House File 2027 - Introduced HOUSE FILE BY WISE Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing for postretirement adjustments to benefits and 2 creditable service under the municipal fire and police 3 retirement system. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5608YH 82 6 ec/rj/8 PAG LIN 1 1 Section 1. Section 411.6, subsection 12, paragraph d, Code 1 2 2007, is amended to read as follows: 1 3 d. A retired member eligible for benefits under subsection 1 4 1of this sectionis not eligible for the readjustment of 1 5 pensions provided in this subsection unless the member served 1 6 twenty=two years and attained the age of fifty=five years 1 7 prior to the member's termination of employment or the member 1 8 served eighteen years and attained the age of sixty years 1 9 prior to the member's termination of employment. 1 10 Sec. 2. NEW SECTION. 411.10 PURCHASE OF ELIGIBLE SERVICE 1 11 CREDIT. 1 12 1. For purposes of this section: 1 13 a. "Eligible qualified service" means service as a member 1 14 of the retirement system at any time if the member received a 1 15 refund of the member's contributions pursuant to section 1 16 411.23 for that period of membership service. 1 17 b. "Permissive service credit" means credit that will be 1 18 recognized by the retirement system for purposes of 1 19 calculating a member's benefit, for which the member did not 1 20 previously receive service credit in the retirement system, 1 21 and for which the member voluntarily contributes to the 1 22 retirement system the amount required by the retirement 1 23 system, not in excess of the amount necessary to fund the 1 24 benefit attributable to such service. 1 25 2. An active member of the system may make contributions 1 26 to the system to purchase up to the maximum amount of 1 27 permissive service credit for eligible qualified service as 1 28 determined by the system, pursuant to Internal Revenue Code 1 29 section 415(n) and the requirements of this section. A member 1 30 seeking to purchase permissive service credit pursuant to this 1 31 section shall file a written application along with 1 32 appropriate documentation with the system. 1 33 3. A member making contributions for a purchase of 1 34 permissive service credit for eligible qualified service under 1 35 this section shall make contributions in an amount equal to 2 1 the actuarial cost of the permissive service credit purchase. 2 2 For purposes of this subsection, the actuarial cost of the 2 3 permissive service credit purchase is an amount determined by 2 4 the system in accordance with actuarial tables, as reported to 2 5 the system by the system's actuary, which reflects the 2 6 actuarial cost necessary to fund an increased retirement 2 7 allowance resulting from the purchase of permissive service 2 8 credit. 2 9 Sec. 3. IMPLEMENTATION PROVISION == CONTRIBUTION RATE 2 10 CALCULATION. Notwithstanding any provision of section 411.8 2 11 to the contrary, the statewide fire and police retirement 2 12 system established by chapter 411 shall not increase the 2 13 contribution rate of members of the system to cover any 2 14 increase in cost to the system resulting from this Act. 2 15 EXPLANATION 2 16 This bill makes changes to the municipal fire and police 2 17 retirement system of Iowa (MFPRSI) created in Code chapter 2 18 411. 2 19 Code section 411.6, subsection 12, concerning the annual 2 20 readjustment of pensions following retirement, is amended to 2 21 provide that a retired member is eligible to receive this 2 22 readjustment if the member served 18 years and attained the 2 23 age of 60 years prior to the member's termination of 2 24 employment. Current law, which provides that a member who 2 25 serves 22 years and is 55 years of age at the time of 2 26 termination is eligible to receive the readjustment, is 2 27 unchanged by the bill. 2 28 New Code section 411.10 permits current members of MFPRSI 2 29 to purchase service credit for eligible qualified service. 2 30 The bill defines "eligible qualified service" to include 2 31 previous service under MFPRSI in which the member received a 2 32 refund of the member's contributions. The bill provides that 2 33 the member is required to pay the full actuarial cost of the 2 34 service purchase and must make application with the retirement 2 35 system for the purchase of service. The actuarial cost of the 3 1 service purchase is defined as the cost necessary to fund an 3 2 increased retirement allowance resulting from the purchase of 3 3 the permissive service credit. 3 4 The bill further provides that members of MFPRSI shall not 3 5 have their contribution rates increased to pay for the new 3 6 benefits provided by the bill. 3 7 LSB 5608YH 82 3 8 ec/rj/8