CHAPTER 12
CALCULATION OF MONTHLY RETIREMENT BENEFITS
[Prior to 11/24/04, see 581—Ch 21]
495—12.1(97B) General.
	12.1(1) Formula benefit versus money purchase benefit. If a member is vested by years of service credit in IPERS, a monthly payment allowance will be paid in accordance with the formulas set forth in Iowa Code sections 97B.49A through 97B.49I, the applicable paragraphs of this chapter, and the option the member elects pursuant to Iowa Code section 97B.51(1). IPERS shall determine on the applicable forms which designated fractions of a member’s monthly retirement allowance payable to contingent annuitants shall be provided as options under Iowa Code section 97B.51(1). Any option elected by a member under Iowa Code section 97B.51(1) must comply with the requirements of the Internal Revenue Code that apply to governmental pension plans, including but not limited to Internal Revenue Code Section 401(a)(9). If a member is not vested by years of service credit in IPERS, the benefit receivable will be computed on a money purchase basis, with reference to annuity tables used by IPERS in accordance with the member’s age and option choice.
	12.1(2) Reduction for early retirement for regular class members.
	a. 	Effective July 1, 1988, through December 31, 2000, a member’s benefit formula will be reduced by .25 percent for each month the member’s retirement precedes the normal retirement date, as defined in Iowa Code section 97B.45 excluding section 97B.45(4). The following are situations in which a member is considered to be taking early retirement:
	(1)	If a member has not attained the age of 65 in the member’s first month of entitlement and has less than 20 years of service; or
	(2)	If a member has not attained the age of 62 in the month of the member’s retirement and has 20 years of service.
	b. 	Effective July 1, 1997, a member shall be eligible to receive monthly retirement benefits with no age reduction effective the first of the month in which the member’s age on the last birthday and the member’s years of service equal or exceed 88, provided that the member is at least the age of 55.
	c. 	Effective July 1, 1991, a member qualifying for early retirement due to disability under Iowa Code section 97B.50 shall not be subject to a reduction in benefits due to age.
	d. 	If a member retires with at least 20 years of service but has not attained the age of 62, the age reduction shall be calculated by deducting .25 percent per month for each month that the first month of entitlement precedes the month in which the member attains the age of 62. If a member retires with less than 20 years of service, the age reduction shall be calculated by deducting .25 percent per month for each month that the first month of entitlement precedes the month in which the member attains the age of 65.
	e. 	Effective January 1, 2001, the age reduction shall be calculated by deducting .25 percent per month for each month that the first month of entitlement precedes the earliest possible normal retirement date for that member based on the age and years of service at the member’s actual retirement.
	f. 	For the portion of the member’s retirement allowance based on service through June 30, 2012, the early retirement reduction shall be calculated as provided in paragraphs 12.1(2)“a” through “e.” For the portion of the retirement allowance based on years of service beginning July 1, 2012, and later, the member’s early retirement reduction shall be one-half of one percent for each month that the early retirement precedes the date the member attains age 65.
	12.1(3) Early retirement date for regular class members. A member’s early retirement date shall be the first day of the month of the fifty-fifth birthday or any following month before the normal retirement date, provided that date is after the member’s termination date.
	12.1(4) Benefit formulas for members retiring on or after July 1, 2012.
	a. 	For each member retiring on or after July 1, 2012, who is vested by service, the monthly benefit will be equal to one-twelfth of an amount equal to 60 percent of the final average covered wage multiplied by a fraction of years of service.
	b. 	For all active and inactive vested members, the monthly retirement allowance shall be determined on the basis of the formula in effect on the date of the member’s retirement. If the member takes early retirement, the benefit shall be adjusted as provided in subrule 12.1(2).
	c. 	 In addition to the 60 percent multiplier identified above, regular class members who retire with years of service in excess of 30 years shall have the percentage multiplier increased by .25 percent for each quarter of a year in excess of 30, not to exceed an increase of 5 percent.
	d. 	In addition to the 60 percent multiplier identified above, protection occupation members, sheriffs, and deputy sheriffs who retire with years of service in excess of 22 years shall have the percentage multiplier increased by .375 percent for each quarter of a year in excess of 22, not to exceed an increase of 12 percent.
	e. 	Regular service does not count as “eligible service” in determining a special service member’s applicable percentage.
