Citations Affected: IC 2-3.5; IC 5-10.2; IC 5-10.3; IC 20-5; IC 21-6.1;
IC 33-13; IC 36-8.
Synopsis: PERF and TRF administrative issues. Permits the pooling of
the assets of the public employees' retirement fund (PERF) and the
teachers' retirement fund (TRF) for investment purposes. Authorizes
PERF and TRF to enter into investment contracts for a term longer than
5 years. Allows certain units in the 1977 police officers' and
firefighters' pension and disability fund (1977 fund) to buy back
additional members' service. Permits a PERF or TRF member to
suspend the member's right to a pension benefit and use the member's
annuity savings account to purchase service in another governmental
retirement plan. Permits PERF and TRF to offer dental, vision, and
long term care coverage to retirees. Liberalizes rollover distributions
and trustee to trustee transfers for certain public retirement funds as
permitted by the federal Economic Growth and Tax Relief
Reconciliation Act of 2001. Permits PERF and TRF members to
purchase at actuarial cost additional service credit. Allows a state or
political subdivision to pay all or a part of a member's contribution to
purchase additional service credit. Authorizes school corporations to
make payments to PERF and TRF using electronic funds transfer.
Authorizes political subdivisions to make payments to PERF using
electronic funds transfer.
(The introduced version of this bill was prepared by the pension
management oversight commission.)
Effective: Upon passage; July 1, 2002.
November 20, 2001, read first time and referred to Committee on Pensions and Labor.
January 22, 2002, amended, reported favorably _ Do Pass.
A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
SECTION 1.
IC 2-3.5-5-12
IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2002]: Sec. 12. (a) To the extent permitted by the Internal
Revenue Code and the applicable regulations, the fund may accept,
on behalf of any active member, a rollover distribution from any
of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(b) Any amounts rolled over under subsection (a) must be
accounted for in a "rollover account" that is separate from the
member's account.
(c) A member may direct the investment of the member's
rollover account into any alternative investment option that the
board may make available to the member's rollover account under
section 3 of this chapter.
(d) A member may withdraw the member's rollover account
from the fund in a lump sum at any time before retirement. At
retirement, the member may withdraw the member's rollover
account in accordance with the retirement options that are
available for the member's account.
SECTION 2.
IC 5-10.2-2-2.5
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2.5. (a) Each board
may establish investment guidelines and limits on all types of
investments (including, but not limited to, stocks and bonds) and take
other actions necessary to fulfill its duty as a fiduciary for all funds
assets under its control, subject to the limitations and restrictions set
forth in
IC 5-10.3-5-3
and
IC 21-6.1-3-9.
(b) Each board may commingle or pool assets with the assets of
any other persons or entities. This authority includes, but is not
limited to, the power to invest in commingled or pooled funds,
partnerships, or mortgage pools. In the event of any such
investment, the board shall keep separate detailed records of the
assets invested. Any decision to commingle or pool assets is subject
to the limitations and restrictions set forth in
IC 5-10.3-5-3
and
IC 21-6.1-3-9.
SECTION 3.
IC 5-10.2-3-1.2
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2002]: Sec. 1.2. (a) A member who has
earned at least ten (10) years of service in a position covered by
PERF, TRF, or a combination of the two (2) funds may purchase
one (1) year of service credit for each five (5) years of service that
the member has completed in a position covered by PERF or TRF.
(b) Before a member retires, a member who desires to purchase
additional service credit under subsection (a) must contribute to
the fund as follows:
(1) Contributions that are equal to the product of the
following:
(A) The member's salary at the time the member actually
makes a contribution for the service credit.
(B) A rate, determined by the actuary for the fund, that is
based on the age of the member at the time the member
actually makes a contribution for the service credit and
computed to result in a contribution amount that
approximates the actuarial present value of the benefit
attributable to the service credit purchased.
(C) The number of years of service credit the member
intends to purchase.
(2) Contributions for any accrued interest, at a rate
determined by the actuary for the fund, for the period from
the member's initial membership in the fund to the date
payment is made by the member.
