twenty months of retirement, monthly payments of the member's
 36  9 decreased retirement allowance shall be made to the member's
 36 10 beneficiary until a combined total of one hundred twenty
 36 11 monthly payments have been made to the member and the member's
 36 12 beneficiary.  When the member designates multiple
 36 13 beneficiaries, the present value of the remaining payments
 36 14 shall be paid in a lump sum to each beneficiary, either in
 36 15 equal shares to the beneficiaries, or if the member specifies
 36 16 otherwise in a written request, in the specified proportion.
 36 17 A member may designate a different beneficiary at any time,
 36 18 except as limited by an order that has been accepted by the
 36 19 department as complying with the requirements of section
 36 20 97B.39.
 36 21    2.  The election by a member of an option stated under this
 36 22 section shall be null and void if the member dies prior to the
 36 23 member's first month of entitlement.
 36 24    3.  A member who had elected to take an option stated in
 36 25 this section, may, at any time prior to retirement, revoke
 36 26 such an election by written notice to the department.  A
 36 27 member shall not change or revoke an election once the first
 36 28 retirement allowance is paid.
 36 29    Sec. 45.  Section 97B.52, subsection 1, Code 1999, is
 36 30 amended to read as follows:
 36 31    1.  If a member dies prior to the member's first month of
 36 32 entitlement, the member's beneficiary shall be entitled to
 36 33 receive a death benefit equal to the greater of the amount
 36 34 provided in paragraph "a" or "b".
 36 35    a.  A lump sum payment equal to the accumulated
 37  1 contributions of the member at the date of death plus the
 37  2 product of an amount equal to the highest year of covered
 37  3 wages of the deceased member and the number of years of
 37  4 membership service divided by the applicable denominator shall
 37  5 be paid to the member's beneficiary in a lump sum payment.
 37  6 However, a lump sum payment made to a beneficiary under this
 37  7 subsection paragraph due to the death of a member shall not be
 37  8 less than the amount that would have been payable on the death
 37  9 of the member on June 30, 1984, under this subsection
 37 10 paragraph as it appeared in the 1983 Code.
 37 11    As used in this subsection paragraph, "applicable
 37 12 denominator" means the following, based upon the type of
 37 13 membership service in which the member served either on the
 37 14 date of death, or if the member died after terminating
 37 15 service, on the date of the member's last termination of
 37 16 service:
 37 17    a. (1)  For regular service, the applicable denominator is
 37 18 thirty.
 37 19    b. (2)  For service in a protection occupation, as defined
 37 20 in section 97B.49B, the applicable denominator is twenty-five.
 37 21    c. (3)  For service as a sheriff, deputy sheriff, or
 37 22 airport fire fighter, as provided in section 97B.49C, the
 37 23 applicable denominator is twenty-two.
 37 24    Effective July 1, 1978, a method of payment under this
 37 25 subsection paragraph filed with the department by a member
 37 26 does not apply.
 37 27    b.  For a member who dies on or after January 1, 2001, a
 37 28 lump sum payment equal to the actuarial present value of the
 37 29 member's accrued benefit as of the date of death.  The
 37 30 actuarial equivalent present value of the member's accrued
 37 31 benefit as of the date of death shall be calculated using the
 37 32 same interest rate and mortality tables that are used by the
 37 33 system and the system's actuary under section 97B.51, and
 37 34 shall assume that the member would have retired at the
 37 35 member's earliest normal retirement date.
 38  1    c.  The payment of a death benefit to a designated
 38  2 beneficiary as provided by this subsection shall be in a lump
 38  3 sum payment.  However, if the designated beneficiary is a sole
 38  4 individual, the beneficiary may elect to receive, in lieu of a
 38  5 lump sum payment under this subsection, a monthly annuity
 38  6 payable for the life of the beneficiary.  The monthly annuity
 38  7 shall be calculated by applying the annuity tables used by the
 38  8 department to the lump sum payment under this subsection based
 38  9 on the beneficiary's age.  If the designated beneficiary is
 38 10 more than one individual, or if the designated beneficiary is
 38 11 an estate, trust, church, charity, or other similar
 38 12 organization, a death benefit under this subsection shall only
 38 13 be paid in a lump sum.
 38 14    Sec. 46.  Section 97B.52, subsection 2, Code 1999, is
 38 15 amended to read as follows:
 38 16    2.  If a member dies on or after the first day of the
 38 17 member's first month of entitlement, the excess, if any, of
 38 18 the accumulated contributions by the member as of said date,
 38 19 over the total gross monthly retirement allowances received by
 38 20 the member under the retirement system will be paid to the
 38 21 member's beneficiary unless the retirement allowance is then
 38 22 being paid in accordance with section 97B.48 or with section
 38 23 97B.51, subsection 1, 4, 5, or 6 paragraph "a", "c", "d", or
 38 24 "e".
 38 25    Sec. 47.  Section 97B.52, subsection 5, Code 1999, is
 38 26 amended to read as follows:
 38 27    5.  Following written notification to the department, a
 38 28 beneficiary of a deceased member may waive current and future
 38 29 rights to payments to which the beneficiary would otherwise be
 38 30 entitled under section 97B.51, subsections 5 and 6 and this
 38 31 section subsection 1, paragraphs "a", "b", and "e".  Upon
 38 32 receipt of the waiver, the department shall pay the amount
 38 33 designated to be received by that beneficiary to the member's
 38 34 other surviving beneficiary or beneficiaries or to the estate
 38 35 of the deceased member, as elected by the beneficiary in the
 39  1 waiver.  If the payments being waived are payable to the
 39  2 member's estate and an estate is not probated, the payments
 39  3 shall be paid to the deceased member's surviving spouse, or if
 39  4 there is no surviving spouse, to the member's heirs other than
 39  5 the beneficiary who waived the payments.
 39  6    Sec. 48.  Section 97B.52A, subsection 1, paragraph b, Code
 39  7 1999, is amended to read as follows:
 39  8    b.  For a member whose first month of entitlement is July
 39  9 1998 or later, but before July 2000, the member does not
 39 10 return to any employment with a covered employer until the
 39 11 member has qualified for no fewer than four calendar months of
 39 12 retirement benefits.
 39 13    Sec. 49.  Section 97B.52A, subsection 1, Code 1999, is
 39 14 amended by adding the following new paragraph:
 39 15    NEW PARAGRAPH.  c.  For a member whose first month of
 39 16 entitlement is July 2000 or later, the member does not return
 39 17 to any employment with a covered employer until the member has
 39 18 qualified for no fewer than one calendar month of retirement
 39 19 benefits.  For purposes of this paragraph, effective July 1,
 39 20 2000, any employment with a covered employer does not include
 39 21 employment as an elective official or member of the general
 39 22 assembly if the member is not covered under this chapter for
 39 23 that employment.
 39 24    Sec. 50.  Section 97B.52A, subsection 2, Code 1999, is
 39 25 amended to read as follows:
 39 26    2.  A member may commence receiving retirement benefits
 39 27 under this chapter upon satisfying eligibility requirements.
 39 28 However, a retired member who commences receiving a retirement
 39 29 allowance but returns to employment before qualifying for no
 39 30 fewer than four calendar months of retirement benefits fails
 39 31 to meet the applicable requirements of subsection 1 does not
 39 32 have a bona fide retirement and any retirement allowance
 39 33 received by such a member must be returned to the system
 39 34 together with interest earned on the retirement allowance
 39 35 calculated at a rate determined by the department.  Until the
 40  1 member has repaid the retirement allowance and interest, the
 40  2 department may withhold any future retirement allowance for
 40  3 which the member may qualify.
 40  4    Sec. 51.  Section 97B.52A, Code 1999, is amended by adding
 40  5 the following new subsection:
 40  6    NEW SUBSECTION.  4.  The requirements of this section shall
 40  7 apply to a lump sum payment as provided by section 97B.48,
 40  8 subsection 1, and the payment of contributions as provided in
 40  9 section 97B.48A, subsection 4.
 40 10    Sec. 52.  Section 97B.53, Code Supplement 1999, is amended
 40 11 to read as follows:
 40 12    97B.53  TERMINATION OF EMPLOYMENT – REFUND OPTIONS.
 40 13    Membership in the retirement system, and all rights to the
 40 14 benefits under the system, will cease upon a member's
 40 15 termination of employment with the employer prior to the
 40 16 member's retirement, other than by death, and upon receipt by
 40 17 the member of the a refund of moneys in the member's
 40 18 accumulated contributions account as provided in this section.
 40 19    1.  Upon the termination of employment with the employer
 40 20 prior to retirement other than by death of a member, the
 40 21 member's account, consisting of accumulated contributions by
 40 22 the member and, for a vested member who is vested on the date
 40 23 an application for a refund is filed, the member's share of
 40 24 the accumulated employer contributions for the vested member
 40 25 at the date of the termination, may be paid to the member upon
 40 26 application, except as provided in subsections 2, 5, and 6.
 40 27 For the purpose of this subsection, the "member's share of the
 40 28 accumulated employer contributions" is an amount equal to the
 40 29 total obtained as of any date, by accumulating each individual
 40 30 contribution by the employer for the member with interest plus
 40 31 interest dividends as provided in section 97B.70, for all
 40 32 completed calendar years and for any completed calendar year
 40 33 for which the interest dividend has not been declared and for
 40 34 completed months of partially completed calendar years,
 40 35 compounded as provided in section 97B.70 accumulated employer
 41  1 contributions of the member multiplied by a fraction of years
 41  2 of service for that member as defined in section 97B.49A,
 41  3 97B.49B, or 97B.49C.
 41  4    2.  If a vested member's employment is terminated prior to
 41  5 the member's retirement, other than by death, the member may
 41  6 receive a monthly retirement allowance commencing on the first
 41  7 day of the month in which the member attains the age of sixty-
 41  8 five years, if the member is then alive, or, if the member so
 41  9 elects in accordance with section 97B.47, commencing on the
 41 10 first day of the month in which the member attains the age of
 41 11 fifty-five or any month thereafter prior to the date the
 41 12 member attains the age of sixty-five years, and continuing on
 41 13 the first day of each month thereafter during the member's
 41 14 lifetime, provided the member does not receive prior to the
 41 15 date the member's retirement allowance is to commence a refund
 41 16 of accumulated contributions moneys in the member's account as
 41 17 provided under any of the provisions of this chapter.  The
 41 18 amount of each such monthly retirement allowance shall be
 41 19 determined as provided in either sections 97B.49A through
 41 20 97B.49G, or in section 97B.50, whichever is applicable.
 41 21    3.  The accumulated contributions account of a terminated,
 41 22 vested member shall be credited with interest, including
 41 23 interest dividends, in the manner provided in section 97B.70.
 41 24    4. 3.  A terminated, vested member has the right, prior to
 41 25 the commencement of the member's retirement allowance, to
 41 26 receive a refund of moneys in the member's accumulated
 41 27 contributions account, and in the event of the death of the
 41 28 member prior to the commencement of the member's retirement
 41 29 allowance and prior to the receipt of any such refund the
 41 30 benefits of subsection 1 of section 97B.52 shall be paid.
 41 31    5. 4.  A member has not terminated employment for purposes
 41 32 of this section if the member accepts other covered employment
 41 33 within thirty days four months after receiving the last
 41 34 payment of wages for covered employment, or if the member
 41 35 begins covered employment prior to filing a request for a
 42  1 refund with the department.
 42  2    5A. 5.  Within sixty days after a member has been issued
 42  3 payment for a refund of moneys in the member's accumulated
 42  4 contributions account, the member may repay the accumulated
 42  5 contributions moneys refunded, plus interest that would have
 42  6 accrued, as determined by the department, and receive credit
 42  7 for membership service for the period covered by the refund
 42  8 payment.
 42  9    5B. 6.  A member who does not withdraw moneys in the
 42 10 member's accumulated contributions account upon termination of
 42 11 employment may at any time request the return of the moneys in
 42 12 the member's accumulated contributions account, but if the
 42 13 member receives a return of contributions moneys in the
 42 14 member's account the member has waived all claims for any
 42 15 other benefits and membership rights from the fund.
 42 16    7.  If a member is involuntarily terminated from covered
 42 17 employment, has been issued payment for a refund, and is
 42 18 retroactively reinstated in covered employment as a remedy for
 42 19 an employment dispute, the member may receive credit for
 42 20 membership service for the period covered by the refund
 42 21 payment upon repayment to the department within ninety days
 42 22 after the date of the order or agreement requiring
 42 23 reinstatement of the amount of the refund plus interest that
 42 24 would have accrued, as determined by the department.
 42 25    6. 8.  The system is under no obligation to maintain the
 42 26 accumulated contribution member account of a member who
 42 27 terminates covered employment prior to December 31, 1998, if
 42 28 the member was not vested at the time of termination.  A
 42 29 person who made contributions to the abolished system, who is
 42 30 entitled to a refund in accordance with the provisions of this
 42 31 chapter, and who has not claimed and received such a refund
 42 32 prior to January 1, 1964, shall, if the person makes a claim
 42 33 for refund after January 1, 1964, be required to submit proof
 42 34 satisfactory to the department of the person's entitlement to
 42 35 the refund.  The department is under no obligation to maintain
 43  1 the contribution member accounts of such persons after January
 43  2 1, 1964.
 43  3    7. 9.  Any member whose employment is terminated may elect
 43  4 to leave the moneys in the member's accumulated contributions
 43  5 member account in the retirement fund.
 43  6    8. 10.  If an employee hired to fill a permanent position
 43  7 terminates the employee's employment within six months from
 43  8 the date of employment, the employer may file a claim with the
 43  9 department for a refund of the funds contributed to the
 43 10 department by the employer for the employee.
 43 11    Sec. 53.  Section 97B.53A, Code 1999, is amended to read as
 43 12 follows:
 43 13    97B.53A  DUTY OF DEPARTMENT.
 43 14    Effective July 1, 1991, upon Upon a member's termination of
 43 15 covered employment prior to the member's retirement, the
 43 16 department shall send the member by first class mail, to the
 43 17 member's last known mailing address, a notice setting forth
 43 18 the balance and status of the member's account and
 43 19 supplemental account and an explanation of the courses of
 43 20 action available to the member under this chapter.