	12.1(5) Average covered wages for special service members and for wages of regular class members prior to July 2012.
	a. 	“Three-year average covered wage” means a member’s covered calendar year wages averaged for the highest three years of the member’s service. However, for the member’s final year of wages, IPERS may determine the wages for the third year by computing the final quarter or quarters of wages to complete the year. The computed year will be created when the final quarter or quarters reported are combined with a computed average quarter to complete the last year. The value of this average quarter will be computed by selecting the highest covered wage year not used in the computation of the three high years and dividing the covered salary by four quarters. This value will be combined with the final quarter or quarters to complete a full calendar year. If the member’s final quarter of wages will reduce the three-year average covered wage, it can be dropped from the computation. However, if the covered wages for that quarter are dropped, the service credit for that quarter will be forfeited as well. If the final quarter is the first quarter of a calendar year, those wages must be used in order to give the member a computed year. The computed year wages shall not exceed the Internal Revenue Service maximum covered wage in effect for that calendar year. Furthermore, the computed year shall not exceed the member’s highest actual calendar year of covered wages by more than 3 percent. Effective July 1, 2007, a member’s high three-year average wage shall be the greater of (1) the member’s high three-year average covered wage based on covered wages reported through June 30, 2007; or (2) the member’s high three-year average covered wage after application of the antispiking control as described in paragraph 12.1(5)“b” below.
	b. 	Antispiking limit on the growth of a member’s high three-year average.
	(1)	Selection of the control year shall give highest priority to calendar years of wages in which there are four quarters of service credit for wages on file not used in the high three-year average wage calculation. For example, if the member receives $20,000 of wages for a calendar year with four quarters of service credit for wages, and the member also has received $30,000 of wages for a calendar year with three quarters of service credit for wages, the control year selection process shall give preference to the calendar year with $20,000 of reported wages.
	(2)	If there is a calendar year of covered wages outside the high three-year average wage calculation that has four quarters, but the covered wages for that year are less than the covered wages for the fourth highest calendar year of covered wages, and that fourth highest calendar year of covered wages does not have four quarters of service credit for wages, the control year will be the lowest of the high three calendar years of wages with service credits for wages in all four quarters being used in the high three-year average wage calculation.
	(3)	“Service credit for wages” means service credit recorded for:
	1.	Quarters in which the member receives covered wages from covered employment.
	2.	Quarters in which the member is credited with covered wages due to a military leave.
	3.	Quarters in which the member would have had covered wages but for the application of the IRS covered wage limitations.
	4.	Quarters in which an employee of a nine-month institution receives service credit for a qualifying leave of absence under 495—subrule 7.1(2).
	5.	Quarters in which a legislator, legislative employee, or elected official receives service credit for employment.
	(4)	If none of the calendar years of wages that fall outside of the high three-year average wage calculation have service credit for wages reported in all four quarters, the control year will then be the lowest of the high three calendar years of wages with service credit for wages in all four quarters being used in the high three-year average wage calculation.
	(5)	If none of the wage years used in the high three-year average wage calculation have service credits for wages reported in all four quarters, the control year will then revert to the highest calendar year of wages not included in the high three-year average wage calculation, regardless of whether there are fewer than four quarters with service credits for wages on file.
	(6)	For high three-year average wage calculations that utilize the computed year, the control year may be the calendar year from which the “average quarters” used in the computed year are drawn. However, the control year cannot be the computed year, as the computed year will never be a calendar year with service credit for wages in all four quarters.
	c. 	Effective July 1, 2012, a nonvested regular class member’s average covered wage shall be the member’s five-year average covered wage calculated as provided in Iowa Code section 97B.1A(10A)“a.”
