Introduced Version
SENATE BILL No. 535
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 2-3.5-2; IC 5-10-5.5; IC 5-10.2; IC 5-10.3;
IC 5-10.4; IC 5-10.5; IC 33-38; IC 33-39-7-3; IC 36-8-8-4.
Synopsis: Indiana public retirement system. Establishes the Indiana
public retirement system (system) to administer and manage the
following: (1) the public employees' retirement fund (PERF); (2) the
teachers' retirement fund (TRF); (3) the judges' retirement fund; (4) the
prosecuting attorneys retirement fund; (5) the state excise police,
gaming agent, gaming control officer, and conservation enforcement
officers' retirement fund; (6) the 1977 police officers' and firefighters'
pension and disability fund; (7) the legislators' retirement system; (8)
the pension relief fund; (9) the special death benefit fund; and (10) the
state employees' death benefit fund. Creates a seven member board of
trustees for the system (board) consisting of six members appointed by
the governor and the director of the budget agency (or designee)
serving as an ex officio voting member. Provides that the board's
powers and duties are the combined powers and duties of the PERF and
TRF boards. Provides that each retirement fund continues as a separate
fund managed by the board. Provides for a director of the system who
is appointed by and serves at the pleasure of the board. Eliminates the
treasurer of state as the treasurer of PERF and reassigns the treasurer's
duties to the board and director of the system. Makes conforming and
technical corrections. Repeals provisions that establish the PERF and
TRF boards and the treasurer of state's role as PERF treasurer.
Effective: July 1, 2009.
Kruse
January 15, 2009, read first time and referred to Committee on Pensions and Labor.
Introduced
First Regular Session 116th General Assembly (2009)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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NEW will appear in that style type in the introductory clause of each SECTION that adds
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Conflict reconciliation: Text in a statute in
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between statutes enacted by the 2008 Regular Session of the General Assembly.
SENATE BILL No. 535
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 2-3.5-2-2.7; (09)IN0535.1.1. -->
SECTION 1. IC 2-3.5-2-2.7 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2009]: Sec. 2.7. "Board" refers to the board of trustees of the
Indiana public retirement system established by IC 5-10.5-3-1.
SOURCE: IC 5-10-5.5-3; (09)IN0535.1.2. -->
SECTION 2. IC 5-10-5.5-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 3. (a) The management
administration of the retirement plan created by this chapter is hereby
vested in the board. of trustees of the public employees' retirement
fund.
(b) Records of individual participants in the retirement plan created
by this chapter and participants' information are confidential, except for
the name and years of service of a retirement plan participant.
SOURCE: IC 5-10-5.5-7.5; (09)IN0535.1.3. -->
SECTION 3. IC 5-10-5.5-7.5, AS ADDED BY P.L.180-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 7.5. (a) As used in this section, "board" refers to
the board of trustees of the
public employees' retirement fund
established by IC 5-10.3-3-1. Indiana public retirement system
established by IC 5-10.5-3-1.
(b) As used in this section, "public retirement fund" refers
collectively to:
(1) the public employees' retirement fund (IC 5-10.3);
(2) the Indiana state teachers' retirement fund (IC 5-10.4);
(3) the state police pension trust (IC 10-12); and
(4) the 1977 police officers' and firefighters' pension and
disability fund (IC 36-8-8).
(c) Subject to this section, a participant may purchase service credit
for the participant's prior service in a position covered by a public
retirement fund.
(d) To purchase the service credit described in subsection (c), a
participant must meet the following requirements:
(1) The participant has at least one (1) year of creditable service
in the retirement plan created by this chapter.
(2) The participant has not attained vested status in and is not an
active participant in the public retirement fund from which the
participant is purchasing the service credit.
(3) Before the participant retires, the participant makes
contributions to the retirement plan created by this chapter as
follows:
(A) Contributions that are equal to the product of the
following:
(i) The participant's salary at the time the participant actually
makes a contribution for the service credit.
(ii) A rate, determined by the actuary for the retirement plan
created by this chapter, based on the age of the participant
at the time the participant actually makes a contribution for
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.
(iii) The number of years of service credit the participant
intends to purchase.
(B) Contributions for any accrued interest, at a rate determined
by the actuary for the retirement plan created by this chapter,
for the period from the participant's initial participation in the
retirement plan created by this chapter to the date payment is
made by the participant.
(e) At the request of the participant purchasing service credit under
this section, the amount a participant is required to contribute under
subsection (d)(3) may be reduced by a trustee to trustee transfer from
a public retirement fund in which the participant has an account that
contains amounts attributable to member contributions, including
contributions made on behalf of a member (plus any credited
earnings) to the retirement plan created by this chapter. The participant
may direct the transfer of an amount only to the extent necessary to
fund the service purchase under subsection (d)(3). The participant shall
complete any forms required by the public retirement fund from which
the participant is requesting a transfer or the retirement plan created by
this chapter before the transfer is made.
(f) At least ten (10) years of service in the retirement plan created
by this chapter is required before a participant may receive a benefit
based on service credit purchased under this section.
(g) A participant who:
(1) terminates employment before satisfying the eligibility
requirements necessary to receive an annual retirement
allowance; or
(2) receives an annual retirement allowance for the same service
from another tax supported governmental retirement plan other
than under the federal Social Security Act;
may withdraw the purchase amount plus accumulated interest after
submitting a properly completed application for a refund to the
retirement plan created by this chapter.
