February 20, 2001





HOUSE BILL No. 1193

_____


DIGEST OF HB 1193 (Updated February 19, 2001 1:25 PM - DI 73)



Citations Affected: IC 5-10.

Synopsis: Provides that the deferred compensation committee shall adopt provisions in a defined contribution plan for the purpose of converting unused excess accrued leave to a monetary contribution for employees of a state agency. Requires the state personnel department to adopt rules concerning: (1) the type and amount of leave that may be converted to a monetary contribution; (2) the conversion formula for valuing any leave that is converted; (3) the manner of employee selection of leave conversion; and (4) the vesting schedule for any leave that is converted. The rules adopted by the state personnel department must provide for a conversion rate under which the amount contributed on behalf of a participating employee for a day of leave that is converted is equal to at least 75% of the employee's daily pay as of the employee's retirement date. Provides that the provisions may be implemented only if the deferred compensation committee has received from the Internal Revenue Service any rulings or determination letters that the committee considers necessary or appropriate. Provides that the existing provisions establishing a Section 125 cafeteria plan program for unused leave time for state employees do not apply after the defined contribution plan is implemented and the deferred compensation committee has received from the Internal Revenue Service any rulings or determination letters that the committee considers necessary or appropriate for the defined contribution plan.

Effective: July 1, 2001; July 1, 2002.





Kromkowski , Buell , Tincher




    January 9, 2001, read first time and referred to Committee on Ways and Means.
    February 19, 2001, amended, reported _ Do Pass.







February 20, 2001

First Regular Session 112th General Assembly (2001)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2000 General Assembly.

HOUSE BILL No. 1193



    A BILL FOR AN ACT to amend the Indiana Code concerning employee benefits.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 5-10-1.1-1.5; (01)HB1193.1.1. -->     SECTION 1. IC 5-10-1.1-1.5, AS ADDED BY P.L.273-1999, SECTION 231, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1.5. (a) The state, through the budget agency, may adopt a defined contribution plan, under Section 401(a) of the Internal Revenue Code, for the purpose of matching all or a specified portion of state employees' contributions to the state employees' deferred compensation plan and for any additional purposes established by statute.
    (b) The deferred compensation committee shall be the trustee of a plan established under subsection (a) as described in section 4 of this chapter. A plan established under subsection (a) shall be administered by the auditor of state as described in section 5 of this chapter.
    (c) The deferred compensation committee may approve funding offerings for a plan established under subsection (a), which may be the same as offerings for the state employees' deferred compensation plan. All funds in each plan shall be separately accounted for but may be commingled for investment purposes.
    (d) Contributions to a plan established under subsection (a) are limited to the amount of biennial appropriations made for that purpose.
    (e) A plan established under subsection (a) must include appropriate provisions concerning the plan's day to day operation and any other provisions that are appropriate. Notwithstanding IC 22-2-6-2, the plan may also include provisions for the use of automated voice response units and telephonic communications, online activities, and other technology for participant elections, directions, and services if the technology has sufficient capacity to record and store the elections and directions.
    (f) The state is obligated at any particular time only for the current market value of the funding previously made to a plan established under subsection (a).
SOURCE: IC 5-10-1.1-7.5; (01)HB1193.1.2. -->     SECTION 2. IC 5-10-1.1-7.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 7.5. (a) As used in this section, "state agency" means the following:
        (1) An authority, a board, a branch, a commission, a committee, a department, a division, or other instrumentality of state government.
        (2) A separate corporate body politic that adopts the plan described in subsection (b).
However, the term does not include a state educational institution (as defined in IC 20-12-0.5-1) or a political subdivision.
    (b) The deferred compensation committee shall adopt provisions in a defined contribution plan, under Sections 401(a) and 414(d) of the Internal Revenue Code, for the purpose of converting unused excess accrued leave to a monetary contribution for employees of a state agency. These provisions may be part of the plan and trust established under section 1.5(a) of this chapter.
    (c) The deferred compensation committee shall be the trustees of the plan described in subsection (b). The plan must be a qualified plan, as determined by the Internal Revenue Service.
    (d) The state personnel department shall adopt rules under IC 4-22-2 that it considers appropriate or necessary to implement this section. The rules adopted by the state personnel department under this section must:
        (1) be consistent with the plan described in subsection (b);
        (2) include provisions concerning:
            (A) the type and amount of leave that may be converted to a monetary contribution;
            (B) the conversion formula for valuing any leave that is

converted;
            (C) the manner of employee selection of leave conversion; and
            (D) the vesting schedule for any leave that is converted; and
        (3) apply to all state agencies.
    (e) The rules adopted by the state personnel department under subsection (d) specifying the conversion formula must provide for a conversion rate under which the amount contributed on behalf of a participating employee for a day of leave that is converted under this section is equal to at least seventy-five percent (75%) of the employee's daily pay as of the employee's retirement date.
    (f) The deferred compensation committee may adopt the following:
        (1) Plan provisions governing:
            (A) the investment of accounts in the plan; and
            (B) the accounting for converted leave.
        (2) Any other plan provisions that are necessary or appropriate for operation of the plan.
    (g) The plan described in subsection (b) may be implemented only if the deferred compensation committee has received from the Internal Revenue Service any rulings or determination letters that the committee considers necessary or appropriate.

SOURCE: IC 5-10-12-3; (01)HB1193.1.3. -->     SECTION 3. IC 5-10-12-3, AS ADDED BY P.L.195-1999, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. (a) Subject to subsection subsections (b) and (c), an employee who:
        (1) has at least ten (10) years of creditable service with a state agency;
        (2) retires after June 30, 2000; and
        (3) has accrued and unused sick days, vacation days, or personal days on the employee's retirement date;
is entitled to have the amounts specified in section 5 of this chapter deposited by the state into a cafeteria plan under Section 125 of the Internal Revenue Code.
    (b) The provisions of this chapter requiring the department to make deposits into a cafeteria plan on behalf of retired employees described in subsection (a) apply only if the department has received from the Internal Revenue Service any approvals or rulings that the department considers necessary or appropriate for the cafeteria plan.
     (c) The provisions of this chapter requiring the department to make deposits into a cafeteria plan on behalf of retired employees

described in subsection (a) do not apply if the plan described in IC 5-10-1.1-7.5(g) is implemented and the deferred compensation committee has received from the Internal Revenue Service any rulings or determination letters that the committee considers necessary or appropriate for the plan described in IC 5-10-1.1-7.5(g).