 43 21    Sec. 54.  Section 97B.53B, subsection 1, paragraph c,
 43 22 unnumbered paragraph 1, Code 1999, is amended to read as
 43 23 follows:
 43 24    "Eligible rollover distribution" means all or any portion
 43 25 of a member's account and supplemental account, except that an
 43 26 eligible rollover distribution does not include any of the
 43 27 following:
 43 28    Sec. 55.  Section 97B.60, Code 1999, is amended to read as
 43 29 follows:
 43 30    97B.60  ACTUARIAL INVESTIGATION.
 43 31    At least once in each two-year period During calendar year
 43 32 2002, and every four years thereafter, the department shall
 43 33 cause an actuarial investigation to be made of all experience
 43 34 under the retirement system.  Pursuant to such an
 43 35 investigation, the department shall, from time to time,
 44  1 determine upon an actuarial basis the condition of the system
 44  2 and shall report to the general assembly its findings and
 44  3 recommendations.  The department shall adopt from time to time
 44  4 mortality tables and all other necessary factors for use in
 44  5 all actuarial calculations required in connection with the
 44  6 retirement system.
 44  7    Sec. 56.  Section 97B.70, Code 1999, is amended to read as
 44  8 follows:
 44  9    97B.70  INTEREST AND DIVIDENDS TO MEMBERS.
 44 10    1.  For calendar years prior to January 1, 1997, interest
 44 11 at two percent per annum and interest dividends declared by
 44 12 the department shall be credited to the member's contributions
 44 13 and the employer's contributions to become part of the
 44 14 accumulated contributions and accumulated employer
 44 15 contributions thereby.
 44 16    a.  The average rate of interest earned shall be determined
 44 17 upon the following basis:
 44 18    (1)  Investment income shall include interest and cash
 44 19 dividends on stock.
 44 20    (2)  Investment income shall be accounted for on an accrual
 44 21 basis.
 44 22    (3)  Capital gains and losses, realized or unrealized,
 44 23 shall not be included in investment income.
 44 24    (4)  Mean assets shall include fixed income investments
 44 25 valued at cost or on an amortized basis, and common stocks at
 44 26 market values or cost, whichever is lower.
 44 27    (5)  The average rate of earned interest shall be the
 44 28 quotient of the investment income and the mean assets of the
 44 29 retirement fund.
 44 30    b.  The interest dividend shall be determined within sixty
 44 31 days after the end of each calendar year as follows:
 44 32    The dividend rate for a calendar year shall be the excess
 44 33 of the average rate of interest earned for the year over the
 44 34 statutory two percent rate plus twenty-five hundredths of one
 44 35 percent.  The average rate of interest earned and the interest
 45  1 dividend rate in percent shall be calculated to the nearest
 45  2 one hundredth, that is, to two decimal places.  Interest and
 45  3 interest dividends calculated pursuant to this subsection
 45  4 shall be compounded annually.
 45  5    2.  For calendar years beginning January 1, 1997, a per
 45  6 annum interest rate at one percent above the interest rate on
 45  7 one-year certificates of deposit shall be credited to the
 45  8 member's contributions and the employer's contributions to
 45  9 become part of the accumulated contributions and accumulated
 45 10 employer contributions account.  For purposes of this
 45 11 subsection, the interest rate on one-year certificates of
 45 12 deposit shall be determined by the department based on the
 45 13 average rate for such certificates of deposit as of the first
 45 14 business day of each year as published in a publication of
 45 15 general acceptance in the business community.  The per annum
 45 16 interest rate shall be credited on a quarterly basis by
 45 17 applying one-quarter of the annual interest rate to the sum of
 45 18 the accumulated contributions and the accumulated employer
 45 19 contributions as of the end of the previous calendar quarter.
 45 20    3.  Interest shall be credited to the accumulated
 45 21 contributions and accumulated employer contributions accounts,
 45 22 and supplemental accounts of active members, inactive vested
 45 23 members, and, effective January 1, 1999, to inactive nonvested
 45 24 members, until the quarter prior to the quarter in which the
 45 25 member's first retirement allowance is paid or in which the
 45 26 member is issued a refund under section 97B.53, or in which a
 45 27 death benefit is issued.
 45 28    4.  Prior to January 1, 1999, interest and interest
 45 29 dividends shall be credited to the accumulated contributions
 45 30 and accumulated employer contributions account of a person who
 45 31 leaves the contributions in the retirement fund upon
 45 32 termination from covered employment prior to achieving vested
 45 33 status, but who subsequently returns to covered employment.
 45 34 Upon return to covered employment but prior to January 1,
 45 35 1999, interest and interest dividends shall be credited to the
 46  1 accumulated contributions and accumulated employer
 46  2 contributions account of the person commencing upon the date
 46  3 on which the person has covered wages.
 46  4    5.  If the department no longer maintains the accumulated
 46  5 contribution and accumulated employer contributions account of
 46  6 the person pursuant to this chapter, but the person submits
 46  7 satisfactory proof to the department that the person, or the
 46  8 person's employer, did make the contributions that should be
 46  9 included in the accumulated contributions and accumulated
 46 10 employer contributions account, the department shall credit
 46 11 interest and interest dividends in the manner provided in
 46 12 subsection 4.
 46 13    Sec. 57.  NEW SECTION.  97B.82  PURCHASE OF SERVICE CREDIT
 46 14 – DIRECT ROLLOVERS.
 46 15    Effective July 1, 2002, a member may purchase any service
 46 16 credit permitted under this chapter by means of a direct
 46 17 rollover pursuant to rules adopted by the department and
 46 18 consistent with applicable requirements of the Internal
 46 19 Revenue Code.  For purposes of this section, a "direct
 46 20 rollover" means a transfer to the system of an eligible
 46 21 rollover distribution from a qualified plan, including an
 46 22 eligible rollover distribution of qualified plan assets made
 46 23 through a conduit eligible retirement plan, all as described
 46 24 under the Internal Revenue Code.  The amount of the direct
 46 25 rollover into the system cannot exceed the cost of the service
 46 26 purchase by a member under this chapter.  Once a direct
 46 27 rollover is made, the member must forfeit the applicable
 46 28 service credit under the qualified plan from which the
 46 29 eligible rollover distribution is received.
 46 30    Sec. 58.  Section 97B.13, Code 1999, is repealed.
 46 31    Sec. 59.  EFFECTIVE DATE – RETROACTIVE APPLICABILITY.
 46 32 Section 16 of this Act, amending section 97B.1A, subsection
 46 33 24, paragraph "b", being deemed of immediate importance, takes
 46 34 effect upon enactment and is retroactively applicable to
 46 35 January 1, 2000, and is applicable on and after that date.
 47  1    Sec. 60.  IMPLEMENTATION DATE.  Section 57 of this Act,
 47  2 creating new section 97B.82 which establishes a direct
 47  3 rollover for the purchase of service credit, shall not be
 47  4 implemented until the Iowa public employees' retirement system
 47  5 has received a determination letter from the federal internal
 47  6 revenue service approving the retirement system plan's
 47  7 qualified status under Internal Revenue Code section 401(a),
 47  8 as amended by section 97B.82.
 47  9    Sec. 61.  IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM –
 47 10 DEFINED CONTRIBUTION OPTIONS – INTERIM STUDY.  It is the
 47 11 intent of the general assembly that the legislative council
 47 12 may appoint a legislative interim study committee during the
 47 13 2000 interim to consider possible defined contribution options
 47 14 for persons covered by the Iowa public employees' retirement
 47 15 system.  In conducting its study, the interim study committee
 47 16 may consider proposals to allow members of the Iowa public
 47 17 employees' retirement system to select a defined contribution
 47 18 option in lieu of or in addition to the current defined
 47 19 benefit plan.  
 47 20                          DIVISION III
 47 21           STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM
 47 22    Sec. 62.  Section 400.8, subsection 1, Code 1999, is
 47 23 amended to read as follows:
 47 24    1.  The commission, when necessary under the rules,
 47 25 including minimum and maximum age limits, which shall be
 47 26 prescribed and published in advance by the commission and
 47 27 posted in the city hall, shall hold examinations for the
 47 28 purpose of determining the qualifications of applicants for
 47 29 positions under civil service, other than promotions, which
 47 30 examinations shall be practical in character and shall relate
 47 31 to matters which will fairly test the mental and physical
 47 32 ability of the applicant to discharge the duties of the
 47 33 position to which the applicant seeks appointment.  The
 47 34 physical examination of applicants for appointment to the
 47 35 positions of police officer, police matron, or fire fighter
 48  1 shall be held in accordance with medical protocols established
 48  2 by the board of trustees of the fire and police retirement
 48  3 system established by section 411.5 and shall be conducted by
 48  4 the medical board as established in section 411.5.  The board
 48  5 of trustees may change the medical protocols at any time the
 48  6 board so determines.  The commission shall conduct a medical
 48  7 physical examination of an applicant for the position of
 48  8 police officer, police matron, or fire fighter shall be
 48  9 conducted after a conditional offer of employment has been
 48 10 made to the applicant.  An applicant shall not be
 48 11 discriminated against on the basis of height, weight, sex, or
 48 12 race in determining physical or mental ability of the
 48 13 applicant.  Reasonable rules relating to strength, agility,
 48 14 and general health of applicants shall be prescribed.  The
 48 15 costs of the physical examination required under this
 48 16 subsection shall be paid from the trust and agency fund of the
 48 17 city.
 48 18    Sec. 63.  NEW SECTION.  400.8A  GUIDELINES FOR ONGOING
 48 19 FITNESS FOR POLICE OFFICERS AND FIRE FIGHTERS.
 48 20    The board of trustees of the fire and police retirement
 48 21 system established by section 411.5, in consultation with the
 48 22 medical board established in section 411.5, shall establish
 48 23 and maintain protocols and guidelines for ongoing wellness and
 48 24 fitness for police officers and fire fighters while in
 48 25 service.  The board of trustees may change the protocols and
 48 26 guidelines at any time the board so determines.  The protocols
 48 27 and guidelines shall be established by the board of trustees
 48 28 for the consideration of cities covered by this chapter and
 48 29 may be applied by a city for the purpose of determining
 48 30 continued wellness and fitness for members of the city's
 48 31 police and fire departments.  The medical board established in
 48 32 section 411.5 shall provide to cities and fire and police
 48 33 departments assistance regarding the possible implementation
 48 34 and operation of the protocols and guidelines for ongoing
 48 35 wellness and fitness provided by this section.  For purposes
 49  1 of this section, "wellness and fitness" means the process by
 49  2 which police officers and fire fighters maintain fitness for
 49  3 duty.
 49  4    Sec. 64.  Section 411.1, subsection 6, Code 1999, is
 49  5 amended to read as follows:
 49  6    6.  "Child" means only surviving issue of a deceased active
 49  7 or retired member, or a child legally adopted by a deceased
 49  8 member prior to the member's retirement.  "Child" includes
 49  9 only an individual who is under the age of eighteen years, an
 49 10 individual who is under the age of twenty-two years and is a
 49 11 full-time student, or an individual who is disabled at the
 49 12 time under the definitions used in section 402 202 of the
 49 13 Social Security Act as amended if the disability occurred to
 49 14 the individual during the time the individual was under the
 49 15 age of eighteen years and the parent of the individual was an
 49 16 active member of the system.
 49 17    Sec. 65.  Section 411.1, subsection 10, Code 1999, is
 49 18 amended to read as follows:
 49 19    10.  "Medical board" shall mean the board of physicians
 49 20 single medical provider network designated by the system as
 49 21 the medical board as provided for in section 411.5.
 49 22    Sec. 66.  Section 411.1, subsection 12, Code 1999, is
 49 23 amended to read as follows:
 49 24    12.  "Membership service" shall mean service as a police
 49 25 officers officer or a fire fighters fighter rendered since
 49 26 last becoming a member, or, where membership is regained as
 49 27 provided in this chapter, all of such service for a city which
 49 28 is credited as service pursuant to section 411.4.
 49 29    Sec. 67.  Section 411.1, subsection 19, Code 1999, is
 49 30 amended to read as follows:
 49 31    19.  "Surviving spouse" shall mean the surviving spouse of
 49 32 a marriage solemnized prior to retirement of a deceased member
 49 33 from active service.  Surviving spouse shall include a former
 49 34 spouse only if the division of assets in the dissolution of
 49 35 marriage decree pursuant to section 598.17 grants the former
 50  1 spouse rights of a spouse under this chapter.  If there is no
 50  2 surviving spouse of a marriage solemnized prior to retirement
 50  3 of a deceased member, surviving spouse includes a surviving
 50  4 spouse of a marriage of two years or more duration solemnized
 50  5 subsequent to retirement of the member.
 50  6    Sec. 68.  Section 411.1A, Code 1999, is amended to read as
 50  7 follows:
 50  8    411.1A  PURPOSE OF CHAPTER.
 50  9    The purpose of this chapter is to promote economy and
 50 10 efficiency in the municipal public safety service by providing
 50 11 doing the following:
 50 12    1.  Provide an orderly means for police officers and fire
 50 13 fighters to have a retirement system which will provide for
 50 14 the payment of pensions to retired members and members
 50 15 incurring disabilities, and to the surviving spouses and
 50 16 dependents of deceased members.
 50 17    2.  Provide a comprehensive disability program for police
 50 18 officers and fire fighters to include standards for entrance
 50 19 physical examinations, guidelines for ongoing fitness and
 50 20 wellness, disability pensions, and postdisability retirement
 50 21 compliance requirements.
 50 22    Sec. 69.  Section 411.3, subsection 2, Code 1999, is
 50 23 amended to read as follows:
 50 24    2.  Should any member in any period of five consecutive
 50 25 years after last becoming a member, be absent from service for
 50 26 more than four years cease to be employed as a police officer
 50 27 or fire fighter by a city, or should the member become a
 50 28 beneficiary or die, the member shall thereupon cease to be a
 50 29 member of the system.