(h) The following may apply to the purchase of service credit under
this section:
(1) The board may allow a participant to make periodic payments
of the contributions required for the purchase of the 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 participant may not claim the service credit for purposes of
determining eligibility for a benefit or computing benefits unless
the participant has made all payments required for the purchase
of the service credit.
(i) To the extent permitted by the Internal Revenue Code and
applicable regulations, the retirement plan created by this chapter may
accept, on behalf of a participant 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.
(j) To the extent permitted by the Internal Revenue Code and
applicable regulations, the retirement plan created by this chapter may
accept, on behalf of a participant 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.
SOURCE: IC 5-10.2-1-1; (09)IN0535.1.4. -->
SECTION 4. IC 5-10.2-1-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. Board. "Board" as
used in this article means the board of trustees of the Indiana state
teachers' retirement fund and the board of trustees of the public
employees' retirement fund. Indiana public retirement system
established by IC 5-10.5-3-1.
SOURCE: IC 5-10.2-2-1; (09)IN0535.1.5. -->
SECTION 5. IC 5-10.2-2-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. Scope; Purpose. (a)
This article applies to the Indiana state teachers' retirement fund and
the public employees' retirement fund. Each retirement fund covered
by this article is a separate retirement fund managed by its the board
under its the fund's retirement fund law. Each The board shall make
and publish regulations which are appropriate to the efficient
administration of this article. The obligations of the state and political
subdivisions for benefit payments are specified in each retirement fund
law.
(b) Each fund is an independent body corporate and politic. A fund
is not a department or agency of the state but is an independent
instrumentality exercising essential government functions.
(c) For purposes of IC 34-13-2, IC 34-13-3, and IC 34-13-4, each
board, each fund, and all employees of each board or fund are public
employees (as defined in IC 34-6-2-38). All employees of each board
or fund employed within a classification covered by a labor agreement
to which the state is a party shall continue to remain subject to the
terms and conditions of that agreement and any successor labor
agreements entered into by the state.
(d) (c) The benefits specified in this article and the benefits from the
Social Security Act provide the retirement, disability, and survivor
benefits for public employees and teachers. However, this article does
not prohibit a political subdivision from establishing and providing
before January 1, 1995, and continuing to provide after January 1,
1995, retirement, disability, and survivor benefits for the public
employees of the political subdivision independent of this article if the
political subdivision took action before January 1, 1995, and was not
a participant in the public employees' retirement fund on January 1,
1995, under this article or IC 5-10.3.
SOURCE: IC 5-10.2-2-2; (09)IN0535.1.6. -->
SECTION 6. IC 5-10.2-2-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 2. (a) The board of the
public employees' retirement fund shall maintain the following separate
accounts in the public employees' retirement fund:
(1) The annuity savings account.
(2) The retirement allowance account.
(b) The board of the Indiana state teachers' retirement fund shall
maintain the following two (2) separate accounts in the Indiana state
teachers' retirement fund:
(1) The pre-1996 account.
(2) The 1996 account.
(c) Within each account specified in subsection (b), the board of the
Indiana state teachers' retirement fund shall maintain the following
separate subaccounts:
(1) The annuity savings account.
(2) The retirement allowance account.
SOURCE: IC 5-10.2-9-2; (09)IN0535.1.7. -->
SECTION 7. IC 5-10.2-9-2, AS ADDED BY P.L.149-2007,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 2. As used in this chapter, "board" refers to the
following:
(1) the board of trustees of the Indiana state teachers' retirement
fund;
(2) the board of trustees of the public employees' retirement fund.
board of trustees of the Indiana public retirement system
established by IC 5-10.5-3-1.
SOURCE: IC 5-10.3-1-1; (09)IN0535.1.8. -->
SECTION 8. IC 5-10.3-1-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. Board. "Board" as
used in this article means the board of trustees of the public employees'
retirement fund. Indiana public retirement system established by
IC 5-10.5-3-1.
SOURCE: IC 5-10.3-1-2.5; (09)IN0535.1.9. -->
SECTION 9. IC 5-10.3-1-2.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 2.5. As used in this
article, "director" refers to the director of the fund. Indiana public
retirement system established by IC 5-10.5-2-1.
SOURCE: IC 5-10.3-2-1; (09)IN0535.1.10. -->
SECTION 10. IC 5-10.3-2-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. Establishment of
Fund and Board. (a) The public employees' retirement fund of Indiana,
referred to as the fund, is established to pay benefits to officers and
employees of the state and its political subdivisions after specified
years of service and under other specified circumstances. The purpose
of the fund is to promote economy and efficiency in the administration
of state and local government by providing an orderly way for members
to be retired without prejudice and without inflicting hardship on the
retired member.
(b) The fund is a trust. The board of trustees of the public
employees' retirement fund referred to as the board, Indiana public
retirement system shall administer the fund and implement this
article, without the supervision of the department of insurance.
SOURCE: IC 5-10.3-3-7; (09)IN0535.1.11. -->
SECTION 11. IC 5-10.3-3-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 7. The board shall do
all of the following:
(1) Appoint and fix the salary of a director. subject to the
approval of the governor.