(c) The following apply to the purchase of service credit under
this section:
(1) The board may allow a member to make periodic
payments of the contributions required for the purchase of
service credit. The board shall determine the length of the
period during which the payments must be made.
(2) The board may deny an application for the purchase of
service credit if the purchase would exceed the limitations
under Section 415 of the Internal Revenue Code.
(3) A member may not claim the service credit for the purpose
of computing benefits unless the member has made all
payments required for the purchase of the service credit.
(4) To the extent permitted by the Internal Revenue Code and
applicable regulations, a member may purchase service credit
under this section by a rollover distribution to the fund from
any of the following:
(A) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(B) An annuity contract or account described in Section
403(b) of the Internal Revenue Code.
(C) An eligible plan that is maintained by a state, a
political subdivision of a state, or an agency or
instrumentality of a state or political subdivision of a state
under Section 457(b) of the Internal Revenue Code.
(D) An individual retirement account or annuity described
in Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(d) A member who terminates employment before satisfying the
eligibility requirements necessary to receive a monthly benefit may
withdraw the purchase amount, plus accumulated interest, after
submitting a properly completed application for a refund to the
fund. However, the member must also apply for a refund of the
member's entire annuity savings account under section 6 of this
chapter to be eligible for a refund of the member's rollover
amount.
(e) For a member who is a state employee, the employer may
pay all or a part of the member contributions required for the
purchase of service credit under this section. In that event, the
actuary shall determine the amortization, and subsections (c)(1),
(c)(3), (c)(4), and (d) do not apply.
(f) For a member who is an employee of a participating political
subdivision, the employer may adopt an ordinance to pay all or a
part of the member contributions required for the purchase of
service credit under this section. In that event, the actuary shall
determine the amortization, and subsections (c)(1), (c)(3), (c)(4),
and (d) do not apply.
SECTION 4.
IC 5-10.2-3-6.2
IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2002]: Sec. 6.2. A member who:
(1) has attained vested status in the fund;
(2) has terminated employment;
(3) has not begun receiving benefits; and
(4) is transferring creditable service earned under PERF or
TRF to another governmental retirement plan under section
1(i) of this chapter;
may suspend the member's membership and withdraw the
member's annuity savings account to purchase creditable service
in the other governmental retirement plan.
SECTION 5.
IC 5-10.2-3-10
IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2002]: Sec. 10. (a) To the extent permitted by the Internal
Revenue Code and the applicable regulations, the fund may accept,
on behalf of any active member, a rollover distribution from any
of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(b) Any amounts rolled over under subsection (a) must be
accounted for in a "rollover account" that is separate from the
member's annuity savings account.
(c) A member may direct the investment of the member's
rollover account into any alternative investment option that the
board may make available to the member's rollover account under
IC 5-10.2-2-3.
However, the member may not invest the member's
rollover account in the guaranteed fund.
(d) A member may withdraw the member's rollover account
from the fund in a lump sum at any time before retirement. At
retirement, the member may withdraw the member's rollover
account in accordance with the retirement options that are
available for the member's annuity savings account, including the
deferral of a withdrawal.
SECTION 6. IC 5-10.3-3-8, AS AMENDED BY P.L.119-2000,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 8. (a) The board may do any of the following:
(1) Establish and amend rules and regulations:
(A) for the administration and regulation of the fund and the
board's affairs; and
(B) to effectuate the powers and purposes of the board;
without adopting a rule under IC 4-22-2.
(2) Make contracts and sue and be sued as the board of trustees of
the public employees' retirement fund of Indiana.
(3) Delegate duties to its employees.
(4) Enter into agreements with one (1) or more insurance
companies to provide life, hospitalization, surgical, medical,
dental, vision, long term care, or supplemental Medicare
insurance, utilizing individual or group insurance policies for
retired members of the fund, and, upon authorization of the
respective member, deduct premium payments for such policies
from the members' retirement benefits and remit the payments to
the insurance companies.
(5) Enter into agreements with one (1) or more insurance
companies to provide annuities for retired members of the fund,
and, upon a member's authorization, transfer the amount credited
to the member in the annuity savings account to the insurance
companies.
