HF 2387 (LSB 5231YH (2) 91)

HOUSE FILE 2387

BY  MEGGERS

A BILL FOR

An Act relating to early retirement benefits for members of the peace officers’ retirement, accident, and disability system.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 97A.6, subsection 2A, Code 2026, is amended to read as follows:
   2A.  Early retirement benefits.
   a.  Notwithstanding the calculation of the service retirement allowance under subsection 2, beginning July 1, 1996 2026, a member who has completed twenty-two twenty-five years or more of creditable service and is at least fifty years of age, but less than fifty-five years of age, who has otherwise completed the requirements for retirement under subsection 1, may retire and receive a reduced service retirement allowance pursuant to this subsection. The service retirement allowance for a member less than fifty-five years of age shall be calculated in the manner prescribed in subsection 2, except that the percentage multiplier of the member’s average final compensation used in the determination of the service retirement allowance shall be reduced by the board of trustees pursuant to paragraph “b”.
   b.  On July 1, 1996, and on each July 1 thereafter, the board of trustees shall determine for the respective fiscal year the percent by which the percentage multiplier under subsection 2 shall be reduced for each month that a member’s retirement date precedes the member’s fifty-fifth birthday. The board of trustees shall make this determination based upon the most recent actuarial valuation of the system, the calculation of the actuarial cost for each month of retirement of a member prior to age fifty-five, and the premise that the provision of a service retirement allowance to a member who is less than fifty-five years of age will not result in any increase in cost to the system.
   (1)  A member who has completed at least twenty-five years of creditable service but less than thirty-two years shall receive a reduced service retirement allowance of eighty-four percent of the amount calculated in the manner prescribed in subsection 2.
   (2)  A member who has completed at least thirty-two years of creditable service but less than thirty-four years shall receive a reduced service retirement allowance of eighty-eight percent of the amount calculated in the manner prescribed in subsection 2.
   (3)  A member who has completed thirty-four years or more of creditable service shall receive a reduced service retirement allowance of ninety percent of the amount calculated in the manner prescribed in subsection 2.
   b.  On each July 1, the monthly pensions authorized in this subsection payable to retired members and to beneficiaries shall be adjusted by adding to that monthly pension an amount equal to one and one-half percent of the monthly pension payable on that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Under current law, a member of the department of public safety peace officers’ retirement, accident, and disability system who has completed 22 years or more of creditable service and is at least 50 years of age, but less than 55 years of age, may retire and receive reduced retirement benefits based upon calculations by the board of trustees. This bill increases the required number of years of creditable service for early retirement to 25 and strikes the benefits calculation by the board of trustees. Instead, the bill provides that a member who has completed at least 25 years of creditable service but less than 32 years may retire and receive 84 percent of the benefits the member would have received upon retiring at the age of 55 with 22 years of creditable service, a member retiring with at least 32 years of creditable service but less than 34 years shall receive 88 percent, and a member retiring with 34 years or more of creditable service shall receive 90 percent. The bill provides that the monthly pension for an early retirement shall be increased each year on July 1 by 1.5 percent of the member or beneficiary’s monthly pension.