House Study Bill 514 HOUSE FILE BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON ELGIN) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to the statewide fire and police retirement 2 system. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5864HC 81 5 ec/gg/14 PAG LIN 1 1 Section 1. Section 411.1, subsection 12, Code 2005, is 1 2 amended to read as follows: 1 3 12. "Member in good standing" means a member in service 1 4 who is not subject to removal by the employing city of the 1 5 member pursuant to section 400.18 or 400.19, or other 1 6 comparable process, and who is not the subject of an 1 7 investigation that could lead to such removal. A person who 1 8 is restored to active service for purposes of applying for a 1 9 pension under this chapter is not a member in good standing. 1 10 Sec. 2. Section 411.5, subsection 6, Code 2005, is amended 1 11 by adding the following new paragraph: 1 12 NEW PARAGRAPH. d. Records containing financial or 1 13 commercial information that relates to the investment of 1 14 retirement system funds if the disclosure of such information 1 15 could result in a loss to the retirement system or to the 1 16 provider of the information are not public records for the 1 17 purposes of chapter 22. 1 18 Sec. 3. Section 411.5, Code 2005, is amended by adding the 1 19 following new subsection: 1 20 NEW SUBSECTION. 15. CLOSED SESSIONS. In addition to the 1 21 reasons provided in section 21.5, subsection 1, the board may 1 22 hold a closed session pursuant to the requirements of section 1 23 21.5 of that portion of a board meeting in which financial or 1 24 commercial information is provided to or discussed by the 1 25 board if the board determines that disclosure of such 1 26 information could result in a loss to the retirement system or 1 27 to the provider of the information. 1 28 Sec. 4. Section 411.6, subsection 5, paragraph a, Code 1 29 2005, is amended to read as follows: 1 30 a. Upon application to the system, of a member in good 1 31 standing or of the chief of the police or fire departments, 1 32 respectively, any member in good standing who has become 1 33 totally and permanently incapacitated for duty as the natural 1 34 and proximate result of an injury or disease incurred in or 1 35 aggravated by the actual performance of duty at some definite 2 1 time and place, or while acting pursuant to order, outside of 2 2 the city by which the member is regularly employed, shall be 2 3 retired by the system if the medical board certifies that the 2 4 member is mentally or physically incapacitated for further 2 5 performance of duty, that the incapacity is likely to be 2 6 permanent, and that the member should be retired. However, if 2 7 a person's membership in the system first commenced on or 2 8 after July 1, 1992, the member shall not be eligible for 2 9 benefits with respect to a disability which would not exist, 2 10 but for a medical condition that was known to exist on the 2 11 date that membership commenced. A medical condition shall be 2 12 deemed to have been known to exist on the date that membership 2 13 commenced if the medical condition is reflected in any record 2 14 or document completed or obtained in accordance with the 2 15 system's medical protocols pursuant to section 400.8, or in 2 16 any other record or document obtained pursuant to an 2 17 application for disability benefits from the system, if such 2 18 record or document existed prior to the date membership 2 19 commenced. A member who is denied a benefit under this 2 20 subsection, by reason of a finding by the medical board that 2 21 the member is not mentally or physically incapacitated for the 2 22 further performance of duty, shall be entitled to be restored 2 23 to active service in the same position held immediately prior 2 24 to the application for disability benefits. 2 25 Sec. 5. Section 411.6, subsection 5, paragraph b, Code 2 26 2005, is amended to read as follows: 2 27 b. If a member in service or the chief of the police or 2 28 fire departments becomes incapacitated for duty as a natural 2 29 or proximate result of an injury or disease incurred in or 2 30 aggravated by the actual performance of duty at some definite 2 31 time or place or while acting, pursuant to order, outside the 2 32 city by which the member is regularly employed, the member, 2 33 upon being found to be temporarily incapacitated following a 2 34 medical examination as directed by the city, is entitled to 2 35 receive the member's full pay and allowances from the city's 3 1 general fund or trust and agency fund until re=examined as 3 2 directed by the city and found to be fully recovered or until 3 3 the city determines that the member is likely to be 3 4 permanently disabled. If the temporary incapacity of a member 3 5 continues more than sixty days, or if the city expects the 3 6 incapacity to continue more than sixty days, the city shall 3 7 notify the system of the temporary incapacity. Upon 3 8 notification by a city, the system may refer the matter to the 3 9 medical board for review and consultation with the member's 3 10 treating physician during the temporary incapacity. Except as 3 11 provided by this paragraph, the board of trustees of the 3 12 statewide system has no jurisdiction over these matters until 3 13 the city determines that the disability is likely to be 3 14 permanent. 