	d. 	Effective July 1, 2012, for regular class members vested as of June 30, 2012, the member’s average covered wage shall be the greater of the member’s three-year average covered wage calculated as provided under paragraphs 12.1(5)“a” and “b,” or the member’s five-year average covered wage calculated as provided in Iowa Code section 97B.1A(10A)“a.” The “five-year average covered wage” means a member’s covered calendar year wages averaged for the highest five years of the member’s service. However, in the member’s final year of wages, IPERS may determine the wages for the fifth year by computing the final quarter or quarters of wages to complete the year. The computed year wages shall not exceed the Internal Revenue Service maximum covered wage in effect for that calendar year. Furthermore, the computed year shall not exceed the member’s highest actual calendar year of covered wages by more than 3 percent. A full fifth year will be created when the final quarter or quarters reported are combined with a computed average quarter to complete the last year. The value of this average quarter will be computed by selecting the highest covered wage year not used in the computation of the five high years and dividing the covered salary by four quarters. This value will be combined with the final quarter or quarters of wages to complete a full calendar year. If the member’s final quarter of wages will reduce the five-year average covered wage, it can be dropped from the computation. However, if the covered wages for that quarter are dropped, the service credit for that quarter will be forfeited as well. If the final quarter is the first quarter of a calendar year, those wages must be used in order to give the member a computed year. The five-year average covered wage cannot exceed the highest Internal Revenue Service maximum covered wages in effect during the member’s service. In addition, the average five-year salary is restricted to an antispiking limit of 134 percent of the highest sixth year of wages.
[ARC 8601B, IAB 3/10/10, effective 4/14/10; ARC 0017C, IAB 2/22/12, effective 3/28/12; ARC 1348C, IAB 2/19/14, effective 3/26/14; ARC 1887C, IAB 2/18/15, effective 3/25/15; ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.2(97B) Initial benefit determination.
	12.2(1) The initial monthly benefit for the retired member will be calculated utilizing the wages that have been reported as of the member’s retirement and subject to the requirements of subrule 12.1(5). When the final quarter(s) of wages is reported for the retired member, a recalculation of benefits will be performed by IPERS to redetermine the member’s benefit amount. In cases where the recalculation determines that the benefit will be changed, the adjustment in benefits will be made retroactive to the first month of entitlement. The wages for the “computed year” shall not exceed the highest covered wage ceiling in effect during the member’s period of employment.
	12.2(2) In cases where the member’s final quarter’s wages have been reported to IPERS prior to retirement, the original benefit will be calculated utilizing all available wages.
	12.2(3) The Option 1 death benefit amount cannot exceed the member’s investment and cannot lower the member’s benefit below the minimum distribution required by federal law.
[ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.3(97B) Hybrid formula for members with more than one type of service credit.
	12.3(1) Eligibility. Effective July 1, 1996, members having both regular and special service (as defined in Iowa Code section 97B.1A(22)) shall receive the greater of the benefit amount calculated under this subrule or the benefit amount calculated under the applicable nonhybrid benefit formula.
	a. 	Members who are vested by service as defined in Iowa Code section 97B.1A(25)“d” may utilize the hybrid formula.
	b. 	The following classes of members are not eligible for the hybrid formula:
	(1)	Members who have only regular service credit.
	(2)	Members who have 22 years of special service credit.
	(3)	Members who have 30 years of regular service.
	(4)	Members who are not vested by service as defined in Iowa Code section 97B.1A(25)“d.”
	12.3(2) Assumptions. IPERS shall utilize the following assumptions in calculating benefits under this rule.
	a. 	The member’s average covered wage shall be determined in the same manner as it is determined for the nonhybrid formula.
	b. 	Increases in the benefit formula under this rule shall be determined as provided under Iowa Code section 97B.49D. The percentage multiplier shall only be increased for total years of service over 30.
	c. 	Years of service shall be utilized as follows:
	(1)	Quarters which have two or more occupation class codes shall be credited as the class that has the highest reported wage for said quarter. A member shall not receive more than one quarter of credit for any calendar quarter, even though more than one type of service credit is recorded for that quarter.
	(2)	Quarters shall not be treated as special service quarters unless the applicable employer and employee contributions have been made.