(2) Appoint an actuary and employ or contract with employees,
auditors, technical experts, legal counsel, and other service
providers as it considers necessary to transact the business of the
fund, without the approval of any state officer.
(3) Fix the compensation of persons:
(A) appointed or employed by the board; or
(B) who contract with the board.
(4) Establish a general office in Indianapolis for board meetings
and for administrative personnel.
(5) Provide for the installation in the general office of a complete
system of books, accounts including reserve accounts, and records
in order to give effect to all the requirements of this article and to
assure the proper operation of the fund.
(6) Provide for a report at least annually, before June 1, to each
member of the amount credited to him in the annuity savings
account in each investment program under IC 5-10.2-2.
(7) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies which are necessary for
the fund's operation.
(8) Act on applications for benefits and claims of error filed by
members.
(9) Have the accounts of the fund audited annually by the state
board of accounts, and if the board determines that it is
advisable, have the operation of a pubic pension or retirement
fund of the system audited by a certified public accounting
firm.
(10) Publish for the members a synopsis of the fund's condition.
(11) Adopt a budget on a calendar year or fiscal year basis that is
sufficient, as determined by the board, to perform the board's
duties and, as appropriate and reasonable, draw upon fund assets
to fund the budget.
(12) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(13) Establish personnel programs and policies for its employees.
(14) Submit a report of its activities each year before November
1 to the governor, the pension management oversight commission,
and the budget committee. before November 1 of each year. The
report to the pension management oversight commission must
be submitted in an electronic format under IC 5-14-6. The
report under this subdivision must set forth a complete operating
and financial statement covering its operations during the most
recent available audited fiscal year, including information on the
following:
(A) Investment performance.
(B) Investment and administrative costs as a percentage of
assets under management.
(C) Investment asset allocation strategy.
(D) Member services.
(E) Member communications.
(15) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
(16) Submit to the auditor or treasurer vouchers or reports
necessary to claim amounts due from the state to a public
pension or retirement fund of the system administered by the
board.
SOURCE: IC 5-10.3-3-8; (09)IN0535.1.12. -->
SECTION 12. IC 5-10.3-3-8 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: 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. Indiana public
retirement system.
(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) For the 1977 police officers' and firefighters' pension and
disability fund, deduct from benefits paid and remit to the
appropriate entities amounts authorized by IC 36-8-8-17.2.
(7) 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.
(8) Amortize prior service liability over a period of forty (40)
years or less.
(9) Recover payments made under false or fraudulent
representation.
(10) 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.
SOURCE: IC 5-10.3-3-10; (09)IN0535.1.13. -->
SECTION 13. IC 5-10.3-3-10 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 10.
The Actuary. The
actuary is the technical advisor on the operation of the fund. The
actuary shall perform the duties specified in this article and in
IC 5-10.2 and all other duties assigned by the board.
SOURCE: IC 5-10.3-5-4; (09)IN0535.1.14. -->
SECTION 14. IC 5-10.3-5-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 4. (a) Securities shall
be held for the fund by banks or trust companies under a custodial
agreement. Income, interest, proceeds of sale, materials, redemptions,
and all other receipts from securities and other investments which the
board retains for the cash working balance shall be deposited with the
treasurer of state. as authorized by the board.
(b) The board may contract with investment counsel, trust
companies, or banks to assist the board in its investment program.
SOURCE: IC 5-10.3-11-1; (09)IN0535.1.15. -->
SECTION 15. IC 5-10.3-11-1 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 1. There is created
within the public employees' retirement fund a separate account known
as the pension relief fund. This fund is administered by the board of
trustees of the public employees' retirement fund, Indiana public
retirement system, referred to as the "state board" in this chapter. The
pension relief fund consists of revenues received under
IC 6-7-1-28.1(4), IC 7.1-4-12-1, any appropriations to the fund, and
earnings on these revenues.
SOURCE: IC 5-10.4-1-5; (09)IN0535.1.16. -->
SECTION 16. IC 5-10.4-1-5, AS ADDED BY P.L.2-2006,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 5. "Board" refers to the board of trustees of the
Indiana state teachers' retirement fund. Indiana public retirement
system established by IC 5-10.5-3-1.
SOURCE: IC 5-10.4-3-6; (09)IN0535.1.17. -->
SECTION 17. IC 5-10.4-3-6, AS ADDED BY P.L.2-2006,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 6. (a) A trustee shall give bond as specified
periodically by the state board of finance.
(b) The board shall do all the following:
(1) Act on an application for benefits.
(2) Provide the necessary forms for administering the fund.
(3) Establish records and accounts, which:
(A) provide the necessary information for an actuary's
examination; and
(B) are sanctioned by the state board of accounts.
(4) Maintain individual records for each member containing the
member's:
(A) name;
(B) date of birth;
(C) age at beginning service;
(D) service record;
(E) address;
(F) contributions to the fund;
(G) amounts withdrawn; and
(H) benefits paid;
and other items considered necessary.
(5) Employ or contract with employees, auditors, technical
experts, legal counsel, and other service providers as the board
considers necessary to transact the business of the fund without
the approval of any state officer, and fix the compensation of
those persons.
(6) Make rules as required to administer the fund.
(7) Publish a summary of the fund's condition.
