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 until remarriage or death.
  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 until remarriage
  3 26 or death.
  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 until remarriage or death.
  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