3 15 Sec. 6. Section 411.6, subsection 8, paragraph c, 3 16 subparagraph (3), Code 2005, is amended to read as follows: 3 17 (3) If there is no surviving spouse or child, then the 3 18 member's dependent father or mother, or both, as the system 3 19 determines, to continue untilremarriage ordeath. 3 20 Sec. 7. Section 411.6, subsection 9, paragraph b, 3 21 subparagraph (1), subparagraph subdivision (c), Code 2005, is 3 22 amended to read as follows: 3 23 (c) If the member's designated beneficiary is the member's 3 24 dependent father or mother, or both, then to the father or 3 25 mother, or both, in equal shares, to continue untilremarriage 3 26 ordeath. 3 27 Sec. 8. Section 411.6, subsection 9, paragraph b, 3 28 subparagraph (2), subparagraph subdivision (c), Code 2005, is 3 29 amended to read as follows: 3 30 (c) If there is no surviving spouse or child, then to the 3 31 member's dependent father or mother, or both, in equal shares, 3 32 to continue untilremarriage ordeath. 3 33 Sec. 9. Section 411.23, Code 2005, is amended by adding 3 34 the following new subsection: 3 35 NEW SUBSECTION. 3. a. Commencing July 1, 2006, a 4 1 member's contributions shall be refunded to the member by the 4 2 system if the following conditions are met: 4 3 (1) The member was a member of the system for less than 4 4 four years. 4 5 (2) The member terminated service four or more years prior 4 6 to the date of the refund. 4 7 (3) The amount to be refunded does not exceed five 4 8 thousand dollars, or such other amount as may be established 4 9 under section 401(a) of the Internal Revenue Code. 4 10 b. In the event a refund is made in accordance with this 4 11 subsection without the member's consent, the system shall pay 4 12 the distribution in a direct rollover to an individual 4 13 retirement plan designated by the system unless the member 4 14 elects to have such distribution paid directly to an eligible 4 15 retirement plan specified by the member in a direct rollover 4 16 in accordance with section 411.6B or elects to receive the 4 17 distribution directly. The system may, by rule, implement a 4 18 de minimus exception to the automatic rollover provision of 4 19 this subsection, subject to the limitations of the Internal 4 20 Revenue Code and any applicable internal revenue service 4 21 regulations. 4 22 EXPLANATION 4 23 This bill makes changes to the statewide fire and police 4 24 retirement system created in Iowa Code chapter 411. 4 25 The definition of "member in good standing" in Code section 4 26 411.1 is amended to provide that a person who is restored to 4 27 active service for purposes of applying for a pension is not a 4 28 member in good standing. 4 29 Code section 411.5, governing the administration of the 4 30 system, is amended to provide that investment=related records 4 31 of the system are not to be considered public records subject 4 32 to disclosure under Code chapter 22 if the disclosure could 4 33 result in a loss to the system or the provider of the 4 34 information. In addition, the section is amended to permit 4 35 the board governing the system to go into closed session to 5 1 discuss financial or commercial information if the disclosure 5 2 of such information may result in a loss to the system or to 5 3 the provider of the information. 5 4 Code section 411.6, subsection 5, concerning the 5 5 determination of an accidental disability retirement is 5 6 amended. Current law precludes the member from receiving 5 7 disability benefits for a condition known to exist prior to 5 8 the member's entrance to the system. The bill provides that 5 9 the existence of a medical condition can be established if it 5 10 is reflected in any document obtained through the system's 5 11 medical protocol or through the disability application process 5 12 and in existence prior to the date membership commenced. 5 13 Code section 411.6, subsection 5, is further amended to 5 14 allow cities to pay a member who is temporarily disabled due 5 15 to a work injury or illness the worker's full pay and 5 16 allowances from the city's trust and agency funds or the 5 17 city's general fund. Current law only allows this payment 5 18 from the city's general fund. 5 19 Code section 411.6 is further amended concerning the 5 20 eligibility of a dependent parent of a deceased member to 5 21 receive death benefits. Under current law, the surviving 5 22 dependent mother or father of a deceased member can continue 5 23 to receive a death benefit, if otherwise eligible, until the 5 24 dependent mother or father dies or remarries. The bill 5 25 eliminates the provision terminating the death benefit if the 5 26 dependent mother or father remarries. 5 27 Code section 411.23 is amended to authorize the system to 5 28 automatically disburse a refund of contributions for certain 5 29 members who have left service under the system. The bill 5 30 provides for this automatic disbursement if the contribution 5 31 amount to be refunded is less than $5,000 or the amount the 5 32 internal revenue service allows and the recipient is a 5 33 terminated, nonvested member of the system who has been absent 5 34 from active membership for four years or more. The bill 5 35 provides that the refunded amount will be distributed to an 6 1 individual retirement plan designated by the system unless the 6 2 member elects to receive the distribution directly or as a 6 3 rollover to an eligible retirement plan. 6 4 LSB 5864HC 81 6 5 ec:rj/gg/14