Senate File 90 - Introduced

SENATE FILE  	 BY	DANIELSON

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

A BILL FOR

An Act allowing the purchase of service credit under the
statewide fire and police retirement system for prior service
under the retirement system.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 1987SS 83
ec/nh/8

PAG LIN

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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
35 member received a refund of the member's contributions.	The
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
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