SB 149-1_ Filed 03/17/2005, 11:37
Adopted 3/17/2005


Text Box

Adopted Rejected


[

]



COMMITTEE REPORT

            
                                                        YES:

10

                                                        NO:
0

MR. SPEAKER:

    Your Committee on       Employment and Labor     , to which was referred       Senate Bill 149     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

SOURCE: Page 1, line 1; (05)CR014901.1. -->     Page 1, between the enacting clause and line 1, begin a new paragraph and insert:
SOURCE: IC 5-10.2-2-3; (05)CR014901.1. -->     "SECTION 1. IC 5-10.2-2-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 3. (a) The annuity savings account consists of:
        (1) the members' contributions; and
        (2) the interest credits on these contributions in the guaranteed fund or the gain or loss in market value on these contributions in the alternative investment program, as specified in section 4 of this chapter.
Each member shall be credited individually with the amount of the member's contributions and interest credits.
    (b) Each board shall maintain the annuity savings account program in effect on December 31, 1995 (referred to in this chapter as the guaranteed program). In addition, the board of the Indiana state teachers' retirement fund shall establish and maintain a guaranteed

program within the 1996 account. 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 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 or as may be determined by the rules of each board.
        (5) A valuation of each member's account must be completed as of:
            (A) the last day of each quarter; or
            (B) another time as each board may specify by rule.

    (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 under rules established by each board. A board shall allow a member to make a selection or change any existing selection at least once 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 or an alternate date established by the rules of each 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 or smaller increments that may be established by the rules of each board.
        (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 or at an alternate time established by the rules of each board 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 or at an alternate time established by the rules of each board. 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 or at an alternate time established by the rules of each board.
    (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. However, each board may by rule provide for an alternate valuation date. 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. However, each board may by rule provide for an alternate valuation date.
SOURCE: IC 5-10.2-4-2; (05)CR014901.2. -->     SECTION 2. IC 5-10.2-4-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2005]: Sec. 2. (a) Unless a member elects otherwise under this section, the retirement benefit for each member consists of the sum of a pension provided by employer contributions plus an annuity provided by the amount credited to the member in the annuity savings account.
    (b) A member may choose at retirement or upon a disability retirement to receive a distribution of:
        (1) the entire amount credited to the member in the annuity savings account; or
        (2) an amount equal to the member's federal income tax basis in the member's annuity savings account balance as it existed on December 31, 1986.
If the member chooses to receive the distribution under subdivision (1), the member is not entitled to an annuity as part of the retirement or disability benefit. If the member chooses to receive the distribution under subdivision (2), the member is entitled to an annuity purchasable by the amount remaining in the member's annuity savings account after the payment under subdivision (2).
    (c) Instead of choosing to receive the benefits described in subsection (a) or (b), a member may choose upon retirement or upon

disability retirement to begin receiving a pension provided by employer contributions and to defer receiving in any form the member's annuity savings account. If a member chooses this option, the member:
        (1) is not entitled to an annuity as part of the member's retirement or disability benefit, and the member's annuity savings account will continue to be invested according to the member's direction under IC 5-10.2-2-3; and
        (2) may later choose, as of the first day of a month, or an alternate date established by the rules of each board, to receive a distribution of:
            (A) the entire amount credited to the member in the annuity savings account; or
            (B) an amount equal to the member's federal income tax basis in the member's annuity savings account balance as it existed on December 31, 1986.
If the member chooses to receive the distribution under subdivision (2)(A), the member is not entitled to an annuity as part of the member's retirement or disability benefit. If the member chooses to receive the distribution under subdivision (2)(B), the member is entitled to an annuity purchasable by the amount remaining in the member's annuity savings account after the payment under subdivision (2)(B). If the member does not choose to receive a distribution under this subsection, the member is entitled to an annuity purchasable by the entire amount in the member's annuity savings account, and the form of the annuity shall be as described in subsection (d) unless the member elects an option described in section 7(b)(1), 7(b)(2), or 7(b)(4) of this chapter. The amount to be paid under this section shall be determined in the manner described in IC 5-10.2-2-3, except that it shall be determined as of the last day of the quarter preceding the member's actual distribution or annuitization date. However, each board may by rule provide for an alternate valuation date.
    (d) Retirement benefits must be distributed in a manner that complies with Section 401(a)(9) of the Internal Revenue Code, as specified in IC 5-10.2-2-1.5.".

SOURCE: Page 1, line 10; (05)CR014901.1. -->     Page 1, line 10, after "be" insert ":".
    Page 1, line 11, reset in roman "(A) a member of a collective bargaining unit of state".
    Page 1, line 11, after "member of" insert ":
                 (i) the fund; or
                 (ii)".
    Page 1, line 12, reset in roman "employees represented by a labor organization; or".
    Page 1, line 13, reset in roman "(B)".
    Page 1, line 13, after "(B) an" insert " individual who is:
                (i) an
".
    Page 1, line 13, after "officer" insert " or a member".
    Page 1, line 14, strike "employees." and insert " or university employees; and
                (ii) an Indiana resident.
".
    Page 1, line 16, after "board." insert " An individual appointed under this subsection to serve as the director's designee:
        (1) is subject to the provisions of section 3 of this chapter; and
        (2) serves as a permanent designee until replaced by the director.
".
    Page 2, line 7, delete "both of the".
    Page 2, delete line 8.
    Page 2, line 9, delete "(1)".
    Page 2, line 9, delete "Compensation" and insert "compensation".
    Page 2, line 9, strike "of four hundred fifty dollars ($450) on October".
    Page 2, line 10, strike "1, January 1, April 1, and June 30.".
    Page 2, line 12, delete "(2) Reimbursement" and insert " reimbursement".
    Page 2, run in lines 7 through 12.
    Page 2, line 41, after "board." insert " An individual appointed
under this subsection to serve as the director's designee serves as a permanent designee until replaced by the director.
".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 149 as reprinted January 25, 2005.)

and when so amended that said bill do pass.

__________________________________

Representative Torr


CR014901/DI 96    2005