SF 2238 (LSB 5765SS (4) 84)

SENATE FILE 2238

BY  SENG

A BILL FOR

An Act concerning financing of the municipal fire and police retirement system and providing for an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 411.8, subsection 1, paragraph f, Code 2011, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (9)  Beginning July 1, 2012, and each fiscal year thereafter, for members whose membership in the system first commenced on or after July 1, 2012, an amount equal to the member’s contribution rate times each member’s compensation shall be paid to the fund from the earnable compensation of the member. For the purposes of this subparagraph, the member’s contribution rate shall be ten and four-tenths percent. However, the system shall increase the member’s contribution rate as necessary to cover any increase in cost to the system resulting from statutory changes which are enacted by any session of the general assembly meeting after January 1, 1991, if the increase cannot be absorbed within the contribution rates otherwise established pursuant to this paragraph, but subject to a maximum employee contribution rate of eleven and thirty-five hundredths percent. The contribution rate increases specified in 1994 Iowa Acts, ch. 1183, pursuant to this chapter and chapter 97A shall be the only member contribution rate increases for these systems resulting from the statutory changes enacted in 1994 Iowa Acts, ch. 1183, and shall apply only to the fiscal periods specified in 1994 Iowa Acts, ch. 1183. After the employee contribution reaches eleven and thirty-five hundredths percent, sixty percent of the additional cost of such statutory changes shall be paid by employers under paragraph “c” and forty percent of the additional cost shall be paid by employees under this paragraph.
    Sec. 2.  NEW SECTION.  411.20  State appropriation.
   1.  There is appropriated from the general fund of the state for each fiscal year an amount to be distributed to the statewide fire and police retirement system equal to three and nine-tenths percent of the earnable compensation of all members. The percentage shall be the normal contribution rate, as determined by section 411.8, reduced by the percentage rate payable by the participating cities. The method of distribution shall be determined by the board of trustees based on information provided by the actuary of the statewide retirement system.
   2.  Moneys appropriated by the state shall not be used to reduce the normal rate of contribution of any city below seventeen percent.
EXPLANATION
   This bill concerns the financing of the statewide municipal fire and police retirement system.
   Code section 411.8(1)(f), concerning the contribution rate payable by members of the system, is amended to provide that members whose membership in the system first commenced on or after July 1, 2012, shall pay 10.4 percent of earnable compensation to the system. All other members of the system shall continue to pay 9.4 percent. Current law that provides for an increase in the employee contribution rate under certain circumstances remains unchanged and is made applicable to the members paying the increased 10.4 percent rate.
   New Code section 411.20 provides that the state shall pay an amount equal to 3.9 percent of the earnable compensation of all members. In 2010, an annual state contribution to the system was repealed and replaced with a set state appropriation to the system for only fiscal years 2010-2011 and 2011-2012.