Senate File 2373 - Introduced



                                       SENATE FILE       
                                       BY  COMMITTEE ON STATE
                                           GOVERNMENT

                                       (SUCCESSOR TO SSB 3244)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to public retirement systems and other employee
  2    benefit=related matters, including the public safety peace
  3    officers' retirement, accident, and disability system, the
  4    Iowa public employees' retirement system, the statewide fire
  5    and police retirement system, and the judicial retirement
  6    system, including an implementation provision, and providing
  7    effective and retroactive applicability dates.
  8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  9 TLSB 5594SV 82
 10 ec/sc/5

PAG LIN



  1  1                           DIVISION I
  1  2            PUBLIC SAFETY PEACE OFFICERS' RETIREMENT,
  1  3                 ACCIDENT, AND DISABILITY SYSTEM
  1  4    Section 1.  Section 97A.1, subsection 14, Code 2007, is
  1  5 amended by striking the subsection.
  1  6    Sec. 2.  Section 97A.1, subsection 15, Code 2007, is
  1  7 amended to read as follows:
  1  8    15.  "Pensions" shall mean annual payments for life derived
  1  9 from the appropriations provided by the state of Iowa and from
  1 10 contributions of the members which are deposited in the
  1 11 pension accumulation retirement fund.  All pensions shall be
  1 12 paid in equal monthly installments.
  1 13    Sec. 3.  Section 97A.5, subsections 3 and 4, Code 2007, are
  1 14 amended to read as follows:
  1 15    3.  COMPENSATION.  The trustees shall serve as such without
  1 16 compensation, but they shall be reimbursed from the expense
  1 17 retirement fund for all necessary expenses which they may
  1 18 incur through service on the board.
  1 19    4.  RULES.  The board of trustees shall, from time to time,
  1 20 establish such rules not inconsistent with this chapter, for
  1 21 the administration of funds the system and the retirement fund
  1 22 created by this chapter and as may be necessary or appropriate
  1 23 for the transaction of its business.
  1 24    Sec. 4.  Section 97A.5, subsection 6, paragraph a, Code
  1 25 2007, is amended to read as follows:
  1 26    a.  The department of public safety shall keep in
  1 27 convenient form the data necessary for the actuarial valuation
  1 28 of the various funds of the system and for checking the
  1 29 expense of the system.  The commissioner of public safety
  1 30 shall keep a record of all the acts and proceedings of the
  1 31 board, which records shall be open to public inspection.  The
  1 32 board of trustees shall biennially make a report to the
  1 33 general assembly showing the fiscal transactions of the system
  1 34 for the preceding biennium, the amount of the accumulated cash
  1 35 and securities of the system, and the last balance sheet
  2  1 showing the financial condition of the system by means of an
  2  2 actuarial valuation of the assets and liabilities of the
  2  3 system.
  2  4    Sec. 5.  Section 97A.5, subsections 8, 9, 11, and 12, Code
  2  5 2007, are amended to read as follows:
  2  6    8.  MEDICAL BOARD.  The board of trustees shall designate a
  2  7 single medical provider network as the medical board to be
  2  8 composed of three physicians who for the system.  The medical
  2  9 board shall arrange for and pass upon the all medical
  2 10 examinations required under the provisions of this chapter and
  2 11 shall report in writing to the board of trustees, its
  2 12 conclusions and recommendations upon all matters duly referred
  2 13 to it.  For examinations required because of disability, a
  2 14 physician from the medical board specializing in occupational
  2 15 medicine, and a second physician specializing in an
  2 16 appropriate field of medicine as determined by the
  2 17 occupational medicine physician, shall pass upon the medical
  2 18 examinations required for disability retirements and shall
  2 19 report to the system in writing their conclusions and
  2 20 recommendations upon all matters referred to the medical
  2 21 board.  Each report of a medical examination under section
  2 22 97A.6, subsections 3 and 5, shall include the medical board's
  2 23 findings in accordance with section 97A.6 as to the extent of
  2 24 the member's physical impairment.
  2 25    9.  DUTIES OF ACTUARY.  The actuary hired by the board of
  2 26 trustees shall be the technical advisor of the board of
  2 27 trustees on matters regarding the operation of the funds
  2 28 retirement fund created by the provisions of this chapter and
  2 29 shall perform such other duties as are required in connection
  2 30 therewith.
  2 31    11.  ACTUARIAL INVESTIGATION.  At least once in each
  2 32 two=year period, the actuary hired by the board of trustees
  2 33 shall make an actuarial investigation in the mortality,
  2 34 service, and compensation experience of the members and
  2 35 beneficiaries of the system, and the interest and other
  3  1 earnings on the moneys and other assets of the system, and
  3  2 shall make a valuation of the assets and liabilities of the
  3  3 funds retirement fund of the system, and taking into account
  3  4 the results of the investigation and valuation, the board of
  3  5 trustees shall:
  3  6    a.  Adopt adopt for the system, upon recommendation of the
  3  7 system's actuary, such actuarial methods and assumptions,
  3  8 interest rate, and mortality and other tables as shall be
  3  9 deemed necessary;
  3 10    b.  Certify the rates of contribution payable by the state
  3 11 of Iowa in accordance with section 97A.8 to conduct the
  3 12 actuarial valuation of the system.
  3 13    12.  ANNUAL ACTUARIAL VALUATION.
  3 14    a.  On the basis of the actuarial methods and assumptions,
  3 15 rate of interest, and tables adopted by the board of trustees,
  3 16 the actuary hired by the board of trustees shall make an
  3 17 annual actuarial valuation of the assets and liabilities of
  3 18 the funds of the system retirement fund created by this
  3 19 chapter.  As a result of the annual actuarial valuation, the
  3 20 board of trustees shall certify the rates of contribution
  3 21 payable by the state of Iowa in accordance with section 97A.8.
  3 22    b.  Effective with the fiscal year beginning July 1, 2008,
  3 23 the annual actuarial valuation required to be conducted shall
  3 24 include information as required by section 97D.5.
  3 25    Sec. 6.  Section 97A.5, subsection 13, paragraphs b, c, and
  3 26 d, Code 2007, are amended to read as follows:
  3 27    b.  The funds retirement fund established in section 97A.8
  3 28 shall be held in trust for the benefit of the members of the
  3 29 system and the members' beneficiaries.  No part of the corpus
  3 30 or income of the funds retirement fund shall be used for, or
  3 31 diverted to, purposes other than for the exclusive benefit of
  3 32 the members or the members' beneficiaries or for expenses
  3 33 incurred in the operation of the funds retirement fund.  A
  3 34 person shall not have any interest in, or right to, any part
  3 35 of the corpus or income of the funds retirement fund except as
  4  1 otherwise expressly provided.
  4  2    c.  Notwithstanding any provision of this chapter to the
  4  3 contrary, in the event of a complete discontinuance of
  4  4 contributions, for reasons other than achieving fully funded
  4  5 status upon an actuarially determined basis, or upon
  4  6 termination of the funds retirement fund established in
  4  7 section 97A.8, a member shall be vested, to the extent then
  4  8 funded, in the benefits which the member has accrued at the
  4  9 date of the discontinuance or termination.
  4 10    d.  Benefits payable from the funds retirement fund
  4 11 established in section 97A.8 to members and members'
  4 12 beneficiaries shall not be increased due to forfeitures from
  4 13 other members.  Forfeitures shall be used as soon as possible
  4 14 to reduce future contributions by the state to the pension
  4 15 accumulation retirement fund, except that the rate shall not
  4 16 be less than the minimum rate established in section 97A.8.
  4 17    Sec. 7.  Section 97A.5, subsection 14, Code 2007, is
  4 18 amended to read as follows:
  4 19    14.  INVESTMENT CONTRACTS.  The board of trustees may
  4 20 execute contracts and agreements with investment advisors,
  4 21 consultants, and investment management and benefit consultant
  4 22 firms in the administration of the funds retirement fund
  4 23 established in section 97A.8.
  4 24    Sec. 8.  Section 97A.6, subsection 7, Code 2007, is amended
  4 25 by adding the following new paragraph:
  4 26    NEW PARAGRAPH.  d.  Should a disability beneficiary under
  4 27 age fifty=five be employed in a public safety occupation, the
  4 28 disability beneficiary's retirement allowance shall cease.
  4 29 Notwithstanding any provision of this chapter to the contrary,
  4 30 if a disability beneficiary is employed in a public safety
  4 31 occupation that would otherwise constitute membership service,
  4 32 the disability beneficiary shall not become a member of the
  4 33 system.  For purposes of this paragraph, "public safety
  4 34 occupation" means a peace officer, as defined in section
  4 35 97A.1; a protection occupation, as defined in section 97B.49B;
  5  1 a sheriff or deputy sheriff as defined in section 97B.49C; and
  5  2 a police officer or fire fighter as defined in section 411.1,
  5  3 who was not restored to active service as provided by this
  5  4 subsection.
  5  5    Sec. 9.  Section 97A.6, subsection 11, Code 2007, is
  5  6 amended to read as follows:
  5  7    11.  PENSIONS OFFSET BY COMPENSATION BENEFITS.  Any amounts
  5  8 which may be paid or payable by the state under the provisions
  5  9 of any workers' compensation or similar law to a member or to
  5 10 the dependents of a member on account of any disability or
  5 11 death, shall be offset against and payable in lieu of any
  5 12 benefits payable out of funds the retirement fund provided by
  5 13 the state under the provisions of this chapter on account of
  5 14 the same disability or death.  In case the present value of
  5 15 the total commuted benefits under said workers' compensation
  5 16 or similar law is less than the pension reserve on present
  5 17 value of the benefits otherwise payable from funds the
  5 18 retirement fund provided by the state under this chapter, then
  5 19 the present value of the commuted payments shall be deducted
  5 20 from the pension reserve payable and such benefits as may be
  5 21 provided by the pension reserve system so reduced shall be
  5 22 payable under the provisions of this chapter.
  5 23    Sec. 10.  Section 97A.7, subsections 1, 2, and 3, Code
  5 24 Supplement 2007, are amended to read as follows:
  5 25    1.  The board of trustees shall be the trustees of the
  5 26 several funds retirement fund created by this chapter as
  5 27 provided in section 97A.8 and shall have full power to invest
  5 28 and reinvest such funds subject to the terms, conditions,
  5 29 limitations, and restrictions imposed by subsection 2 of this
  5 30 section and chapter 12F, and subject to like terms,
  5 31 conditions, limitations, and restrictions said trustees shall
  5 32 have full power to hold, purchase, sell, assign, transfer, or
  5 33 dispose of any of the securities and investments in which any
  5 34 of the funds created herein shall retirement fund which have
  5 35 been invested, as well as of the proceeds of said investments
  6  1 and any moneys belonging to said funds the retirement fund.
  6  2 The board of trustees may authorize the treasurer of state to
  6  3 exercise any of the duties of this section.  When so
  6  4 authorized the treasurer of state shall report any
  6  5 transactions to the board of trustees at its next monthly
  6  6 meeting.
  6  7    2.  The several funds retirement fund created by this
  6  8 chapter may be invested in any investments authorized for the
  6  9 Iowa public employees' retirement system in section 97B.7A.
  6 10    3.  The treasurer of the state shall be the custodian of
  6 11 the several funds retirement fund.  All payments from said
  6 12 funds the retirement fund shall be made by the treasurer only
  6 13 upon vouchers signed by two persons designated by the board of
  6 14 trustees.  A duly attested copy of the resolution of the board
  6 15 of trustees designating such persons and bearing on its face
  6 16 specimen signatures of such persons shall be filed with the
  6 17 treasurer of state as the treasurer's authority for making
  6 18 payments on such vouchers.  No voucher shall be drawn unless
  6 19 it shall previously have been allowed by resolution of the
  6 20 board of trustees.
  6 21    Sec. 11.  Section 97A.8, Code 2007, is amended to read as
  6 22 follows:
  6 23    97A.8  METHOD OF FINANCING.
  6 24    There is hereby created as a special fund, separate and
  6 25 apart from all other public moneys or funds of this state, the
  6 26 peace officers' retirement, accident, and disability system
  6 27 retirement fund, hereafter called the "retirement fund".  All
  6 28 the assets of the system created and established by this
  6 29 chapter shall be credited according to the purpose for which
  6 30 they are held to one of three funds, namely, the pension
  6 31 accumulation fund, the pension reserve fund, and the expense
  6 32 to the retirement fund.
  6 33    1.  PENSION ACCUMULATION FUND.  The pension accumulation
  6 34 fund shall be the fund in which shall be accumulated all All
  6 35 moneys for the payment of all pensions and other benefits
  7  1 payable from contributions made by the state and from which
  7  2 shall be paid the lump=sum death benefits for all members
  7  3 payable from the said contributions shall be accumulated in
  7  4 the retirement fund.  The refunds and benefits for all members
  7  5 and beneficiaries shall be payable from the retirement fund.
