Senate File 90 - Introduced SENATE FILE BY DANIELSON Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act allowing the purchase of service credit under the 2 statewide fire and police retirement system for prior service 3 under the retirement system. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1987SS 83 6 ec/nh/8 PAG LIN 1 1 Section 1. NEW SECTION. 411.10A PURCHASE OF SERVICE 1 2 CREDIT FOR PRIOR SERVICE. 1 3 1. An active member of the system who has been a member of 1 4 the retirement system five or more years and who received a 1 5 refund of the member's contributions for a prior period of 1 6 service under the system may elect to purchase up to five 1 7 years of service credit for that prior period of service, that 1 8 will be recognized by the retirement system for purposes of 1 9 calculating a member's benefit, pursuant to Internal Revenue 1 10 Code section 415(n) and the requirements of this section. 1 11 2. a. A member seeking to purchase service credit 1 12 pursuant to this section shall file a written application with 1 13 the system requesting an actuarial determination of the cost 1 14 of a purchase of service credit. Upon receipt of the cost 1 15 estimate for the purchase of service from the system, the 1 16 member may make contributions to the system in an amount equal 1 17 to the actuarial cost of the service credit purchase. 1 18 b. For purposes of this subsection, the actuarial cost of 1 19 the service credit purchase is an amount determined by the 1 20 system in accordance with actuarial tables, as reported to the 1 21 system by the system's actuary, which reflects the actuarial 1 22 cost necessary to fund an increased retirement allowance 1 23 resulting from the purchase of service credit. 1 24 3. The system shall ensure that the member, in exercising 1 25 an option provided in this section, does not exceed the amount 1 26 of annual additions to a member's account permitted pursuant 1 27 to section 415 of the federal Internal Revenue Code. 1 28 4. The board of trustees shall adopt rules providing for 1 29 the implementation and administration of this section. 1 30 EXPLANATION 1 31 This bill permits an active member of the Municipal Fire 1 32 and Police Retirement System (MFPRSI) who has been a member of 1 33 the retirement system for five or more years to purchase 1 34 service credit for prior service under MFPRSI in which the 1 35 member received a refund of the member's contributions. The 2 1 bill provides that the member may purchase up to five years of 2 2 membership service for that period of prior service upon 2 3 making contributions to the system in an amount equal to the 2 4 actuarial cost of the purchase of service credit. The bill 2 5 provides that the board of trustees shall adopt rules 2 6 providing for the implementation and administration of this 2 7 new purchase of service credit. 2 8 LSB 1987SS 83 2 9 ec/nh/8