(6) Whenever the fund's membership is sufficiently large for
actuarial valuation, establish an employer's contribution rate for
all employers, including employers with special benefit provisions
for certain employees.
(7) Amortize prior service liability over a period of forty (40)
years or less.
(8) Recover payments made under false or fraudulent
representation.
(9) Exercise all powers necessary, convenient, or appropriate to
carry out and effectuate its public and corporate purposes and to
conduct its business.
(b) An agreement under subsection (a)(4) may be for a duration of
three (3) years.
(c) This subsection does not apply to investments of the board.
A contract under subsection (a)(2) may be for a term of not more than
five (5) years, with an ability to renew thereafter.
(d) The board's powers and the fund's powers specified in this
chapter shall be interpreted broadly to effectuate the purposes of this
chapter and may not be construed as a limitation of powers.
SECTION 7.
IC 5-10.3-7-9.5
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 9.5. (a) The fund may
accept cash rollover contributions from a member who is making
payments for additional service credits under this chapter if the
following conditions are met:
(1) The rollover contribution must represent:
(A) all or a portion of the member's interest in a retirement
plan of a former employer which is qualified under Section
401(a) of the Internal Revenue Code and which permits the
interest to be transferred to the fund as a qualifying rollover
contribution under the Internal Revenue Code; or
(B) all or a portion of the member's interest from a conduit an
individual retirement account under or annuity described in
Section 408 (a) or Section 408(b) of the Internal Revenue
Code; However, the conduit individual retirement account may
not have any assets other than assets that:
(i) were previously distributed to the member by an
employer plan qualified under Section 401(a) of the Internal
Revenue Code as a lump sum distribution;
(ii) are eligible for tax free rollover treatment; and
(iii) were deposited in the conduit individual retirement
account within sixty (60) days of receipt, and earnings on
the conduit account.
(C) all or a portion of the member's interest in:
(i) a qualified plan described in Section 403(a) of the
Internal Revenue Code; or
(ii) an annuity contract or account described in Section
403(b) of the Internal Revenue Code; or
(D) all or a portion of the member's interest in an eligible
plan that is maintained by a state, a political subdivision of
a state, or an agency or instrumentality of a state or
political subdivision of a state under Section 457(b) of the
Internal Revenue Code.
(2) The amount of the rollover contributions may not exceed the
amount of payment required to purchase the service credits under
this chapter.
(3) The rollover contributions may contain only tax-deferred
contributions and earnings on the contributions, and may not
include any post-tax contributions.
(4) The member must be otherwise eligible to purchase the
service credit under this chapter.
(b) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the fund may accept, on behalf of a
member who is purchasing permissive service credit under this
chapter, a trustee to trustee transfer from:
(1) an annuity contract or account described in Section 403(b)
of the Internal Revenue Code; or
(2) an eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
(c) The fund, the board, and their respective members, officers, and
employees do not have any responsibility or liability with respect to the
federal and state income tax consequences of any transfer made to the
fund under this section. The board may require, as a condition to the
fund's acceptance of a rollover contribution:
(1) satisfactory evidence that the proposed transfer is a qualifying
rollover contribution under the Internal Revenue Code; and
(2) reasonable releases or indemnifications from the member
against any and all liabilities that may be connected with the
transfer.
(c) (d) Cash transferred to the fund as a rollover contribution shall
be deposited in the retirement allowance account.
(d) (e) A member who terminates employment before satisfying the
eligibility requirements necessary for a pension or disability benefit
may withdraw the member's rollover contribution, plus accumulated
interest, after submitting a properly completed application for a refund
to the fund. However, the member must also apply for a refund of the
member's entire annuity savings account under
IC 5-10.2-3
to be
eligible for a refund of their the member's rollover amount.
(e) (f) Except as provided in this section, the fund shall not accept
any other rollover contributions from a member.
(f) (g) The board shall administer this section in accordance with the
rollover provisions of the Internal Revenue Code and any applicable
regulations.