  7  6 Contributions to and payments from the pension accumulation
  7  7 retirement fund shall be as follows:
  7  8    a.  On account of each member there shall be paid annually
  7  9 into the pension accumulation retirement fund by the state of
  7 10 Iowa an amount equal to a certain percentage of the earnable
  7 11 compensation of the member to be known as the "normal
  7 12 contribution".  The rate percent of such contribution shall be
  7 13 fixed on the basis of the liabilities of the retirement system
  7 14 as shown by annual actuarial valuations.
  7 15    b.  (1)  On the basis of the actuarial methods and
  7 16 assumptions, rate of interest, and of the mortality, interest,
  7 17 and other tables adopted by the board of trustees, the board
  7 18 of trustees, upon the advice of the actuary hired by the board
  7 19 for that purpose, shall make each valuation required by this
  7 20 chapter pursuant to the requirements of section 97A.5 and
  7 21 shall immediately after making such valuation, determine the
  7 22 "normal contribution rate".  The normal contribution rate
  7 23 shall be the rate percent of the earnable compensation of all
  7 24 members obtained by deducting from the total liabilities of
  7 25 the fund the sum of the amount of the funds in hand to the
  7 26 credit of the fund and dividing the remainder by one percent
  7 27 of the present value of the prospective future compensation of
  7 28 all members as computed on the basis of the rate of interest
  7 29 and of mortality and service tables adopted by the board of
  7 30 trustees, all equal to the rate required by the system to
  7 31 discharge its liabilities, stated as a percentage of the
  7 32 earnable compensation of all members, and reduced by the
  7 33 employee contribution made pursuant to rate provided in this
  7 34 subsection.  However, the normal rate of contribution shall
  7 35 not be less than seventeen percent.  The normal rate of
  8  1 contribution shall be determined by the board of trustees
  8  2 after each valuation.  To assist in determining the normal
  8  3 rate of contribution, the board of trustees may adopt a
  8  4 smoothing method for valuing the assets of the system.  The
  8  5 smoothing method is designed to reduce changes in the normal
  8  6 contribution rate which could result from fluctuations in the
  8  7 market value of the assets of the system.
  8  8    (2)  Notwithstanding the provisions of subparagraph (1) to
  8  9 the contrary, the normal contribution rate shall be as
  8 10 follows:
  8 11    (a)  For the fiscal year beginning July 1, 2008, nineteen
  8 12 percent.
  8 13    (b)  For the fiscal year beginning July 1, 2009, twenty=one
  8 14 percent.
  8 15    (c)  For the fiscal year beginning July 1, 2010,
  8 16 twenty=three percent.
  8 17    (d)  For the fiscal year beginning July 1, 2011,
  8 18 twenty=five percent.
  8 19    (e)  For each fiscal year beginning on or after July 1,
  8 20 2012, the lesser of twenty=seven percent or the normal
  8 21 contribution rate as calculated pursuant to subparagraph (1).
  8 22    c.  The total amount payable in each year to the pension
  8 23 accumulation retirement fund shall not be less than the rate
  8 24 percent known as the normal contribution rate of the total
  8 25 compensation earnable by all members during the year.
  8 26 However, the aggregate payment by the state shall be
  8 27 sufficient when combined with the amount in the retirement
  8 28 fund to provide the pensions and other benefits payable out of
  8 29 the retirement fund during the then current year.
  8 30    d.  All lump=sum death benefits on account of death in
  8 31 active service payable from contributions of the state shall
  8 32 be paid from the pension accumulation retirement fund.
  8 33    e.  Upon the retirement or death of a member an amount
  8 34 equal to the pension reserve on any pension payable to the
  8 35 member or on account of the member's death shall be
  9  1 transferred from the pension accumulation fund to the pension
  9  2 reserve fund.
  9  3    f.  e.  Except as otherwise provided in paragraph "h" "g":
  9  4    (1)  An amount equal to three and one=tenth percent of each
  9  5 member's compensation from the earnable compensation of the
  9  6 member shall be paid to the pension accumulation retirement
  9  7 fund for the fiscal year beginning July 1, 1989.
  9  8    (2)  An amount equal to four and one=tenth percent of each
  9  9 member's compensation from the earnable compensation of the
  9 10 member shall be paid to the pension accumulation retirement
  9 11 fund for the fiscal year beginning July 1, 1990.
  9 12    (3)  An amount equal to five and one=tenth percent of each
  9 13 member's compensation from the earnable compensation of the
  9 14 member shall be paid to the pension accumulation retirement
  9 15 fund for the fiscal year beginning July 1, 1991.
  9 16    (4)  An amount equal to six and one=tenth percent of each
  9 17 member's compensation from the earnable compensation of the
  9 18 member shall be paid to the pension accumulation retirement
  9 19 fund for the fiscal year beginning July 1, 1992.
  9 20    (5)  An amount equal to seven and one=tenth percent of each
  9 21 member's compensation from the earnable compensation of the
  9 22 member shall be paid to the pension accumulation retirement
  9 23 fund for the fiscal year beginning July 1, 1993.
  9 24    (6)  An amount equal to eight and one=tenth percent of each
  9 25 member's compensation from the earnable compensation of the
  9 26 member shall be paid to the pension accumulation retirement
  9 27 fund for the fiscal period beginning July 1, 1994, through
  9 28 December 31, 1994, and an amount equal to eight and
  9 29 thirty=five hundredths percent of each member's compensation
  9 30 from the earnable compensation of the member shall be paid to
  9 31 the pension accumulation retirement fund for the fiscal period
  9 32 beginning January 1, 1995, through June 30, 1995.
  9 33    (7)  An amount equal to nine and thirty=five hundredths
  9 34 percent of each member's compensation from the earnable
  9 35 compensation of the member shall be paid to the pension
 10  1 accumulation retirement fund for the fiscal year beginning
 10  2 July 1, 1995.
 10  3    (8)  Notwithstanding any other provision of this chapter,
 10  4 beginning July 1, 1996, and each fiscal year thereafter, an
 10  5 amount equal to the member's contribution rate times each
 10  6 member's compensation shall be paid to the pension
 10  7 accumulation retirement fund from the earnable compensation of
 10  8 the member.  For the purposes of this subparagraph, the
 10  9 member's contribution rate shall be nine and thirty=five
 10 10 hundredths percent.  However, the system shall increase the
 10 11 member's contribution rate as necessary to cover any increase
 10 12 in cost to the system resulting from statutory changes which
 10 13 are enacted by any session of the general assembly meeting
 10 14 after January 1, 1995, if the increase cannot be absorbed
 10 15 within the contribution rates otherwise established pursuant
 10 16 to this paragraph, but subject to a maximum employee
 10 17 contribution rate of eleven and three=tenths percent.  After
 10 18 the employee contribution reaches eleven and three=tenths
 10 19 percent, sixty percent of the additional cost of such
 10 20 statutory changes shall be paid by the employer under
 10 21 paragraph "c" and forty percent of the additional cost shall
 10 22 be paid by employees under this paragraph subparagraph (8).
 10 23    g.  f.  The board of trustees shall certify to the director
 10 24 of the department of administrative services and the director
 10 25 of the department of administrative services shall cause to be
 10 26 deducted from the earnable compensation of each member the
 10 27 contribution required under this subsection and shall forward
 10 28 the contributions to the board of trustees for recording and
 10 29 for deposit in the pension accumulation retirement fund.
 10 30    The deductions provided for under this subsection shall be
 10 31 made notwithstanding that the minimum compensation provided by
 10 32 law for any member is reduced.  Every member is deemed to
 10 33 consent to the deductions made under this section.
 10 34    h.  g.  Notwithstanding the provisions of paragraph "f"
 10 35 "e", the following transition percentages apply to members'
 11  1 contributions as specified:
 11  2    (1)  For members who on July 1, 1990, have attained the age
 11  3 of forty=nine years or more, an amount equal to nine and
 11  4 one=tenth percent of each member's compensation from the
 11  5 earnable compensation of the member shall be paid to the
 11  6 pension accumulation retirement fund for the fiscal period
 11  7 beginning July 1, 1990, through October 15, 1992, and
 11  8 commencing October 16, 1992, and for each subsequent fiscal
 11  9 period, the rates specified in paragraph "f" "e",
 11 10 subparagraphs (4) through (8), shall apply.
 11 11    (2)  For members who on July 1, 1990, have attained the age
 11 12 of forty=eight years but have not attained the age of
 11 13 forty=nine years, an amount equal to eight and one=tenth
 11 14 percent shall be paid for the fiscal year beginning July 1,
 11 15 1990, and an amount equal to nine and one=tenth percent shall
 11 16 be paid for the fiscal period beginning July 1, 1991, through
 11 17 October 15, 1992, and commencing October 16, 1992, and for
 11 18 each subsequent fiscal period, the rates specified in
 11 19 paragraph "f" "e", subparagraphs (4) through (8), shall apply.
 11 20    (3)  For members who on July 1, 1990, have attained the age
 11 21 of forty=seven years but have not attained the age of
 11 22 forty=eight years, an amount equal to seven and one=tenth
 11 23 percent shall be paid for the fiscal year beginning July 1,
 11 24 1990, an amount equal to eight and one=tenth percent shall be
 11 25 paid for the fiscal year beginning July 1, 1991, and an amount
 11 26 equal to nine and one=tenth percent shall be paid for the
 11 27 fiscal period beginning July 1, 1992, through October 15,
 11 28 1992, and commencing October 16, 1992, and for each subsequent
 11 29 fiscal period, the rates specified in paragraph "f" "e",
 11 30 subparagraphs (4) through (8), shall apply.
 11 31    (4)  For members who on July 1, 1990, have attained the age
 11 32 of forty=six years but have not attained the age of
 11 33 forty=seven years, an amount equal to six and one=tenth
 11 34 percent shall be paid for the fiscal year beginning July 1,
 11 35 1990, an amount equal to seven and one=tenth percent shall be
 12  1 paid for the fiscal year beginning July 1, 1991, an amount
 12  2 equal to eight and one=tenth percent shall be paid for the
 12  3 fiscal period beginning July 1, 1992, through October 15,
 12  4 1992, and commencing October 16, 1992, and for each subsequent
 12  5 fiscal period, the rates specified in paragraph "f" "e",
 12  6 subparagraphs (4) through (8), shall apply.
 12  7    (5)  For members who on July 1, 1990, have attained the age
 12  8 of forty=five years but have not attained the age of forty=six
 12  9 years, an amount equal to five and one=tenth percent shall be
 12 10 paid for the fiscal year beginning July 1, 1990, an amount
 12 11 equal to six and one=tenth percent shall be paid for the
 12 12 fiscal year beginning July 1, 1991, and an amount equal to
 12 13 seven and one=tenth percent shall be paid for the fiscal
 12 14 period beginning July 1, 1992, through October 15, 1992.
 12 15 Commencing October 16, 1992, and for each subsequent fiscal
 12 16 period, the rates specified in paragraph "f" "e",
 12 17 subparagraphs (4) through (8), shall apply.
 12 18    i.  h.  (1)  Notwithstanding paragraph "g" "f" or other
 12 19 provisions of this chapter, beginning January 1, 1995, for
 12 20 federal income tax purposes, and beginning January 1, 1999,
 12 21 for state income tax purposes, member contributions required
 12 22 under paragraph "f" "e" or "h" "g" which are picked up by the
 12 23 department shall be considered employer contributions for
 12 24 federal and state income tax purposes, and the department
 12 25 shall pick up the member contributions to be made under
 12 26 paragraph "f" "e" or "h" "g" by its employees.  The department
 12 27 shall pick up these contributions by reducing the salary of
 12 28 each of its employees covered by this chapter by the amount
 12 29 which each employee is required to contribute under paragraph
 12 30 "f" "e" or "h" "g" and shall certify the amount picked up in
 12 31 lieu of the member contributions to the department of
 12 32 administrative services.  The department of administrative
 12 33 services shall forward the amount of the contributions picked
 12 34 up to the board of trustees for recording and deposit in the
 12 35 pension accumulation retirement fund.
 13  1    (2)  Member contributions picked up by the department under
 13  2 subparagraph (1) shall be treated as employer contributions
 13  3 for federal and state income tax purposes only and for all
 13  4 other purposes of this chapter shall be treated as employee
 13  5 contributions and deemed part of the employee's earnable
 13  6 compensation or salary.
 13  7    2.  PENSION RESERVE FUND.  The pension reserve fund shall
 13  8 be the fund in which shall be held the reserves on all
 13  9 pensions granted to members or to their beneficiaries and from
 13 10 which such pensions and benefits in lieu thereof shall be
 13 11 paid.  Should a beneficiary retired on account of disability
 13 12 be restored to active service and again become a member of the
 13 13 system, the member's pension reserve shall be transferred from
 13 14 the pension reserve fund to the pension accumulation fund.
 13 15 Should the pension of a disability beneficiary be reduced as a
 13 16 result of an increase in the beneficiary's amount earned, the
 13 17 amount of the annual reduction in the beneficiary's pension
 13 18 shall be paid annually into the pension accumulation fund
 13 19 during the period of such reduction.
