1. There is established, for each active member, a supplemental account consisting of amounts credited to the account as provided in this section which shall be held and used for the exclusive benefit of the member pursuant to the requirements of this section.
2. Amounts shall be credited to a supplemental account of each active member pursuant to the requirements of this section following a determination by the system's actuary during the most recent annual actuarial valuation that the system does not have an unfunded accrued liability. For purposes of this section, the system does not have an unfunded accrued liability if the actuarial accrued liability of the system based on the actuarial cost method used by the actuary does not exceed the actuarial value of assets of the system as of the valuation date.
3. The department shall annually determine the amount to be credited to the supplemental accounts of active members. The amount to be credited shall be calculated by multiplying the member's covered wages for the applicable wage reporting period by the supplemental rate. For purposes of this subsection, the supplemental rate is the difference, if positive, between the combined employee and employer statutory contribution rates in effect under section 97B.11 and the normal cost rate of the system as determined by the system's actuary in the most recent annual actuarial valuation of the system. The credits shall be made at least quarterly during the calendar year following a determination that the system does not have an unfunded accrued liability. The normal cost rate, calculated according to the actuarial cost method used, is the percent of pay allocated to each year of service that is necessary to fund projected benefits over all members' service with the system.
4. Amounts credited to a member's supplemental account shall be credited with interest quarterly pursuant to section 97B.70, subsection 2.
5. Amounts credited to a member's supplemental account shall be distributed as follows:
a. If a member terminates covered employment and files an application for a refund under section 97B.53, the member shall receive in a lump sum payment, in addition to any other payment provided by this chapter, all amounts credited to the member's supplemental account.
b. If a member dies prior to retirement, the member's beneficiary shall receive in a lump sum payment, in addition to any other payment provided by this chapter, all amounts credited to the member's supplemental account.
c. Upon retirement, the member shall receive in a lump sum payment or in an annuity, in addition to any other payment provided by this chapter, all amounts credited to the member's supplemental account.
98 Acts, ch 1183, §42, 43
Referred to in § 97B.46, 97B.48, 97B.48A, 602.11115, 602.11116
Implementation of section conditional upon approval from federal internal revenue service; 98 Acts, ch 1183, § 43
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