	12.3(3) Years of service fraction not to exceed one.
	a. 	In no event shall a member’s years of service fraction under the hybrid formula exceed, in the aggregate, one.
	b. 	If the years of service fraction does, in the aggregate, exceed one, the member’s quarters of service credit shall be reduced until the member’s years of service fraction equals, in the aggregate, one.
	c. 	Service credit shall first be subtracted from the member’s regular service credit and, if necessary, shall next be subtracted from the member’s special service credit.
	12.3(4) Age reduction. The portion of the member’s benefit calculated under this rule that is based on the member’s regular service shall be subject to a reduction for early retirement. In calculating the age reduction to be applied to the portion of the member’s benefit based on the member’s regular service, the system shall use all quarters of service credit, including both regular and special service quarters.
	12.3(5) Calculations. A member’s benefit under the hybrid formula shall be the sum of the following:
	a. 	The applicable percentage multiplier divided by 22 times the years of special service credit times the member’s high three-year average covered wage, plus
	b. 	The applicable percentage multiplier divided by 30 times the years of regular service credit (if any) times the member’s high three-year average prior to July 1, 2012, or the member’s high five-year average after June 30, 2012, covered wage minus the applicable wage reduction (if any).
	c. 	If the sum of the percentages obtained exceeds the applicable percentage multiplier for that member, the percentage obtained above for each class of service shall be subject to reduction so that the total shall not exceed the member’s applicable percentage multiplier in the order specified in paragraph 12.3(3)“c.”
[ARC 0017C, IAB 2/22/12, effective 3/28/12; ARC 4337C, IAB 3/13/19, effective 4/17/19; ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.4(97B) Money purchase benefits.
	12.4(1) For each member not vested by service as defined in Iowa Code section 97B.1A(25)“d,” a monthly annuity shall be determined by applying the total member and employer’s accumulated contributions as of the effective retirement date to the annuity tables in use by the system according to the member’s age (or member’s and contingent annuitant’s ages, if applicable).
	12.4(2) For each vested member for whom the present value of future benefits under Option 2 is less than the member reserve as of the effective retirement date, a monthly annuity shall be determined by applying the member reserve to the annuity tables in use by the system according to the member’s age (or member’s and contingent annuitant’s ages, if applicable).
	12.4(3) For calculations under subrule 12.4(1), Options 2, 3, 4, 5 and 6 shall be calculated by dividing the member’s total reserve by the applicable Option 2, 3, 4, 5 or 6 annuity factor taken from the system’s tables to determine the monthly amount. For calculations under subrule 12.4(2), Options 2, 3, 4, 5 and 6 shall be calculated by dividing the member reserve by the applicable Option 2, 3, 4, 5 or 6 annuity factor taken from the system’s tables to determine the monthly amount.
	12.4(4) For Option 1, the cost per $1,000 of death benefit shall be determined according to the system’s tables. That cost shall be subtracted from the Option 3 monthly amount to determine the Option 1 monthly benefit amount. The Option 1 death benefit amount shall be reduced as necessary so that the Option 1 monthly benefit amount is not less than one-half of the Option 2 monthly benefit amount.
	12.4(5) For members retiring after June 30, 2012, the money purchase benefit calculated pursuant to this rule shall be provided to members who are not vested by service as defined in Iowa Code section 97B.1A(25)“d.”
[ARC 0017C, IAB 2/22/12, effective 3/28/12; ARC 0662C, IAB 4/3/13, effective 5/8/13; ARC 4337C, IAB 3/13/19, effective 4/17/19; ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.5(97B) Recalculation for a member aged 70. A member remaining in covered employment after attaining the age of 70 years may receive a retirement allowance without terminating the covered employment. A member who is in covered employment, attains the age of 70 and begins receiving a retirement allowance must terminate all covered employment before the member’s retirement allowance can be recalculated to take into account service after the member’s original FME. The termination of employment must be a true severance lasting at least 30 days. The formula to be used in recalculating such a member’s retirement allowance depends on the date of the member’s FME and the member’s termination date, as follows:
If the member is receiving a retirement allowance with an FME prior to July 1, 2000, and terminates covered employment on or after January 1, 2000, the member’s retirement formula for recalculation purposes shall be the formula in effect at the time of the member’s termination from covered employment or, if later, the date the member applies for a recalculation.