 50 30    Sec. 70.  Section 411.4, Code 1999, is amended to read as
 50 31 follows:
 50 32    411.4  SERVICE CREDITABLE.
 50 33    1.  Service for fewer than six months of a year is not
 50 34 creditable as service.  Service of six months or more of a
 50 35 year is equivalent to one year of service, but in no case
 51  1 shall more than one year of service be creditable for all
 51  2 service in one calendar year, nor shall the system allow
 51  3 credit as service for any period of more than one month
 51  4 duration during which the member was absent without pay.
 51  5    2.  The system shall credit as service for a member of the
 51  6 system a previous period of service for which the only under
 51  7 any of the following circumstances:
 51  8    a.  The member had withdrawn the member's accumulated
 51  9 contributions, as defined in section 411.21, for the previous
 51 10 period of service.
 51 11    b.  The member returned to service after an absence of
 51 12 service of a period of less than four years from the last day
 51 13 of the prior period of service.
 51 14    c.  The member returned to service after an absence of
 51 15 service of a period of four or more years from the last day of
 51 16 the prior period of service and the member had sufficient
 51 17 service as of the last day of the prior period of service to
 51 18 have been entitled to a retirement allowance on that date
 51 19 under section 411.6, subsection 1, paragraph "b".
 51 20    Sec. 71.  Section 411.5, subsection 6, Code 1999, is
 51 21 amended by adding the following new paragraph:
 51 22    NEW PARAGRAPH.  c.  Notwithstanding any provision of
 51 23 chapter 22 to the contrary, the system's records may be
 51 24 released to any political subdivision, instrumentality, or
 51 25 agency of the state solely for use in a civil or criminal law
 51 26 enforcement activity pursuant to the requirements of this
 51 27 paragraph.  To obtain the records, the political subdivision,
 51 28 instrumentality, or agency of the state shall, in writing,
 51 29 certify to the system that the activity is authorized by law,
 51 30 provide a written description of the information desired, and
 51 31 describe the law enforcement activity for which the
 51 32 information is sought.  The system shall not be civilly or
 51 33 criminally liable for the release of records in accordance
 51 34 with the requirements of this paragraph.
 51 35    Sec. 72.  Section 411.5, subsection 8, Code 1999, is
 52  1 amended to read as follows:
 52  2    8.  MEDICAL BOARD.  The system board of trustees shall
 52  3 designate a single medical provider network as the medical
 52  4 board to be composed of three physicians who for the system.
 52  5 The medical board shall arrange for and pass upon all medical
 52  6 examinations required under the provisions of chapter 400 and
 52  7 this chapter, except that for and shall assist the system in
 52  8 all aspects of the comprehensive disability program described
 52  9 in section 411.1A.  For examinations required because of
 52 10 disability three physicians, a physician from the university
 52 11 of Iowa hospitals and clinics who medical board specializing
 52 12 in occupational medicine, and a second physician specializing
 52 13 in an appropriate field of medicine as determined by the
 52 14 occupational medicine physician shall pass upon the medical
 52 15 examinations required for disability retirements, and shall
 52 16 report to the system in writing its their conclusions and
 52 17 recommendations upon all matters referred to it the medical
 52 18 board.  Each report of a medical examination under section
 52 19 411.6, subsections 3 and 5, shall include the medical board's
 52 20 findings in accordance with section 411.6 as to the extent of
 52 21 the member's physical impairment.
 52 22    Sec. 73.  Section 411.6, subsection 2, Code 1999, is
 52 23 amended to read as follows:
 52 24    2.  ALLOWANCE ON SERVICE RETIREMENT.
 52 25    a.  The service retirement allowance for a member who
 52 26 terminates service, other than by death or disability, prior
 52 27 to July 1, 1990, shall consist of a pension which equals fifty
 52 28 percent of the member's average final compensation.
 52 29    b.  The service retirement allowance for a member who
 52 30 terminates service, other than by death or disability, on or
 52 31 after July 1, 1990, but before July 1, 1992, shall consist of
 52 32 a pension which equals fifty-four percent of the member's
 52 33 average final compensation.
 52 34    c.  Commencing July 1, 1992, for members who terminate
 52 35 service, other than by death or disability, on or after that
 53  1 date, but before July 1, 2000, the system shall increase the
 53  2 percentage multiplier of the member's average final
 53  3 compensation by an additional two percent each July 1 until
 53  4 reaching sixty percent of the member's average final
 53  5 compensation.  The applicable percentage multiplier shall be
 53  6 the rate in effect on the date of the member's termination
 53  7 from service.
 53  8    d.  Upon retirement from service on or after July 1, 2000,
 53  9 a member shall receive a service retirement allowance which
 53 10 shall consist of a pension which equals sixty-six percent of
 53 11 the member's average final compensation.
 53 12    d. e.  Commencing July 1, 1990, if the member has completed
 53 13 more than twenty-two years of creditable service, the service
 53 14 retirement allowance shall consist of a pension which equals
 53 15 the amount provided in paragraphs paragraph "b", and "c", or
 53 16 "d", plus an additional percentage as set forth below:
 53 17    (1)  For a member who terminates service, other than by
 53 18 death or disability, on or after July 1, 1990, but before July
 53 19 1, 1991, and who does not withdraw the member's contributions
 53 20 pursuant to section 411.23, upon the member's retirement there
 53 21 shall be added three-tenths percent of the member's average
 53 22 final compensation for each year of service over twenty-two
 53 23 years, excluding years of service after the member's fifty-
 53 24 fifth birthday.  However, this subparagraph does not apply to
 53 25 more than eight additional years of service.
 53 26    (2)  For a member who terminates service, other than by
 53 27 death or disability, on or after July 1, 1991, but before
 53 28 October 16, 1992, and who does not withdraw the member's
 53 29 contributions pursuant to section 411.23, upon the member's
 53 30 retirement there shall be added six-tenths percent of the
 53 31 member's average final compensation for each year of service
 53 32 over twenty-two years, excluding years of service after the
 53 33 member's fifty-fifth birthday.  However, this subparagraph
 53 34 does not apply to more than eight additional years of service.
 53 35    (3)  For a member who terminates service, other than by
 54  1 death or disability, on or after October 16, 1992, but before
 54  2 July 1, 1998, and who does not withdraw the member's
 54  3 contributions pursuant to section 411.23, upon the member's
 54  4 retirement there shall be added six-tenths percent of the
 54  5 member's average final compensation for each year of service
 54  6 over twenty-two years.  However, this subparagraph does not
 54  7 apply to more than eight additional years of service.
 54  8    (4)  For a member who terminates service, other than by
 54  9 death or disability, on or after July 1, 1998, but before July
 54 10 1, 2000, and who does not withdraw the member's contributions
 54 11 pursuant to section 411.23, upon the member's retirement there
 54 12 shall be added one and one-half percent of the member's
 54 13 average final compensation for each year of service over
 54 14 twenty-two years.  However, this subparagraph does not apply
 54 15 to more than eight additional years of service.
 54 16    (5)  For a member who terminates service, other than by
 54 17 death or disability, on or after July 1, 2000, and who does
 54 18 not withdraw the member's contributions pursuant to section
 54 19 411.23, upon the member's retirement there shall be added two
 54 20 percent of the member's average final compensation for each
 54 21 year of service over twenty-two years.  However, this
 54 22 subparagraph does not apply to more than eight additional
 54 23 years of service.
 54 24    Sec. 74.  Section 411.6, subsection 5, paragraph b, Code
 54 25 1999, is amended to read as follows:
 54 26    b.  If a member in service or the chief of the police or
 54 27 fire departments becomes incapacitated for duty as a natural
 54 28 or proximate result of an injury or disease incurred in or
 54 29 aggravated by the actual performance of duty at some definite
 54 30 time or place or while acting, pursuant to order, outside the
 54 31 city by which the member is regularly employed, the member,
 54 32 upon being found to be temporarily incapacitated following a
 54 33 medical examination as directed by the city, is entitled to
 54 34 receive the member's full pay and allowances from the city's
 54 35 general fund until re-examined as directed by the city and
 55  1 found to be fully recovered or until the city determines that
 55  2 the member is likely to be permanently disabled.  The If the
 55  3 temporary incapacity of a member continues more than sixty
 55  4 days, or if the city expects the incapacity to continue more
 55  5 than sixty days, the city shall notify the system of the
 55  6 temporary incapacity.  Upon notification by a city, the system
 55  7 may refer the matter to the medical board for review and
 55  8 consultation with the member's treating physician during the
 55  9 temporary incapacity.  Except as provided by this paragraph,
 55 10 the board of trustees of the statewide system has no
 55 11 jurisdiction over these matters until the city determines that
 55 12 the disability is likely to be permanent.
 55 13    Sec. 75.  Section 411.6, subsection 6, paragraph c, Code
 55 14 1999, is amended to read as follows:
 55 15    c.  Upon retirement for accidental disability on or after
 55 16 July 1, 1998, a member shall receive an accidental disability
 55 17 retirement allowance which shall consist of a pension in an
 55 18 amount equal to the greater of sixty percent of the member's
 55 19 average final compensation or the retirement allowance that
 55 20 the member would receive under subsection 2 if the member has
 55 21 had attained fifty-five years of age.
 55 22    Sec. 76.  Section 411.6, subsection 7, unnumbered paragraph
 55 23 1, Code 1999, is amended to read as follows:
 55 24    Once each year during the first five years following the
 55 25 retirement of a member on a disability retirement allowance,
 55 26 and once in every three-year period thereafter, the system
 55 27 may, and upon the member's application shall, require any
 55 28 disability beneficiary who has not yet attained age fifty-five
 55 29 to undergo a medical examination at a place designated by the
 55 30 medical board.  The examination shall be made by the medical
 55 31 board or in special cases, by an additional physician or
 55 32 physicians designated by such board.  If any disability
 55 33 beneficiary who has not attained the age of fifty-five refuses
 55 34 to submit to the medical examination, the member's allowance
 55 35 may be discontinued until withdrawal of such refusal, and if
 56  1 the refusal continues for one year all rights in and to the
 56  2 member's pension may be revoked by the system.  For a
 56  3 disability beneficiary who has not attained the age of fifty-
 56  4 five and whose entitlement to a disability retirement
 56  5 commenced on or after July 1, 2000, the medical board may, as
 56  6 part of the examination required by this subsection, suggest
 56  7 appropriate medical treatment or rehabilitation if, in the
 56  8 opinion of the medical board, the recommended treatment or
 56  9 rehabilitation would likely restore the disability beneficiary
 56 10 to duty.
 56 11    Sec. 77.  Section 411.6, subsection 7, paragraph a,
 56 12 unnumbered paragraph 1, Code 1999, is amended to read as
 56 13 follows:
 56 14    Should any beneficiary for either ordinary or accidental
 56 15 disability, except a beneficiary who is fifty-five years of
 56 16 age or over and would have completed twenty-two years of
 56 17 service if the beneficiary had remained in active service, be
 56 18 engaged in a gainful occupation paying more than the
 56 19 difference between the member's net retirement allowance and
 56 20 one and one-half times the earnable compensation of an active
 56 21 member at the same position on the salary scale within the
 56 22 member's rank as the member held at retirement, then the
 56 23 amount of the member's retirement allowance shall be reduced
 56 24 to an amount such that the member's net retirement allowance
 56 25 plus the amount earned by the member shall equal one and one-
 56 26 half times the amount of the current earnable compensation of
 56 27 an active member at the same position on the salary scale
 56 28 within the member's rank as the member held at retirement.
 56 29 Should the member's earning capacity earnings be later
 56 30 changed, the amount of the member's retirement allowance may
 56 31 be further modified, provided that the new retirement
 56 32 allowance shall not exceed the amount of the retirement
 56 33 allowance adjusted by annual readjustments of pensions
 56 34 pursuant to subsection 12 of this section nor an amount which
 56 35 would cause the member's net retirement allowance, when added
 57  1 to the amount earned by the beneficiary, to equal one and one-
 57  2 half times the amount of the earnable compensation of an
 57  3 active member at the same position on the salary scale within
 57  4 the member's rank as the member held at retirement.  A
 57  5 beneficiary restored to active service at a salary less than
 57  6 the average final compensation upon the basis of which the
 57  7 member was retired at age fifty-five or greater, shall not
 57  8 again become a member of the retirement system and shall have
 57  9 the member's retirement allowance suspended while in active
 57 10 service.  If the rank or position held by the retired member
 57 11 is subsequently abolished, adjustments to the allowable limit
 57 12 on the amount of income which can be earned in a gainful
 57 13 occupation shall be computed by the board of trustees as
 57 14 though such rank or position had not been abolished and salary
 57 15 increases had been granted to such rank or position on the
 57 16 same basis as increases granted to other ranks and positions
 57 17 in the department.  For purposes of this paragraph, "net
 57 18 retirement allowance" means the amount determined by
 57 19 subtracting the amount paid during the previous calendar year
 57 20 by the beneficiary for health insurance or similar health care
 57 21 coverage for the beneficiary and the beneficiary's dependents
 57 22 from the amount of the member's retirement allowance paid for
 57 23 that year pursuant to this chapter.  The beneficiary shall
 57 24 submit sufficient documentation to the system to permit the
 57 25 system to determine the member's net retirement allowance for
 57 26 the applicable year.
 57 27    Sec. 78.  Section 411.6, subsection 7, Code 1999, is
 57 28 amended by adding the following new paragraph:
 57 29    NEW PARAGRAPH.  c.  Should a disability beneficiary under
 57 30 age fifty-five be employed in a public safety occupation, the
 57 31 disability beneficiary's retirement allowance shall cease.
 57 32 Notwithstanding any provision of this chapter to the contrary,
 57 33 if a disability beneficiary is employed in a public safety
 57 34 occupation that would otherwise constitute membership service,
 57 35 the disability beneficiary shall not become a member of the
 58  1 system.  For purposes of this paragraph, "public safety
 58  2 occupation" means a peace officer, as defined in section
 58  3 97A.1; a protection occupation, as defined in section 97B.49B;
 58  4 a sheriff, deputy sheriff, or airport fire fighter, as defined
 58  5 in section 97B.49C; and a police officer or fire fighter as
 58  6 defined in section 411.1, who was not restored to active
 58  7 service as provided by this subsection.