SECTION 8. IC 5-13-5-5 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 5. (a) The fiscal body of any
political subdivision may by ordinance or resolution authorize the
proper legal officers of the political subdivision to transact the political
subdivision's business with a financial institution or a retirement fund
administered by the public employees' retirement fund through the
use of electronic funds transfer.
(b) The ordinance or resolution must:
(1) specify the types of transactions that may be conducted by
electronic funds transfer; and
(2) require the proper officers to maintain adequate
documentation of the transactions so that they may be audited as
provided by law.
SECTION 9. IC 20-5-3-1, AS AMENDED BY P.L.68-2001,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 1. (a) The governing body of each school
corporation shall organize by electing a president, a vice president, and
a secretary, each of whom shall be a different member, within the first
fifteen (15) days following the commencement date of the members'
terms of office, as provided for under section 3 of this chapter.
(b) The governing body shall also at such time appoint a treasurer
of the governing body and of the school corporation who is a person,
other than the superintendent of schools, who is not a member of the
governing body. The treasurer may, with the approval of the governing
body, appoint a deputy who shall also be a person, other than the
superintendent of schools, who is not a member of the governing body
and who shall have the same powers and duties as the treasurer, or such
lesser duties as the governing body by rule shall provide.
(c) The treasurer shall be the official custodian of all funds of the
school corporation and shall be responsible for the proper safeguarding
and accounting for all the funds and shall:
(1) issue a receipt for any money coming into the treasurer's
hands;
(2) deposit such money in accordance with the laws governing the
deposit of public funds; and
(3) issue all warrants in payment of expenses lawfully incurred on
behalf of the school corporation, but, except as otherwise
provided by law, shall issue the warrants only after proper
allowance or approval by the governing body. No allowance or
approval shall be required by the governing body for amounts
lawfully due in payment of indebtedness or payments due the
state of Indiana, the United States Government, or their agencies
and instrumentalities.
No verification, other than a properly itemized invoice, shall be
required for any claim of one hundred dollars ($100) or less, and any
claim over this amount is sufficient as to form if the bill or statement
therefor has printed or stamped on its face a verification of the bill or
statement in language approved by the state board of accounts.
(d) Notwithstanding subsection (c), a treasurer may transact school
corporation financial business with a financial institution or a public
retirement fund through the use of electronic funds transfer. For
purposes of this section, "electronic funds transfer" means any transfer
of funds, other than a transaction originated by check, draft, or similar
paper instrument, that is initiated through an electronic terminal,
telephone, or computer or magnetic tape for the purpose of ordering,
instructing, or authorizing a financial institution to debit or credit an
account. The treasurer must provide adequate documentation to the
governing body of the transfers made under this subsection. This
subsection applies only to agreements for joint investment of money
under IC 5-13-9 and to payments to:
(1) the Indiana state teachers' retirement fund; or
(2) the public employees' retirement fund;
from participating employers.
(e) A treasurer is not personally liable for an act or omission
occurring in connection with the performance of the duties set forth in
this section, unless the act or omission constitutes gross negligence or
an intentional disregard of the treasurer's duties.
(f) The governing body may establish the position of executive
secretary to the governing body. The executive secretary:
(1) must be an employee of the school corporation;
(2) may not be a member of the governing body; and
(3) shall be appointed by the governing body upon the
recommendation of the superintendent of the school corporation.
The governing body shall determine the duties of the executive
secretary, which may include all or part of the duties of the secretary of
the board.
SECTION 10.
IC 21-6.1-3-7
, AS AMENDED BY P.L.119-2000,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 7. (a) The board may do any of the following:
(1) Adopt and enforce rules and regulations regarding the fund's
administration and the control and investment of the fund.
(2) Bond employees for the fund's protection.
(3) Receive from the federal government the state's share of the
cost of the pension contribution for a member on leave of absence
to work in a federally supported educational project.
(4) Sue and be sued as the board of trustees of the Indiana state
teachers' retirement fund.
(5) Summon and examine witnesses when adjusting claims.
(6) Require, when adjusting disability claims, medical
examinations by doctors approved or appointed by the board;
however, not more than two (2) examinations may be conducted
in one (1) year.