In all other cases, the recalculation for a member aged 70 who retires while actively employed shall use the retirement formula in effect at the time of the member’s FME.
Payments under this rule shall begin no earlier than the month following the month of termination, upon IPERS’ receipt of a member’s application for recalculation. It is the member’s responsibility to apply for the recalculation by completing and submitting the form specified by IPERS.
A member receiving a recalculation under this rule after June 30, 2012, will have the member’s average covered wage calculated as follows. IPERS will calculate the average high three covered wage as of June 30, 2012. IPERS will next calculate the average high five covered wage at the time of the member’s termination from covered employment or, if later, the date the member applies for a recalculation. IPERS will determine the benefit amount based on the calculation that produces the greatest benefit to the member.
[ARC 0662C, IAB 4/3/13, effective 5/8/13; ARC 2981C, IAB 3/15/17, effective 4/19/17; ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.6(97B) Level payment choice for special service members. A level payment choice is created effective July 1, 2002. IPERS shall implement the level payment choice by preparing factors to convert nonhybrid IPERS Options 1, 2, 3, 4, and 5 to the level payment choice. The new benefit feature applies solely to special service members, and any reference to members in this rule shall only apply to special service members.
	12.6(1) Member’s social security retirement amount. Calculations of a member’s level payment choice shall be based on the member’s social security retirement amount at age 62 as verified by Social Security Administration statements provided by the member. No adjustments shall be made if subsequent social security statements indicate an increase in the age 62 social security retirement amount. Verification of the social security benefits shall not precede the member’s first month of entitlement by more than 12 months.
	12.6(2) Death benefit assumptions. In preparing level payment choice factors, IPERS shall assume:
	a. 	For IPERS Options 1 and 2, death benefits under those options shall not be reduced as a result of a member’s attaining the age of 62 and having the member’s monthly allowance reduced under this rule.
	b. 	For IPERS Options 4 and 5, IPERS shall assume that the contingent annuitant’s or beneficiary’s monthly payments and death benefits, if any, prior to the date the member attains, or would have attained, age 62 shall be based on the amount that was payable to the member for periods before the member attains, or would have attained, age 62. Beginning with the month after the month that the member attains, or would have attained, age 62, a contingent annuitant’s or beneficiary’s monthly payments and death benefits, except death benefits under IPERS Options 1 and 2, shall be based on the reduced amount that would have been payable to the member in the month after the month that the member attained age 62.
	12.6(3) Favorable experience dividends. An eligible member’s or beneficiary’s favorable experience dividend, if any, shall be based on the member’s or beneficiary’s level payment choice monthly amount as of the preceding December 31.
	12.6(4) Prohibitions. The following special service members shall be prohibited from receiving benefits under this rule:
	a. 	Those who retire under Iowa Code section 97B.49D, 97B.50(2), or 97B.50A.
	b. 	Those who retire under Option 6.
	c. 	Those who request a level payment amount that reflects less than a full offset for the social security retirement amount at age 62.
	d. 	Those reemployed in covered employment and subsequently retiring, for the period of reemployment. A member who has elected the level payment choice shall have retirement benefits calculated solely for the period of reemployment, except for vesting credit.
	12.6(5) Limit on reductions.  The level payment choice factors shall not reduce the monthly amount payable to a member at age 62 to less than 50 percent of the monthly amount that would have been payable under IPERS Option 2. Accordingly, payments before age 62 to such members shall be reduced in the same manner, with the corresponding adjustments made to death benefits.
	12.6(6) Commencement of level payment option reduction. The monthly benefit of a member who selects the level payment option shall be reduced beginning with the month after the member reaches age 62.
[ARC 0017C, IAB 2/22/12, effective 3/28/12; ARC 1887C, IAB 2/18/15, effective 3/25/15; ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.7(97B) Reemployment of retired members.