 58  8    Sec. 79.  Section 411.6, subsection 8, Code 1999, is
 58  9 amended to read as follows:
 58 10    8.  ORDINARY DEATH BENEFIT.
 58 11    a.  Upon the receipt of proof of the death of a member in
 58 12 service, or a member not in service who has completed four or
 58 13 more years of service as provided in subsection 1, paragraph
 58 14 "b", there shall be paid to the person designated by the
 58 15 member to the system as the member's beneficiary, if the
 58 16 member has had one or more years of membership service and no
 58 17 pension is payable under subsection 9, an the greater of the
 58 18 following:
 58 19    (1)  An amount equal to fifty percent of the compensation
 58 20 earnable by the member during the year immediately preceding
 58 21 the member's death if the member is in service, or an amount
 58 22 equal to fifty percent of the compensation earned by the
 58 23 member during the member's last year of service if the member
 58 24 is not in service.
 58 25    (2)  An amount the member would have been entitled to
 58 26 withdraw pursuant to section 411.23 if the member had
 58 27 terminated service on the date of the member's death.
 58 28    b.  In lieu of the payment specified in paragraph "a", a
 58 29 beneficiary meeting the qualifications of paragraph "c" may
 58 30 elect to receive a monthly pension equal to one-twelfth of
 58 31 forty percent of the average final compensation of the member,
 58 32 but not less than twenty percent of the monthly earnable
 58 33 compensation paid to an active member holding the highest
 58 34 grade in the rank of fire fighter, for a beneficiary of a
 58 35 deceased member of a fire department, or the highest grade in
 59  1 the rank of police patrol officer, for a beneficiary of a
 59  2 deceased member of a police department, if the member was in
 59  3 service at the time of death.  For a member not in service at
 59  4 the time of death, the pension shall be reduced as provided in
 59  5 subsection 1, paragraph "b".
 59  6    For a member not in service at the time of death, the
 59  7 pension shall be paid commencing when the member would have
 59  8 attained the age of fifty-five except that if there is a child
 59  9 of the member, the pension shall be paid commencing with the
 59 10 member's death until the children reach the age of eighteen,
 59 11 or twenty-two if applicable child of the member no longer
 59 12 meets the definition of child as provided in section 411.1.
 59 13 The pension shall resume commencing when the member would have
 59 14 attained the age of fifty-five.
 59 15    For a member in service at the time of death, the pension
 59 16 shall be paid commencing with the member's death.  In addition
 59 17 to the pension, there shall also be paid for each child of a
 59 18 member, a monthly pension equal to six percent of the monthly
 59 19 earnable compensation paid to an active member holding the
 59 20 highest grade in the rank of fire fighter, for a child of a
 59 21 deceased member of a fire department, or the highest grade in
 59 22 the rank of police patrol officer, for a child of a deceased
 59 23 member of a police department.
 59 24    Notwithstanding section 411.6, subsection 8, Code 1985,
 59 25 effective July 1, 1990, for a member's surviving spouse who,
 59 26 prior to July 1, 1986, elected to receive pension benefits
 59 27 under this paragraph, the monthly pension benefit shall be
 59 28 equal to the higher of one-twelfth of forty percent of the
 59 29 average final compensation of the member, or the amount the
 59 30 surviving spouse was receiving on July 1, 1990.
 59 31    c.  The pension under paragraph "b" may be selected only by
 59 32 the following beneficiaries:
 59 33    (1)  The spouse.
 59 34    (2)  If there is no spouse, or if the spouse dies and there
 59 35 is a child of a member, then the guardian of the member's
 60  1 child or children, divided as the system determines, to
 60  2 continue as a joint and survivor pension until every child of
 60  3 the member dies or attains the age of eighteen, or twenty-two
 60  4 if applicable in equal shares.  The pension to each child
 60  5 shall terminate when the child no longer meets the definition
 60  6 of child in section 411.1.
 60  7    (3)  If there is no surviving spouse or child, then the
 60  8 member's dependent father or mother, or both, as the system
 60  9 determines, to continue until remarriage or death.
 60 10    d.  If there is no nomination of the member failed to
 60 11 designate a beneficiary, or if the beneficiary designated by
 60 12 the member predeceases the member, the benefits provided in
 60 13 paragraph "a" of this subsection shall be paid to the member's
 60 14 estate. as follows in the following order of priority:
 60 15    (1)  To the member's surviving spouse.
 60 16    (2)  To the member's surviving children, including any
 60 17 adult children, in equal shares.
 60 18    (3)  To the member's surviving parents, in equal shares.
 60 19    (4)  To the member's estate.
 60 20    (5)  To the member's heirs if the estate is not probated.
 60 21    Sec. 80.  Section 411.6, subsection 9, Code 1999, is
 60 22 amended to read as follows:
 60 23    9.  ACCIDENTAL DEATH BENEFIT.
 60 24    a.  If, upon the receipt of evidence and proof from the
 60 25 chief of the police or fire department that the death of a
 60 26 member in service was the natural and proximate result of an
 60 27 injury or disease incurred in or aggravated by the actual
 60 28 performance of duty at some definite time and place, or while
 60 29 acting pursuant to order, outside of the city by which the
 60 30 member is regularly employed, the system decides that death
 60 31 was so caused in the performance of duty, there shall be paid,
 60 32 in lieu of the ordinary death benefit provided in subsection
 60 33 8, to the member's estate or to such person having an
 60 34 insurable interest in the member's life as the member has
 60 35 nominated by written designation duly executed and filed with
 61  1 the system, the benefits an accidental death benefit as set
 61  2 forth in paragraphs "a" and "b" of this subsection:.  Disease
 61  3 under this subsection shall mean heart disease or any disease
 61  4 of the lungs or respiratory tract and shall be presumed to
 61  5 have been contracted while on active duty as a result of
 61  6 strain or the inhalation of noxious fumes, poison, or gases.
 61  7    a. b.  A An accidental death benefit pension equal to one-
 61  8 half of the average final compensation of the member shall be
 61  9 paid to the member's spouse, children or dependent parents as
 61 10 provided in paragraphs "c", "d", and "e" of subsection 8 of
 61 11 this section.  There as follows:
 61 12    (1)  To the member's spouse.
 61 13    (2)  If there is no spouse, or if the spouse dies and there
 61 14 is a child of the member, then to the member's child or
 61 15 children in equal shares.  The pension to each child shall
 61 16 terminate when the child no longer meets the definition of
 61 17 child in section 411.1.
 61 18    (3)  If there is no surviving spouse or child, then to the
 61 19 member's dependent father or mother, or both, as the system
 61 20 determines, to continue until remarriage or death.
 61 21    c.  In addition to the accidental death benefit pension
 61 22 provided in paragraph "b", there shall also be paid for each
 61 23 child of a member a monthly pension equal to six percent of
 61 24 the monthly earnable compensation paid to an active member
 61 25 holding the highest grade in the rank of fire fighter, for a
 61 26 child of a deceased member of a fire department, or holding
 61 27 the highest grade in the rank of police patrol officer, for a
 61 28 child of a deceased member of a police department.
 61 29    d.  A person eligible to receive the pension payable under
 61 30 paragraph "b" of this subsection may elect to receive the
 61 31 benefit payable under subsection 8, paragraph "a", in lieu of
 61 32 the pension provided in paragraph "b" of this subsection.
 61 33    b. e.  If there is no spouse, child, or dependent parent
 61 34 surviving a deceased member person entitled to the pension
 61 35 payable under paragraph "b" of this subsection, the death
 62  1 shall be treated as an ordinary death case and the benefit
 62  2 payable under subsection 8, paragraph "a", in lieu of the
 62  3 pension provided in paragraph "a" of this subsection, shall be
 62  4 paid to the member's estate as provided by that subsection.
 62  5    Disease under this subsection shall mean heart disease or
 62  6 any disease of the lungs or respiratory tract and shall be
 62  7 presumed to have been contracted while on active duty as a
 62  8 result of strain or the inhalation of noxious fumes, poison,
 62  9 or gases.
 62 10    Sec. 81.  Section 411.6, subsection 11, Code 1999, is
 62 11 amended to read as follows:
 62 12    11.  Pension to spouse and children of deceased pensioned
 62 13 member.  In the event of the death of any member receiving a
 62 14 retirement allowance under the provisions of subsections 2, 4,
 62 15 or 6 of this section there shall be paid a pension:
 62 16    a.  To the spouse, equal to one-half the amount received by
 62 17 the deceased beneficiary, but in no instance less than twenty
 62 18 percent of the monthly earnable compensation paid to an active
 62 19 member holding the highest grade in the rank of fire fighter,
 62 20 for a beneficiary of a deceased member of the fire department,
 62 21 or the highest grade in the rank of police patrol officer, for
 62 22 a beneficiary of a deceased member of a police department, and
 62 23 in addition a monthly pension equal to the monthly pension
 62 24 payable under subsection 9 of this section for each child
 62 25 under eighteen years of age or twenty-two years of age if
 62 26 applicable; or
 62 27    b.  If the spouse dies either prior or subsequent to the
 62 28 death of the member, to the guardian of each surviving child,
 62 29 a monthly pension equal to the monthly pension payable under
 62 30 subsection 9 of this section for the support of the child.
 62 31    Sec. 82.  Section 411.6, Code 1999, is amended by adding
 62 32 the following new subsection:
 62 33    NEW SUBSECTION.  14.  BENEFICIARY DESIGNATION.  A member
 62 34 may designate, in writing on a form prescribed by the system,
 62 35 any person or persons to whom the system will pay a death
 63  1 benefit under this section in the event of the member's death.
 63  2 If the member is married at the time a designation is signed,
 63  3 a designation of a beneficiary other than the member's spouse
 63  4 shall not be valid unless the member's spouse consents in
 63  5 writing to the designation.  A designation filed with the
 63  6 system shall be deemed revoked if, subsequent to the
 63  7 designation, a new designation is filed with the system, the
 63  8 member marries, or the member divorces the individual who was
 63  9 the member's named beneficiary.
 63 10    Sec. 83.  Section 411.6, Code 1999, is amended by adding
 63 11 the following new subsection:
 63 12    NEW SUBSECTION.  15.  LINE OF DUTY DEATH BENEFIT.
 63 13    a.  If, upon the receipt of evidence and proof from the
 63 14 chief of the police or fire department that the death of a
 63 15 member in service was the direct and proximate result of a
 63 16 traumatic personal injury incurred in the line of duty, the
 63 17 system decides that death was so caused, there shall be paid,
 63 18 to a person authorized to receive an accidental death benefit
 63 19 as provided in subsection 9, paragraph "b", the amount of one
 63 20 hundred thousand dollars, which shall be payable in a lump
 63 21 sum.
 63 22    b.  A line of duty death benefit shall not be payable under
 63 23 this subsection if any of the following applies:
 63 24    (1)  The death resulted from stress, strain, occupational
 63 25 illness, or a chronic, progressive, or congenital illness,
 63 26 including, but not limited to, a disease of the heart, lungs,
 63 27 or respiratory system, unless a traumatic personal injury was
 63 28 a substantial contributing factor to the member's death.
 63 29    (2)  The death was caused by the intentional misconduct of
 63 30 the member or by the member's intent to cause the member's own
 63 31 death.
 63 32    (3)  The member was voluntarily intoxicated at the time of
 63 33 death.
 63 34    (4)  The member was performing the member's duties in a
 63 35 grossly negligent manner at the time of death.
 64  1    (5)  An individual who would otherwise be entitled to a
 64  2 benefit under this subsection was, through the individual's
 64  3 actions, a substantial contributing factor to the member's
 64  4 death.
 64  5    Sec. 84.  Section 411.6, Code 1999, is amended by adding
 64  6 the following new subsection:
 64  7    NEW SUBSECTION.  16.  INELIGIBILITY FOR DISABILITY
 64  8 BENEFITS.
 64  9    a.  A member otherwise eligible to receive a disability
 64 10 retirement benefit under this chapter shall not be eligible to
 64 11 receive such a benefit if the system determines that any of
 64 12 the following conditions for ineligibility apply:
 64 13    (1)  The disability would not exist but for the member's
 64 14 chemical dependency, as defined in section 125.2, on a
 64 15 schedule I controlled substance, as defined in section
 64 16 124.204, or the member's chemical dependency on a schedule II
 64 17 controlled substance, as defined in section 124.206, resulting
 64 18 from the inappropriate use of the schedule II controlled
 64 19 substance.
 64 20    (2)  The disability is a mental disability proximately
 64 21 caused by appropriate disciplinary actions taken against the
 64 22 member, or by conflicts with a superior or coworker if the
 64 23 superior or coworker was acting legally and appropriately
 64 24 toward the member when the conflicts occurred.
 64 25    b.  A member otherwise eligible to receive a disability
 64 26 retirement benefit under this chapter, or who is receiving
 64 27 such a benefit, shall not be eligible to receive such a
 64 28 benefit beginning with the month following the determination
 64 29 by the system that the disability would not exist but for the
 64 30 action of the member for which the member has been convicted
 64 31 of a felony.
 64 32    c.  A member eligible to commence receiving a disability
 64 33 benefit on or after July 1, 2000, may be ineligible to receive
 64 34 a disability retirement benefit if the system determines that
 64 35 the member's alcoholism or drug addiction was a contributing
 65  1 factor material to the determination of the member's
 65  2 disability.  Upon a determination that the member's alcoholism
 65  3 or drug addiction was a contributing factor in the member's
 65  4 disability, the system shall direct the member to undergo
 65  5 substance abuse treatment that the medical board determines is
 65  6 appropriate to treat the member's alcoholism or drug
 65  7 addiction.  After the end of a twenty-four-month period
 65  8 following the member's first month of entitlement to a
 65  9 disability benefit, the system shall reevaluate the member's
 65 10 disability.  If the system determines that the member failed
 65 11 to comply with the treatment program prescribed by this
 65 12 paragraph and that the member would not be disabled but for
 65 13 the member's alcoholism or drug addiction, the member's
 65 14 entitlement to a disability benefit under this chapter shall
 65 15 terminate effective the first day of the first month following
 65 16 the month the member is notified of the system's
 65 17 determination.