 13 20    3.  2.  a.  EXPENSE FUND.  The expense fund shall be the
 13 21 fund to which shall be credited all money provided by the
 13 22 state of Iowa to pay the administration expenses of the system
 13 23 and from which shall be paid all All the expenses necessary in
 13 24 connection with the administration and operation of the system
 13 25 shall be paid from the retirement fund.  Biennially the board
 13 26 of trustees shall estimate the amount of money necessary to be
 13 27 paid into the expense fund during the ensuing biennium to
 13 28 provide for the expense of operation of the system.
 13 29 Investment management expenses shall be charged to the
 13 30 investment income of the system and there is appropriated from
 13 31 the system an amount required for the investment management
 13 32 expenses.  The board of trustees shall report the investment
 13 33 management expenses for the fiscal year as a percent of the
 13 34 market value of the system.
 13 35    b.  For purposes of this subsection, investment management
 14  1 expenses are limited to the following:
 14  2    a.  (1)  Fees for investment advisors, consultants, and
 14  3 investment management and benefit consultant firms hired by
 14  4 the board of trustees in administering this chapter.
 14  5    b.  (2)  Fees and costs for safekeeping fund assets.
 14  6    c.  (3)  Costs for performance and compliance monitoring,
 14  7 and accounting for fund investments.
 14  8    d.  (4)  Any other costs necessary to prudently invest or
 14  9 protect the assets of the fund.
 14 10    Sec. 12.  Section 97A.11, Code 2007, is amended to read as
 14 11 follows:
 14 12    97A.11  CONTRIBUTIONS BY THE STATE.
 14 13    On or before the first day of November in each year, the
 14 14 board of trustees shall certify to the director of the
 14 15 department of administrative services the amounts which will
 14 16 become due and payable during the year next following to the
 14 17 pension accumulation retirement fund and the expense fund.
 14 18 The amounts so certified shall be paid by the director of the
 14 19 department of administrative services out of the funds
 14 20 appropriated for the Iowa department of public safety, to the
 14 21 treasurer of state, the same to be credited to the system for
 14 22 the ensuing year.
 14 23    Sec. 13.  Section 97A.12, Code 2007, is amended to read as
 14 24 follows:
 14 25    97A.12  EXEMPTION FROM EXECUTION AND OTHER PROCESS OR
 14 26 ASSIGNMENT == EXCEPTIONS.
 14 27    The right of any person to a pension, annuity, or
 14 28 retirement allowance, to the return of contributions, the
 14 29 pension, annuity, or retirement allowance itself, any optional
 14 30 benefit or death benefit, any other right accrued or accruing
 14 31 to any person under this chapter, and the moneys in the
 14 32 various funds retirement fund created under this chapter, are
 14 33 not subject to execution, garnishment, attachment, or any
 14 34 other process whatsoever, and are unassignable except for the
 14 35 purposes of enforcing child, spousal, or medical support
 15  1 obligations or marital property orders, or as otherwise
 15  2 specifically provided in this chapter.  For the purposes of
 15  3 enforcing child, spousal, or medical support obligations, the
 15  4 garnishment or attachment of or the execution against
 15  5 compensation due a person under this chapter shall not exceed
 15  6 the amount specified in 15 U.S.C. } 1673(b).
 15  7    Sec. 14.  Section 97A.14, Code 2007, is amended to read as
 15  8 follows:
 15  9    97A.14  HOSPITALIZATION AND MEDICAL ATTENTION.
 15 10    The board of trustees shall provide hospital, nursing, and
 15 11 medical attention for the members in service when injured
 15 12 while in the performance of their duties and shall continue to
 15 13 provide hospital, nursing, and medical attention for injuries
 15 14 or diseases incurred while in the performance of their duties
 15 15 for the members receiving a retirement allowance under section
 15 16 97A.6, subsection 6.  The cost of hospital, nursing, and
 15 17 medical attention shall be paid out of the expense retirement
 15 18 fund.  However, any amounts received by the injured person
 15 19 under the workers' compensation law of the state, or from any
 15 20 other source for such specific purposes, shall be deducted
 15 21 from the amount paid by the board of trustees provisions of
 15 22 this section.
 15 23    Sec. 15.  Section 97A.14A, subsection 5, Code 2007, is
 15 24 amended to read as follows:
 15 25    5.  All funds recovered by the system under this section
 15 26 shall be deposited in the pension accumulation retirement fund
 15 27 created in section 97A.8.
 15 28    Sec. 16.  Section 97A.15, subsection 2, paragraph a, Code
 15 29 2007, is amended to read as follows:
 15 30    a.  "Accumulated contributions" means the sum of all
 15 31 amounts deducted from the compensation of a member and
 15 32 credited to the member's individual account in the annuity
 15 33 savings fund together with regular interest thereon as
 15 34 provided in this subsection.  Accumulated contributions do not
 15 35 include any amount deducted from the compensation of a member
 16  1 and credited to the pension accumulation retirement fund.
 16  2    Sec. 17.  Section 97A.15, subsection 8, Code 2007, is
 16  3 amended to read as follows:
 16  4    8.  The actuary shall annually determine the amount
 16  5 required in the annuity reserve fund.  If the amount required
 16  6 is less than the amount in the annuity reserve fund, the board
 16  7 of trustees shall transfer the excess funds from the annuity
 16  8 reserve fund to the pension accumulation retirement fund.  If
 16  9 the amount required is more than the amount in the annuity
 16 10 reserve fund, the board of trustees shall transfer the amount
 16 11 prescribed by the actuary to the annuity reserve fund from the
 16 12 pension accumulation retirement fund.
 16 13                           DIVISION II
 16 14            IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
 16 15    Sec. 18.  Section 97B.1A, subsection 20, paragraph a, Code
 16 16 2007, is amended to read as follows:
 16 17    a.  Service in the armed forces of the United States, if
 16 18 the employee was employed by a covered employer immediately
 16 19 prior to entry into the armed forces, and if the any of the
 16 20 following requirements are met:
 16 21    (1)  The employee was released from service and returns to
 16 22 covered employment with an employer within twelve months of
 16 23 the date on which the employee has the right of release from
 16 24 service or within a longer period as required by the
 16 25 applicable laws of the United States.
 16 26    (2)  The employee, while serving on active duty in the
 16 27 armed forces of the United States in an area designated by the
 16 28 president of the United States or the United States Congress
 16 29 as a combat zone or as a qualified hazardous duty area, or
 16 30 deployed outside the United States away from the individual's
 16 31 permanent duty station while participating in an operation
 16 32 designated by the United States secretary of defense as a
 16 33 contingency operation as defined in 10 U.S.C. } 101(a)(13), or
 16 34 which became such a contingency operation by the operation of
 16 35 law, dies, or suffers an injury or acquires a disease
 17  1 resulting in death, so long as the death from the injury or
 17  2 disease occurs within a two=year period from the date the
 17  3 employee suffered the active duty injury or disease and the
 17  4 active duty injury or disease prevented the employee from
 17  5 returning to covered employment as provided in subparagraph
 17  6 (1).
 17  7    Sec. 19.  Section 97B.1A, subsection 26, paragraph a,
 17  8 subparagraph (2), subparagraph subdivision (i), Code 2007, is
 17  9 amended to read as follows:
 17 10    (i)  Payments for allowances made to an employee that are
 17 11 not included in an employee's federal taxable income except
 17 12 for those allowances included as wages for a member of the
 17 13 general assembly.
 17 14    Sec. 20.  Section 97B.1A, subsection 26, paragraph a,
 17 15 subparagraph (2), Code 2007, is amended by adding the
 17 16 following new subparagraph subdivision:
 17 17    NEW SUBPARAGRAPH SUBDIVISION.  (n)  Bonuses of any type,
 17 18 whether paid in a lump sum or in installments.
 17 19    Sec. 21.  Section 97B.4, subsection 2, Code Supplement
 17 20 2007, is amended by adding the following new paragraph:
 17 21    NEW PARAGRAPH.  d.  In administering this chapter, the
 17 22 system shall not be a participating agency for purposes of
 17 23 chapter 8A, subchapter II.
 17 24    Sec. 22.  Section 97B.4, subsection 4, paragraph d, Code
 17 25 Supplement 2007, is amended to read as follows:
 17 26    d.  ANNUAL VALUATION OF ASSETS.  The system shall cause an
 17 27 annual actuarial valuation to be made of the assets and
 17 28 liabilities of the retirement system and shall prepare an
 17 29 annual statement of the amounts to be contributed under this
 17 30 chapter, and shall publish annually such valuation of the
 17 31 assets and liabilities and the statement of receipts and
 17 32 disbursements of the retirement system.  Based upon the
 17 33 actuarial methods and assumptions adopted by the board for the
 17 34 annual actuarial valuation, the system shall certify to the
 17 35 governor the contribution rates determined thereby as the
 18  1 rates necessary and sufficient for members and employers to
 18  2 fully fund the benefits and retirement allowances being
 18  3 credited.  Effective with the fiscal year beginning July 1,
 18  4 2008, the annual actuarial valuation required by this
 18  5 paragraph shall include information as required by section
 18  6 97D.5 for each membership group which separately determines
 18  7 contribution rates under this chapter.
 18  8    Sec. 23.  Section 97B.7, subsection 3, paragraph d, Code
 18  9 2007, is amended to read as follows:
 18 10    d.  To be used to pay for investment management expenses
 18 11 incurred in the management of the retirement fund.  Expenses
 18 12 incurred pursuant to this paragraph shall be charged to the
 18 13 investment income of the retirement fund.  However, the amount
 18 14 appropriated for a fiscal year under this paragraph shall not
 18 15 exceed four=tenths of one percent of the market value of the
 18 16 retirement fund.
 18 17    Sec. 24.  Section 97B.9, subsections 1 and 2, Code 2007,
 18 18 are amended to read as follows:
 18 19    1.  An employer shall be charged the greater of ten twenty
 18 20 dollars per occurrence or interest at the combined interest
 18 21 and dividend rate required under section 97B.70 for the
 18 22 applicable calendar year for contributions unpaid on the date
 18 23 on which they are due and payable as prescribed by the system.
 18 24 The system may adopt rules prescribing circumstances for which
 18 25 the interest or charge shall not accrue with respect to
 18 26 contributions required.  Interest or charges collected
 18 27 pursuant to this section shall be paid into the Iowa public
 18 28 employees' retirement fund.
 18 29    2.  If within thirty days after due notice the employer
 18 30 defaults in payment of contributions or interest thereon, the
 18 31 amount due shall may be collected by civil action in the name
 18 32 of the system, and the employer adjudged in default shall pay
 18 33 the costs of such action.  Civil actions brought under this
 18 34 section to collect contributions or interest thereon shall be
 18 35 heard by the court at the earliest possible date and shall be
 19  1 entitled to preference upon the calendar of the court over all
 19  2 other civil actions.
 19  3    Sec. 25.  Section 97B.10, subsection 3, Code 2007, is
 19  4 amended to read as follows:
 19  5    3.  Except as provided in this subsection, interest
 19  6 Interest shall not be paid on credits issued pursuant to this
 19  7 section.  However, if a credit for contributions paid prior to
 19  8 an individual's decision to elect out of coverage pursuant to
 19  9 section 97B.42A is issued, accumulated interest and interest
 19 10 on dividends as provided in section 97B.70 shall apply.  In
 19 11 addition, the system may, at any time, apply accumulated
 19 12 interest and interest dividends as provided in section 97B.70
 19 13 on any credits issued under this section if the system finds
 19 14 that the crediting of interest is just and equitable.
 19 15    Sec. 26.  Section 97B.11, Code 2007, is amended to read as
 19 16 follows:
 19 17    97B.11  CONTRIBUTIONS BY EMPLOYER AND EMPLOYEE.
 19 18    1.  Each employer shall deduct from the wages of each
 19 19 member of the retirement system a contribution in the amount
 19 20 of the applicable employee percentage of the covered wages
 19 21 paid by the employer and such additional amount if otherwise
 19 22 required by law, until the member's termination from
 19 23 employment.  The contributions of the employer shall be in the
 19 24 amount of the applicable employer percentage of the covered
 19 25 wages of the member and such additional amount if otherwise
 19 26 required by law.
 19 27    2.  For Prior to July 1, 2011, for purposes of this
 19 28 section, unless the context otherwise requires:
 19 29    a.  "Applicable employee percentage" means the percentage
 19 30 rate equal to three and seven=tenths percent plus forty
 19 31 percent of the total additional percentage.
 19 32    b.  "Applicable employer percentage" means the percentage
 19 33 rate equal to five and seventy=five hundredths percent plus
 19 34 sixty percent of the total additional percentage.
 19 35    c.  "Total additional percentage" means as follows:
 20  1    (1)  For, for the fiscal period beginning July 1, 2007,
 20  2 through June 30, 2011, the total additional percentage for a
 20  3 fiscal year shall be the total additional percentage for the
 20  4 prior fiscal year plus, only if the total comparison
 20  5 percentage is greater than the total of the applicable
 20  6 employee percentage and the applicable employer percentage for
 20  7 the prior fiscal year, one=half percentage point.
 20  8    (2)  For each fiscal year beginning on or after July 1,
 20  9 2011, the total additional percentage shall be the total
 20 10 additional percentage for the prior fiscal year.