	12.7(1) Effective July 1, 1998, the monthly benefit payments for a member under the age of 65 who has a bona fide retirement and is then reemployed in covered employment shall be reduced by 50 cents for each dollar the member earns in excess of the annual limit. Effective July 1, 2002, this reduction is not required until the member earns the amount of remuneration permitted for a calendar year for a person under the age of 65 before a reduction in federal social security retirement benefits is required, or earns $30,000, whichever is greater. The foregoing reduction shall apply only to IPERS benefits payable for the applicable year that the member has reemployment earnings and after the earnings limit has been reached. Said reductions shall be applied as provided in subrule 12.7(2).
Effective January 1, 1991, this earnings limitation does not apply to covered employment as an elected official. A member aged 65 or older who has completed at least four full calendar months of bona fide retirement and is later reemployed in covered employment shall not be subject to any wage-earning disqualification.
	12.7(2) Beginning on or after July 1, 1996, the retirement allowance of a member subject to reduction pursuant to subrule 12.7(1) shall be reduced as follows:
	a. 	A member’s monthly retirement allowance in the following calendar year shall be reduced by the excess benefit paid in the preceding year after the excess benefit payment amount has been determined.
	b. 	Employers shall be required to complete IPERS wage reporting forms for reemployed individuals which shall reflect the prior year’s wage payments on a month-to-month basis. These reports shall be used by IPERS to determine the amount which must be recovered to offset overpayments in the prior calendar year due to reemployment wages.
	c. 	The member’s overpayment shall be collected as follows:
	(1)	IPERS will reduce the member’s gross monthly benefit by 50 percent until the overpayment is repaid. If the 50 percent reduction will not recover the overpayment by the end of the current calendar year, IPERS will calculate the monthly reduction amount so that the overpayment will be recovered within the current calendar year. Other monthly reduction amounts may be made by an agreement in writing between the member and IPERS; or
	(2)	A member may elect to make repayments of the overpayment amounts out of pocket in lieu of having the member’s monthly benefit reduced. An out-of-pocket repayment may be made in one check or in installments. However, an election to make repayment in installments must be agreed to in writing between the member and IPERS.
	(3)	If a member dies and the full amount of overpayment determined under this subrule has not been repaid, the remaining amounts shall be deducted from the payments to be made, if any, to the member’s designated beneficiary or contingent annuitant. If the member has selected an option under which there are no remaining amounts to be paid, or the remaining amounts are insufficient, the unrecovered amounts shall be a charge on the member’s estate.
	(4)	A member may elect in writing to have the member’s monthly retirement allowance suspended in the month in which the member’s remuneration exceeds the amount of remuneration permitted under this subrule in lieu of receiving a reduced retirement allowance under subparagraph (1). In order to become effective, the member’s written election must be delivered to IPERS in person, by regular mail, email, facsimile or by private carrier. Oral elections shall not be accepted. The member’s election to suspend benefit payments in the month when the member’s remuneration exceeds the amount of reimbursement permitted under this subrule shall remain in effect for all subsequent calendar years until revoked by the member in writing. If the member’s written election is not received in time to avoid overpayment, the overpayment must be recovered, to the extent possible, from monthly amounts beginning in January of the next calendar year or under one of the alternate arrangements permitted under this rule. Effective July 1, 2007, remuneration shall include those amounts as described in 495—subrule 6.3(13).
	12.7(3) A member who is reemployed in covered employment after retirement may, after again retiring from employment, request a recomputation of benefits. The member’s retirement benefit shall be increased if possible by the addition of a second annuity, which is based on years of reemployment service, reemployment covered wages and the benefit formula in place at the time of the recomputation. A maximum of 30 years of service is creditable to an individual retired member. If a member’s combined years of service exceed 30, a member’s initial annuity may be reduced by a fraction of the years in excess of 30 divided by 30. The second retirement benefit will be treated as a separate annuity by IPERS.
Effective July 1, 1998, a member who is reemployed in covered employment after retirement may, after again terminating employment for at least one full calendar month, elect to receive a refund of the employee and employer contributions made during the period of reemployment in lieu of a second annuity. If a member requests a refund in lieu of a second annuity, the related service credit shall be forfeited.
