HF 2535 (LSB 5745YH (6) 90)

HOUSE FILE 2535

BY  YOUNG, BLOOMINGDALE, NORDMAN, HARRIS, WILLS, KAUFMANN, SEXTON, BRADLEY, COLLINS, FISHER, GERHOLD, P. THOMPSON, DUNWELL, LATHAM, MOORE, DEYOE, A. MEYER, FRY, LOHSE, BOSSMAN, HOLT, RINKER, HORA, LUNDGREN, WILZ, GEHLBACH, SIEGRIST, THOMSON, SHIPLEY, BODEN, ANDREWS, GUSTOFF, HAYES, CARLSON, BROWN-POWERS, KRESSIG, and LEVIN

A BILL FOR

An Act relating to the Iowa public employees’ retirement system by modifying the retirement benefits of sheriffs and deputy sheriffs.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 97B.49C, subsection 1, paragraph a, subparagraph (3), Code 2024, is amended to read as follows:
   (3)  For each active or inactive vested member retiring on or after July 1, 1998, and before July 1, 2024, sixty percent plus, if applicable, an additional three-eighths of one percentage point for each additional calendar quarter of eligible service beyond twenty-two years of service, not to exceed a total of twelve additional percentage points.
    Sec. 2.  Section 97B.49C, subsection 1, paragraph a, Code 2024, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (4)  For each active or inactive vested member retiring on or after July 1, 2024, sixty percent plus, if applicable, an additional five-eighths of one percentage point for each additional calendar quarter of eligible service beyond twenty-two years of service, not to exceed a total of twenty additional percentage points.
    Sec. 3.  Section 97B.49C, Code 2024, is amended by adding the following new subsection:
   NEW SUBSECTION.  2A.  Annual adjustment of allowance.  A member who retires from employment as a sheriff or deputy sheriff on or after July 1, 2024, and who receives a monthly retirement allowance under this section shall, in lieu of a retirement dividend under section 97B.49F, have the monthly allowance adjusted as follows:
   a.  On each July 1, the monthly retirement allowance authorized in this section and payable to members retired prior to that date and to beneficiaries entitled to a monthly retirement allowance prior to that date shall be adjusted by adding to the monthly retirement allowance payable on that date an amount equal to the sum of one and one-half percent of the monthly retirement allowance payable on that date.
   b.  A retired member or beneficiary of a retired member shall not be eligible for an annual readjustment of allowance provided in this subsection unless the member has twenty-two years of eligible service and attained the age of fifty years prior to the member’s termination of employment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the Iowa public employees’ retirement system (IPERS) by modifying the retirement benefits of sheriffs and deputy sheriffs.
   The monthly retirement benefit under IPERS for a sheriff or deputy sheriff is calculated by multiplying the retiree’s applicable covered wage by a percentage. The bill increases, for sheriffs and deputy sheriffs retiring on or after July 1, 2024, the applicable percentage used to calculate the retiree’s monthly retirement benefit by five-eighths of one percentage point for each calendar quarter of service beyond 22 years of service up to a maximum of 20 additional percentage points. Under current law, the applicable percentage is increased by three-eighths of one percentage point up to a maximum of 12 additional percentage points for calendar quarters of service beyond 22 years of service.
   Under current law, a vested member retiring prior to July 1, 1990, is eligible to receive an automatic retirement dividend under Code section 97B.49F(1). For a vested member retiring on or after July 1, 1990, a favorable experience dividend (FED) reserve account is provided in Code section 97B.49F(2). The FED reserve account pays a dividend to an eligible member when a favorable experience on the actuarial liabilities and assets occurs and IPERS is fully funded.
   The bill establishes a cost-of-living adjustment (COLA) to the monthly allowance for active and inactive members and to any beneficiaries for retirements occurring on or after July 1, 2024. Beginning July 1, 2024, and on each July 1, the monthly retirement allowance of such a member shall be adjusted by adding to the monthly retirement allowance an amount equal to one and one-half percent of the monthly retirement allowance payable on that date. A member who retires on or after July 1, 2024, is not eligible for the COLA unless the member has 22 years of eligible service and attained 50 years of age prior to the retirement date of the member. The bill prohibits a member retiring after July 1, 2024, from FED dividend eligibility provided under Code section 97B.49F(2).