(8) Provide for a report for each member, at least annually before
June 1, of the value of the amount credited to the member in the
annuity savings account in each investment program under
IC 5-10.2-2.
(9) Provide for the installation in the general office of a complete
system of:
(A) books;
(B) accounts, including reserve accounts; and
(C) records;
to give effect to all the requirements of this article and to ensure
the proper operation of the fund.
(10) Appoint an actuary.
(11) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies necessary for the fund's
operation.
(12) Adopt a budget on a calendar year or fiscal year basis that is
sufficient, as determined by the board, to perform the board's
duties and, as appropriate and reasonable, draw upon fund assets
to fund the budget.
(13) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(14) Establish personnel programs and policies for the employees
of the board.
(15) Submit a report of the board's activities to the governor, the
pension management oversight commission, and the budget
committee before November 1 of each year.
The report to the
pension management oversight commission must be submitted
in an electronic format under IC 5-14-6. The report under this
subdivision shall set forth a complete operating and financial
statement covering the board's operations during the most recent
available audited fiscal year, including information on the
following:
(A) Investment performance.
(B) Investment and administrative costs as a percentage of
assets under management.
(C) Investment asset allocation strategy.
(D) Member services.
(E) Member communications.
(16) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
SOURCE: IC 5-10.4-3-8; (09)IN0535.1.18. -->
SECTION 18. IC 5-10.4-3-8, AS ADDED BY P.L.2-2006,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 8. (a) The board may do the following:
(1)
Without adopting a rule under IC 4-22-2, adopt and enforce
rules regarding the fund's administration and the control and
investment of the fund.
(2) Give bond for an employee for the fund's protection.
(3) Receive the state's share of the cost of the pension
contribution from the federal government for a member on leave
of absence in order 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. public retirement system.
(5) Summon and examine witnesses when adjusting claims.
(6) When adjusting disability claims, require medical
examinations by doctors approved or appointed by the board. 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 an emergency that may arise in the administration of the
board's trust.
(9) Determine other matters regarding the board's trust that are
not specified.
(10) Enter into agreements with an insurance company to provide
life, hospitalization, surgical, medical, dental, vision, long term
care, or supplemental Medicare insurance, using individual or
group insurance policies for retired teachers, and deduct premium
payments for the policies from the teachers' retirement benefits
and remit the payments to the insurance companies when
deduction is authorized by the respective retired teacher.
(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 the board's public and corporate purposes
and to conduct the board's business.
(13) Establish and amend rules:
(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.
(c) This subsection does not apply to:
(1) an agreement under subsection (a)(10); or
(2) investments of the board.
A contract that the board enters into under section 10(b) of this chapter
or any other provision may be for a term of not more than five (5)
years, with the ability to renew.
(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.
SOURCE: IC 5-10.4-3-9; (09)IN0535.1.19. -->
SECTION 19. IC 5-10.4-3-9, AS ADDED BY P.L.2-2006,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 9. (a) The board is responsible for the fund's
property. The board may take and hold any property given outright or
on condition to the fund and shall perform the conditions accepted.
Unless restricted by a condition, the board may transfer the property
when necessary for the fund's benefit.
(b) The board shall receipt:
(1) property belonging to or coming into the fund and shall
judiciously invest the property; and
(2) money coming into the fund and, except as specified in
sections 13 and 14 of this chapter, shall deposit the money
with
the state treasurer in the manner required of other state funds by
IC 5-13. as authorized by the board.
(c) The board shall make quarterly reports to the auditor of state as
required by law for the transference of the fund to the auditor of state's
books.
(d) (c) The board shall direct the fund's disbursements on itemized
vouchers
to the auditor of state approved by the president of the board
and the director or, in the absence or incapacity of both officers, by
another trustee directed by order of the board. The auditor of state then
shall issue a warrant on the treasurer of state.
SOURCE: IC 5-10.4-3-14; (09)IN0535.1.20. -->
SECTION 20. IC 5-10.4-3-14, AS ADDED BY P.L.2-2006,
SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 14. All income and other receipts from securities
may be:
(1) collected by the custodian bank or safekeeping bank approved
for that purpose by the board and deposited in the custodial
account or a checking account of the board;
(2) reinvested from the custodial account or checking account
when the board determines that the receipts may be safely
invested; or
(3) withdrawn by the board for the immediate needs of the fund
from the checking account or custodial account. and then
deposited with the treasurer of state, as required for other money
coming into the fund.
SOURCE: IC 5-10.5; (09)IN0535.1.21. -->
SECTION 21. IC 5-10.5 IS ADDED TO THE INDIANA CODE AS
A
NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2009]:
ARTICLE 10.5. INDIANA PUBLIC PENSION
MODERNIZATION ACT
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this
article.
Sec. 2. "Board" refers to the board of trustees of the system
established by IC 5-10.5-3-1.
Sec. 3. "Director" refers to the director of the system.
Sec. 4. "Public employees' retirement system" means the public
employees' retirement fund established under IC 5-10.2 and
IC 5-10.3.
Sec. 5. "Public pension and retirement funds of the system"
means the public pension and retirement funds listed in
IC 5-10.5-2-2.
Sec. 6. "System" refers to the Indiana public retirement system
established by IC 5-10.5-2-1.
