SENATE FILE 2098

BY  KETTERING

A BILL FOR

An Act concerning reemployed retired members under the Iowa public employees’ retirement system.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 97B.1A, subsection 8, paragraph b, Code Supplement 2011, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (10)  Retired members.
    Sec. 2.  Section 97B.1A, subsection 26, paragraph b, subparagraph (3), Code Supplement 2011, is amended to read as follows:
   (3)  Effective July 1, 1992, “covered wages” does not include wages to a member on or after the effective date of the member’s retirement, except as otherwise permitted by the system’s administrative rules, unless the member is reemployed, as provided under section 97B.48A.
    Sec. 3.  NEW SECTION.  97B.11B  Additional contributions.
   Notwithstanding any provision of this chapter to the contrary, an employer of an eligible retired member shall make contributions to the system in an amount equal to the amount the employer would have contributed for that eligible retired member pursuant to section 97B.11 if the eligible retired member was not excluded from coverage under this chapter. Contributions made pursuant to this section shall not be refunded to the retired member. For purposes of this section, an “eligible retired member” is a retired member who would otherwise be covered under this chapter if the retired member was not excluded from the definition of employee as provided in section 97B.1A, subsection 8.
    Sec. 4.  Section 97B.48A, subsections 1, 2, and 4, Code 2011, are amended to read as follows:
   1.
  a.  If a
 
retired member who has not reached the
 
retired member’s sixty-fifth birthday and who has a bona fide retirement under this chapter is in regular full-time employment
 
with a covered employer during a calendar year, the
 
retired member’s retirement allowance shall be reduced by fifty cents for each dollar the
 
retired member earns over the limit provided in this subsection. However, employment is not full-time employment
 
with a covered employer until the
 
retired member receives remuneration in an amount in excess of thirty thousand dollars for a calendar year, or an amount equal to the amount of remuneration permitted for a calendar year for persons under sixty-five years of age before a reduction in federal social security retirement benefits is required, whichever is higher. Effective the first of the month in which a
 
retired member attains the age of sixty-five years, a retired member may receive a retirement allowance without a reduction after return to covered employment
 
with a covered employer regardless of the amount of remuneration received.
   b.  If a
 
retired member dies and the full amount of the reduction from retirement allowances required under this subsection has not been paid, the remaining amounts shall be deducted from the payments made, if any, to the
 
retired member’s designated beneficiary or contingent annuitant. If the
 
retired member has selected an option under which remaining payments are not required or the remaining payments are insufficient to satisfy the full amount of the reduction from retirement allowances required under this subsection, the amount still unpaid shall be a claim against the member’s estate.
   c.  For purposes of this subsection and not for purposes of determining a retiree’s covered wages, remuneration paid on and after July 1, 2007, includes noncovered contributions to a defined contribution plan qualified under Internal Revenue Code section 401(a), a tax-deferred annuity qualified under Internal Revenue Code section 403(b), an eligible deferred compensation plan qualified under Internal Revenue Code section 457, or any other tax qualified or nonqualified investment vehicle, that is provided by an employer to a retiree who has been or will be reemployed in covered
 
regular full-time employment
 
with a covered employer.
   2.  Effective January 1, 1991, a retired member of any age may receive a retirement allowance after return to covered employment
 
with a covered employer, regardless of the amount of remuneration received, if the covered employment consists of holding an elective office.
   4.  The system shall pay to the
 
a retired member the accumulated contributions of the
 
retired member and all of the employer contributions
 
made prior to July 1, 2012, plus interest plus interest dividends as provided in section 97B.70, for all completed calendar years, compounded as provided in section 97B.70, on the covered wages earned by a retired member
 
prior to July 1, 2012, that are not used in the
 
calculation or recalculation of the retirement allowance of a member. A payment of contributions to a
 
retired member pursuant to this subsection shall be considered a retirement payment and not a refund and the
 
retired member shall not be eligible to buy back the period of reemployment service.
    Sec. 5.  Section 97B.52A, subsection 1, paragraph c, Code 2011, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (3)  For purposes of this paragraph “c”, “covered employment” means employment by a retired member with a covered employer that would be covered employment under this chapter if the retired member was not excluded from the definition of employee as provided in section 97B.1A, subsection 8.
EXPLANATION
   This bill provides that retired members under the Iowa public employees’ retirement system (IPERS) are excluded from the definition of employee for purposes of IPERS. By excluding retired members from the definition of employee, a retired member returning to employment with an IPERS-covered employer shall not become a member of the system for that employment and shall not make contributions to the system or be granted membership service for that employment. Under current law, a retired member who returns to employment with an IPERS-covered employer can be considered an employee for purposes of IPERS coverage.
   New Code section 97B.11B provides that an employer of a retired member shall make employer contributions to the system for that member in an amount equal to what the employer would have been required to contribute if the retired member was not excluded from the definition of employee as provided in this bill. Contributions made pursuant to this Code section shall not be refunded to the retired member.
   Code section 97B.48A, concerning reemployment, is amended to provide that current requirements applicable to retired reemployed members apply to retired members who return to full-time employment with an IPERS-covered employer. The provision allowing the refund of accumulated contributions made on behalf of retired reemployed members is amended to provide that only employer contributions made prior to July 1, 2012, can be refunded.
   Code section 97B.52A, concerning bona fide retirement, is amended to provide that covered employment for purposes of determining a bona fide retirement for a retired member means employment that would have been covered employment under IPERS if the retired member was not excluded from the definition of employee as provided in the bill.