 20 11    d.  "Total comparison percentage" means the percentage rate
 20 12 that the system determines, based upon the most recent
 20 13 actuarial valuation of the retirement system, would be
 20 14 sufficient to amortize the unfunded actuarial liability of the
 20 15 retirement system in ten years.
 20 16    3.  On and after July 1, 2011, for purposes of this
 20 17 section, unless the context otherwise requires:
 20 18    a.  For members in regular service:
 20 19    (1)  "Applicable employee percentage" means the percentage
 20 20 rate equal to forty percent of the required contribution rate
 20 21 for members in regular service.
 20 22    (2)  "Applicable employer percentage" means the percentage
 20 23 rate equal to sixty percent of the required contribution rate
 20 24 for members in regular service.
 20 25    b.  For members in special service in a protection
 20 26 occupation as described in section 97B.49B:
 20 27    (1)  "Applicable employee percentage" means the percentage
 20 28 rate equal to forty percent of the required contribution rate
 20 29 for members described in section 97B.49B.
 20 30    (2)  "Applicable employer percentage" means the percentage
 20 31 rate equal to sixty percent of the required contribution rate
 20 32 for members described in section 97B.49B.
 20 33    c.  For members in special service as a county sheriff or
 20 34 deputy sheriff as described in section 97B.49C:
 20 35    (1)  "Applicable employee percentage" means the percentage
 21  1 rate equal to fifty percent of the required contribution rate
 21  2 for members described in section 97B.49C.
 21  3    (2)  "Applicable employer percentage" means the percentage
 21  4 rate equal to fifty percent of the required contribution rate
 21  5 for members described in section 97B.49C.
 21  6    d.  "Required contribution rate" means that percentage of
 21  7 the covered wages of members in regular service, members
 21  8 described in section 97B.49B, and members described in section
 21  9 97B.49C, that the system shall, for each fiscal year,
 21 10 separately set for members in each membership category as
 21 11 provided in this paragraph.  The required contribution rate
 21 12 for a membership category shall be the contribution rate the
 21 13 system actuarially determines, based upon the most recent
 21 14 actuarial valuation of the system and using the actuarial
 21 15 methods, assumptions, and funding policy approved by the
 21 16 investment board, is the rate required by the system to
 21 17 discharge its liabilities as a percentage of the covered wages
 21 18 of members in that membership category.  However, the required
 21 19 contribution rate set by the system for a fiscal year shall
 21 20 not vary by more than one=half percentage point from the
 21 21 required contribution rate for the prior fiscal year.
 21 22    Sec. 27.  Section 97B.14, Code 2007, is amended to read as
 21 23 follows:
 21 24    97B.14  CONTRIBUTIONS FORWARDED.
 21 25    Contributions deducted from the wages of the member under
 21 26 section 97B.11 prior to January 1, 1995, member contributions
 21 27 picked up by the employer under section 97B.11A beginning
 21 28 January 1, 1995, and the employer's contribution shall be
 21 29 forwarded to the system for recording and deposited with the
 21 30 treasurer of the state to the credit of the Iowa public
 21 31 employees' retirement fund.  Contributions shall be remitted
 21 32 monthly, if total contributions by both employee and employer
 21 33 amount to one hundred dollars or more each month, and shall be
 21 34 otherwise paid in such manner, at such times, and under such
 21 35 conditions, either by copies of payrolls or other methods
 22  1 necessary or helpful in securing proper identification of the
 22  2 member, as may be prescribed by the system.
 22  3    Sec. 28.  Section 97B.33, Code 2007, is amended to read as
 22  4 follows:
 22  5    97B.33  CERTIFICATION TO DIRECTOR PAYMENT TO INDIVIDUALS.
 22  6    Upon final decision of the system, or upon final judgment
 22  7 of any court of competent jurisdiction, that any person is
 22  8 entitled to any payment or payments under this chapter, the
 22  9 system shall certify to the director of the department of
 22 10 administrative services the name and address of the person so
 22 11 entitled to receive such payment or payments, the amount of
 22 12 such payment or payments, and the time at which such payment
 22 13 or payments should be made, and the system, through the
 22 14 director of the department of administrative services, shall
 22 15 make payment in accordance with the certification of the
 22 16 system to the person, provided that where judicial review of
 22 17 the system system's decision is or may be sought in accordance
 22 18 with the terms of the Iowa administrative procedure Act,
 22 19 chapter 17A, certification of payment may be withheld pending
 22 20 such review.  The director of the department of administrative
 22 21 services shall not be held personally liable for any payment
 22 22 or payments made in accordance with a certification by the
 22 23 system.
 22 24    Sec. 29.  Section 97B.34A, subsections 1 and 2, Code 2007,
 22 25 are amended to read as follows:
 22 26    1.  If the total sum to be paid to the minor is less than
 22 27 ten the greater of twenty=five thousand dollars or the maximum
 22 28 amount permitted under section 565B.7, subsection 3, the funds
 22 29 may be paid to an adult as custodian for the minor.  The
 22 30 custodian must complete the proper forms as determined by the
 22 31 system.
 22 32    2.  If the total sum to be paid to the minor is equal to or
 22 33 more than ten thousand dollars the amount authorized in
 22 34 subsection 1, the funds must be paid to a court=established
 22 35 conservator.  The system shall not make payment until the
 23  1 conservatorship has been established and the system has
 23  2 received the appropriate documentation.
 23  3    Sec. 30.  Section 97B.38, Code 2007, is amended to read as
 23  4 follows:
 23  5    97B.38  FEES FOR SERVICES.
 23  6    The system may, by rule, prescribe reasonable fees which
 23  7 may be charged for production costs incurred, including staff
 23  8 time and materials, associated with performing to perform its
 23  9 duties under this chapter for active, inactive, and retired
 23 10 members, beneficiaries, and the general public, where such
 23 11 production costs are more than de minimis, as determined by
 23 12 the system.
 23 13    Sec. 31.  Section 97B.49B, subsection 1, paragraph e, Code
 23 14 2007, is amended by adding the following new subparagraphs:
 23 15    NEW SUBPARAGRAPH.  (9)  A jailer or detention officer who
 23 16 performs duties as a jailer, including but not limited to the
 23 17 transportation of inmates, who is certified as having
 23 18 completed jailer training pursuant to chapter 80B, and who is
 23 19 employed by a county as a jailer.
 23 20    NEW SUBPARAGRAPH.  (10)  An employee covered by the merit
 23 21 system as provided in chapter 8A, subchapter IV, whose primary
 23 22 duty is providing security at Iowa national guard
 23 23 installations and facilities and who carries or is licensed to
 23 24 carry a firearm while performing those duties.
 23 25    NEW SUBPARAGRAPH.  (11)  An emergency medical care provider
 23 26 who provides emergency medical services, as defined in section
 23 27 147A.1, and who is not a member of the retirement systems
 23 28 established in chapter 410 or 411.
 23 29    NEW SUBPARAGRAPH.  (12)  An investigator employed by a
 23 30 county attorney's office who is a certified law enforcement
 23 31 officer and who is deputized as an investigator for the county
 23 32 attorney's office by the sheriff of the applicable county.
 23 33    Sec. 32.  Section 97B.49B, subsection 3, paragraph a, Code
 23 34 2007, is amended by striking the paragraph.
 23 35    Sec. 33.  Section 97B.49C, subsection 3, paragraph a, Code
 24  1 2007, is amended by striking the paragraph.
 24  2    Sec. 34.  Section 97B.49F, subsection 1, paragraph b,
 24  3 subparagraph (2), subparagraph subdivision (b), Code 2007, is
 24  4 amended to read as follows:
 24  5    (b)  The percentage representing the percentage amount the
 24  6 actuary has certified, in the annual actuarial valuation of
 24  7 the retirement system as of June 30 of the year in which the
 24  8 dividend is to be paid, that the fund can absorb without
 24  9 requiring an increase in the employer and employee
 24 10 contributions to the fund.  The actuary's certification of
 24 11 such percentage amount shall be based on a comparison of the
 24 12 actuarially required contribution rate for the fiscal year of
 24 13 the dividend adjustment to the statutory contribution rate for
 24 14 that same fiscal year.  If the actuarially required
 24 15 contribution rate exceeds the statutory contribution rate for
 24 16 that same fiscal year, the percentage amount shall be zero.
 24 17    Sec. 35.  Section 97B.49H, subsection 3, Code 2007, is
 24 18 amended to read as follows:
 24 19    3.  The system shall annually determine the amount to be
 24 20 credited to the supplemental accounts of active members.  The
 24 21 total amount credited to the supplemental accounts of all
 24 22 active members shall not exceed the amount that the system
 24 23 determines, in consultation with the system's actuary, can be
 24 24 absorbed without significantly impacting the funded status of
 24 25 leaves the system fully funded following the crediting of the
 24 26 total amount to the supplemental accounts.  The amount to be
 24 27 credited shall not be greater than the amount calculated by
 24 28 multiplying the member's covered wages for the applicable wage
 24 29 reporting period by the supplemental rate.  For purposes of
 24 30 this subsection, the supplemental rate is the difference, if
 24 31 positive, between the combined employee and employer statutory
 24 32 contribution rates in effect under section 97B.11 and the
 24 33 normal cost rate of the retirement system as determined by the
 24 34 system's actuary in the most recent annual actuarial valuation
 24 35 of the retirement system.  The credits shall be made at least
 25  1 quarterly to each member's account at the time that covered
 25  2 wages are reported for each wage reporting period during the
 25  3 calendar year following a determination that the retirement
 25  4 system does not have an unfunded accrued liability will remain
 25  5 fully funded following the crediting of the total amount to
 25  6 the supplemental accounts.  The normal cost rate, calculated
 25  7 according to the actuarial cost method used, is the percent of
 25  8 pay allocated to each year of service that is necessary to
 25  9 fund projected benefits over all members' service with the
 25 10 retirement system.
 25 11    Sec. 36.  Section 97B.50, subsection 2, Code 2007, is
 25 12 amended by adding the following new paragraph:
 25 13    NEW PARAGRAPH.  d.  For a vested member who retires from
 25 14 the retirement system due to disability on or after July 1,
 25 15 2009, and commences receiving disability benefits pursuant to
 25 16 the federal Railroad Retirement Act, 45 U.S.C. } 231 et seq.,
 25 17 or the federal Social Security Act, 42 U.S.C. } 423 et seq.,
 25 18 the system may require the vested member to certify on an
 25 19 annual basis continued eligibility for disability payments
 25 20 under the federal Railroad Retirement Act or the federal
 25 21 Social Security Act.  If the vested member is under the age at
 25 22 which disability benefits are converted under the federal
 25 23 Social Security Act or the federal Railroad Retirement Act to
 25 24 retirement benefits and is no longer eligible for disability
 25 25 payments under either the federal Railroad Retirement Act or
 25 26 the federal Social Security Act, the vested member shall no
 25 27 longer be eligible to receive retirement benefits as provided
 25 28 by this subsection.  If the system has paid retirement
 25 29 benefits to the member between the month the member was no
 25 30 longer eligible for payment pursuant to the federal Railroad
 25 31 Retirement Act or the federal Social Security Act and the
 25 32 month the system terminated retirement benefits under this
 25 33 paragraph, the member shall return all retirement benefits
 25 34 paid by the system following the termination of such federal
 25 35 disability benefits, plus interest.  The system shall adopt
 26  1 rules pursuant to chapter 17A to implement this paragraph.
 26  2    Sec. 37.  Section 97B.50A, subsection 12, Code 2007, is
 26  3 amended to read as follows:
 26  4    12.  CONTRIBUTIONS.  The expenses incurred in the
 26  5 administration of this section by the system shall be paid
 26  6 through contributions as determined pursuant to section
 26  7 97B.49B, subsection 3, or section 97B.49C, subsection 3, as
 26  8 applicable 97B.11.
 26  9    Sec. 38.  Section 97B.52, subsection 1, paragraph a,
 26 10 unnumbered paragraphs 1 and 3, Code 2007, are amended to read
 26 11 as follows:
 26 12    A lump sum payment equal to the accumulated contributions
 26 13 of the member at the date of death plus the product of an
 26 14 amount equal to the highest year of covered wages of the
 26 15 deceased member and the number of years of membership service
 26 16 divided by the applicable denominator.  However, a lump sum
 26 17 payment made to a beneficiary under this paragraph due to the
 26 18 death of a member shall not be less than the amount that would
 26 19 have been payable on the death of the member on June 30, 1984,
 26 20 under this paragraph as it appeared in the 1983 Code.
 26 21    Effective July 1, 1978, a method of payment under this
 26 22 paragraph filed with the system by a member does not apply.
 26 23    Sec. 39.  Section 97B.53B, Code 2007, is amended to read as
 26 24 follows:
 26 25    97B.53B  ROLLOVERS OF MEMBERS' ACCOUNTS.
 26 26    1.  As used in this section, unless the context otherwise
 26 27 requires, and to the extent permitted by the internal revenue
 26 28 service:
 26 29    a.  "Direct rollover" means a payment by the system to the
 26 30 eligible retirement plan specified by the member or the
 26 31 member's surviving spouse an eligible person.
 26 32    b.  "Eligible person" means any of the following:
 26 33    (1)  The member.