Sec. 7. "Teachers' retirement fund" means the Indiana state
teachers' retirement fund established under IC 5-10.2 and
IC 5-10.4.
Chapter 2. Indiana Public Retirement System
Sec. 1. On August 1, 2009, the Indiana public retirement system
is established.
Sec. 2. The system consists of the following public pension or
retirement funds:
(1) The public employees' retirement fund established under
IC 5-10.2 and IC 5-10.3.
(2) The Indiana state teachers' retirement fund established
under IC 5-10.2 and IC 5-10.4.
(3) The Indiana judges' retirement fund established under
IC 33-38-6.
(4) The prosecuting attorneys retirement fund established
under IC 33-39-7.
(5) The state excise police, gaming agent, gaming control
officer, and conservation enforcement officers' retirement
fund established under IC 5-10-5.5.
(6) The 1977 police officers' and firefighters' pension and
disability fund established under IC 36-8-8.
(7) The legislators' retirement system established under
IC 2-3.5.
(8) The pension relief fund established under IC 5-10.3-11.
(9) The special death benefit fund established under
IC 5-10-10.
(10) The state employees' death benefit fund established under
IC 5-10-11.
Sec. 3. The system is an independent body corporate and politic.
The system is not a department or agency of the state but is an
independent instrumentality exercising essential government
functions.
Sec. 4. For purposes of IC 34-13-2, IC 34-13-3, and IC 34-13-4,
the board, the system, and all employees of the board or the system
are public employees (as defined in IC 34-6-2-38).
Sec. 5. The system shall be managed and administered by a
board of trustees established under IC 5-10.5-3.
Sec. 6. Each public pension or retirement fund listed in section
2 of this chapter is a separate fund managed by the board under
this article and the retirement law applicable to the public pension
or retirement fund. The obligations of the state and political
subdivisions for benefit payments are specified in the retirement
law applicable to each public pension or retirement fund.
Chapter 3. Board of Trustees
Sec. 1. (a) The board of trustees of the Indiana public retirement
system is established.
(b) The board shall manage and administer each public pension
or retirement fund that comprises the system in accordance with:
(1) this article; and
(2) the retirement law applicable to the public pension or
retirement fund.
Sec. 2. (a) The board is composed of seven (7) trustees.
(b) The governor shall appoint six (6) of the trustees, as follows:
(1) At least one (1) of the trustees must be an active member
of the public employees' retirement fund with at least ten (10)
years of creditable service.
(2) At least one (1) of the trustees must be:
(A) an active or retired member of a public pension or
retirement fund administered by the board, other than the
public employees' retirement fund or the teachers'
retirement fund; or
(B) an Indiana resident who is an officer or a member of a
local, national, or international labor union that represents
members of a public pension or retirement fund
administered by the board.
(3) At least two (2) of the trustees must be active or retired
members of the teachers' retirement fund.
(4) Not more than four (4) trustees may be members of the
same political party.
(c) The director of the budget agency or the director's designee
is an ex officio voting member of the board. An individual
appointed under this subsection to serve as the director's designee
serves as a permanent designee until the individual is replaced by
the director of the budget agency.
(d) The governor shall fill a vacancy on the board by
appointment not later than forty-five (45) days after the date the
vacancy occurs.
Sec. 3. (a) A trustee shall serve a term of four (4) years,
beginning on August 1 following the trustee's appointment.
(b) Whenever a trustee is appointed to fill a vacancy caused by
death or resignation, the trustee shall serve the unexpired term of
the trustee's predecessor.
(c) A trustee shall serve until the trustee's successor is appointed
and qualified.
Sec. 4. (a) Notwithstanding section 3(a) of this chapter, the
initial terms of office for the six (6) individuals appointed to the
board under section 2(b) of this chapter are as follows:
(1) Two (2) trustees for a term of two (2) years.
(2) Two (2) trustees for a term of three (3) years.
(3) Two (2) trustees for a term of four (4) years.
(b) The initial terms of office for the individuals appointed
under subsection (a) begin August 1, 2009. When making the
appointments to the board under subsection (a), the governor shall
specify the initial term of each trustee appointed.
(c) The governor shall appoint to initial terms of office under
subsection (a) at least three (3) individuals who, on July 31, 2009,
are serving as trustees of a public pension or retirement fund that,
on August 1, 2009, becomes part of the system administered by the
board.
(d) This section expires August 1, 2013.
Sec. 5. (a) Each trustee shall take an oath of office. The oath
must be:
(1) subscribed to by the trustee making the oath;
(2) certified by the officer before whom the trustee takes the
oath; and
(3) filed with the secretary of state.
(b) A trustee is qualified for membership on the board when the
trustee's oath is filed with the secretary of state.
Sec. 6. (a) Each trustee is entitled to reimbursement for
necessary expenses actually incurred through service on the board.
(b) Trustee expenses shall be paid from resources available to
the board for that purpose.
Sec. 7. (a) Not later than September 30 each year, the board
shall elect a chair and vice chair from its members to serve as the
officers of the board.
(b) An officer shall serve for one (1) year or until the officer's
successor is elected and qualified.
Sec. 8. (a) The board shall hold:
(1) an annual meeting in September each year; and
(2) regular meetings at least quarterly.
(b) The board may hold special meetings:
(1) at the call of the chair; or
(2) with a written request signed by at least four (4) trustees.