(7) Conduct investigations to help determine the merit of a claim.
(8) Meet any emergency which may arise in the administration of
its trust.
(9) Determine other matters regarding its trust which are not
specified.
(10) Enter into agreements with one (1) or more insurance
companies to provide life, hospitalization, surgical, medical,
dental, vision, long term care, or supplemental Medicare
insurance, utilizing individual or group insurance policies for
retired teachers, and, upon authorization of the respective retired
teacher, deduct premium payments for such policies from the
teachers' retirement benefits and remit the payments to the
insurance companies.
(11) Enter into agreements with one (1) or more insurance
companies to provide annuities for retired teachers and upon a
member's authorization transfer the amount credited to the
member in the annuity savings account to the insurance
companies.
(12) Exercise all powers necessary, convenient, or appropriate to
carry out and effectuate its public and corporate purposes and to
conduct its business.
(13) Establish and amend rules and regulations:
(A) for the administration and regulation of the fund and the
board's affairs; and
(B) to effectuate the powers and purposes of the board;
without adopting a rule under
IC 4-22-2.
(b) An agreement under subsection (a)(10) may be for a duration of
three (3) years.
FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 10. (a) This section
applies to a person who:
(1) is a judge participating under this chapter;
(2) before becoming a judge was appointed by a court to serve as
a full-time referee, full-time commissioner, or full-time
magistrate;
(3) was a member of the public employees' retirement fund during
the employment described in subdivision (2); and
(4) received credited service under the public employees'
retirement fund for the employment described in subdivision (2).
(b) If a person becomes a participant in the judges' 1977 benefit
system under IC 33-13-9.1-1, section 1 of this chapter, credit for prior
service by the judge as a full-time referee, full-time commissioner, or
full-time magistrate shall be granted under this chapter by the board if:
(1) the prior service was credited under the public employees'
retirement fund;
(2) the state contributes to the judges' 1977 benefit system the
amount the board determines necessary to amortize the prior
service liability over a period determined by the board, but not
more than ten (10) years; and
(3) the judge pays in a lump sum or in a series of payments
determined by the board, not exceeding five (5) annual payments,
the amount the judge would have contributed if the judge had
been a member of the judges' 1977 benefit system during the prior
service.
(c) If the requirements of subsection (b)(2) and (b)(3) are not
satisfied, a participant is entitled to credit only for years of service after
the date of participation in the 1977 benefit system.
(d) An amortization schedule for contributions paid under
subsection (b)(2) or (b)(3) must include interest at a rate determined by
the board.
(e) The following provisions apply to a person described in
subsection (a):
(1) A minimum benefit applies to participants receiving credit in
the judges' 1977 benefit system from service covered by the
public employees' retirement fund. The minimum benefit is
payable at sixty-five (65) years of age and equals the actuarial
equivalent of the vested retirement benefit that is:
(A) payable to the member at normal retirement under
IC 5-10.2-4-1
as of the day before the transfer; and
(B) based solely on:
(i) creditable service;
the applicable regulations, the judges' 1977 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a trustee to trustee transfer
from any of the following:
(1) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
SECTION 13.
IC 33-13-9.1-10.5
, AS ADDED BY P.L.195-1999,
SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 10.5. (a) This section applies only to a person
who:
(1) is a judge participating under this chapter;
(2) before becoming a judge was a member of an Indiana public
employees' retirement fund;
(3) received credited service under an Indiana public employees'
retirement fund for the employment described in subdivision (2),
and the credited service is not eligible for prior service credit
under section 10 of this chapter;
(4) has not attained vested status under an Indiana public
employees' retirement fund for the employment described in
subdivision (2); and
(5) has at least eight (8) years of service credit in the judges'
retirement system.
(b) If a person becomes a participant in the judges' 1977 benefit
system under this chapter, credit for service described in subsection (a)
shall be granted under this chapter by the board if:
(1) the prior service was credited under an Indiana public
employees' retirement fund; and
(2) the judge pays in a lump sum or in a series of payments
determined by the board, not exceeding five (5) annual payments,
the amount determined by the actuary for the 1977 benefit system
as the total actual cost of the service.