 65 18    Sec. 85.  Section 411.6, Code 1999, is amended by adding
 65 19 the following new subsection:
 65 20    NEW SUBSECTION.  17.  LIMITATIONS ON BENEFITS – PRISONERS.
 65 21    a.  An individual who is otherwise entitled to a retirement
 65 22 allowance under this chapter shall not receive a retirement
 65 23 allowance for any month during which both of the following
 65 24 conditions exist:
 65 25    (1)  The individual is confined in a jail, prison, or
 65 26 correctional facility pursuant to the individual's conviction
 65 27 of a felony.
 65 28    (2)  The individual has a spouse, or a child or children,
 65 29 as defined in section 411.1.
 65 30    b.  The amount of the retirement allowance not paid to the
 65 31 individual under paragraph "a" shall be paid in the following
 65 32 order of priority:
 65 33    (1)  To the individual's spouse, if any.
 65 34    (2)  If there is no spouse, then to the individual's child
 65 35 or children, as defined in section 411.1.
 66  1    c.  This subsection shall not be construed in a manner that
 66  2 impairs the rights of any individual under a marital property,
 66  3 spousal support, or child support order.  In addition, this
 66  4 subsection shall not be construed to impair the statutory
 66  5 rights of a governmental entity, including, but not limited
 66  6 to, the right of a governmental entity to collect an amount
 66  7 for deposit in the victim compensation fund established in
 66  8 chapter 915.
 66  9    Sec. 86.  Section 411.11, Code 1999, is amended to read as
 66 10 follows:
 66 11    411.11  CONTRIBUTIONS BY THE CITY.
 66 12    1.  On or before January 1 of each year the system shall
 66 13 certify to the superintendent of public safety of each
 66 14 participating city the amounts which will become due and
 66 15 payable during the year next following to the fire and police
 66 16 retirement fund.  The amounts so certified shall be included
 66 17 by the superintendent of public safety in the annual budget
 66 18 estimate.  The amounts so certified shall be appropriated by
 66 19 the respective cities and transferred to the retirement system
 66 20 for the ensuing year.  The cities shall annually levy a tax
 66 21 sufficient in amount to cover the appropriations.
 66 22    2.  Amounts paid by a city to a member as back pay that
 66 23 would have constituted earnable compensation if paid when
 66 24 earned shall be allocated by the system as earnable
 66 25 compensation to the period or periods for which paid and
 66 26 employer and employee contributions shall be paid to the
 66 27 system for the amounts.  The contribution rate to be applied
 66 28 to such amounts shall be determined pursuant to section 411.8
 66 29 based on the rates in effect for the period or periods to
 66 30 which the amounts are allocated.  Interest on the
 66 31 contributions required to be paid shall be calculated pursuant
 66 32 to this section as if the contributions were unpaid as of the
 66 33 date the contributions would have been due if the back pay had
 66 34 been paid to the member during the period in which it was due.
 66 35 The requirements of this subsection apply regardless of
 67  1 whether the back pay is made under a covenant not to sue,
 67  2 compromise settlement, denial of liability, or other agreement
 67  3 between the member and the employer.
 67  4    3.  Contributions unpaid on the date on which they are due
 67  5 and payable as prescribed by the system shall bear interest at
 67  6 the greater of the interest rate assumption adopted by the
 67  7 board of trustees or the rate of interest on the short-term
 67  8 investment fund account of the system's custodial bank for the
 67  9 period the contributions remain unpaid.  Interest due pursuant
 67 10 to this section may be waived by the system pursuant to rules
 67 11 adopted by the board.  Interest collected pursuant to this
 67 12 section shall be paid into the retirement fund created in
 67 13 section 411.8.
 67 14    4.  If an employer fails to pay contributions or interest
 67 15 as required by this chapter after receiving thirty days'
 67 16 notice of the employer's obligation, the system may maintain a
 67 17 civil action to collect the unpaid contributions and interest
 67 18 from the employer, which action shall be heard as
 67 19 expeditiously as possible.  If the system prevails in the
 67 20 civil action to recover unpaid contributions and interest, the
 67 21 court shall require the employer to pay the costs of the
 67 22 action.
 67 23    Sec. 87.  Section 411.22, Code 1999, is amended to read as
 67 24 follows:
 67 25    411.22  LIABILITY OF THIRD PARTIES – SUBROGATION.
 67 26    1.  If a member receives an injury or dies for which
 67 27 benefits are payable under section 411.6, subsection 3, or 5,
 67 28 8, or 9, or section 411.15, and if the injury or death is
 67 29 caused under circumstances creating a legal liability for
 67 30 damages against a third party other than the retirement
 67 31 system, the retirement system is subrogated to the rights of
 67 32 the member or the member's legal representative beneficiary
 67 33 entitled to receive a death benefit and may maintain an action
 67 34 for damages against the third party for lost earnings and lost
 67 35 earnings capacity.  If the retirement system recovers damages
 68  1 in the action, the court shall enter judgment for distribution
 68  2 of the recovery as follows:
 68  3    a.  A sum sufficient to repay the retirement system for the
 68  4 amount of such benefits actually paid by the retirement system
 68  5 up to the time of the entering of the judgment.
 68  6    b.  A sum sufficient to pay the retirement system the
 68  7 present worth, computed at the interest rate provided in
 68  8 section 535.3 for court judgments and decrees, of the future
 68  9 payments of such benefits, for which the retirement system is
 68 10 liable, but the sum is not a final adjudication of the future
 68 11 payments which the member is entitled to receive.
 68 12    c.  A sum sufficient to repay the retirement system for the
 68 13 costs and expenses of maintaining the action.
 68 14    d.  Any balance remaining after the repayments provided by
 68 15 paragraphs "a" through "c" shall be paid to the injured
 68 16 member, or the beneficiary under section 411.6, subsection 8
 68 17 or 9, whichever is applicable.
 68 18    2.  If the system, after receiving written notice of the
 68 19 third-party liability, declines in writing to maintain an
 68 20 action against the third party or fails to maintain an action
 68 21 within one hundred eighty days of receiving written notice of
 68 22 the third-party liability, the member, the member's estate, or
 68 23 the legal representative of the member or the member's estate,
 68 24 may maintain an action for damages against the third party.
 68 25 If a member or a member's legal representative commences such
 68 26 an action is commenced, the plaintiff member, estate, or
 68 27 representative shall serve a copy of the original notice upon
 68 28 the retirement system not less than ten days before the trial
 68 29 of the action, but a failure to serve the notice does not
 68 30 prejudice the rights of the retirement system, and the
 68 31 following rights and duties ensue:
 68 32    a.  The retirement system shall be indemnified out of the
 68 33 recovery of damages to the extent of benefit payments made
 68 34 paid or awarded by the retirement system, with legal interest,
 68 35 except that the plaintiff member's or estate's attorney fees
 69  1 may be first allowed by the district court.  For purposes of
 69  2 this paragraph, "benefit payments paid or awarded" means the
 69  3 sum of the following amounts:
 69  4    (1)  The amount of benefits actually paid by the retirement
 69  5 system up to the time of the entering of the judgment.
 69  6    (2)  The present worth, computed at the interest rate
 69  7 provided in section 535.3 for court judgments and decrees, of
 69  8 the future payments of such benefits, for which the retirement
 69  9 system is liable, but the sum is not a final adjudication of
 69 10 the future payments which the member is entitled to receive.
 69 11    b.  The retirement system has a lien on the damage claim
 69 12 against the third party and on any judgment on the damage
 69 13 claim for benefits for which the retirement system is liable.
 69 14 In order to continue and preserve the lien, the retirement
 69 15 system shall file a notice of the lien within thirty days
 69 16 after receiving a copy of the original notice in the office of
 69 17 the clerk of the district court in which the action is filed.
 69 18    2.  If a member fails to bring an action for damages
 69 19 against a third party within thirty days after the retirement
 69 20 system requests the member in writing to do so, the retirement
 69 21 system is subrogated to the rights of the member and may
 69 22 maintain the action against the third party, and may recover
 69 23 damages for the injury to the same extent that the member may
 69 24 recover damages for the injury.  If the retirement system
 69 25 recovers damages in the action, the court shall enter judgment
 69 26 for distribution of the recovery as follows:
 69 27    a.  A sum sufficient to repay the retirement system for the
 69 28 amount of such benefits actually paid by the retirement system
 69 29 up to the time of the entering of the judgment.
 69 30    b.  A sum sufficient to pay the retirement system the
 69 31 present worth, computed at the interest rate provided in
 69 32 section 535.3 for court judgments and decrees, of the future
 69 33 payments of such benefits, for which the retirement system is
 69 34 liable, but the sum is not a final adjudication of the future
 69 35 payments which the member is entitled to receive.
 70  1    c.  Any balance shall be paid to the member.
 70  2    3.  Before a settlement is effective between the retirement
 70  3 system and a third party who is liable for an injury or death,
 70  4 the member or beneficiary must consent in writing to the
 70  5 settlement; and if the settlement is between the member or the
 70  6 member's estate and a third party, the retirement system must
 70  7 consent in writing to the settlement; or on refusal to
 70  8 consent, in either case, the district court in the county in
 70  9 which either the city or the retirement system is located must
 70 10 consent in writing to the settlement.
 70 11    4.  For purposes of subrogation under this section, a
 70 12 payment made to an injured member, a member's estate, or the
 70 13 member's legal representative of the member or member's
 70 14 estate, by or on behalf of a third party or the third party's
 70 15 principal or agent, who is liable for, connected with, or
 70 16 involved in causing the injury to or death of the member,
 70 17 shall be considered paid as damages because the injury or
 70 18 death was caused under circumstances creating a legal
 70 19 liability against the third party, whether the payment is made
 70 20 under a covenant not to sue, compromise settlement, denial of
 70 21 liability, or is otherwise made.
 70 22    Sec. 88.  EFFECTIVE DATE – RETROACTIVE APPLICABILITY.
 70 23 Sections 66, 69, 70, 83, and 86, of this Act, amending section
 70 24 411.1, subsection 12, section 411.3, section 411.4, section
 70 25 411.6, by creating new subsection 15, and section 411.11,
 70 26 being deemed of immediate importance, take effect upon
 70 27 enactment and are retroactively applicable to January 1, 1992,
 70 28 and are applicable on and after that date.
 70 29    Sec. 89.  EFFECTIVE DATE.  Section 65 of this Act amending
 70 30 section 411.1, subsection 10, and section 72 of this Act,
 70 31 amending section 411.5, subsection 8, take effect July 1,
 70 32 2001.
 70 33    Sec. 90.  STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM –
 70 34 LEGISLATIVE INTENT.  It is the intent of the general assembly
 70 35 that members of the retirement system be afforded a retirement
 71  1 benefit based upon ninety percent of a member's earnable
 71  2 compensation at the time of a member's retirement after the
 71  3 member has completed thirty years of service when the
 71  4 retirement system can afford it on an actuarially sound basis.  
 71  5                           DIVISION IV
 71  6                   JUDICIAL RETIREMENT SYSTEM
 71  7    Sec. 91.  Section 602.9104, Code 1999, is amended to read
 71  8 as follows:
 71  9    602.9104  DEDUCTIONS FROM JUDGES' SALARIES – CONTRIBUTIONS
 71 10 BY STATE.
 71 11    1.  A judge to whom this article applies, shall be paid an
 71 12 amount equal to ninety-six percent of the basic salary of the
 71 13 judge as set by the general assembly.  An minus an amount
 71 14 equal to four percent of the basic salary of the judge as set
 71 15 by the general assembly is designated as the judge's
 71 16 contribution to the judicial retirement fund, and shall be
 71 17 paid by the state in the manner provided in subsection 2.  The
 71 18 amount designated as the judge's contribution to the judicial
 71 19 retirement fund shall be calculated as provided in subsection
 71 20 1A and shall be paid by the state in the manner provided in
 71 21 subsection 2.
 71 22    1A.  a.  Effective with the fiscal year commencing July 1,
 71 23 1994, and for each subsequent fiscal year until the system
 71 24 attains fully funded status based upon the benefits provided
 71 25 for judges through the judicial retirement system as of July
 71 26 1, 2001, contributions to the judicial retirement fund shall
 71 27 be calculated as follows:
 71 28    (1)  The state shall contribute annually to the judicial
 71 29 retirement fund an amount equal to at least twenty-three and
 71 30 seven-tenths percent of the basic salary of each judge covered
 71 31 under this article.  The state's contribution shall be
 71 32 appropriated directly to the judicial retirement fund.
 71 33    (2)  Each judge to whom this article applies shall
 71 34 contribute annually to the judicial retirement fund an amount
 71 35 equal to five percent of the basic salary of the judge as set
 72  1 by the general assembly.
 72  2    b.  Commencing with the first fiscal year in which the
 72  3 system attains fully funded status based upon the benefits
 72  4 provided for judges through the judicial retirement system as
 72  5 of July 1, 2001, and for each subsequent fiscal year,
 72  6 contributions to the judicial retirement fund shall be
 72  7 calculated as follows:
 72  8    (1)  The state shall contribute annually to the judicial
 72  9 retirement fund an amount equal to sixty percent of the
 72 10 required contribution rate multiplied by the basic salary of
 72 11 each judge covered under this article.  The state's
 72 12 contribution shall be appropriated directly to the judicial
 72 13 retirement fund.
 72 14    (2)  Each judge to whom this article applies shall
 72 15 contribute annually to the judicial retirement fund an amount
 72 16 equal to forty percent of the required contribution rate
 72 17 multiplied by the basic salary of the judge as set by the
 72 18 general assembly.