(c) The board may hold its meetings at the system's general
offices or at any other place in the state that the board designates.
(d) All meetings must be open to the public in accordance with
IC 5-14-1.5.
(e) The board shall keep a record of its proceedings.
Sec. 9. (a) This section applies to any meeting of the board.
(b) A member of the board may participate in a meeting of the
board using any means of communication that permits:
(1) all other board members participating in the meeting; and
(2) all members of the public physically present at the place
where the meeting is conducted;
to simultaneously communicate with each other during the
meeting.
(c) A member of the board who participates in a meeting under
subsection (b) is considered to be present at the meeting.
(d) The memorandum of the meeting prepared under
IC 5-14-1.5-4 must also state the name of each member who:
(1) was physically present at the place where the meeting was
conducted;
(2) participated in the meeting using a means of
communication described in subsection (b); and
(3) was absent.
Sec. 10. (a) Five (5) trustees constitute a quorum for the
transaction of business.
(b) Each trustee is entitled to one (1) vote.
(c) A majority vote of the trustees appointed to the board is
required for the board to adopt a resolution or take other action at
a regular or special meeting.
Chapter 4. Board Powers and Duties
Sec. 1. The board shall have the powers and duties formerly
exercised by:
(1) the board of directors of the public employee's retirement
fund under IC 5-10.3-3-7; and
(2) the board of directors of the teachers' retirement fund
under IC 5-10.4-3-6.
Sec. 2. The board may exercise any of the powers or perform
any of the duties formerly exercised by:
(1) the board of directors of the public employee's retirement
fund under IC 5-10.3-3-8; and
(2) the board of directors of the teachers' retirement fund
under IC 5-10.4-3-8.
Sec. 3. The board's powers as specified in this article or the
retirement law applicable to a public pension or retirement fund
of the system:
(1) shall be interpreted broadly to accomplish the purposes of
this article or the applicable retirement law; and
(2) may not be construed as a limitation of powers.
Chapter 5. Investments
Sec. 1. The board shall have the powers, duties, restrictions,
limitations, and penalties in connection with the board's investment
and management of the assets of the public pension and retirement
funds of the system under the following provisions:
(1) IC 5-10.2-2-2.5.
(2) IC 5-10.2-2-13.
(3) IC 5-10.2-2-18.
(4) IC 5-10.3-3-7.1.
(5) IC 5-10.3-5-3.
(6) IC 5-10.3-5-3.1.
(7) IC 5-10.3-5-4.
(8) IC 5-10.3-5-5.
(9) IC 5-10.3-5-6.
(10) IC 5-10.4-3-7.
(11) IC 5-10.4-3-9.
(12) IC 5-10.4-3-10.
(13) IC 5-10.4-3-11.
(14) IC 5-10.4-3-12.
(15) IC 5-10.4-3-13.
(16) IC 5-10.4-3-14.
(17) IC 5-10.4-3-15.
(18) IC 5-10.4-3-16.
Sec. 2. The board's transactions under this chapter are subject
to IC 2-3.5-3-3, IC 5-10-5.5-2.5, IC 5-10.2-2-1.5, IC 33-38-6-13,
IC 33-39-7-22, and IC 36-8-8-2.5.
Chapter 6. Director; Reports and Administration
Sec. 1. (a) The director is the executive officer of the system and
is responsible for the administration of the system.
(b) The director is appointed by and serves at the pleasure of the
board.
Sec. 2. The director shall do the following:
(1) Maintain a record of the board's proceedings.
(2) Keep the books and records of the system.
(3) Deposit payments made to the system with the custodian
for the system's accounts.
(4) Sign vouchers for the payment of money from the system
as authorized by the board.
(5) Execute a corporate surety bond in an amount specified by
the board. The premium for the bond is an administrative
expense of the system.
(6) Perform other duties as assigned by the board.
Sec. 3. (a) The board shall maintain individual records for each
member of a public pension or retirement fund of the system
administered by the board.
(b) A member's record must include at least the following
information:
(1) The member's name.
(2) Date of birth.
(3) Age at beginning service.
(4) Service record.
(5) Address.
(6) Contributions.
(7) Amounts withdrawn.
(8) Benefits paid.
Sec. 4. (a) Records of:
(1) individual members of; and
(2) membership information concerning;
a public pension or retirement fund administered by the board are
confidential, except for the name and years of service of a member.
(b) This section does not prohibit the board from providing fund
records to an association described in IC 2-3.5-4-12, IC 2-3.5-5-10,
IC 5-10.3-8-10, IC 5-10.4-5-14, or IC 36-8-8-17.2.
Sec. 5. (a) Each public pension and retirement fund of the
system shall pay the expenses of administration attributable to that
public pension or retirement fund.
(b) The board shall:
(1) prorate the expenses of administration of the system that
cannot be attributed to a particular public pension or
retirement fund and the bond of the director among; and
(2) pay the prorated expenses from;
the public pension and retirement funds of the system.
Chapter 7. Short Title and Saving Provisions
Sec. 1. This article shall be known as and may be cited as the
Indiana public pension modernization act.
Sec. 2. (a) All powers, duties, liabilities, property, equipment,
records, rights, and contracts of the:
(1) board of trustees of the public employees' retirement fund;
and
(2) board of trustees of the teachers' retirement fund;
are transferred to or assumed by the board on August 1, 2009.