 26 34    (2)  The member's surviving spouse.
 26 35    (3)  The member's spouse or former spouse as an alternate
 27  1 payee under a qualified domestic relations order.
 27  2    (4)  Effective January 1, 2007, the member's nonspouse
 27  3 beneficiaries who are designated beneficiaries as defined by
 27  4 section 401(a)(9)(E) of the federal Internal Revenue Code, as
 27  5 authorized under section 829 of the federal Pension Protection
 27  6 Act of 2006.
 27  7    c.  "Eligible retirement plan" means either, for an
 27  8 eligible person, any of the following retirement plans that
 27  9 accepts can accept an eligible rollover distribution from a
 27 10 member or a member's surviving spouse that eligible person:
 27 11    (1)  An individual retirement account in accordance with
 27 12 section 408(a) of the federal Internal Revenue Code.
 27 13    (2)  An individual retirement annuity in accordance with
 27 14 section 408(b) of the federal Internal Revenue Code.
 27 15    (3)  In addition, an "eligible retirement plan" includes an
 27 16 An annuity plan in accordance with section 403(a) of the
 27 17 federal Internal Revenue Code, or a qualified trust in
 27 18 accordance with section 401(a) of the federal Internal Revenue
 27 19 Code, that accepts an eligible rollover distribution from a
 27 20 member.
 27 21    (4)  Effective January 1, 2002, the term "eligible
 27 22 retirement plan" also includes an annuity contract described
 27 23 in section 403(b) of the federal Internal Revenue Code, and an
 27 24 eligible plan under section 457(b) of the federal Internal
 27 25 Revenue Code which is maintained by a state, political
 27 26 subdivision of a state, or any agency or instrumentality of a
 27 27 state or political subdivision of a state that chooses to
 27 28 separately account for amounts transferred into such eligible
 27 29 retirement plan from the system.
 27 30    (5)  Effective January 1, 2008, a Roth individual
 27 31 retirement account or a Roth individual retirement annuity
 27 32 established under section 408A of the Internal Revenue Code.
 27 33    c. d.  (1)  "Eligible rollover distribution" includes any
 27 34 of the following:
 27 35    (a)  All or any portion of a member's account and
 28  1 supplemental account.
 28  2    (b)  Effective January 1, 2002, after=tax employee
 28  3 contributions, if the plan to which such amounts are to be
 28  4 transferred is an individual retirement account described in
 28  5 federal Internal Revenue Code section 408(a) or 408(b), or is
 28  6 a qualified defined contribution plan described in federal
 28  7 Internal Revenue Code section 401(a) or 403(a), and such plan
 28  8 agrees to separately account for the after=tax amount so
 28  9 transferred.
 28 10    (c)  A distribution made on behalf of a surviving spouse
 28 11 and to an alternate payee, who is a spouse or former spouse,
 28 12 under a qualified domestic relations order.  Effective January
 28 13 1, 2007, after=tax employee contributions to a qualified
 28 14 defined benefit plan described in federal Internal Revenue
 28 15 Code section 401(a) or 403(a), or a tax=sheltered annuity plan
 28 16 described in federal Internal Revenue Code section 403(b), and
 28 17 such plan agrees to separately account for the after=tax
 28 18 amount so transferred.
 28 19    (2)  An eligible rollover distribution does not include any
 28 20 of the following:
 28 21    (a)  A distribution that is one of a series of
 28 22 substantially equal periodic payments, which occur annually or
 28 23 more frequently, made for the life or life expectancy of the
 28 24 distributee or the joint lives or joint life expectancies of
 28 25 the distributee and the distributee's designated beneficiary,
 28 26 or made for a specified period of ten years or more.
 28 27    (b)  A distribution to the extent that the distribution is
 28 28 required pursuant to section 401(a)(9) of the federal Internal
 28 29 Revenue Code.
 28 30    (c)  Prior to January 1, 2002, the portion of any
 28 31 distribution that is not includible in the gross income of the
 28 32 distributee, determined without regard to the exclusion for
 28 33 net unrealized appreciation with respect to employer
 28 34 securities.
 28 35    2.  Effective January 1, 1993, a member or a member's
 29  1 surviving spouse An eligible person may elect, at the time and
 29  2 in the manner prescribed in rules adopted by the system and in
 29  3 rules of the receiving retirement plan, to have the system pay
 29  4 all or a portion of an eligible rollover distribution directly
 29  5 to an eligible retirement plan, specified by the member or the
 29  6 member's surviving spouse, in a direct rollover.  However,
 29  7 effective January 1, 2007, if the eligible person is a
 29  8 nonspouse beneficiary as described in subsection 1, paragraph
 29  9 "b", subparagraph (4), the nonspouse beneficiary may only have
 29 10 a direct rollover of the distribution to an individual
 29 11 retirement account or annuity as described in subsection 1,
 29 12 paragraph "c", subparagraphs (1) or (2), established for the
 29 13 purpose of receiving the distribution on behalf of the
 29 14 nonspouse beneficiary, and such individual retirement account
 29 15 or annuity will be treated as an inherited individual
 29 16 retirement account or annuity pursuant to section 829 of the
 29 17 federal Pension Protection Act of 2006.
 29 18    Sec. 40.  Section 97B.65, Code 2007, is amended to read as
 29 19 follows:
 29 20    97B.65  REVISION RIGHTS RESERVED == LIMITATION ON INCREASE
 29 21 OF BENEFITS == RATES OF CONTRIBUTION.
 29 22    1.  The right is reserved to the general assembly to alter,
 29 23 amend, or repeal any provision of this chapter or any
 29 24 application thereof to any person, provided, however, that to
 29 25 the extent of the funds in the retirement system the amount of
 29 26 benefits which at the time of any such alteration, amendment,
 29 27 or repeal shall have accrued to any member of the retirement
 29 28 system shall not be repudiated, provided further, however,
 29 29 that the amount of benefits accrued on account of prior
 29 30 service shall be adjusted to the extent of any unfunded
 29 31 accrued liability then outstanding.
 29 32    2.  An increase in the benefits or retirement allowances
 29 33 provided under this chapter shall not be enacted until after
 29 34 the system's actuary determines that the system is fully
 29 35 funded and will continue to be fully funded immediately
 30  1 following enactment of the increase and the increase can be
 30  2 absorbed within the contribution rates otherwise established
 30  3 for the membership group authorized to receive the increase.
 30  4 However, an increase in the benefits or retirement allowances
 30  5 provided under this chapter may be enacted if the statutory
 30  6 change providing for the increase is accompanied by a change
 30  7 in the employer and employee contribution rates an adjustment
 30  8 in the required contribution rate of the membership group
 30  9 affected that is necessary to support such increase as
 30 10 determined by the system's actuary.
 30 11    Sec. 41.  Section 97B.80C, subsection 1, paragraph a, Code
 30 12 2007, is amended to read as follows:
 30 13    a.  "Nonqualified service" means service that is not
 30 14 qualified service and includes, but is not limited to, any of
 30 15 the following:
 30 16    (1)  Full=time volunteer public service in the federal
 30 17 peace corps program.  Service that is not qualified service.
 30 18    (2)  Public employment comparable to employment covered
 30 19 under this chapter in a qualified Canadian governmental entity
 30 20 that is an elementary school, secondary school, college, or
 30 21 university that is organized, administered, and primarily
 30 22 supported by the provincial, territorial, or federal
 30 23 governments of Canada, or any combination of the same.  Any
 30 24 period of time for which there was no performance of services.
 30 25    (3)  Service as described in subsection 1, paragraph "c",
 30 26 subparagraph (2).
 30 27    Sec. 42.  Section 97B.80C, subsection 2, Code 2007, is
 30 28 amended to read as follows:
 30 29    2.  a.  A vested or retired member may make contributions
 30 30 to the retirement system to purchase up to the maximum amount
 30 31 of permissive service credit for qualified service as
 30 32 determined by the system, pursuant to Internal Revenue Code
 30 33 section 415(n), and the requirements of this section, and the
 30 34 system's administrative rules.
 30 35    b.  A vested or retired member of the retirement system who
 31  1 has five or more full calendar years of covered wages may make
 31  2 contributions to the retirement system to purchase up to five
 31  3 years a maximum of twenty quarters of permissive service
 31  4 credit for nonqualified service as determined by the system,
 31  5 pursuant to Internal Revenue Code section 415(n), and the
 31  6 requirements of this section, and the system's administrative
 31  7 rules.  A vested or retired member must have at least twenty
 31  8 quarters of covered wages in order to purchase permissive
 31  9 service credit for nonqualified service.
 31 10    c.  A vested or retired member may convert regular member
 31 11 service credit to special service credit by payment of the
 31 12 amount actuarially determined as necessary to fund the
 31 13 resulting increase in the member's accrued benefit.  The
 31 14 conversion shall be treated as a purchase of qualified service
 31 15 credit subject to the requirements of paragraph "a" if the
 31 16 service credit to be converted was or would have been for
 31 17 qualified service.  The conversion shall be treated as a
 31 18 purchase of nonqualified service credit subject to the
 31 19 requirements of paragraph "b" if the service credit to be
 31 20 converted was purchased as nonqualified service credit.
 31 21    Sec. 43.  Section 97B.82, subsection 2, paragraph b,
 31 22 subparagraph (2), subparagraph subdivision (c), Code 2007, is
 31 23 amended to read as follows:
 31 24    (c)  The For rollover service purchases prior to January 1,
 31 25 2007, the portion of any distribution that is not includible
 31 26 in the gross income of the distributee, determined without
 31 27 regard to the exclusion for net unrealized appreciation with
 31 28 respect to employer securities.
 31 29    For rollover service purchases on or after January 1, 2007,
 31 30 the portion of any distribution that is not includible in the
 31 31 gross income of the distributee, determined without regard to
 31 32 the exclusion for net unrealized appreciation with respect to
 31 33 employer securities, shall be treated as an eligible rollover
 31 34 distribution only when such portion is received from a
 31 35 qualified plan under section 401(a) or 403(a) of the federal
 32  1 Internal Revenue Code.
 32  2    Sec. 44.  Section 97B.82, subsection 3, Code 2007, is
 32  3 amended to read as follows:
 32  4    3.  A member may purchase any service credit as authorized
 32  5 by this section, to the extent permitted by the internal
 32  6 revenue service, by means of a direct transfer, excluding of
 32  7 pretax amounts, and effective January 1, 2007, any after=tax
 32  8 contributions, from an annuity contract qualified under
 32  9 federal Internal Revenue Code section 403(b), or an eligible
 32 10 plan described in federal Internal Revenue Code section
 32 11 457(b), maintained by a state, political subdivision of a
 32 12 state, or any agency or instrumentality of a state or
 32 13 political subdivision of a state.  A direct transfer is a
 32 14 trustee=to=trustee transfer to the retirement system of
 32 15 contributions made to annuity contracts qualified under
 32 16 federal Internal Revenue Code section 403(b) and eligible
 32 17 governmental plans qualified under federal Internal Revenue
 32 18 Code section 457(b) for purposes of purchasing service credit
 32 19 in the retirement system.
 32 20    Sec. 45.  Section 97B.73B, Code 2007, is repealed.
 32 21    Sec. 46.  TRANSITION PROVISION == REQUIRED CONTRIBUTION
 32 22 RATE FOR FISCAL YEAR 2010=2011.  For purposes of establishing
 32 23 the required contribution rate for the fiscal year beginning
 32 24 July 1, 2011, as provided in section 97B.11, as amended in
 32 25 this Act, the required contribution rate for the fiscal year
 32 26 beginning July 1, 2010, shall be, for members in regular
 32 27 service, members described in section 97B.49B, and members
 32 28 described in section 97B.49C, the total contribution
 32 29 percentage rate paid by members and employers of that
 32 30 membership group for the fiscal year beginning July 1, 2010.
 32 31    Sec. 47.  IMPLEMENTATION PROVISION.  Notwithstanding any
 32 32 provision of section 97B.65 to the contrary, the provisions of
 32 33 this division of this Act shall be enacted and implemented by
 32 34 the Iowa public employees' retirement system upon the
 32 35 effective dates provided for the provisions of this division
 33  1 of this Act.
 33  2    Sec. 48.  EFFECTIVE DATES == RETROACTIVE APPLICABILITY.
 33  3    1.  The sections of this Act amending section 97B.49B,
 33  4 subsection 3, section 97B.49C, subsection 3, section 97B.50A,
 33  5 subsection 12, and section 97B.65 take effect July 1, 2011.
 33  6    2.  The section of this Act amending section 97B.53B, being
 33  7 deemed of immediate importance, takes effect upon enactment,
 33  8 and, except as otherwise stated, is retroactively applicable
 33  9 to January 1, 2007, and is applicable on and after that date.
 33 10    3.  The sections of this Act amending section 97B.82, being
 33 11 deemed of immediate importance, take effect upon enactment,
 33 12 and are retroactively applicable to January 1, 2007, and are
 33 13 applicable on and after that date.