 72 19    2.  The amount designated in subsection 1 and subsection 1A
 72 20 as the judge's contribution to the judicial retirement fund
 72 21 shall be paid by the department of revenue and finance from
 72 22 the general fund of the state to the court administrator for
 72 23 deposit with the treasurer of state to the credit of the
 72 24 judicial retirement fund.  Moneys in the fund are appropriated
 72 25 for the payment of annuities, refunds, and allowances provided
 72 26 by this article, except that the amount of the appropriations
 72 27 affecting payment of annuities, refunds, and allowances to
 72 28 judges of the municipal and superior court is limited to that
 72 29 part of the fund accumulated for their benefit as provided in
 72 30 this article.  The corpus and income of the fund shall be used
 72 31 only for the exclusive benefit of the judges covered under
 72 32 this article, their survivors, or an alternate payee who is
 72 33 assigned benefits pursuant to a domestic relations order.
 72 34    3.  A judge covered under this article is deemed to consent
 72 35 to the reduction in basic salary as provided in subsection 1.
 73  1    4.  a.  As used in this subsection section, unless the
 73  2 context otherwise requires:
 73  3    (1) a.  "Actuarial valuation" means an actuarial valuation
 73  4 of the judicial retirement system or an annual actuarial
 73  5 update of an actuarial valuation, as required pursuant to
 73  6 section 602.9116.
 73  7    (2) b.  "Fully funded status" means that the most recent
 73  8 actuarial valuation reflects that, using the aggregate cost
 73  9 method in accordance with generally recognized and accepted
 73 10 actuarial principles and practices set forth by the American
 73 11 academy of actuaries, the funded status of the system is at
 73 12 least one hundred percent.
 73 13    (3) c.  "Required contribution rate" means that percentage
 73 14 of the basic salary of all judges covered under this article
 73 15 which, in addition to the judge's contribution established in
 73 16 subsection 1, the actuary of the system determines is
 73 17 necessary to maintain fully funded status.
 73 18    b.  Effective with the fiscal year commencing July 1, 1994,
 73 19 and for each subsequent fiscal year until the system attains
 73 20 fully funded status, the state shall contribute annually to
 73 21 the judicial retirement fund an amount equal to at least
 73 22 twenty-three and seven-tenths percent of the basic salary of
 73 23 all judges covered under this article.  Commencing with the
 73 24 first fiscal year in which the system attains fully funded
 73 25 status, and for each subsequent fiscal year, the state shall
 73 26 contribute to the judicial retirement fund the required
 73 27 contribution rate.  The state's contribution shall be
 73 28 appropriated directly to the judicial retirement fund.
 73 29    Sec. 92.  Section 602.9107, subsection 1, Code 1999, is
 73 30 amended to read as follows:
 73 31    1.  a.  The annual annuity of a judge under this system is
 73 32 an amount equal to three percent of the judge's average annual
 73 33 basic salary for the judge's last three years as a judge of
 73 34 one or more of the courts included in this article, multiplied
 73 35 by the judge's years of service as a judge of one or more of
 74  1 the courts for which contributions were made to the system.
 74  2 However, an annual annuity shall not exceed an amount equal to
 74  3 a specified percentage of the basic annual salary which the
 74  4 judge is receiving at the time the judge becomes separated
 74  5 from service.  Forfeitures shall not be used to increase the
 74  6 annuities a judge or survivor would otherwise receive under
 74  7 the system.
 74  8    b.  "Specified percentage", for purposes of this section,
 74  9 means as follows:
 74 10    (1)  For judges who retire and receive an annuity prior to
 74 11 July 1, 1998, the specified percentage shall be fifty percent.
 74 12    (2)  For judges who retire and receive an annuity on or
 74 13 after July 1, 1998, but before July 1, 2000, the specified
 74 14 percentage shall be fifty-two percent.
 74 15    (3)  For judges who retire and receive an annuity on or
 74 16 after July 1, 2000, but before July 1, 2001, the specified
 74 17 percentage shall be fifty-six percent.
 74 18    (4)  For judges who retire and receive an annuity on or
 74 19 after July 1, 2001, the specified percentage shall be sixty
 74 20 percent.
 74 21    Sec. 93.  Section 602.9204, Code Supplement 1999, is
 74 22 amended to read as follows:
 74 23    602.9204  SALARY – ANNUITY OF SENIOR JUDGE AND RETIRED
 74 24 SENIOR JUDGE.
 74 25    1.  A judge who retires on or after July 1, 1994, and who
 74 26 is appointed a senior judge under section 602.9203 shall be
 74 27 paid a salary as determined by the general assembly.  A senior
 74 28 judge or retired senior judge shall be paid an annuity under
 74 29 the judicial retirement system in the manner provided in
 74 30 section 602.9109, but computed under this section in lieu of
 74 31 section 602.9107, as follows:  The annuity paid to a senior
 74 32 judge or retired senior judge shall be an amount equal to
 74 33 three percent of the basic senior judge salary, multiplied by
 74 34 the judge's years of service prior to retirement as a judge of
 74 35 one or more of the courts included under this article, for
 75  1 which contributions were made to the system, except the
 75  2 annuity of the senior judge or retired senior judge shall not
 75  3 exceed fifty percent an amount equal to the applicable
 75  4 specified percentage of the basic senior judge salary used in
 75  5 calculating the annuity.  However, following the twelve-month
 75  6 period during which the senior judge or retired senior judge
 75  7 attains seventy-eight years of age, the annuity paid to the
 75  8 person shall be an amount equal to three percent of the basic
 75  9 senior judge salary cap, multiplied by the judge's years of
 75 10 service prior to retirement as a judge of one or more of the
 75 11 courts included under this article, for which contributions
 75 12 were made to the system, except that the annuity shall not
 75 13 exceed fifty percent an amount equal to the applicable
 75 14 specified percentage of the basic senior judge salary cap.  A
 75 15 senior judge or retired senior judge shall not receive
 75 16 benefits calculated using a basic senior judge salary
 75 17 established after the twelve-month period in which the senior
 75 18 judge or retired senior judge attains seventy-eight years of
 75 19 age.  The state shall provide, regardless of age, to an active
 75 20 senior judge or a senior judge with six years of service as a
 75 21 senior judge and to the judge's spouse, and pay for medical
 75 22 insurance until the judge attains the age of seventy-eight
 75 23 years.
 75 24    2.  As used in this section, unless the context otherwise
 75 25 requires:
 75 26    a.  "Applicable specified percentage" means, for a senior
 75 27 judge or retired senior judge, the specified percentage, as
 75 28 defined in section 602.9107, subsection 1, that applied on the
 75 29 date the judge was separated from full-time service.
 75 30    a. b.  "Basic senior judge salary" means the basic annual
 75 31 salary which the judge is receiving at the time the judge
 75 32 becomes separated from full-time service, as would be used in
 75 33 computing an annuity pursuant to section 602.9107 without
 75 34 service as a senior judge, plus seventy-five percent of the
 75 35 escalator.
 76  1    b. c.  "Basic senior judge salary cap" means the basic
 76  2 senior judge salary, at the end of the twelve-month period
 76  3 during which the senior judge or retired senior judge attained
 76  4 seventy-eight years of age, of the office in which the person
 76  5 last served as a judge before retirement as a judge or senior
 76  6 judge.
 76  7    c. d.  "Escalator" means the difference between the current
 76  8 basic salary, as of the time each payment is made up to and
 76  9 including the twelve-month period during which the senior
 76 10 judge or retired senior judge attains seventy-eight years of
 76 11 age, of the office in which the senior judge last served as a
 76 12 judge before retirement as a judge or senior judge, and the
 76 13 basic annual salary which the judge is receiving at the time
 76 14 the judge becomes separated from full-time service as a judge
 76 15 of one or more of the courts included in this article, as
 76 16 would be used in computing an annuity pursuant to section
 76 17 602.9107 without service as a senior judge.  
 76 18                           EXPLANATION
 76 19    This bill makes numerous changes to public retirement
 76 20 systems, including the public safety peace officers'
 76 21 retirement, accident, and disability system, the Iowa public
 76 22 employees' retirement system, the statewide fire and police
 76 23 retirement system, and the judicial retirement system.  This
 76 24 bill may include a state mandate as defined in Code section
 76 25 25B.3.  The state mandate funding requirement in Code section
 76 26 25B.2, however, does not apply to public employee retirement
 76 27 systems.  The changes to each public retirement system are as
 76 28 follows:  
 76 29     PUBLIC SAFETY PEACE OFFICERS' RETIREMENT, ACCIDENT, AND
 76 30                    DISABILITY SYSTEM (PORS)
 76 31    Code section 97A.5, governing the administration of the
 76 32 retirement system, is changed to add a retired member of the
 76 33 system to the board of trustees.  The retired member of the
 76 34 board shall be elected from the retired members and shall have
 76 35 a two-year term.
 77  1    Code section 97A.6, subsection 2, governing the calculation
 77  2 of retirement benefits, is amended by adding a new paragraph
 77  3 to provide that member of PORS receives 2.75 percent of the
 77  4 member's average final compensation for each year of service
 77  5 up to a total of 32 years of service or a maximum of 88
 77  6 percent.
 77  7    Code section 97A.6, subsection 8, governing an ordinary
 77  8 death benefit, is amended to provide that certain eligible
 77  9 beneficiaries of a member who dies shall receive, at a
 77 10 minimum, a monthly pension equal to 25 percent, rather than 20
 77 11 percent, of the monthly pay of a senior patrol officer if the
 77 12 member died in service.
 77 13    Code section 97A.6, subsection 14, governing the annual
 77 14 readjustment of pensions, is amended.  The current
 77 15 readjustment escalator provisions are amended to increase the
 77 16 percentages used to provide an annual readjustment of the
 77 17 pensions payable from the current 30 percent and 33 1/3
 77 18 percent to 40 percent, and from the current 15 percent to 24
 77 19 percent.
 77 20    In addition to the modification of the current escalator
 77 21 increase received by an eligible member or beneficiary each
 77 22 July 1, the bill provides for adding to the amount calculated
 77 23 using the current escalator provisions as amended by this bill
 77 24 an additional dollar amount based on the number of years the
 77 25 member has been retired.  The additional amount is $15 for a
 77 26 member retired less than five years, $20 for a member retired
 77 27 between five and 10 years, $25 for a member retired between 10
 77 28 and 15 years, $30 for a member retired between 15 and 20
 77 29 years, and $35 for a member retired over 20 years.
 77 30    Code section 97A.8, concerning the method of financing the
 77 31 PORS through contributions, is amended to permit the board of
 77 32 trustees to adopt a method designed to stabilize changes in
 77 33 the normal contribution rate which could result from
 77 34 fluctuations in the market value of the assets of the system.
 77 35    The bill also provides that it is the intent of the general
 78  1 assembly that members of PORS receive a retirement benefit of
 78  2 90 percent of their earnable compensation after 30 years of
 78  3 service once the system can afford it.  
 78  4            IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
 78  5    Code section 97B.1A is amended by adding new subsection 2A
 78  6 which defines accumulated employer contributions as employer
 78  7 contributions made on behalf of a member plus interest.
 78  8    Code section 97B.1A, subsection 8, paragraph "a",
 78  9 subparagraph (1), which provides for the ability of an elected
 78 10 official to opt for coverage, is amended to allow an elected
 78 11 official who has opted to be covered under IPERS to opt out of
 78 12 coverage while still in office.  Specifically, the change
 78 13 permits an official to opt out of IPERS coverage if the
 78 14 official terminates employment from all employment covered
 78 15 under this chapter other than employment as an elective
 78 16 official and applies to receive a retirement benefit under
 78 17 IPERS.
 78 18    Code section 97B.1A, subsection 8, concerning the
 78 19 definition of temporary employees, is changed to provide that
 78 20 an employee is a temporary employee if the employee is hired
 78 21 for less than six consecutive months.  Current law provides
 78 22 that an employee is a temporary employee if the employee is
 78 23 hired for less than six months in a calendar year.
 78 24    Code section 97B.1A is amended by adding new subsection 14A
 78 25 which defines a member account as the amount established for a
 78 26 member that includes the accumulated contributions of the
 78 27 member and the relevant accumulated employer contributions for
 78 28 that member.
 78 29    Code section 97B.1A is amended by adding subsection 22A
 78 30 which adds a definition for a supplemental account for active
 78 31 members that is consistent with Code section 97B.49H which
 78 32 created this account.
 78 33    Code section 97B.1A, subsection 24, concerning the
 78 34 definition of three-year average covered wage used in
 78 35 determining IPERS retirement benefits is amended by modifying
 79  1 the multiyear mechanism for implementing a revision to the
 79  2 calculation of three-year average covered wage if the member's
 79  3 average wage exceeds a certain dollar level.  Current law
 79  4 provides that a member's "three-year average covered wage"
 79  5 will be calculated using the highest seven years for a member
 79  6 who retires during calendar year 2000, 2001, or 2002, and
 79  7 whose three-year average covered wage exceeds $55,000.  The
 79  8 bill provides that only the highest six years will be used,
 79  9 that the income threshold will increase to $65,000 for persons
 79 10 retiring on or after January 1, 2000, but before 2001, and to
 79 11 $75,000 for persons retiring in calendar year 2001, and that
 79 12 the modification ends after calendar year 2001 and not after
 79 13 calendar year 2002.  The portion of this change which applies
 79 14 to members retiring during calendar year 2000 is effective
 79 15 upon enactment and applicable on or after January 1, 2000.
 79 16    Code section 97B.1A, subsection 24, concerning the three-
 79 17 year average covered wage, is also amended to provide for a
 79 18 new determination of this covered wage for a member who
 79 19 retires on or after July 1, 2003.  The change provides that
 79 20 beginning July 2003, a member's three-year average covered
 79 21 wage shall be the greater of the member's highest 12 quarters
 79 22 of service, or the member's highest three years of service.
 79 23 Under current law, a member's three-year average covered wage
 79 24 is determined based solely on calendar years.
