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