 33 14                          DIVISION III
 33 15           STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM
 33 16    Sec. 49.  Section 411.5, subsections 10 and 11, Code 2007,
 33 17 are amended to read as follows:
 33 18    10.  ACTUARIAL INVESTIGATION == TABLES == RATES.  At least
 33 19 once in each five=year period, the actuary shall make an
 33 20 actuarial investigation into the mortality, service, and
 33 21 compensation experience of the members and beneficiaries of
 33 22 the retirement system, and the interest and other earnings on
 33 23 the moneys and other assets of the retirement system, and
 33 24 shall make a valuation of the assets and liabilities of the
 33 25 fire and police retirement fund, and on the basis of the
 33 26 results of the investigation and valuation, the system shall
 33 27 do all of the following:
 33 28    a.  Adopt adopt for the retirement system such actuarial
 33 29 methods and assumptions, interest rate, and mortality and
 33 30 other tables as are deemed necessary to conduct the annual
 33 31 actuarial valuation of the system.
 33 32    b.  Certify the rates of contribution payable by the cities
 33 33 in accordance with section 411.8.
 33 34    c.  Certify the rates of contributions payable by the
 33 35 members in accordance with section 411.8.
 34  1    11.  ANNUAL ACTUARIAL VALUATION.
 34  2    a.  On the basis of the actuarial methods and assumptions,
 34  3 rate of interest and tables adopted, the actuary shall make an
 34  4 annual valuation of the assets and liabilities of the fire and
 34  5 police retirement fund created by this chapter.  As a result
 34  6 of the annual actuarial valuation, the system shall do all of
 34  7 the following:
 34  8    (1)  Certify the rates of contribution payable by the
 34  9 cities in accordance with section 411.8.
 34 10    (2)  Certify the rates of contributions payable by the
 34 11 members in accordance with section 411.8.
 34 12    b.  Effective with the fiscal year beginning July 1, 2008,
 34 13 the annual actuarial valuation required to be conducted shall
 34 14 include information as required by section 97D.5.
 34 15    Sec. 50.  Section 411.8, subsection 1, paragraph b, Code
 34 16 2007, is amended to read as follows:
 34 17    b.  On the basis of the actuarial methods and assumptions,
 34 18 rate of interest, and of the mortality, interest and other
 34 19 tables adopted by the system, the actuary engaged by the
 34 20 system to make each valuation required by this chapter
 34 21 pursuant to the requirements of section 411.5, shall
 34 22 immediately after making such valuation, determine the "normal
 34 23 contribution rate".  Except as otherwise provided in this
 34 24 lettered paragraph, the normal contribution rate shall be the
 34 25 rate percent of the earnable compensation of all members
 34 26 obtained by deducting from the total liabilities of the fund
 34 27 the amount of the funds in hand to the credit of the fund and
 34 28 dividing the remainder by one percent of the present value of
 34 29 the prospective future compensation of all members as computed
 34 30 on the basis of the rate of interest and of mortality and
 34 31 service tables adopted, all equal to the rate required by the
 34 32 system to discharge its liabilities, stated as a percentage of
 34 33 the earnable compensation of all members, and reduced by the
 34 34 employee contribution made pursuant to rate provided in
 34 35 paragraph "f" of this subsection and the contribution rate
 35  1 representing the state appropriation made as provided in
 35  2 section 411.20.  However, the normal rate of contribution
 35  3 shall not be less than seventeen percent.
 35  4    Beginning July 1, 1996, and each fiscal year thereafter,
 35  5 the normal contribution rate shall be the rate percent of the
 35  6 earnable compensation of all members obtained by deducting
 35  7 from the total liabilities of the fund the amount of the funds
 35  8 in hand to the credit of the fund and dividing the remainder
 35  9 by one percent of the present value of the prospective future
 35 10 compensation of all members as computed on the basis of the
 35 11 rate of interest and of mortality and service tables adopted,
 35 12 multiplied by six=tenths, or seventeen percent, whichever is
 35 13 greater.
 35 14    The normal rate of contribution shall be determined by the
 35 15 actuary after each valuation.
 35 16    Sec. 51.  NEW SECTION.  411.10  PURCHASE OF SERVICE CREDIT
 35 17 FOR MILITARY SERVICE.
 35 18    1.  An active member of the system who has been a member of
 35 19 the retirement system five or more years may elect to purchase
 35 20 up to five years of service credit for military service, other
 35 21 than military service required to be recognized under Internal
 35 22 Revenue Code section 414(u) or under the federal Uniformed
 35 23 Services Employment and Reemployment Rights Act, that will be
 35 24 recognized by the retirement system for purposes of
 35 25 calculating a member's benefit, pursuant to Internal Revenue
 35 26 Code section 415(n) and the requirements of this section.
 35 27    2.  a.  A member seeking to purchase service credit
 35 28 pursuant to this section shall file a written application with
 35 29 the system requesting an actuarial determination of the cost
 35 30 of a purchase of service credit.  Upon receipt of the cost
 35 31 estimate for the purchase of service from the system, the
 35 32 member may make contributions to the system in an amount equal
 35 33 to the actuarial cost of the service credit purchase.
 35 34    b.  For purposes of this subsection, the actuarial cost of
 35 35 the service credit purchase is an amount determined by the
 36  1 system in accordance with actuarial tables, as reported to the
 36  2 system by the system's actuary, which reflects the actuarial
 36  3 cost necessary to fund an increased retirement allowance
 36  4 resulting from the purchase of service credit.
 36  5    3.  The system shall ensure that the member, in exercising
 36  6 an option provided in this section, does not exceed the amount
 36  7 of annual additions to a member's account permitted pursuant
 36  8 to section 415 of the federal Internal Revenue Code.
 36  9    4.  The board of trustees shall adopt rules providing for
 36 10 the implementation and administration of this section.
 36 11    Sec. 52.  Section 411.15, Code 2007, is amended to read as
 36 12 follows:
 36 13    411.15  HOSPITALIZATION AND MEDICAL ATTENTION.
 36 14    Cities shall provide hospital, nursing, and medical
 36 15 attention for the members of the police and fire departments
 36 16 of the cities, when injured while in the performance of their
 36 17 duties as members of such department, and shall continue to
 36 18 provide hospital, nursing, and medical attention for injuries
 36 19 or diseases incurred while in the performance of their duties
 36 20 for members receiving a retirement allowance under section
 36 21 411.6, subsection 6.  Members receiving hospital, nursing, and
 36 22 medical attention pursuant to this section have the right to
 36 23 choose the care.  Cities may provide the hospital, nursing,
 36 24 and medical attention required by this section through the
 36 25 purchase of insurance, by self=insuring the obligation, or
 36 26 through payment of moneys into a local government risk pool
 36 27 established for the purpose of covering the costs associated
 36 28 with the requirements of this section.  The cost of providing
 36 29 the hospital, nursing, and medical attention required by this
 36 30 section shall be paid from moneys held in a trust and agency
 36 31 fund established pursuant to section 384.6, or out of the
 36 32 appropriation for the department to which the injured person
 36 33 belongs or belonged; provided that any amounts received by the
 36 34 injured person under the workers' compensation law of the
 36 35 state, or from any other source for such specific purposes,
 37  1 shall be deducted from the amount paid by the city under the
 37  2 provisions of this section.
 37  3                           DIVISION IV
 37  4                   JUDICIAL RETIREMENT SYSTEM
 37  5    Sec. 53.  Section 602.9104, subsection 1, paragraph b, Code
 37  6 2007, is amended to read as follows:
 37  7    b.  The state shall contribute annually to the judicial
 37  8 retirement fund an amount equal to the state's required
 37  9 contribution for all judges covered under this article.  The
 37 10 state's required contribution shall be appropriated directly
 37 11 to the judicial retirement fund by the general assembly.
 37 12    Sec. 54.  Section 602.9104, subsection 4, paragraphs b, c,
 37 13 d, and e, Code 2007, are amended to read as follows:
 37 14    b.  "Fully funded status" means that the most recent
 37 15 actuarial valuation reflects that, using the projected unit
 37 16 credit method in accordance with generally recognized and
 37 17 accepted actuarial principles and practices set forth by the
 37 18 American academy of actuaries, the funded status of the system
 37 19 is at least ninety percent, based upon the benefits provided
 37 20 for judges through the judicial retirement system as of July
 37 21 1, 2006.
 37 22    c.  "Judge's required contribution" means an amount equal
 37 23 to the basic salary of the judge multiplied by the following
 37 24 applicable percentage:
 37 25    (1)  For the fiscal year beginning July 1, 2008, and ending
 37 26 June 30, 2009, seven and seven=tenths percent.
 37 27    (2)  For the fiscal year beginning July 1, 2009, and ending
 37 28 June 30, 2010, eight and seven=tenths percent.
 37 29    (1) (3)  For the fiscal year beginning July 1, 2006 2010,
 37 30 and for each subsequent fiscal year until the system attains
 37 31 fully funded status, six percent multiplied by a fraction
 37 32 equal to the actual percentage rate contributed by the state
 37 33 for that fiscal year divided by twenty=three and seven=tenths
 37 34 percent nine and seven=tenths percent.
 37 35    (2) (4)  Commencing with the first fiscal year in which the
 38  1 system attains fully funded status, and for each subsequent
 38  2 fiscal year, the percentage rate equal to fifty forty percent
 38  3 of the required contribution rate.
 38  4    d.  "Required contribution rate" means that percentage of
 38  5 the basic salary of all judges covered under this article
 38  6 which the actuary of the system determines is necessary, using
 38  7 the projected unit credit method in accordance with generally
 38  8 recognized and accepted actuarial principles and practices set
 38  9 forth by the American academy of actuaries, to amortize the
 38 10 unfunded actuarial liability of the judicial retirement system
 38 11 within twenty years equal to the actuarially required
 38 12 contribution rate determined by the actuary pursuant to
 38 13 section 602.9116.
 38 14    e.  "State's required contribution" means an amount equal
 38 15 to the basic salary of all judges covered under this article
 38 16 multiplied by the following applicable percentage:
 38 17    (1)  For the fiscal year beginning July 1, 2006 2008, and
 38 18 for each subsequent fiscal year until the system attains fully
 38 19 funded status, twenty=three and seven=tenths percent the
 38 20 required contribution rate reduced by the applicable
 38 21 percentage used in determining the judge's required
 38 22 contribution for that fiscal year.
 38 23    (2)  Commencing with the first fiscal year in which the
 38 24 system attains fully funded status, and for each subsequent
 38 25 fiscal year, the percentage rate equal to fifty sixty percent
 38 26 of the required contribution rate.
 38 27    Sec. 55.  Section 602.9116, subsection 1, Code Supplement
 38 28 2007, is amended to read as follows:
 38 29    1.  The court administrator shall cause an actuarial
 38 30 valuation to be made of the assets and liabilities of the
 38 31 judicial retirement fund at least once every four years
 38 32 commencing with the fiscal year beginning July 1, 1981.  For
 38 33 each fiscal year in which an actuarial valuation is not
 38 34 conducted, the court administrator shall cause an annual
 38 35 actuarial update to be prepared for the purpose of determining
 39  1 the adequacy of the contribution rates specified in section
 39  2 602.9104.  The court administrator shall adopt actuarial
 39  3 methods and assumptions, mortality tables, and other necessary
 39  4 factors for use in the actuarial calculations required for the
 39  5 valuation upon the recommendation of the actuary.  In
 39  6 addition, effective with the fiscal year beginning July 1,
 39  7 2008, the actuarial valuation or actuarial update required to
 39  8 be conducted shall include information as required by section
 39  9 97D.5.  Following the actuarial valuation or annual actuarial
 39 10 update, the court administrator shall determine the condition
 39 11 of the system, determine the actuarially required contribution
 39 12 rate for each fiscal year which is the rate required by the
 39 13 system to discharge its liabilities, stated as a percentage of
 39 14 the basic salary of all judges covered under this article, and
 39 15 shall report any findings and recommendations to the general
 39 16 assembly.
 39 17                           DIVISION V
 39 18                    MISCELLANEOUS PROVISIONS
 39 19    Sec. 56.  Section 55.1, unnumbered paragraph 1, Code 2007,
 39 20 is amended to read as follows:
 39 21    A person who is elected to a municipal, county, state, or
 39 22 federal office shall, upon written application to the employer
 39 23 of that person, be granted a leave of absence from regular
 39 24 employment to serve in that office except where prohibited by
 39 25 the federal law.  The leave of absence may be granted without
 39 26 pay and, except that if a salaried employee takes leave
 39 27 without pay from regular employment for a portion of a pay
 39 28 period, the employee's salaried compensation for that pay
 39 29 period shall be reduced by the ratio of the number of days of
 39 30 leave taken to the total number of days in the pay period.
 39 31 The leave of absence shall be granted without loss of net
 39 32 credited service and benefits earned.  This section shall not
 39 33 be construed to require an employer to pay pension, health or
 39 34 other benefits during the leave of absence to an employee
 39 35 taking a leave of absence under this section.
 40  1    Sec. 57.  Section 55.1, unnumbered paragraph 3, Code 2007,
 40  2 is amended to read as follows:
 40  3    An employee shall not be prohibited from returning to
 40  4 regular employment before the period expires for which the
 40  5 leave of absence was granted.  This section applies only to
 40  6 employers which employ twenty or more full=time persons.  The
 40  7 leave of absence granted by this section need not exceed six
 40  8 years.  The leave of absence granted by this section does not
 40  9 apply to an elective office held by the employee prior to the
 40 10 election.
