Citations Affected:
IC 5-10.2-2-3.
Synopsis: Pension investment options. Provides that a member of the
public employees' retirement fund or the Indiana state teachers'
retirement fund may change the allocation among available funds of
the amount credited to the member's annuity savings account once each
quarter. (Current law provides that the allocation may be changed only
one time every 12 months.)
Effective: January 1, 2002.
January 9, 2001, read first time and referred to Committee on Ways and Means.
A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
limited to, stocks and bonds) and take other actions necessary to fulfill
its duty as a fiduciary of the annuity savings account, subject to the
limitations and restrictions set forth in
IC 5-10.3-5-3
and
IC 21-6.1-3-9.
(c) Each board shall establish alternative investment programs
within the annuity savings account of the public employees' retirement
fund, the pre-1996 account, and the 1996 account, based on the
following requirements:
(1) Each board shall maintain at least one (1) alternative
investment program that is an indexed stock fund and one (1)
alternative investment program that is a bond fund.
(2) The programs should represent a variety of investment
objectives under IC 5-10.3-5-3.
(3) No program may permit a member to withdraw money from
the member's account except as provided in
IC 5-10.2-3
and
IC 5-10.2-4.
(4) All administrative costs of each alternative program shall be
paid from the earnings on that program.
(5) A valuation of each member's account must be completed as
of the last day of each quarter.
(d) The board must prepare, at least annually, an analysis of the
guaranteed program and each alternative investment program. This
analysis must:
(1) include a description of the procedure for selecting an
alternative investment program;
(2) be understandable by the majority of members; and
(3) include a description of prior investment performance.
(e) A member may direct the allocation of the amount credited to
the member among the guaranteed fund and any available alternative
investment funds, subject to the following conditions:
(1) A member may make a selection or change an existing
selection at any time, but not more than once in a twelve (12)
month period. each quarter.
(2) The board shall implement the member's selection beginning
the first day of the next calendar quarter that begins at least thirty
(30) days after the selection is received by the board. This date is
the effective date of the member's selection.
(3) A member may select any combination of the guaranteed fund
or any available alternative investment funds, in ten percent
(10%) increments.
(4) A member's selection remains in effect until a new selection
is made.
(5) On the effective date of a member's selection, the board shall
reallocate the member's existing balance or balances in
accordance with the member's direction, based on:
(A) for an alternative investment program balance, the market
value on the effective date; and
(B) for any guaranteed program balance, the account balance
on the effective date.
All contributions to the member's account shall be allocated as of
the last day of that quarter in accordance with the member's most
recent effective direction. The board shall not reallocate the
member's account at any other time.
(f) When a member who participates in an alternative investment
program transfers the amount credited to the member from one (1)
alternative investment program to another alternative investment
program or to the guaranteed program, the amount credited to the
member shall be valued at the market value of the member's
investment, as of the day before the effective date of the member's
selection. When a member who participates in an alternative
investment program retires, becomes disabled, dies, or suspends
membership and withdraws from the fund, the amount credited to the
member shall be the market value of the member's investment as of the
last day of the quarter preceding the member's distribution or
annuitization at retirement, disability, death, or suspension and
withdrawal, plus contributions received after that date.
(g) When a member who participates in the guaranteed program
transfers the amount credited to the member to an alternative
investment program, the amount credited to the member in the
guaranteed program is computed without regard to market value and is
based on the balance of the member's account in the guaranteed
program as of the last day of the quarter preceding the effective date of
the transfer. When a member who participates in the guaranteed
program retires, becomes disabled, dies, or suspends membership and
withdraws from the fund, the amount credited to the member shall be
computed without regard to market value and is based on the balance
of the member's account in the guaranteed program as of the last day
of the quarter preceding the member's distribution or annuitization at
retirement, disability, death, or suspension and withdrawal, plus any
contributions received since that date plus interest since that date.