Interest at two percent per annum and interest dividends declared by the department shall be credited to the member's contributions and the employer's contributions to become part of the accumulated contributions thereby.
1. The average rate of interest earned shall be determined upon the following basis:
a. Investment income shall include interest and cash dividends on stock.
b. Investment income shall be accounted for on an accrual basis.
c. Capital gains and losses, realized or unrealized, shall not be included in investment income.
d. Mean assets shall include fixed income investments valued at cost or on an amortized basis, and common stocks at market values or cost, whichever is lower.
e. The average rate of earned interest shall be the quotient of the investment income and the mean assets of the retirement fund.
2. The interest dividend shall be determined within sixty days after the end of each calendar year as follows:
The dividend rate for a calendar year shall be the excess of the average rate of interest earned for the year over the statutory two percent rate plus twenty-five hundredths of one percent. The average rate of interest earned and the interest dividend rate in percent shall be calculated to the nearest one hundredth, that is, to two decimal places.
3. Interest and interest dividends shall be credited to the contributions of active members and inactive vested members until the first of the month coinciding with or next following the member's retirement date.
4. Effective upon the date that the department determines that this subsection shall be implemented, interest and interest dividends shall be credited to the contributions of a person who leaves the contributions in the retirement fund upon termination from covered employment prior to achieving vested status, but who subsequently achieves vested status. The interest and interest dividends shall be credited to the contributions commencing either upon the date that the department determines that this subsection shall be implemented, or the date on which the person becomes a vested member, whichever is later. Interest and interest dividends shall cease upon the first of the month coinciding with or next following the person's retirement date. If the department no longer maintains the accumulated contribution account of the person pursuant to section 97B.53, but the person submits satisfactory proof to the department that the person did make the contributions, the department shall credit interest and interest dividends in the manner provided in this subsection. However, the department shall not implement this subsection, unless and until the department determines that the most recent annual actuarial valuation of the retirement system indicates that the employer and employee contribution rates in effect under section 97B.11 can absorb the enactment of this subsection and the amendments to section 97B.41, subsection 12, section 97B.53, subsections 3 and 7, and section 97B.53, subsection 6, unnumbered paragraph 1, contained in 1994 Iowa Acts, chapter 1183, after meeting the other established priorities of the system, as defined in section 97B.41, subsection 12.
[C66, 71, 73, 75, 77, 79, 81, § 97B.70]
94 Acts, ch 1183, § 52, 97
Referred to in § 97B.9, 97B.41, 97B.53
Subsection 4 effective July 1, 1995; 94 Acts, ch 1183, § 97
Iowa General Assembly
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