(c) If the requirements of subsection (b) are not satisfied, a
participant is entitled to credit only for years of service after the date of
participation in the 1977 benefit system.
(d) An amortization schedule for contributions paid under this
section must include interest at a rate determined by the board.
(e) If the requirements of subsection (b) are satisfied, the
appropriate board shall transfer from the retirement fund described in
subsection (a)(2) to the judges' 1977 benefit system the amount
credited to the judge's annuity savings account and the present value of
the retirement benefit payable at sixty-five (65) years of age that is
attributable to the transferring participant.
(f) The amount a participant must contribute to the judges' 1977
benefit system under subsection (b) shall be reduced by the amount
transferred to the judges' 1977 benefit system by the board under
subsection (e).
(g) If the requirements of subsection (b) are satisfied, credit for prior
service in an Indiana public employees' retirement fund is waived.
(h) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1977 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a rollover of a distribution
from any of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(i) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1977 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a trustee to trustee transfer
from any of the following:
(1) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
SECTION 14.
IC 33-13-10.1-14
, AS AMENDED BY P.L.194-1999,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 14. (a) This section applies to a person who:
(1) is a judge participating under this chapter;
(2) before becoming a judge was appointed by a court to serve as
a full-time referee, full-time commissioner, or full-time
magistrate;
(3) was a member of the public employees' retirement fund during
the employment described in subdivision (2); and
retirement fund to the judges' 1985 benefit system the amount
credited to the annuity savings account and the present value of
the retirement benefit payable at sixty-five (65) years of age or at
least fifty-five (55) years of age under section 6(2)(B) of this
chapter that is attributable to the transferring participant.
(3) The amount the state and the participant must contribute to the
judges' 1985 benefit system under subsection (b) shall be reduced
by the amount transferred to the judges' 1985 benefit system by
the board under subdivision (2).
(4) If the requirements of subsection (b)(2) and (b)(3) are
satisfied, credit for prior service in the public employees'
retirement fund as a full-time referee, full-time commissioner, or
full-time magistrate is waived. Any credit for the prior service
under the judges' 1985 benefit system may be granted only under
subsection (b).
(f) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1985 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a rollover of a distribution
from any of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(g) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1985 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a trustee to trustee transfer
from any of the following:
(1) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
SECTION 15.
IC 33-13-10.1-14.5
, AS ADDED BY P.L.195-1999,
SECTION 31, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 14.5. (a) This section applies only to a person
who:
(1) is a judge participating under this chapter;
(2) before becoming a judge was a member of an Indiana public
employees' retirement fund;
(3) received credited service under an Indiana public employees'
retirement fund for the employment described in subdivision (2),
and the credited service is not eligible for prior service credit
under section 14 of this chapter;
(4) has not attained vested status under an Indiana public
employees' retirement fund for the employment described in
subdivision (2); and
(5) has at least eight (8) years of service credit in the judges'
retirement system.
(b) If a person becomes a participant in the judges' 1985 benefit
system under this chapter, credit for service described in subsection (a)
shall be granted under this chapter by the board if:
(1) the prior service was credited under an Indiana public
employees' retirement fund; and
(2) the judge pays in a lump sum or in a series of payments
determined by the board, not exceeding five (5) annual payments,
the amount determined by the actuary for the 1985 benefit system
as the total cost of the service.
(c) If the requirements of subsection (b) are not satisfied, a
participant is entitled to credit only for years of service after the date of
participation in the 1985 benefit system.
(d) An amortization schedule for contributions paid under this
section must include interest at a rate determined by the board.
(e) If the requirements of subsection (b) are satisfied, the
appropriate board shall transfer from the retirement fund described in
subsection (a)(2) to the judges' 1985 benefit system the amount
credited to the judge's annuity savings account and the present value of
the retirement benefit payable at sixty-five (65) years of age that is
attributable to the transferring participant.