 40 11    Sec. 58.  Section 97C.21, Code 2007, is amended to read as
 40 12 follows:
 40 13    97C.21  VOLUNTARY COVERAGE OF ELECTED OFFICIALS.
 40 14    Notwithstanding any provision of this chapter to the
 40 15 contrary, an employer of elected officials otherwise excluded
 40 16 from the definition of employee as provided in section 97C.2,
 40 17 may, but is not required to, choose to provide benefits to
 40 18 those elected officials as employees as provided by this
 40 19 chapter.  Alternatively, the governor may authorize a
 40 20 statewide referendum of the appointed and elected officials of
 40 21 the state and its political subdivisions on the question of
 40 22 whether to include in or exclude from the definition of
 40 23 employee all such positions.  This choice shall be reflected
 40 24 in the federal=state agreement described in section 97C.3,
 40 25 and, if necessary, in this chapter.  An employer who is
 40 26 providing benefits to elected officials otherwise excluded
 40 27 from the definition of employee prior to July 1, 2002, shall
 40 28 not be deemed to be in an erroneous reporting situation, and
 40 29 corrections for prior federal social security withholdings
 40 30 shall not be required.  The implementation of this section
 40 31 shall be subject to the approval of the federal social
 40 32 security administration.
 40 33    Sec. 59.  Section 97D.2, Code 2007, is amended to read as
 40 34 follows:
 40 35    97D.2  ANALYSIS OF COST OF PROPOSED CHANGES.
 41  1    When the public retirement systems committee established by
 41  2 section 97D.4 or a standing committee of the senate or house
 41  3 of representatives recommends a proposal for a change in a
 41  4 public retirement system within this state, the committee
 41  5 shall require the development of actuarial information
 41  6 concerning the costs of the proposed change.  If the proposal
 41  7 affects police and fire retirement under chapter 411, the
 41  8 committee shall arrange for the services of an actuarial
 41  9 consultant or request actuarial information from the statewide
 41 10 fire and police retirement system created in chapter 411 to
 41 11 assist in developing the information.  Actuarial information
 41 12 developed as provided under this section concerning the cost
 41 13 of a proposed change shall include information on the effect
 41 14 of the proposed change on the normal cost rate for that public
 41 15 retirement system using the entry age normal actuarial cost
 41 16 method.
 41 17    Sec. 60.  NEW SECTION.  97D.5  PUBLIC RETIREMENT SYSTEMS ==
 41 18 ANNUAL ACTUARIAL VALUATIONS == REQUIRED INFORMATION.
 41 19    1.  For purposes of this section, "public retirement
 41 20 system" means the public safety peace officers' retirement
 41 21 system created in chapter 97A, the Iowa public employees'
 41 22 retirement system created in chapter 97B, the statewide fire
 41 23 and police retirement system created in chapter 411, or the
 41 24 judicial retirement system created in chapter 602.
 41 25    2.  Effective with the fiscal year beginning July 1, 2008,
 41 26 a public retirement system shall include in each actuarial
 41 27 valuation or actuarial update required to be conducted by that
 41 28 public retirement system the following additional information,
 41 29 all as determined by using the entry age normal actuarial cost
 41 30 method:
 41 31    a.  The actuarially required contribution rate for the
 41 32 public retirement system which is equal to the normal cost
 41 33 rate plus the contribution rate necessary to amortize the
 41 34 unfunded actuarial accrued liability on a level percent of
 41 35 payroll basis over thirty years.
 42  1    b.  The normal cost rate for the public retirement system
 42  2 which shall be determined for each individual member on a
 42  3 level percentage of salary basis and then summed for all
 42  4 members to obtain the total normal cost.
 42  5    Sec. 61.  Section 273.3, subsection 14, Code 2007, is
 42  6 amended by striking the subsection and inserting in lieu
 42  7 thereof the following:
 42  8    14.  a.  The board may purchase for eligible employees one
 42  9 or more investment contracts, on a group or individual basis,
 42 10 pursuant to a plan established by the board in accordance with
 42 11 section 403(b) of the Internal Revenue Code, as defined in
 42 12 section 422.3.  An investment contract purchased for the plan
 42 13 shall be issued by a nonprofit corporation issuing retirement
 42 14 custodial accounts or annuities exclusively for educational
 42 15 institutions and their employees or by a company authorized to
 42 16 do business in this state or purchased through an
 42 17 Iowa=licensed salesperson for the company.
 42 18    b.  The plan established by the board shall include no more
 42 19 than five companies authorized to issue investment contracts
 42 20 as selected by the board and no more than three companies
 42 21 authorized to issue investment contracts as selected by, and
 42 22 in the sole discretion of, the employee organization
 42 23 representing the board's employees.
 42 24    c.  The board may make salary reductions in accordance with
 42 25 the plan as authorized by an eligible employee for the purpose
 42 26 of making contributions to the investment contract on behalf
 42 27 of the employee.  The reductions shall be made in the manner
 42 28 which will qualify contributions to the investment contract
 42 29 for the benefits under section 403(b) of the Internal Revenue
 42 30 Code, as defined in section 422.3.
 42 31    d.  As used in this subsection, unless the context
 42 32 otherwise requires, "investment contract" shall mean a
 42 33 custodial account utilizing mutual funds or an annuity
 42 34 contract which meets the requirements of section 403(b) of the
 42 35 Internal Revenue Code, as defined in section 422.3.
 43  1    Sec. 62.  Section 294.16, Code 2007, is amended by striking
 43  2 the section and inserting in lieu thereof the following:
 43  3    294.16  INVESTMENT CONTRACTS.
 43  4    1.  A school district may purchase for eligible employees
 43  5 one or more investment contracts, on a group or individual
 43  6 basis, pursuant to a plan established by the school district
 43  7 in accordance with section 403(b) of the Internal Revenue
 43  8 Code, as defined in section 422.3.  An investment contract
 43  9 purchased for the plan shall be issued by a company authorized
 43 10 to do business in this state or purchased through an
 43 11 Iowa=licensed salesperson for the company.
 43 12    2.  The plan established by the school district shall
 43 13 include no more than five companies authorized to issue
 43 14 investment contracts as selected by the school district and no
 43 15 more than three companies authorized to issue investment
 43 16 contracts as selected by, and in the sole discretion of, the
 43 17 employee organization representing the school district's
 43 18 certified teachers.
 43 19    3.  The school district may make salary reductions in
 43 20 accordance with the plan as authorized by an eligible employee
 43 21 for the purpose of making contributions to the investment
 43 22 contract on behalf of the employee.  The reductions shall be
 43 23 made in the manner which will qualify contributions to the
 43 24 investment contract for the benefits under section 403(b) of
 43 25 the Internal Revenue Code, as defined in section 422.3.
 43 26    4.  As used in this section, unless the context otherwise
 43 27 requires, "investment contract" shall mean a custodial account
 43 28 utilizing mutual funds or an annuity contract which meets the
 43 29 requirements of section 403(b) of the Internal Revenue Code,
 43 30 as defined in section 422.3.
 43 31                           EXPLANATION
 43 32    This bill makes numerous changes to public retirement
 43 33 systems, including the public safety peace officers'
 43 34 retirement, accident, and disability system, the Iowa public
 43 35 employees' retirement system, and the statewide fire and
 44  1 police retirement system, as well as other employee benefit
 44  2 matters.  The bill may include a state mandate as defined in
 44  3 Code section 25B.3.  The state mandate funding requirement in
 44  4 Code section 25B.2, however, does not apply to public employee
 44  5 retirement systems.  The changes to each public retirement
 44  6 system as well as other employee benefit=related matters are
 44  7 as follows:
 44  8    PEACE OFFICERS' RETIREMENT, ACCIDENT, AND DISABILITY SYSTEM
 44  9 (PORS).  The bill eliminates references in Code chapter 97A to
 44 10 the pension accumulation fund, pension reserve fund, and the
 44 11 expense fund as separate funds of PORS and provides that the
 44 12 assets of PORS are in one retirement fund.
 44 13    Code section 97A.5(8), concerning the medical board for the
 44 14 system, is amended to provide that the board of trustees can
 44 15 designate a single medical provider network as the medical
 44 16 board of the system.  The bill provides that disability
 44 17 examinations shall be conducted by a physician from the
 44 18 medical board specializing in occupational medicine and a
 44 19 second physician selected by the occupational medicine
 44 20 physician in an appropriate field of medicine.  Current law
 44 21 provides for a three=physician medical board.
 44 22    Code section 97A.5(11) and (12), concerning the actuarial
 44 23 investigation and valuation of the system, is amended to
 44 24 provide that the board of trustees shall select the actuarial
 44 25 cost method to be used in conducting the annual actuarial
 44 26 valuation of the system.  A corresponding change in Code
 44 27 section 97A.8 is made to eliminate the requirement that the
 44 28 aggregate cost method be used.
 44 29    Code section 97A.6(7), concerning the reexamination of
 44 30 beneficiaries retired due to disability, is amended to provide
 44 31 that a member's disability retirement shall cease if the
 44 32 disabled member is under age 55 and becomes employed in
 44 33 another public safety occupation.
 44 34    Code section 97A.6(11) is amended to provide that a member
 44 35 receiving an accidental disability benefit under PORS shall
 45  1 not have their pension offset by any workers' compensation
 45  2 benefits payable to the member for a permanent partial
 45  3 disability or permanent total disability.  This provision
 45  4 applies to any injury, disease, or exposure occurring or
 45  5 aggravated on or after July 1, 2000, giving rise to a
 45  6 disability benefit and workers' compensation benefits.  This
 45  7 provision takes effect upon enactment and is retroactively
 45  8 applicable to July 1, 2000.
 45  9    Code section 97A.8(1)(b), concerning the determination of
 45 10 the contribution rate paid by the state to the PORS retirement
 45 11 fund, is amended.  The bill provides that the determination of
 45 12 the "normal contribution rate" paid by the state shall be
 45 13 based upon the actuarial valuation of the system using the
 45 14 actuarial cost method selected by the board of trustees and
 45 15 eliminates the requirement that the actuarial valuation use
 45 16 the aggregate cost actuarial method in calculating this rate.
 45 17 The bill further provides that notwithstanding this
 45 18 calculation, the state's normal contribution rate shall
 45 19 increase from the current minimum 17 percent rate by 2
 45 20 percentage points per fiscal year, beginning July 1, 2008,
 45 21 until reaching a maximum of 27 percent in the fiscal year
 45 22 beginning July 1, 2012.  Beginning July 1, 2012, the state's
 45 23 contribution rate for a fiscal year shall be the lesser of 27
 45 24 percent or the normal contribution rate calculated pursuant to
 45 25 the actuarial valuation of the system.
 45 26    IOWA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (IPERS).  Code
 45 27 section 97B.1A(20), concerning the definition of service, is
 45 28 amended to provide that service includes a period of military
 45 29 service from which the IPERS member does not return to IPERS
 45 30 covered service due to injury or disease resulting in death.
 45 31 Currently, a member must return to covered employment from
 45 32 military service in order to receive service credit for the
 45 33 period of military service.
 45 34    Code section 97B.1A(26), concerning the definition of
 45 35 wages, is amended to exclude bonuses and allowances, except
 46  1 allowances included as wages for members of the general
 46  2 assembly, from the definition of wages.
 46  3    Code section 97B.4(2), concerning the authority of the
 46  4 system in administering IPERS, is amended to provide that
 46  5 IPERS is not a participating agency for purposes of
 46  6 information technology services under the department of
 46  7 administrative services.
 46  8    Code section 97B.7(3), concerning the payment of investment
 46  9 management expenses from the retirement fund, is amended to
 46 10 eliminate the cap on the amount authorized to be expended to
 46 11 pay investment management expenses during a fiscal year.  The
 46 12 current cap is four=tenths of one percent of the market value
 46 13 of the retirement fund.
 46 14    Code section 97B.9 is amended to set the fee for late
 46 15 contributions at the greater of $20 per occurrence or interest
 46 16 at the combined interest and dividend rate required under Code
 46 17 section 97B.70.  Currently, an employer is charged the greater
 46 18 of $10 per occurrence or interest at the combined interest and
 46 19 dividend rate required under Code section 97B.70.  The Code
 46 20 section is also amended to make civil actions to collect
 46 21 unpaid contributions from employers permissive.
 46 22    Code section 97B.10, concerning the crediting of erroneous
 46 23 contributions, is amended to eliminate a provision awarding
 46 24 interest on a credit for contributions paid prior to an
 46 25 individual's decision to elect out of IPERS coverage.
 46 26    Code section 97B.11, concerning contributions to the system
 46 27 by employers and employees, is amended.  Beginning July 1,
 46 28 2011, IPERS will determine a required contribution rate for
 46 29 each membership group, including members in regular service,
 46 30 which is the contribution rate the system actuarially
 46 31 determines is the rate required by the system to discharge its
 46 32 liabilities as to that membership group as a percentage of the
 46 33 covered wages of members in that membership category.