(b) The board shall provide indemnification of:
(1) the board of trustees of the public employees' retirement
fund; and
(2) the board of trustees of the teachers' retirement fund;
as necessary or appropriate in regard to any liabilities of the public
employees' retirement fund or the teachers' retirement fund
assumed by the board.
Sec. 3. Any amounts transferred under this subsection to the
system that represent balances in any fund or account of the public
employees' retirement fund or the teachers' retirement fund for the
administration of the public pension and retirement funds
administered by the public employees' retirement fund or the
teachers' retirement fund before August 1, 2009, including any
related services, shall be:
(1) deposited in a fund or account designed by the board; and
(2) used by the system for the administration of the public
pension and retirement funds of the system and related
services.
Sec. 4. The employees of the:
(1) public employees' retirement fund; and
(2) teachers' retirement fund;
become employees of the system on August 1, 2009, without change
in compensation, seniority, or benefits. An employee who is a
member of the public employees' retirement fund before August 1,
2009, remains a member of the public employees' retirement fund
after July 31, 2009. An employee who is a member of the teachers'
retirement fund before August 1, 2009, remains a member of the
teachers' retirement fund after July 31, 2009.
Sec. 5. Rules and regulations of:
(1) the public employees' retirement fund; and
(2) the teachers' retirement fund;
in effect before August 1, 2009, are considered, after July 31, 2009,
rules and regulations of the system.
Sec. 6. (a) Any reference or cross-reference to:
(1) the board of trustees of the public employees' retirement
fund; or
(2) the board of trustees of the teachers' retirement fund;
in the Indiana Code shall be treated after July 31, 2009, as a
reference or cross-reference to the board.
(b) Any reference or cross-reference to:
(1) the director of the public employees' retirement fund; or
(2) the director of the teachers' retirement fund;
in the Indiana Code shall be treated after July 31, 2009, as a
reference or cross-reference to the director.
Sec. 7. If any provision in this article conflicts with a provision
in IC 5-10.2, IC 5-10.3, or IC 5-10.4, the provisions shall be read
together to the extent possible with any conflict resolved in favor
of the provision in this article.
SOURCE: IC 33-38-6-2; (09)IN0535.1.22. -->
SECTION 22. IC 33-38-6-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 2. As used in this
chapter, "board" refers to the board of trustees of the public employees'
retirement fund. Indiana public retirement system established by
IC 5-10.5-3-1.
SOURCE: IC 33-38-7-3; (09)IN0535.1.23. -->
SECTION 23. IC 33-38-7-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 3. As used in this
chapter, "board" refers to the board of trustees of the public employees'
retirement fund. Indiana public retirement system established by
IC 5-10.5-3-1.
SOURCE: IC 33-38-8-3; (09)IN0535.1.24. -->
SECTION 24. IC 33-38-8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 3. As used in this
chapter, "board" refers to the board of trustees of the public employees'
retirement fund. Indiana public retirement system established by
IC 5-10.5-3-1.
SOURCE: IC 33-39-7-3; (09)IN0535.1.25. -->
SECTION 25. IC 33-39-7-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 3. As used in this
chapter, "board" refers to the board of trustees of the public employees'
retirement fund. Indiana public retirement system established by
IC 5-10.5-3-1.
SOURCE: IC 36-8-8-4; (09)IN0535.1.26. -->
SECTION 26. IC 36-8-8-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 4. (a) There is
established a police officers' and firefighters' pension and disability
fund to be known as the 1977 fund. The 1977 fund consists of fund
member and employer contributions, plus the earnings on them, to be
used to make benefit payments to fund members and their survivors in
the amounts and under the conditions specified in this chapter.
(b) The board of trustees of the
public employees' retirement fund
(referred to in this chapter as the "PERF board") Indiana public
retirement system (referred to in this chapter as the "system
board") shall administer the 1977 fund, which may be commingled
with the public employees' retirement fund for investment purposes.
All actuarial data shall be computed on the total membership of the
fund, and the cost of participation is the same for all employers in the
fund. The fund member and employer contributions shall be recorded
separately for each employer.
(c) The 1977 fund advisory committee, referred to as the committee,
is established. The
PERF system board shall consult with the
committee on matters pertaining to the administration of this chapter
and IC 5-10.3-11. The committee shall consist of the following
members appointed by the governor every two (2) years for a term of
two (2) years:
(1) Two (2) firefighters:
(A) each of whom must be an active or retired member of the
1937 fund or the 1977 fund; and
(B) neither of whom may be in an upper level policymaking
position.
(2) Two (2) police officers:
(A) each of whom must be an active or retired member of the
1925 fund, the 1953 fund, or the 1977 fund; and
(B) neither of whom may be in an upper level policymaking
position.
(3) Two (2) members, each of whom must be an executive of an
employer.
(4) Two (2) members, each of whom must be a member of the
legislative body of an employer.
The term of each member begins on July 1 following appointment and
continues until his the member's successor is qualified. A member of
the committee who no longer holds the position that qualified him the
member for appointment under subdivision (1), (2), (3), or (4) forfeits
his the member's membership on the committee. The governor shall
appoint a person to fill a vacancy on the committee for the remainder
of the unexpired term.