 79 25    Code section 97B.1A, subsection 26, defining wages is
 79 26 amended.  The new definition specifically provides that wages
 79 27 payable to an employee but that are otherwise deducted from
 79 28 the employee's pay and paid to certain IRS qualified plans are
 79 29 considered wages.  Payments for compensatory time are also
 79 30 included up to 240 hours per year.  In addition, the amendment
 79 31 lists several categories of payment to an employee that are
 79 32 not considered wages.  For example, accrued sick leave
 79 33 payments, accrued vacation leave payments, disability
 79 34 payments, reimbursements for business expenses, early
 79 35 retirement bonuses, employer paid contributions to certain IRS
 80  1 qualified plans as well as for health and life insurance or
 80  2 other fringe benefits, payments for service as an independent
 80  3 contractor, and workers' compensation and unemployment
 80  4 payments are all excluded from the definition of wages.
 80  5    Code section 97B.5 is amended to permit IPERS staff members
 80  6 to seek and hold nonpartisan elective public offices.
 80  7 Currently, IPERS staff members are not allowed to seek or hold
 80  8 any elective public office.
 80  9    Code section 97B.9 is amended to permit the department to
 80 10 charge an employer who fails to make required contributions to
 80 11 IPERS on time a uniform $10 charge if that charge exceeds the
 80 12 interest on the unpaid contributions.  Any charge collected
 80 13 shall be paid into the IPERS fund.
 80 14    Code section 97B.9, concerning the repayment of unpaid
 80 15 contributions from employers and employees for service in
 80 16 IPERS, is amended to provide that the department of personnel
 80 17 can collect the total underpayment owed from the employer.
 80 18 Current law specifying who ultimately is required to pay what
 80 19 share of the underpayment is unchanged.  The employee is still
 80 20 obligated to pay the employee's share of unpaid contributions,
 80 21 without interest, to the employer and the employer is allowed
 80 22 to collect this amount from the employee or the employee's
 80 23 estate.
 80 24    Code section 97B.11 is amended to require employers to
 80 25 deduct contributions from an employee's wages regardless of
 80 26 size.  Current law does not require a contribution if the
 80 27 amount does not exceed $1 for a quarter.
 80 28    New Code section 97B.14A is created to require employers to
 80 29 report wages to the department of personnel in a manner and
 80 30 form as prescribed by the department.  The new section also
 80 31 permits the department to seek additional information from an
 80 32 employer if the wages reported for an employee appear to be
 80 33 distorted and to require an employer to resubmit wage
 80 34 information if the wages for that employee were misreported.
 80 35    Code section 97B.42A is amended by adding new subsection
 81  1 3A.  The change provides that persons employed by a municipal
 81  2 water utility or waterworks that has established an
 81  3 alternative pension and annuity retirement system for its
 81  4 employees pursuant to Code chapter 412 may elect to become
 81  5 members of the Iowa public employees' retirement system
 81  6 (IPERS) pursuant to the requirements of this subsection.
 81  7    The change provides that persons hired on or after the
 81  8 effective date of this bill will become members of IPERS
 81  9 unless they elect coverage in the alternative retirement
 81 10 system established in Code chapter 412.  Persons hired before
 81 11 the effective date of this bill become members of IPERS as of
 81 12 July 1, 2000, unless they opt for coverage in the alternative
 81 13 system by August 31, 2000.  Persons who become members of
 81 14 IPERS pursuant to this bill have the ability to purchase
 81 15 service credit for time employed by a water utility or
 81 16 waterworks while covered under a retirement system established
 81 17 pursuant to Code chapter 412.  A corresponding change to the
 81 18 definitions in section 97B.1A is also made in this bill.
 81 19    Code section 97B.42A is amended to require an employee, who
 81 20 became a member of IPERS during 1999 on the basis of
 81 21 employment that previously was not included within IPERS and
 81 22 who wants to buy back that service, to have at least one or
 81 23 more years of covered wages under IPERS before the buyback is
 81 24 allowed.
 81 25    Code section 97B.44 governing the designation of a
 81 26 beneficiary for death benefits by a member is amended to
 81 27 require that the member obtain the written consent of the
 81 28 member's spouse for an original or changed designation.
 81 29    Code sections 97B.48 and 97B.48A are amended to provide
 81 30 that receipt of a lump sum payment in lieu of a retirement
 81 31 allowance under Code section 97B.48, or receipt of a refund of
 81 32 contributions following retirement from reemployment under
 81 33 Code section 97B.48A, are not considered refunds for service
 81 34 which would allow the member to buy back that service at a
 81 35 later time.  Code section 97B.52A is amended to provide that
 82  1 bona fide retirement requirements apply to these payments.
 82  2    Code section 97B.48A, subsection 1, is amended to increase
 82  3 the earned income limit before a member's retirement allowance
 82  4 is reduced pursuant to that section.  Currently, a member can
 82  5 earn the greater of $12,000 or the amount of income permitted
 82  6 under social security before a reduction is potentially
 82  7 applied.  This change provides that the $12,000 be increased
 82  8 to $14,000.
 82  9    Code section 97B.49B, concerning the definition of
 82 10 employees included in a protection occupation, is amended to
 82 11 add airport security employees covered by the state's merit
 82 12 system who carry or are authorized to carry a weapon for their
 82 13 jobs.
 82 14    Code section 97B.49F, governing the determination of the
 82 15 cost of living dividend, is amended.  The dividend program for
 82 16 pre-July 1990 retirees is amended to provide that 100 percent,
 82 17 and not 80 percent, of the percentage based on the consumer
 82 18 price index shall be used in determining the appropriate
 82 19 percentage to use in determining the dividend adjustment each
 82 20 year.  The current 3 percent annual limitation on this
 82 21 percentage is not changed by this bill.
 82 22    Code section 97B.49F, subsection 1, concerning the cost-of-
 82 23 living dividend, is amended to provide that the person
 82 24 eligible to receive the dividend must live through to November
 82 25 1, of any particular year to receive a dividend as of the last
 82 26 day of November for that particular year.
 82 27    Code section 97B.49F, subsection 2, concerning the
 82 28 favorable experience dividend, is amended to provide that the
 82 29 person eligible to receive the dividend must live through to
 82 30 January 1 of any particular year in order to receive a
 82 31 dividend as of the last day of January for that particular
 82 32 year.
 82 33    Code section 97B.49F, subsection 2, concerning the
 82 34 favorable experience dividend, is amended.  The change
 82 35 provides that the amount deposited in the reserve account of
 83  1 IPERS for the payment of this dividend each year shall not
 83  2 exceed the amount necessary to pay this dividend for the
 83  3 following 10 years.  In addition, the subsection is amended to
 83  4 provide that the calculation of the dividend shall be done
 83  5 based upon 12 times the December benefit paid to a member or
 83  6 beneficiary eligible to receive the benefit.
 83  7    Code section 97B.49G is amended to add new subsection 12.
 83  8 This subsection provides that a person employed as a probation
 83  9 officer III or parole officer III, who was a member of the
 83 10 protection occupation for that service between July 1, 1994,
 83 11 and June 30, 1998, shall have the contributions that were
 83 12 contributed to the fund in excess of the percentage applied to
 83 13 most IPERS members deposited in a separate additional
 83 14 contribution account.  In addition, any service as a member of
 83 15 a protection occupation for that service will be credited as
 83 16 regular IPERS service.  Any amount in that account, plus
 83 17 interest, will be available upon request of the member or upon
 83 18 retirement.  Before July 1994, and after June 1998, probation
 83 19 and parole officer IIIs were not included in the protection
 83 20 occupation classification.
 83 21    Code section 97B.49H, governing supplemental accounts for
 83 22 active members, is amended to provide that a member, upon
 83 23 retirement, must elect to receive this amount as a lump sum or
 83 24 annuity.  In addition, the section is changed to provide for
 83 25 the determination of the annuity in a manner similar to that
 83 26 used for other annuity options within Code chapter 97B.
 83 27    Code section 97B.50, subsection 2, governing early
 83 28 retirement and disability, is amended to eliminate the ability
 83 29 of a person who retires due to disability and receives
 83 30 disability payments from federal Social Security or from the
 83 31 federal Railroad Retirement System to receive a retroactive
 83 32 adjustment of IPERS retirement benefits back to July 1, 1990.
 83 33 Instead, the bill allows a member to receive only a 12-month
 83 34 retroactive adjustment of IPERS benefits.
 83 35    New Code section 97B.50A provides for disability retirement
 84  1 benefits for special service members of the Iowa public
 84  2 employees' retirement system (IPERS).  A special service
 84  3 member of IPERS for purposes of this bill includes a person
 84  4 who is a member of a protection occupation or who is a
 84  5 sheriff, deputy sheriff, or airport fire fighter.
 84  6    The new Code section provides that an eligible special
 84  7 service member of IPERS who becomes disabled for duty while in
 84  8 the performance of the member's duty is entitled to an in-
 84  9 service disability retirement allowance equal to the greater
 84 10 of one-twelfth of 60 percent of the member's three-year
 84 11 average covered wage or the amount the member would receive
 84 12 under a normal retirement.  For purposes of establishing an
 84 13 in-service disability, heart or lung disease is presumed to
 84 14 have been contracted while on duty.  The new Code section also
 84 15 provides that a member who becomes disabled and unable to
 84 16 perform the member's job is entitled to an ordinary disability
 84 17 retirement allowance equal to the greater of one-twelfth of 50
 84 18 percent of the member's three-year average covered wage or
 84 19 what the member would receive under a normal retirement.  For
 84 20 both disability retirements, the department of personnel makes
 84 21 the decision as to whether the person is totally disabled.
 84 22 The new Code section also has provisions for offsets to
 84 23 disability allowances, reexamination of members on disability,
 84 24 reemployment, death benefits, establishing the medical board,
 84 25 and subrogation.  The new Code section provides that the costs
 84 26 of administering the disability program shall be paid through
 84 27 contributions from the special service employees and their
 84 28 employers in the same manner as additional benefits are paid.
 84 29 (The employer pays 60 percent and the employee pays 40
 84 30 percent.)  The new Code section applies to a special service
 84 31 member who became disabled prior to the effective date of the
 84 32 bill, if the member did not terminate the special service
 84 33 employment before the effective date of the bill.
 84 34    Code section 97B.51, governing the retirement allowance
 84 35 options a retired IPERS member may select, is amended by
 85  1 striking the section and replacing it with a new section.
 85  2 Current Code section 97B.51 is retained but reordered to
 85  3 provide that all five primary options available to a member
 85  4 upon retirement are listed in the order IPERS refers to them
 85  5 in their administrative rules.  In addition, the new section
 85  6 provides a new option to a member retiring which is reflected
 85  7 in subsection 1, paragraph "d", subparagraph (2).  This option
 85  8 allows a member to obtain a decreased retirement allowance and
 85  9 to provide the member's beneficiary with a retirement
 85 10 allowance upon the member's death.  The change from the
 85 11 current option reflected in subparagraph (1) is that the
 85 12 member can resume receiving an unreduced retirement allowance
 85 13 as otherwise calculated by Code chapter 97B if the designated
 85 14 beneficiary dies before the retiree.
 85 15    Code section 97B.52, governing the death benefit provided a
 85 16 beneficiary of a member who dies prior to retirement is
 85 17 changed.  The change provides that, for a member who dies on
 85 18 or after January 1, 2001, a beneficiary can elect to receive a
 85 19 death benefit equal to the current death benefit or an amount
 85 20 representing the actuarial value of the member's retirement
 85 21 benefit as of the date of death.  The bill provides that a
 85 22 death benefit can be paid as an annuity only if there is one
 85 23 beneficiary and the beneficiary so elects.
 85 24    Code section 97B.52A, concerning bona fide retirement, is
 85 25 modified to permit an elective official or member of the
 85 26 general assembly to remain in that position and still receive
 85 27 a retirement allowance following termination of other covered
 85 28 employment so long as the elective official or member of the
 85 29 general assembly is not contributing to IPERS coverage for the
 85 30 elected position.  In addition, the section is changed to
 85 31 provide that commencing July 2000, a member has a bona fide
 85 32 retirement if the member does not return to any employment
 85 33 with a covered employer until the member has received at least
 85 34 one month of retirement benefits.  Under current law, a member
 85 35 has to receive four months of benefits before returning to
 86  1 work with a covered employer.
 86  2    Code section 97B.53, governing refunds of contributions
 86  3 upon termination of employment, is amended to provide that a
 86  4 member is eligible to receive a portion of the employer
 86  5 contributions only if the member is vested as of the date an
 86  6 application for refund is filed with the department.  In
 86  7 addition, the section is amended to permit a member
 86  8 involuntarily terminated from IPERS covered employment who
 86  9 then received a refund as a result, to repay the refund, plus
 86 10 applicable interest, and obtain full service credit for the
 86 11 IPERS service prior to the involuntary termination if the
 86 12 person is ordered reinstated as a remedy arising out of an
 86 13 employment dispute.
 86 14    Code sections 97B.53A, 97B.53B, and 97B.70 are amended to
 86 15 provide for similar treatment of a member's supplemental
 86 16 account as is provided to the member's account which consists
 86 17 of both employee and employer contributions.
 86 18    Code section 97B.60 is amended to require an actuarial
 86 19 investigation of the experience of IPERS every four years
 86 20 beginning with an investigation in calendar year 2002.
 86 21 Currently, IPERS is required to conduct such an experience
 86 22 study every two years.
 86 23    New Code section 97B.82 is added to allow a member to
 86 24 purchase credit for membership service authorized by Code
 86 25 chapter 97B by means of a direct rollover of assets from a
 86 26 qualified plan of the member as authorized by the Internal
 86 27 Revenue Code.  This section will not be implemented until the
 86 28 department of personnel receives a determination letter from
 86 29 the internal revenue service approving the change.
 86 30    Code section 97B.13, regarding no income tax deduction, is
 86 31 repealed.
 86 32    The bill provides that it is the intent of the general
 86 33 assembly that the legislative council may appoint an interim
 86 34 study committee to consider possible defined contribution
 86 35 options for persons covered by IPERS.  
 87  1           STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM
 87  2    Code section 400.8, governing civil service entrance
 87  3 examinations, is amended to provide that the physical
 87  4 examination of applicants for appointment to positions of
 87  5 police officer, police matron, and fire fighter, shall be
 87  6 conducted by the medical board established under Code chapter
 87  7 411.  Current law provides that the physical examination be
 87  8 conducted as directed by the civil service commission.