Effective July 1, 2007, employer contributions described in 495—subrule 6.3(13) shall constitute “remuneration” for purposes of applying the reemployment earnings limit and determining reductions in the member’s monthly benefits but shall not be considered covered wages for IPERS benefits calculations.
It is the member’s responsibility to apply for the recomputation or lump sum by completing and submitting the form specified by IPERS.
	12.7(4) In recomputing a retired member’s monthly benefit, IPERS shall use the following assumptions.
	a. 	The member cannot change the option or beneficiary with respect to the reemployment period.
	b. 	If the member would only qualify for a money purchase benefit under rule 495—12.4(97B) based solely on the period of reemployment, then the money purchase formula shall be used to compute the additional benefit amount due to the reemployment.
	c. 	If the member would qualify for a non-money purchase retirement allowance based solely on the period of reemployment, the benefit formula in effect as of the first month of entitlement (FME) for the reemployment period shall be used. If the FME is July 1998 or later, and the member has more than 30 years of service, including both original and reemployment service, the percentage multiplier for the reemployment period only will be at the applicable percentage (up to 65 percent) for the total years of service.
	d. 	If a period of reemployment would increase the monthly benefit a member is entitled to receive, the member may elect between the increase and a refund of the employee and employer contributions without regard to reemployment FME.
	e. 	If a member previously elected IPERS Option 1, is eligible for an increase in the Option 1 monthly benefits, and elects to receive the increase in the member’s monthly benefits, the member’s Option 1 death benefit shall also be increased if the investment is at least $1,000. The amount of the increase shall be at least the same percentage of the maximum death benefit permitted with respect to the reemployment as the percentage of the maximum death benefit elected at the member’s original retirement. In determining the increase in Option 1 death benefits, IPERS shall round up to the nearest $1,000. For example, if a member’s investment for a period of reemployment is $1,900 and the member elected at the member’s original retirement to receive 50 percent of the Option 1 maximum death benefit, the death benefit attributable to the reemployment shall be $1,000 (50 percent times $1,900, rounded up to the nearest $1,000). Notwithstanding the foregoing, if the member’s investment for the period of reemployment is less than $1,000, the benefit formula for a member who originally elected new IPERS Option 1 shall be calculated under IPERS Option 3.
	f. 	A retired reemployed member who requests a return of the employee and employer contributions made during a period of reemployment cannot repay the distribution and have the service credit for the period of reemployment restored.
	g. 	If a retired reemployed member selected IPERS Option 5 at retirement, and after the period of reemployment requests an increase in the member’s monthly allowance, at death all remaining guaranteed payments with respect to both periods of employment shall be paid in a commuted lump sum.
	h. 	If a retired reemployed member selected IPERS Option 2 at retirement, and after the period of reemployment requests an increase in the member’s monthly allowance, at death the member’s monthly payments following the increase shall be prorated between the member’s two annuities to determine the amount of the member’s remaining accumulated contributions that may be paid as a death benefit.
	i. 	A retired reemployed member who has attained the age of 70 may take an actuarial equivalent (AE) payment. However, such a member must terminate covered employment for at least 30 days before taking an additional AE payment.
	12.7(5) Mandatory distribution of active wages. If a retired reemployed member whose annual benefit would be increased by less than $600 does not request a second annuity or a lump sum payment of reemployment accruals by the end of the fourth quarter after the last quarter in which the member had covered wages, IPERS shall proceed to pay the member the applicable lump sum amount. The member shall have 60 days after the postmark date of the mandatory payment to return the payment and request a benefit increase.
[ARC 8601B, IAB 3/10/10, effective 4/14/10; ARC 0017C, IAB 2/22/12, effective 3/28/12; ARC 1887C, IAB 2/18/15, effective 3/25/15; ARC 2981C, IAB 3/15/17, effective 4/19/17; ARC 5027C, IAB 4/8/20, effective 5/13/20; ARC 5489C, IAB 3/10/21, effective 4/14/21]
495—12.8(97B) Actuarial equivalent (AE) payments.