 46 34 However, the bill provides that the required contribution rate
 46 35 for each membership group in a fiscal year shall not vary by
 47  1 more than one=half percentage point from the required
 47  2 contribution rate for the previous year.  The bill then
 47  3 provides that, for members in regular service under IPERS, the
 47  4 employers shall pay 60 percent of the rate and members shall
 47  5 pay 40 percent of the rate.  While current law provides for an
 47  6 actuarial determination of the rates for members in each of
 47  7 the special service categories, the contribution rate for
 47  8 members in regular service is fixed.  As a result of this
 47  9 change, Code sections 97B.49B(3) and 97B.49C(3) are amended,
 47 10 effective July 1, 2011, by repealing that portion of each Code
 47 11 section that sets contribution rates for special service
 47 12 members to reflect that the establishment of those rates is
 47 13 done by the bill through amendment to Code section 97B.11 as
 47 14 of July 1, 2011.
 47 15    Code section 97B.14 is amended by eliminating an exception
 47 16 that permitted small employers with total monthly
 47 17 contributions of $100 or less to pay those contributions
 47 18 quarterly rather than monthly.  The bill requires all
 47 19 employers to pay contributions monthly, regardless of the
 47 20 amount of the contributions.
 47 21    Code section 97B.33, concerning payments made to an
 47 22 individual arising out of a decision by the system or a court,
 47 23 is amended to provide that the system may make the payment
 47 24 without certifying to the director of the department of
 47 25 administrative services that the person is entitled to the
 47 26 payment.
 47 27    Code section 97B.34A, concerning payment to minors, is
 47 28 amended to provide that if the sum to be paid is less than the
 47 29 greater of $25,000 or the amount authorized in section 565B.7,
 47 30 subsection 3 (currently $25,000), the funds may be paid to an
 47 31 adult as custodian for the minor.  Payments in excess of this
 47 32 amount are to be paid to a court=established conservator.
 47 33 Current law sets the maximum amount that can be paid to an
 47 34 adult custodian at $10,000.
 47 35    Code section 97B.38, concerning fees for services, is
 48  1 amended to allow the system to charge fees to anyone for the
 48  2 costs incurred by the system in performing its duties.
 48  3 Currently, members, beneficiaries, and the general public, but
 48  4 not employers, may be charged fees.
 48  5    Code section 97B.49B(1), concerning protection occupations,
 48  6 is amended to add county jailers and detention officers, Iowa
 48  7 national guard installation security officers, emergency
 48  8 medical services providers, and county attorney investigators,
 48  9 as members in a protection occupation for purposes of IPERS
 48 10 benefits.
 48 11    Code section 97B.49F, concerning the determination of the
 48 12 cost of living dividend, is amended.  Current law provides
 48 13 that the dividend increases by a percentage that is the lesser
 48 14 of 3 percent, the percentage increase in the consumer price
 48 15 index, and the percentage certified by the system's actuary
 48 16 that the system can absorb.  The bill amends the determination
 48 17 of the percentage calculated by the system's actuary to
 48 18 provide that the determination be made by comparing the
 48 19 actuarial required contribution rate for the system and the
 48 20 statutory contribution rate.  If the actuarial required rate
 48 21 exceeds that statutory rate, the bill provides that the
 48 22 percentage certified by the actuary shall be zero.
 48 23    Code section 97B.49H, concerning active member supplemental
 48 24 accounts, is amended to provide that no payments to the
 48 25 accounts be made unless the system remains fully funded
 48 26 following the payment to the supplemental accounts.  Current
 48 27 law allows payment only if the payment can be absorbed without
 48 28 significantly impacting the funded status of the system.
 48 29    Code section 97B.50, concerning early retirement due to
 48 30 disability, is amended to provide that a member who qualifies
 48 31 for IPERS regular disability benefits by becoming eligible for
 48 32 federal disability benefits must demonstrate their continued
 48 33 qualification for federal disability benefits to receive IPERS
 48 34 benefits.  Current law does not require a determination that
 48 35 the member remains eligible for federal disability benefits
 49  1 once initial eligibility is established.  The change does not
 49  2 affect the ability of the member to qualify for retirement
 49  3 benefits based on criteria other than disability.
 49  4    Code section 97B.52, concerning payment of a lump sum death
 49  5 benefit, is amended to eliminate a provision requiring a
 49  6 determination of what the lump sum payment would have been if
 49  7 the person had died on June 30, 1984, and a provision that the
 49  8 method of payment to a beneficiary selected by a member does
 49  9 not apply.
 49 10    Code section 97B.53B, concerning rollovers of members'
 49 11 accounts from IPERS to another eligible retirement plan, is
 49 12 amended to reflect Internal Revenue Code changes.  The bill
 49 13 provides that nonspouse beneficiaries of a member that are
 49 14 designated as beneficiaries pursuant to federal law are
 49 15 allowed to elect to have IPERS pay all or a portion of an
 49 16 eligible distribution to certain eligible retirement plans.
 49 17 The bill also provides that, beginning January 1, 2008, Roth
 49 18 individual retirement accounts and annuities are eligible
 49 19 retirement plans for a member, a member's surviving spouse, or
 49 20 a qualified payee under a qualified domestic relations order.
 49 21 The provision of the bill amending Code section 97B.53B takes
 49 22 effect upon enactment and is retroactively applicable to
 49 23 January 1, 2007.
 49 24    Code section 97B.65, concerning limitation on increases in
 49 25 benefits, is amended to provide that an increase in benefits
 49 26 shall not be implemented unless the system is fully funded and
 49 27 the increase in benefits can be absorbed into existing
 49 28 contribution rates for the membership group affected.  Current
 49 29 law only requires that the system be fully funded prior to
 49 30 implementing the increase in benefits.  This change also
 49 31 provides that the increase in benefits can be implemented even
 49 32 if the system is not fully funded or existing contribution
 49 33 rates are insufficient if the statutory change providing for
 49 34 the increased benefit is accompanied by a change in the
 49 35 required contribution rate necessary to support the increased
 50  1 benefit.  This provision takes effect July 1, 2011.
 50  2    Code section 97B.73B, concerning the purchase of service
 50  3 for patient advocates, is repealed by the bill.
 50  4    Code section 97B.80C(1) and (2), concerning purchases of
 50  5 permissive service credit, is amended.  The bill provides that
 50  6 any period of time when there was not performance of services
 50  7 is considered nonqualified service eligible for a purchase of
 50  8 service.  The bill also provides that a member may convert
 50  9 existing regular service credit to special service credit upon
 50 10 paying the actuarial cost of that enhanced benefit.  The bill
 50 11 provides that if the existing service was nonqualified
 50 12 service, then the purchase of special service credit for that
 50 13 service shall be made pursuant to the requirements governing
 50 14 the purchase of nonqualified service.  Alternatively, if the
 50 15 existing service was qualified service, then the purchase of
 50 16 special service credit for that service shall be made pursuant
 50 17 to the requirements governing the purchase of qualified
 50 18 service.
 50 19    Code section 97B.82, concerning the purchase of service
 50 20 credit from a direct rollover of moneys from another
 50 21 retirement plan to IPERS, is amended to reflect Internal
 50 22 Revenue Code changes.  The provisions of the bill amending
 50 23 Code section 97B.82 take effect upon enactment and are
 50 24 retroactively applicable to January 1, 2007.
 50 25    The bill also provides that notwithstanding any provision
 50 26 of Code section 97B.65 to the contrary, the provisions in this
 50 27 division of the bill shall be implemented upon the effective
 50 28 dates applicable for those provisions.
 50 29    STATEWIDE FIRE AND POLICE RETIREMENT SYSTEM.  Code sections
 50 30 411.5 and 411.8, concerning the actuarial valuation and the
 50 31 method of financing the retirement system, are amended to
 50 32 provide that the board of trustees shall select the actuarial
 50 33 cost method to be used in the annual actuarial valuation of
 50 34 the system and in calculating the cities' contribution rate to
 50 35 the system.  Current law provides that the system use the
 51  1 aggregate cost actuarial method.
 51  2    New Code section 411.10 permits current members of the
 51  3 retirement system with at least five years of service to
 51  4 purchase up to five years of service credit under the system
 51  5 for military service.  The bill provides that the member is
 51  6 required to pay the full actuarial cost of the service
 51  7 purchase and must make written application with the retirement
 51  8 system for the purchase of service.
 51  9    Code section 411.15 is amended to provide that members of
 51 10 the retirement system who are injured while in the performance
 51 11 of their duties and need medical attention have the right to
 51 12 choose the care provided.
 51 13    JUDICIAL RETIREMENT SYSTEM.  Code section 602.9104,
 51 14 concerning contributions to the judicial retirement system, is
 51 15 amended.  The bill provides that beginning July 1, 2008, the
 51 16 judge's contribution percentage shall be 7.7 percent of salary
 51 17 for FY 2008=2009, 8.7 percent for FY 2009=2010, and 9.7
 51 18 percent for FY 2010=2011 and each fiscal year thereafter until
 51 19 the system reaches fully funded status.  In addition,
 51 20 beginning July 1, 2008, and for each fiscal year thereafter
 51 21 until the system reaches fully funded status, the state's
 51 22 contribution shall be that percentage of the salary of all
 51 23 judges equal to the required contribution rate necessary to
 51 24 fund the liabilities of the system less the applicable
 51 25 percentage used in determining the judge's required
 51 26 contribution for that fiscal year.  Once the fund reaches
 51 27 fully funded status, the bill provides that the state shall
 51 28 pay 60 percent and judges shall pay 40 percent of the required
 51 29 contribution rate.  Current law provides that judges pay 6
 51 30 percent and the state shall pay 23.7 percent until the system
 51 31 reaches fully funded status but adjusts the judge's
 51 32 contribution based on the actual percentage paid by the state.
 51 33 Current law then provides that upon reaching fully funded
 51 34 status, the state and the judges shall pay the required
 51 35 contribution rate to the system on a 50=50 basis.
 52  1    Code section 602.9106, concerning the actuarial valuation
 52  2 of the system, is amended to provide that the court
 52  3 administrator determine the actuarial assumptions and methods
 52  4 to be used by the actuary.  A corresponding change is made in
 52  5 Code section 602.9104 to eliminate the requirement that the
 52  6 projected unit actuarial cost method be used.  The bill also
 52  7 provides that the annual valuation include the actuarially
 52  8 required contribution rate for the system.
 52  9    MISCELLANEOUS PROVISIONS.  Code section 55.1, concerning
 52 10 leaves of absence for service in elective office, is amended
 52 11 by the bill.  Current law provides that a leave of absence
 52 12 granted to a person elected to a municipal, county, state, or
 52 13 federal office need not exceed six years.  This provision of
 52 14 the bill removes the six=year limitation.  In addition, the
 52 15 bill provides that if a salaried employee takes leave without
 52 16 pay to serve in elected office the salaried compensation for
 52 17 the pay period shall be reduced pro rata to the number of days
 52 18 taken.
 52 19    Code section 97C.21, concerning voluntary federal social
 52 20 security coverage for certain part=time elected officials, is
 52 21 amended to permit the governor to authorize a statewide
 52 22 referendum of these officials on whether they should be
 52 23 included as an employee for purposes of social security
 52 24 coverage.
 52 25    Code section 97D.2, concerning the analysis of proposed
 52 26 changes to retirement systems, is amended to require that
 52 27 actuarial information on the cost of a proposed change include
 52 28 information on the effect of the proposed change on the normal
 52 29 cost rate for the system using the entry age normal actuarial
 52 30 cost method.
 52 31    New Code section 97D.5 requires that PORS, IPERS, the
 52 32 statewide fire and police retirement system created in Code
 52 33 chapter 411, and the judicial retirement system created in
 52 34 Code chapter 602, include additional actuarial information in
 52 35 each system's actuarial valuation or update beginning with the
 53  1 2008=2009 fiscal year.  The new Code section requires each
 53  2 public retirement system to determine, using the entry age
 53  3 normal actuarial cost method, the actuarially required
 53  4 contribution rate and normal cost rate for the public
 53  5 retirement system and to include this information in the
 53  6 system's actuarial valuation.
 53  7    Code section 273.3(14) and Code section 294.16, concerning
 53  8 annuity contracts for area education agency (AEA) and school
 53  9 district employees, are stricken and rewritten by the bill.
 53 10 These provisions of the bill provide that an AEA board or
 53 11 school district may establish a plan in accordance with
 53 12 section 403(b) of the Internal Revenue Code allowing eligible
 53 13 employees to select one or more investment contracts.  The
 53 14 bill defines "investment account" as a custodial account
 53 15 utilizing mutual funds or an annuity contract.  The bill
 53 16 provides that in establishing the plan, the AEA board or
 53 17 school district may select up to five companies authorized to
 53 18 issue investment contracts and the employee organization
 53 19 representing the board's employees or school district's
 53 20 teachers may select up to three companies authorized to issue
 53 21 investment contracts.  Current law provides that selection of
 53 22 an investment contract is at the discretion of the employee.
 53 23 LSB 5594SV 82
 53 24 ec/sc/5