Introduced Version
SENATE BILL No. 561
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 36-8-8.5.
Synopsis: Public safety deferred retirement option plan. Permits a
member of the 1925 police pension fund, the 1937 firefighters' pension
fund, the 1953 police pension fund (Indianapolis), or the 1977 police
officers' and firefighters' pension and disability fund who retires
because of a disability more than 12 months after the date the member
enters the deferred retirement option plan (DROP) to choose whether
to receive a retirement benefit calculated as if the member: (1) had
never entered the DROP; or (2) exited the DROP on the date the
member retires because of the disability. Allows a member who
became disabled while in the DROP and was required to retire as if the
member had never entered the DROP to make an election to have the
member's benefit actuarially adjusted and recalculated as if the member
had exited the DROP on the date the member retired because of the
disability.
Effective: July 1, 2007.
Mishler
January 23, 2007, read first time and referred to Committee on Pensions and Labor.
Introduced
First Regular Session 115th General Assembly (2007)
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SENATE BILL No. 561
A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 36-8-8.5-12; (07)IN0561.1.1. -->
SECTION 1. IC 36-8-8.5-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 12. (a) The retirement
benefit for a member who enters the DROP and retires on:
(1) the member's DROP retirement date; or
(2) the date the member retires because of a disability as
provided under section 16.5 of this chapter;
is determined under this chapter rather than under the provisions of the
applicable fund.
(b) A member who retires on the member's DROP retirement date
or on the date the member retires because of a disability as
provided under section 16.5 of this chapter may elect to receive a
retirement benefit in one of the following forms:
(1) A retirement benefit paid by and calculated under the
provisions of the applicable fund as if the member had never
entered the DROP.
(2) A retirement benefit paid by the applicable fund and
consisting of:
(A) the DROP frozen benefit; plus
(B) an additional amount, paid as the member elects under
subsection (c), calculated by multiplying:
(i) the amount of the DROP frozen benefit; by
(ii) the number of months that the member was in the
DROP.
(c) A member who chooses the retirement benefit described in
subdivision (b)(2) must elect to receive the additional amount
described in subdivision (b)(2)(B) as:
(1) a lump sum paid on:
(A) the member's DROP retirement date; or
(B) the date the member retires because of a disability as
provided under section 16.5 of this chapter; or
(2) three (3) equal annual payments:
(A) commencing on:
(i) the member's DROP retirement date; or
(ii) the date the member retires because of a disability as
provided under section 16.5 of this chapter; and
(B) thereafter paid on the anniversary of:
(i) the member's DROP retirement date; or
(ii) the date the member retires because of a disability as
provided under section 16.5 of this chapter.
(d) In calculating a member's retirement benefit under this chapter,
the applicable fund must use the lesser of:
(1) the member's actual years of service; or
(2) thirty-two (32) years of service.
(e) Except as provided under section 16.5 of this chapter, the
retirement benefits for a member who exits the DROP for any reason
other than retirement on the member's DROP retirement date are
calculated under the provisions of the applicable fund as if the member
had never entered the DROP.
SOURCE: IC 36-8-8.5-13; (07)IN0561.1.2. -->
SECTION 2. IC 36-8-8.5-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 13. (a) A cost of living
adjustment to the monthly benefit of a member of the 1925 fund, 1937
fund, or 1953 fund is determined in STEP FOUR of the following
formula:
STEP ONE: Calculate a percentage by dividing:
(A) the amount of any increase in the salary of a first class
officer or firefighter, whichever is applicable; by
(B) the prior year's salary of a first class officer or firefighter,
whichever is applicable.
STEP TWO: Add:
(A) the member's DROP frozen benefit; and
(B) the amount of any prior cost of living adjustments
calculated under this section.
STEP THREE: Multiply the percentage determined under STEP
ONE by the sum determined under STEP TWO.
STEP FOUR: Add the product determined under STEP THREE
to the sum determined under STEP TWO.
(b) A cost of living adjustment to the monthly benefit of a member
of the 1977 fund is determined under the provisions of IC 36-8-8, as
applied after:
(1) the member's DROP retirement date; or
(2) the date the member retires because of a disability as
provided under section 16.5 of this chapter.
SOURCE: IC 36-8-8.5-14; (07)IN0561.1.3. -->
SECTION 3. IC 36-8-8.5-14, AS AMENDED BY P.L.51-2006,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2007]: 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) the date the member retires because of a disability as
provided under section 16.5 of this chapter.
(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.
SOURCE: IC 36-8-8.5-16.5; (07)IN0561.1.4. -->
SECTION 4. IC 36-8-8.5-16.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: Sec. 16.5. (a) This section applies to a
member who retires after June 30, 2007, while the member is in the
DROP, because of a disability that arose either in the line of duty
or other than in the line of duty.
(b) The retirement benefit for a member who retires because of
a disability while in the DROP is determined under this chapter
rather than under the provisions of the applicable fund.
Determinations as to whether:
(1) the member is disabled; and
(2) a disability is in the line of duty;
under this chapter are made under the provisions of the applicable
fund.
(c) If the member retires because of a disability less than twelve
(12) months after the date the member enters the DROP, the
benefits for the member are calculated under the provisions of the
applicable fund as if the member had never entered the DROP.
(d) If the member retires because of a disability at least twelve
(12) months after the date the member enters the DROP, the
benefits for the member are calculated under section 12 of this
chapter, and the member's retirement date is the date the member
retires because of a disability rather than the member's DROP
retirement date.
(e) A member who is receiving benefits under this chapter based
on a determination under the provisions of the member's
applicable fund that the member was disabled in the line of duty is
entitled to receive a disability benefit for the remainder of the
member's life.
SOURCE: IC 36-8-8.5-16; (07)IN0561.1.5. -->
SECTION 5. IC 36-8-8.5-16 IS REPEALED [EFFECTIVE JULY
1, 2007].
SOURCE: ; (07)IN0561.1.6. -->
SECTION 6. [EFFECTIVE JULY 1, 2007]
(a) This SECTION
applies to a person who is a member of any of the following funds:
(1) 1925 police pension fund (IC 36-8-6) (the 1925 fund).
(2) 1937 firefighters' pension fund (IC 36-8-7) (the 1937 fund).
(3) 1953 police pension fund (Indianapolis) (IC 36-8-7.5) (the
1953 fund).
(4) 1977 police officers' and firefighters' pension and
disability fund (IC 36-8-8) (1977 fund).
(b) A member of the 1925 fund, the 1937 fund, the 1953 fund, or
the 1977 fund:
(1) who, before July 1, 2007, retired as the result of a
disability while the member was in the deferred retirement
option plan (DROP) established under IC 36-8-8.5; and
(2) whose monthly retirement benefit was determined under
IC 36-8-8.5-16, before its repeal by this act;
may, before January 1, 2008, make the election described in
subsection (c).
(c) A member described in subsection (b) may elect to have the
member's benefit actuarially adjusted and recalculated under
IC 36-8-8.5-12, IC 36-8-8.5-13, and IC 36-8-8.5-14, all as amended
by this act, and IC 36-8-8.5-16.5, as added by this act.
(d) The election described in subsection (c) is irrevocable.
(e) The recalculation of the member's benefit applies to benefits
first payable after December 31, 2007.
(f) This SECTION expires June 30, 2008.