 87  9    New Code section 400.8A authorizes the board of trustees of
 87 10 the Code chapter 411 retirement system, in consultation with
 87 11 the medical board established in Code chapter 411, to
 87 12 establish and maintain protocols and guidelines for ongoing
 87 13 wellness and fitness of police officers and fire fighters
 87 14 while in service.  The new section allows, but does not
 87 15 require, cities to apply the protocols and guidelines.
 87 16    Code section 411.1, subsection 19, defining surviving
 87 17 spouse, is amended.  The change provides that a person who
 87 18 marries a retired member of the system after the member
 87 19 retired is the member's surviving spouse regardless of the
 87 20 length of the marriage.  Under current law, a person who
 87 21 marries a retired member after retirement must be married for
 87 22 at least two years prior to the member's death to be
 87 23 considered a surviving spouse of the deceased member.
 87 24    Code section 411.1A is amended to provide that a purpose of
 87 25 the retirement system is to provide a comprehensive disability
 87 26 program for police officers and fire fighters.
 87 27    Code section 411.3, governing membership in the retirement
 87 28 system, is amended to provide that once a member ceases to be
 87 29 a police officer or fire fighter of a city covered by the
 87 30 system, the member ceases to be a member of the system.  Under
 87 31 current law, a member ceased to be a member if the member was
 87 32 absent from service for over four years in any five-year
 87 33 period after last becoming a member.  The changes to this
 87 34 section take effect upon enactment and are retroactively
 87 35 applicable to January 1, 1992.
 88  1    Code section 411.4, governing the crediting of service, is
 88  2 amended.  The change provides that a member can receive credit
 88  3 for a previous period of service if the member returned to
 88  4 service after an absence from service of less than four years.
 88  5 If the member returned to service after an absence of four or
 88  6 more years, the bill permits the crediting of prior service
 88  7 only if the prior service was long enough to allow for the
 88  8 receipt of a retirement allowance.  In addition, current law
 88  9 allows credit for prior service if the member had withdrawn
 88 10 the member's accumulated contributions.  Code section 411.1,
 88 11 subsection 12, is also amended to provide that membership
 88 12 service means only that service credited to the member.  The
 88 13 changes to Code section 411.4 and to Code section 411.1,
 88 14 subsection 12, take effect upon enactment and are
 88 15 retroactively applicable to January 1, 1992.
 88 16    Code section 411.5, subsection 6, is amended to allow the
 88 17 release of otherwise confidential records under the board's
 88 18 control to a governmental entity for use in a civil or
 88 19 criminal law enforcement activity.
 88 20    Code section 411.5, subsection 8, concerning the
 88 21 composition and duties of the medical board is amended.  The
 88 22 bill provides that the system can designate a single medical
 88 23 provider network to arrange for the medical examinations
 88 24 required to be conducted and to assist the system in
 88 25 implementing the comprehensive disability program.  The bill
 88 26 provides that a physician specializing in occupational
 88 27 medicine, and another physician specialist selected by that
 88 28 physician, shall conduct disability examinations as required
 88 29 by Code chapter 411.  Under current law, three physicians are
 88 30 designated as the medical board and three physicians from the
 88 31 university of Iowa are required to conduct all disability
 88 32 examinations as required by Code chapter 411.  This section of
 88 33 the bill takes effect July 1, 2001.
 88 34    Code section 411.6, subsection 2, concerning the retirement
 88 35 allowance for a service retirement, is amended.  The change
 89  1 provides, for members retiring on or after July 1, 2000, that
 89  2 the member will receive a service retirement equal to 66
 89  3 percent of the member's average final compensation instead of
 89  4 the current 60 percent.  In addition, the subsection is
 89  5 amended to provide that a member retiring on or after July 1,
 89  6 2000, with more than 22 years of service will receive an
 89  7 increase in the percentage applied to the member's average
 89  8 final compensation of 2 percent for each year of additional
 89  9 service over 22 years up to a maximum of eight additional
 89 10 years of service.
 89 11    Code section 411.6, subsection 5, concerning an accidental
 89 12 disability benefit, is amended to provide that a city shall
 89 13 notify the retirement system if a member is temporarily
 89 14 incapacitated for at least 60 days, or if the city expects a
 89 15 member to be temporarily incapacitated for at least 60 days.
 89 16 The change also provides that the medical board can consult
 89 17 with the member's treating physician during the incapacity.
 89 18 Under current law, the system had no right to be involved
 89 19 until the city determined that the disability is likely to be
 89 20 permanent.
 89 21    Code section 411.6, subsection 7, concerning reexaminations
 89 22 of disability retirement beneficiaries, is amended.  One
 89 23 change permits the medical board, when the medical board
 89 24 reexamines a disability-retired member, to suggest appropriate
 89 25 treatment or rehabilitation for the member if the medical
 89 26 board believes it might return the retired member to duty.
 89 27 The earnings test for disability retirement beneficiaries is
 89 28 also changed to provide that the test does not apply to a
 89 29 beneficiary who is 55 years old or older.  Under current law,
 89 30 the earnings test would still apply to a beneficiary over 55
 89 31 if that beneficiary would not have completed 22 years of
 89 32 service if the beneficiary had remained in active service.
 89 33 Finally, Code section 411.6, subsection 7, is amended by
 89 34 adding a new paragraph which provides that a disability
 89 35 retirement benefit shall cease if the member returns to duty
 90  1 in a public safety occupation.  The bill includes service as a
 90  2 special service member under IPERS, a member of PORS, and a
 90  3 member under Code chapter 411 who was not restored to active
 90  4 duty.
 90  5    Code section 411.6, subsection 8, governing an ordinary
 90  6 death benefit, is changed.  The bill provides that a
 90  7 beneficiary can select, in lieu of the current death benefit,
 90  8 the amount of contributions and interest the member could have
 90  9 withdrawn pursuant to Code section 411.23.  The bill also
 90 10 allows a person over 22 years old but who still meets the
 90 11 definition of child under the chapter to receive a death
 90 12 benefit as provided in this subsection.  In addition, the
 90 13 change provides that if no beneficiary is designated, the
 90 14 death benefit will be distributed, in the following priority,
 90 15 to the member's surviving spouse, to the surviving children
 90 16 regardless of age, to the member's surviving parents, to the
 90 17 member's estate, and finally, to the member's heirs.
 90 18    Code section 411.6, subsection 9, concerning an accidental
 90 19 death benefit, is amended to provide that an eligible
 90 20 accidental death benefit beneficiary can elect to receive an
 90 21 ordinary death benefit instead.  In addition, the subsection
 90 22 provides that if no spouse, child, or parent eligible to
 90 23 receive an accidental death benefit exists and an ordinary
 90 24 death benefit is to be paid, the payment priority established
 90 25 for an ordinary death benefit will be used to pay the benefit.
 90 26    Code section 411.6, subsection 11, concerning pensions to
 90 27 the spouse or children of a deceased pensioned member, is
 90 28 amended to provide that a person over 22 years old but who
 90 29 still meets the definition of child under the chapter to
 90 30 receive a pension as provided in this subsection.
 90 31    Code section 411.6 is amended by adding new subsection 14
 90 32 governing the designation of a death beneficiary.  The new
 90 33 subsection provides that a designation of a person other than
 90 34 the spouse of a member must have the consent of the spouse.
 90 35 In addition, a beneficiary designation is deemed revoked if
 91  1 the member marries, divorces, or files a new designation.
 91  2    Code section 411.6, new subsection 15, provides for a
 91  3 $100,000 lump sum payment to a person authorized to receive an
 91  4 accidental death benefit if a member in service covered by the
 91  5 municipal fire and police retirement system dies as a result
 91  6 of a traumatic personal injury incurred in the line of duty.
 91  7 The benefit is in addition to the benefit currently provided
 91  8 for an accidental death while in the performance of duty.  The
 91  9 bill takes effect upon enactment and applies retroactively to
 91 10 January 1, 1992.
 91 11    Code section 411.6 is amended by adding new subsection 16
 91 12 providing that a member otherwise eligible for a disability
 91 13 pension would be ineligible under certain circumstances.  The
 91 14 new subsection provides that a member is ineligible to receive
 91 15 a disability pension if the disability was caused by the
 91 16 member's chemical dependency on certain controlled substances,
 91 17 an act in which the member is convicted of a felony, or if a
 91 18 mental disability was caused by appropriate disciplinary
 91 19 actions or conflicts at work.  However, if the medical board
 91 20 finds that alcoholism or drug addiction contributed to the
 91 21 disability, the member still receives a disability pension but
 91 22 will be required to submit to treatment and be reevaluated in
 91 23 24 months.  If the member fails to comply with treatment and
 91 24 the reevaluation indicates that the member would not be
 91 25 disabled but for the alcoholism or addiction, the member is
 91 26 then ineligible to receive a disability pension.
 91 27    Code section 411.6 is amended by adding new subsection 17
 91 28 providing that a member otherwise eligible for a pension would
 91 29 be ineligible for that period when the member is incarcerated
 91 30 due to a conviction for a felony.  The new subsection provides
 91 31 that the member's pension would be paid to the member's
 91 32 spouse, if any, and then to any children of the member.
 91 33 However, if no spouse or children exist, then the pension
 91 34 remains payable to the individual.  The new subsection does
 91 35 provide, however, that the provisions of this new subsection
 92  1 do not impair the right of a person entitled to an amount from
 92  2 the member pursuant to a marital property, spousal support, or
 92  3 child support agreement and do not impair the statutory rights
 92  4 of a governmental entity.
 92  5    Code section 411.11, concerning contributions to the system
 92  6 by a city, is amended.  One change provides that if a member
 92  7 is awarded back pay from a city that would otherwise
 92  8 constitute earnable compensation under the chapter,
 92  9 contributions, and interest on the back pay awarded, shall be
 92 10 paid to the system.  In addition, the back pay is then
 92 11 allocated to the member's earnable compensation for the period
 92 12 in which it would have been paid.  Another change to the
 92 13 section allows the system to collect interest on unpaid
 92 14 contributions at a rate equal to the system's interest rate
 92 15 assumption or the interest charged by a bank on the system's
 92 16 short-term investment fund account.  In addition, the system
 92 17 is granted the right to collect unpaid contributions from a
 92 18 city in a legal action with costs of the action assessed to
 92 19 the city if the system prevails.  The changes to this section
 92 20 take effect upon enactment and are retroactively applicable to
 92 21 January 1, 1992.
 92 22    Code section 411.22, concerning the system's right to
 92 23 maintain an action to recover benefits paid when a third party
 92 24 is liable, is amended.  The section is amended to provide that
 92 25 the system is subrogated to the rights of a member's
 92 26 beneficiary who receives a death benefit for the death of a
 92 27 member in which a third party is liable.  In addition, the
 92 28 section is changed to provide that the system is entitled to
 92 29 bring an action against a liable third party for lost earnings
 92 30 and lost earnings capacity prior to the member or the member's
 92 31 estate having the right to seek recovery.  Under current law,
 92 32 the member has the right to seek legal action and the system
 92 33 is entitled to maintain an action if the member fails to bring
 92 34 an action after the system requests the member to bring the
 92 35 action.  The amended section provides that if the system
 93  1 recovers damages, the court shall enter judgment in an amount
 93  2 for the system sufficient to pay the system for any past and
 93  3 future benefits for which the system is liable and to pay the
 93  4 system the costs of the action.  The remainder of any damages
 93  5 recovered shall be awarded to the member or member's
 93  6 beneficiary or estate.  The amended section further provides
 93  7 that the member or member's estate may maintain an action if
 93  8 the system declines in writing to maintain an action or fails
 93  9 to maintain an action within 180 days of receiving notice of
 93 10 the potential third-party liability.
 93 11    The bill also provides that it is the intent of the general
 93 12 assembly that members of the statewide system receive a
 93 13 retirement benefit of 90 percent of their earnable
 93 14 compensation after 30 years of service once the system can
 93 15 afford it.  
 93 16                   JUDICIAL RETIREMENT SYSTEM
 93 17    Code section 602.9104, governing contributions from judges
 93 18 and the state to the judicial retirement system, is amended.
 93 19 The change provides that the state will contribute 23.7
 93 20 percent of all judges' salaries, and each judge will
 93 21 contribute 5 percent of the judge's salary to the fund, until
 93 22 the actuary determines that the fund has reached fully funded
 93 23 status based upon the benefits provided judges as of July 1,
 93 24 2001.  Current law provides that the stated percentages shall
 93 25 be contributed until the fund has reached fully funded status
 93 26 based upon the benefits provided judges as of the date of the
 93 27 actuarial valuation.  Once fully funded status is reached,
 93 28 based upon the benefits provided as of July 1, 2001, the
 93 29 amendment to Code section 602.9104 provides that the state
 93 30 contribute 60 percent, and the judges' 40 percent, of the cost
 93 31 to maintain the fund in a fully funded status.  Under current
 93 32 law, once fully funded status is reached, the state's
 93 33 contribution is decreased while maintaining the judge's 4
 93 34 percent contribution rate.
 93 35    Code section 602.9107, governing the basic retirement
 94  1 annuity for a judge, is amended.  The amendment provides that
 94  2 the maximum annuity for a judge retiring between July 1, 2000,
 94  3 and July 1, 2001, shall be limited to 56 percent of the
 94  4 judge's average annual salary for the last three years of
 94  5 service, while the maximum annuity for a judge retiring on or
 94  6 after July 1, 2001, shall be limited to 60 percent.  Under
 94  7 current law, a judge receives an annuity based on 3 percent of
 94  8 salary multiplied by the number of years of service with a cap
 94  9 of 52 percent.  The increase in this percentage is also
 94 10 applied to the calculation of a senior judge pension with the
 94 11 percentage to be applied to the benefits in existence as of
 94 12 the date the judge ceased to be a full-time judge.  
 94 13 LSB 5811SC 78
 94 14 ec/cf/24.1
     

Text: SSB03208                          Text: SSB03210
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