AN ACT to amend the Indiana Code concerning pensions.
FOLLOWS [EFFECTIVE JULY 1, 2006]: Sec. 14. (a) Subject to
subsection (b), a member who enters the DROP established by this
chapter shall exit the DROP at the earliest of:
(1) the member's DROP retirement date;
(2) thirty-six (36) months after the member's DROP entry date; or
(3) the mandatory retirement age applicable to the member, if any.
or
(4) December 31, 2007.
(b) A member of the 1925 fund, the 1937 fund, or the 1953 fund
who enters the DROP established by this chapter must exit the
DROP on the date the authority of the board of trustees of the
public employees' retirement fund to distribute from the pension
relief fund established under IC 5-10.3-11-1 to units of local
government (described in IC 5-10.3-11-3) amounts determined
under IC 5-10.3-11-4.7 expires.
maximum years of service under the retirement plan.
(2) The employee beneficiary's retirement date.
(3) The date any required benefit begins.
(g) The retirement benefit paid to the employee beneficiary who
participated in a DROP consists of:
(1) the DROP frozen benefit; plus
(2) an additional amount, paid as the employee beneficiary elects
under subsection (h), determined in STEP THREE of the
following formula:
STEP ONE: Multiply:
(A) the DROP frozen benefit; by
(B) the number of months the employee beneficiary
participated in the DROP.
STEP TWO: Multiply the product determined in STEP ONE by
an interest rate that does not exceed three percent (3%) annually.
STEP THREE: Add the product determined under STEP ONE
and the product determined under STEP TWO.
(h) The employee beneficiary shall elect, at the employee
beneficiary's retirement, to receive the additional amount calculated
under subsection (g)(2) in one (1) of the following ways:
(1) A lump sum.
(2) An actuarially equivalent increase in the monthly pension
benefit payable to the employee beneficiary.
(3) A combination of (1) and (2).
(i) The cost of living payment determined under section 23 of this
chapter does not apply to the additional amount calculated under
subsection (g)(2). No cost of living payment is applied to a DROP
frozen benefit while the employee beneficiary is participating in a
DROP.
(j) If an employee beneficiary becomes disabled:
(1) in the line of duty; or
(2) other than in the line of duty;
benefits for the employee beneficiary are calculated as if the employee
beneficiary had never entered the DROP.
(k) Except as provided in subsection (m), if, before the employee
beneficiary's monthly pension benefit begins, an employee beneficiary
dies, in the line of duty or other than in the line of duty, death benefits
are payable as follows:
(1) The benefit under subsection (g)(2) is paid in a lump sum to
the employee beneficiary's surviving spouse. If there is no
surviving spouse, the lump sum must be divided equally among
the employee beneficiary's surviving children. If there are no
surviving children, the lump sum is paid to the employee
beneficiary's parents. If there are no surviving parents, the lump
sum is paid to the employee beneficiary's estate.
(2) A benefit is paid on the DROP frozen benefit under the terms
of the county's retirement plan.
(l) A DROP under this section must be designed to be actuarially
cost neutral to the county's retirement plan.
(m) This subsection applies if:
(1) an employee beneficiary dies in the line of duty before
payment of the employee beneficiary's monthly pension
benefit begins; and
(2) the calculation of a death benefit under the provisions of
the county's retirement plan depends upon whether an
employee beneficiary dies in the line of duty or other than in
the line of duty.
Death benefits for an employee beneficiary who dies in the line of
duty are calculated under the provisions of the county's retirement
plan as if the employee beneficiary had never entered the DROP
and shall be adjusted as necessary to ensure compliance with
subsection (l).