(d) Each member of the committee who is not a state employee is
entitled to reimbursement for expenses actually incurred in connection
with the member's duties. Such a member is also entitled to
reimbursement for traveling expenses and other expenses actually
incurred in connection with the member's duties, as approved by the
PERF system board.
SOURCE: IC 2-3.5-2-9; IC 2-3.5-2-13; IC 5-10.2-2-16; IC 5-10.2-2-
17; IC 5-10.3-3-1; IC 5-10.3-3-2; IC 5-10.3-3-3; IC 5-10.3-3-4; IC 5-
10.3-3-5; IC 5-10.3-3-6; IC 5-10.3-3-9; IC 5-10.3-4-1; IC 5-10.3-4-2;
IC 5-10.3-9-5; IC 5-10.4-3-1; IC 5-10.4-3-2; IC 5-10.4-3-3; IC 5-10.4-
3-4; IC 5-10.4-3-5.
; (09)IN0535.1.27. -->
SECTION 27. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2009]: IC 2-3.5-2-9; IC 2-3.5-2-13; IC 5-10.2-2-16;
IC 5-10.2-2-17; IC 5-10.3-3-1; IC 5-10.3-3-2; IC 5-10.3-3-3;
IC 5-10.3-3-4; IC 5-10.3-3-5; IC 5-10.3-3-6; IC 5-10.3-3-9;
IC 5-10.3-4-1; IC 5-10.3-4-2; IC 5-10.3-9-5; IC 5-10.4-3-1;
IC 5-10.4-3-2; IC 5-10.4-3-3; IC 5-10.4-3-4; IC 5-10.4-3-5.
SOURCE: ; (09)IN0535.1.28. -->
SECTION 28. [EFFECTIVE JULY 1, 2009]
(a) As used in this
SECTION, "PERF board" refers to the board of trustees of the
public employees' retirement fund established under IC 5-10.3-3-1
(before its repeal by this act).
(b) As used in this SECTION, "PERF director" refers to the
director of the public employees retirement fund whose duties are
described in IC 5-10.3-3-9 (before its repeal by this act).
(c) As used in this SECTION, "system board" refers to the
board of trustees of the Indiana public retirement system
established by IC 5-10.5-3-1, as added by this act.
(d) As used in this SECTION, "system director" refers to the
director of the Indiana public retirement system appointed under
IC 5-10.5-6-1, as added by this act.
(e) As used in this SECTION, "TRF board" refers to the board
of trustees of the Indiana state teachers' retirement fund
established under IC 5-10.4-3-1 (before its repeal by this act).
(f) As used in this SECTION, "TRF director" refers to the
director of the Indiana state teachers' retirement fund appointed
under IC 5-10.4-3-5 (before its repeal by this act).
(g) Notwithstanding the duties assigned to the system board by
IC 5-10-5.5-3, IC 5-10.2-1-1, IC 5-10.2-2-2, IC 5-10.2-9-2,
IC 5-10.3-1-1, IC 5-10.3-2-1, IC 5-10.3-11-1, IC 5-10.4-1-5,
IC 33-38-6-2, IC 33-38-7-3, IC 33-38-8-3, IC 33-39-7-3, and
IC 36-8-8-4, all as amended by this act, and IC 2-3.5-2-2.7 and
IC 5-10.5, both as added by this act, the PERF board and TRF
board shall continue to perform the duties assigned by:
(1) IC 5-10-5.5-3, IC 5-10.2-1-1, IC 5-10.2-2-2, IC 5-10.2-9-2,
IC 5-10.3-1-1, IC 5-10.3-2-1, IC 5-10.3-11-1, IC 5-10.4-1-5,
IC 33-38-6-2, IC 33-38-7-3, IC 33-38-8-3, IC 33-39-7-3, and
IC 36-8-8-4 (before their amendment by this act); and
(2) IC 2-3.5-2-9, IC 2-3.5-2-13, IC 5-10.2-2-16, IC 5-10.2-2-17,
IC 5-10.3-3-1, IC 5-10.3-3-2, IC 5-10.3-3-3, IC 5-10.3-3-4,
IC 5-10.3-3-5, IC 5-10.3-3-6, IC 5-10.3-9-5, IC 5-10.4-3-1,
IC 5-10.4-3-2, IC 5-10.4-3-3, and IC 5-10.4-3-4 (before their
repeal by this act);
during the period after June 30, 2009, and before August 1, 2009.
(h) Notwithstanding the duties assigned to the system director
by IC 5-10.3-1-2.5, as amended by this act, and IC 5-10.5, as added
by this act, the PERF director and the TRF director shall continue
to perform the duties assigned by:
(1) IC 5-10.3-1-2.5 (before its amendment by this act); and
(2) IC 5-10.3-3-9 and IC 5-10.4-3-5 (before their repeal by this
act);
during the period after June 30, 2009, and before August 1, 2009.
(i) This SECTION expires June 30, 2010.
SOURCE: ; (09)IN0535.1.29. -->
SECTION 29. [EFFECTIVE JULY 1, 2009]
(a) The legislative
services agency shall prepare legislation for introduction in the
2010 regular session of the general assembly to organize and
correct statutes affected by this act.
(b) This SECTION expires June 30, 2010.