	12.8(1) If a member aged 55 or older requests an estimate of benefits which results in a monthly benefit amount under Option 2 of less than $50, the member shall receive, under Iowa Code section 97B.48(1), a lump sum actuarial equivalent (AE) payment in lieu of a monthly benefit. Once the AE payment has been paid to the member, the member shall not be entitled to any further benefits based on the contributions included in the AE payment and the employment period represented thereby. If the member later returns to covered employment, any future benefits the member accrues shall be based solely on the new employment period. If an estimate of benefits based on the new employment period again results in any one of the options having a monthly benefit amount of less than $50, the member may again elect to receive an AE payment.
	12.8(2) If a member, upon attaining the age of 70 or later, requests a retirement allowance without terminating employment and the member’s monthly benefit amount under Option 2 is less than $50, the member shall receive an AE payment based on the member’s employment up to, but not including, the quarter in which the application is filed. When the member subsequently terminates covered employment, any benefits due to the member will be based only on the period of employment not used in computing the AE paid when the member first applied for a retirement allowance. If an estimate of benefits based on the later period of employment again results in a monthly benefit amount under Option 2 of less than $50, the member shall receive another AE payment. However, a member who elects to receive an AE payment upon or after attaining age 70 without terminating employment may not elect to receive additional AE payments unless the member terminates all covered employment for at least one full calendar month.
	12.8(3) An AE payment under this rule shall be equal to the sum of the member’s and employer’s accumulated contributions.
[ARC 5027C, IAB 4/8/20, effective 5/13/20]
495—12.9(97B) Conforming rules for lump sum payments. Effective January 1, 2007, IPERS may, notwithstanding certain provisions of Iowa Code section 97B.53B enacted in order to comply with prior rollover provisions of the Internal Revenue Code, utilize forms and procedures affording payees of lump sum distributions with broader rollover rights as permitted under the applicable rollover provisions of the Internal Revenue Code as amended subsequent to the enactment of Iowa Code section 97B.53B.
[ARC 5027C, IAB 4/8/20, effective 5/13/20]
These rules are intended to implement Iowa Code sections 97B.1A, 97B.1A(24), 97B.15, 97B.25, 97B.45, 97B.47 to 97B.48A, 97B.49A to 97B.49I, 97B.51, and 97B.53B.
[Filed 11/5/04, Notice 9/15/04—published 11/24/04, effective 12/29/04]
[Filed 12/1/05, Notice 10/26/05—published 12/21/05, effective 1/25/06]
[Filed 4/7/06, Notice 3/1/06—published 4/26/06, effective 5/31/06]
[Filed 11/3/06, Notice 9/27/06—published 11/22/06, effective 12/27/06]
[Filed 5/3/07, Notice 3/28/07—published 5/23/07, effective 6/27/07]
[Filed 8/10/07, Notice 7/4/07—published 8/29/07, effective 10/3/07]
[Filed 11/12/08, Notice 10/8/08—published 12/3/08, effective 1/7/09]
[Filed ARC 8601B (Notice ARC 8477B, IAB 1/13/10), IAB 3/10/10, effective 4/14/10]
[Filed ARC 0017C (Notice ARC 9951B, IAB 12/28/11), IAB 2/22/12, effective 3/28/12]
[Filed ARC 0662C (Notice ARC 0598C, IAB 2/6/13), IAB 4/3/13, effective 5/8/13]
[Filed ARC 1348C (Notice ARC 1256C, IAB 12/25/13), IAB 2/19/14, effective 3/26/14]
[Filed ARC 1887C (Notice ARC 1800C, IAB 12/24/14), IAB 2/18/15, effective 3/25/15]
[Filed ARC 2981C (Notice ARC 2892C, IAB 1/18/17), IAB 3/15/17, effective 4/19/17]
[Filed ARC 4337C (Notice ARC 4238C, IAB 1/16/19), IAB 3/13/19, effective 4/17/19]
[Filed ARC 5027C (Notice ARC 4925C, IAB 2/12/20), IAB 4/8/20, effective 5/13/20]
[Filed ARC 5489C (Notice ARC 5359C, IAB 12/30/20), IAB 3/10/21, effective 4/14/21]