495—12.8 (97B) Reemployment of retired members.
	 12.8(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 12.8(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.
	 12.8(2) Beginning on or after July 1, 1996, the retirement allowance of a member subject to reduction pursuant to subrule 12.8(1) shall be reduced as follows:
	  a.   	 A member’s monthly retirement allowance in the following calendar year shall be reduced by the excess amounts earned in the preceding year divided by the number of months remaining in the following calendar year after the excess amount has been determined. A member may elect to make repayment of the overpayments received in lieu of having the member’s monthly benefit reduced. Elections to make installment payments must be accompanied by a repayment agreement signed by the member and IPERS. If the monthly amount to be deducted exceeds a member’s monthly retirement allowance, the member’s monthly allowance shall be withheld in its entirety until the overpayment is recovered. If a member dies and the full amount of overpayments 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.
	  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.   	 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 rule in lieu of receiving a reduced retirement allowance under paragraph “a” of this subrule. If the member’s retirement allowance is not suspended timely, the overpayment will be recovered pursuant to paragraph “a” of this subrule. The member’s retirement allowance shall remain suspended until the earlier of January of the following calendar year or the member’s termination of covered employment. The member’s election shall remain binding until revoked in writing. Effective July 1, 2007, “remuneration” shall include those amounts as described in 495—subrule 6.3(13).
	 12.8(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. Any contributions that cannot be used in the recomputation of benefits shall be refunded to the employee and the employer.
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.
	 12.8(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 reemployment period is less than 4 years, the money purchase formula shall be used to compute the benefit amount.
	  c.   	 If the reemployment period is 4 or more years, 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 maximum amount of the increase shall be equal to the member’s investment (reemployment contributions and interest). 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 $2,900, the maximum death benefit attributable to the reemployment shall be $3,000 ($2,900 rounded up to the nearest $1,000). In the example above, the member may choose a death benefit increase of $1,000, or $2,000, or $3,000, but must choose at least the $1,000 increase. 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 whose reemployment FME precedes July 1998 shall not be eligible to receive the employer contributions made available to retired reemployed members under Iowa Code section 97B.48A(4) effective July 1, 1998.
	  g.   	 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.
	  h.   	 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.
	  i.   	 If a retired reemployed member selected IPERS Option 2 (or old IPERS Option 1) 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.
	  j.   	 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.
	 12.8(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 restore the member’s account.