HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON WAGNER)

A BILL FOR

An Act allowing certain cities to adopt and establish an alternative benefits retirement system for police officers and fire fighters.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  411.3A  Defined contribution retirement system —— local government option.
   1.
  a.  Notwithstanding any other provision of law, each city participating in the retirement system for police officers and fire fighters, as described in section 411.2, shall have the option to adopt and establish, by ordinance, an alternative benefits retirement system for police officers and fire fighters, in lieu of participation in the retirement system for police officers and fire fighters created within this chapter. Participation in such an alternative benefits retirement system, if adopted, shall be mandatory for all applicable employees appointed on or after the effective date of the ordinance.
   b.  The alternative benefits retirement system shall be an employer-sponsored defined contribution plan requiring mandatory employer contributions that meet the requirements of section 401(a) or section 457 of the Internal Revenue Code.
   2.  The city shall select a provider of the alternative benefits retirement system that is a financial institution capable of providing bundled services for the retirement system, including but not limited to administration, investment management, employee education, and recordkeeping. In selecting a provider, the city shall place primary emphasis on the reasonableness of services in relation to cost, the ability and experience of the provider in providing bundled retirement services to political subdivisions, the financial stability of the provider, and the ability of the provider to provide services as required by this section.
   3.  Upon termination of employment as a police officer or fire fighter employed by a city, the police officer or fire fighter shall be eligible to receive a benefit payable in at least any of the following forms:
   a.  Payment of all or part of the police officer’s or fire fighter’s account balance in the alternative benefits retirement system in a lump sum.
   b.  Payment based on the police officer’s or fire fighter’s account balance in the alternative benefits retirement system in monthly, quarterly, or annual installments over a fixed reasonable period of time, not exceeding the life expectancy of the police officer or fire fighter and the police officer’s or fire fighter’s beneficiary, if applicable.
   c.  Payment based on the police officer’s or fire fighter’s account balance in the form of a single life or joint life and survivorship annuity.
EXPLANATION
   This bill allows a city to adopt and establish, by ordinance, a defined contribution retirement plan as an alternative benefits retirement system for police officers and fire fighters.
   The bill provides that each city participating in the statewide fire and police retirement system, created in Code chapter 411, may establish an alternative benefits retirement system for police officers and fire fighters, in lieu of participation in the statewide fire and police retirement system.
   The bill requires that such an alternative benefits retirement system be an employer-sponsored defined contribution plan that meets the requirements of either Code section 401(a) or section 457 of the Internal Revenue Code.
   The bill provides that a city must select a provider that meets certain requirements related to administration, investment management, employee education, and record keeping, among other things. The bill also provides certain guidelines for the selection of a provider.