(f) The amount a participant must contribute to the judges' 1985
benefit system under subsection (b) shall be reduced by the amount
transferred to the judges' 1985 benefit system by the board under
subsection (e).
(g) If the requirements of subsection (b) are satisfied, credit for prior
service in an Indiana public employees' retirement fund is waived.
(h) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1985 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a rollover of a distribution
from any of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(i) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the judges' 1985 benefit system may
accept, on behalf of a participant who is purchasing permissive
service credit under subsection (b), a trustee to trustee transfer
from any of the following:
(1) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
SECTION 16.
IC 36-8-8-18
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 18. (a) Except as
provided in subsection (b), if a unit becomes a participant in the 1977
fund, credit for prior service by police officers (including prior service
as a full-time, fully paid town marshal or full-time, fully paid deputy
town marshal by a police officer employed by a metropolitan board of
police commissioners) or by firefighters before the date of participation
may be given by the PERF board only if:
(1) the unit contributes to the 1977 fund the amount necessary to
amortize prior service liability over a period of not more than
forty (40) years, the amount and period to be determined by the
PERF board; and
(2) the police officers or firefighters pay, either in a lump sum or
in a series of payments determined by the PERF board, the
amount that they would have contributed if they had been
members of the 1977 fund during their prior service.
If the requirements of subdivisions (1) and (2) are not met, a fund
member is entitled to credit only for years of service after the date of
participation.
section 7(g) of this chapter.
(B) The amount the firefighter would have contributed if the
firefighter had been a member of the 1977 fund during the
firefighter's prior service must be fully paid and must be based
on the firefighter's actual salary earned during that period
before service can be credited under this section.
(C) Any amortization schedule for contributions paid under
clause (A) and contributions to be paid under clause (B) must
include interest at a rate determined by the PERF board.
(3) If, at the time a unit entered the 1977 fund, the unit
contributed the amount required by subdivision (2) so that a
fund member received the maximum prior service credit
allowed by subdivision (2) and, at a later date, the earliest
retirement age was lowered, the unit may contribute to the
1977 fund on the fund member's behalf an additional amount
that is determined in the same manner as under subdivision
(2) with respect to the additional prior service, if any,
available as a result of the lower retirement age. If the unit
pays the additional amount described in this subdivision in
accordance with the requirements of subdivision (2), the fund
member shall receive the additional service credit necessary
for the fund member to retire at the lower earliest retirement
age.
(c) This subsection applies to a unit that:
(1) becomes a participant in the 1977 fund under section 3(c) of
this chapter; and
(2) is a fire protection district created under
IC 36-8-11
that
includes a township or a municipality that had a 1937 fund.
A firefighter who continues uninterrupted service with a unit covered
by this subsection and who participated in the township or municipality
1937 fund is entitled to receive service credit for such service in the
1977 fund. However, credit for such service is limited to the amount
accrued by the firefighter in the 1937 fund or the amount necessary to
allow the firefighter to accrue twenty (20) years of service credit in the
1977 fund by the time the firefighter becomes fifty-five (55) years of
age, whichever is less.
(d) The unit shall contribute into the 1977 fund the amount
necessary to fund the amount of past service determined in accordance
with subsection (c), amortized over a period not to exceed ten (10)
years with interest at a rate determined by the PERF board.
(e) If the township or municipality has accumulated money in its
1937 fund, any amount accumulated that exceeds the present value of
all projected future benefits from the 1937 plan shall be paid by the
township or municipality to the unit for the sole purpose of making the
contributions determined in subsection (d).
(f) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the 1977 fund may accept, on behalf of
a fund member who is purchasing permissive service credit under
this chapter, a rollover of a distribution from any of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a
state or political subdivision of a state under Section 457(b) of
the Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue
Code.
(g) To the extent permitted by the Internal Revenue Code and
the applicable regulations, the 1977 fund may accept, on behalf of
a fund member who is purchasing permissive service credit under
this chapter, a trustee to trustee transfer from any of the following:
(1) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(2) An eligible deferred compensation plan under Section
457(b) of the Internal Revenue Code.
SECTION 17. An emergency is declared for this act.