First Regular Session 117th General Assembly (2011)
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HOUSE ENROLLED ACT No. 1048
AN ACT to amend the Indiana Code concerning pensions.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 5-10.5-4-1; (11)HE1048.1.1. -->
SECTION 1. IC 5-10.5-4-1, AS ADDED BY SEA 549-2011,
SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2011]: Sec. 1. The board shall do all of the following:
(1) Appoint and fix the salary of a director.
(2) 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
(3) Establish a general office in Indianapolis for board meetings
and for administrative personnel.
(4) Provide for the installation in the general office of a complete
(B) accounts, including reserve accounts; and
to give effect to all the requirements of this article and to ensure
the proper operation of the fund.
(5) Provide for a report at least annually to each member of the
amount credited to the member in the annuity savings account in
each investment program under IC 5-10.2-2.
(6) With the advice of the actuary, adopt actuarial tables and
compile data needed for actuarial studies that are necessary for
the fund's operation.
(7) Act on applications for benefits and claims of error filed by
(8) 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 public pension or retirement fund of the
system audited by a certified public accountant.
(9) Publish for the members a synopsis of the fund's condition.
(10) 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.
(11) Expend money, including income from the fund's
investments, for effectuating the fund's purposes.
(12) Establish personnel programs and policies for the employees
of the system.
(13) Submit a financial report before November 1 each year to the
governor, the pension management oversight commission, and the
budget committee. The report under this subdivision must set
forth a complete operating and financial statement covering its
operations during the most recent fiscal year, and include any
other information requested by the chair of the pension
management oversight commission. The report must be submitted
to the pension management oversight commission in an electronic
format pursuant to IC 5-14-6.
(14) Establish a code of ethics or decide to be under the
jurisdiction and rules adopted by the state ethics commission.
(15) (14) Provide the necessary forms for administering the fund.
(16) (15) Submit to the auditor of state or the treasurer of state
vouchers or reports necessary to claim an amount due from the
state to the system.
SOURCE: IC 36-8-8-13.4; (11)HE1048.1.2. -->
SECTION 2. IC 36-8-8-13.4 IS ADDED TO THE INDIANA CODE
AS A NEW
SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2011]: Sec. 13.4. (a) This section applies only to a fund member
or survivor of a fund member who is receiving a disability benefit
under section 13.3(b) of this chapter.
(b) A fund member or survivor of a fund member described in
subsection (a) may file an application, in accordance with this
section, requesting a determination that:
(1) the member's covered impairment, as determined under
section 13.3(b) of this chapter, was:
(A) the direct result of:
(i) a personal injury that occurred while the fund
member was on duty;
(ii) a personal injury that occurred while the fund
member was off duty and was responding to an offense
or a reported offense, in the case of a police officer, or an
emergency or reported emergency for which the fund
member was trained, in the case of a firefighter; or
(iii) an occupational disease (as defined in IC 22-3-7-10),
including a duty related disease that is also included
within clause (B);
(B) a duty related disease, which for purposes of this
section, means a disease arising out of the fund member's
employment. A disease is considered to arise out of the
fund member's employment if it is apparent to the rational
mind, upon consideration of all of the circumstances, that:
(i) there is a connection between the conditions under
which the fund member's duties are performed and the
(ii) the disease can be seen to have followed as a natural
incident of the fund member's duties as a result of the
exposure occasioned by the nature of the fund member's
(iii) the disease can be traced to the fund member's
employment as the proximate cause; or
(C) a disability presumed incurred in the line of duty under
IC 5-10-13 or IC 5-10-15; or
(2) the member's covered impairment, as determined under
section 13.3(b) of this chapter, was not a covered impairment
described in subsection (b)(1).
The application must be filed with the local board that made the
determination of a covered impairment resulting in a disability
benefit under section 13.3(b) of this chapter. The application form
shall be prepared by the PERF board or its designee and be made
available to a fund member or survivor of a fund member
described in subsection (a) upon request.
(c) A fund member or survivor of a fund member who files an
application under this section has the burden of presenting
sufficient evidence to support a finding that the member's covered
impairment, as determined under section 13.3(b) of this chapter,
satisfies the standard provided in subsection (b)(1). Such evidence
may include any documents, materials, or other evidence provided
in connection with the original hearing and determination of a
covered impairment as determined under section 13.3(b) of this
chapter, including any transcript from that proceeding. A fund
member or a survivor of a fund member may include with an
application any additional probative evidence that is relevant to
the determination under subsection (b)(1). The local board may
establish reasonable procedures with respect to the application
process and may engage a medical authority to provide opinions
relevant to making its determination. The local board may hold a
hearing with respect to an application filed under this section if the
fund member or survivor of a fund member shows good cause that
documents or other probative evidence sufficient to make the
showing required under this subsection is not reasonably
obtainable and that holding a hearing would be reasonably likely
to provide such probative evidence. If the local board conducts a
hearing, it shall be subject to the provisions of section 12.7 of this
chapter relating to the conduct of hearings on the determinations
of covered impairments under this chapter.
(d) The local board shall make its recommendation, including
findings of fact, in writing and shall provide copies of its
recommendation to the fund member or survivor of the fund
member, the 1977 fund advisory committee, and the PERF board
no later than thirty (30) days after the:
(1) filing of the application, if no hearing is held; or
(2) hearing, if held.
(e) If the local board does not issue its recommendation within
the time required under subsection (d), the member's covered
impairment shall be considered to be a covered impairment
described under subsection (b)(1) for purposes of the local board's
(f) The 1977 fund advisory committee shall review the local
board's recommendation, or the considered recommendation
under subsection (e), not later than forty-five (45) days after
receiving the recommendation and shall then issue an initial
determination of whether the covered impairment is one described
under subsection (b)(1). The 1977 fund advisory committee shall
notify the PERF board, the local board, and the fund member or
survivor of the fund member of its initial determination, and the
PERF board or its designee will issue a final determination to the
local board and the fund member or survivor of the fund member.
If no objection is made to the initial determination under
subsection (g) or (h), the PERF board must issue a final
determination not later than thirty (30) days after receiving an
(g) The fund member or survivor of the fund member or the
local board may object in writing to the 1977 fund advisory
committee's initial determination under subsection (f) not later
than fifteen (15) days after the initial determination is issued by
filing an objection with the PERF board. If a written objection is
not filed, the 1977 advisory committee's initial determination
becomes final. If a timely written objection is filed, the PERF
board shall issue a final determination after a hearing. Unless an
administrative law judge orders a waiver or an extension of the
period for cause shown, the final determination must be issued not
later than one hundred eighty (180) days after the date of receipt
of the local board's recommendation.
(h) If the 1977 fund advisory committee fails to issue an initial
determination within forty-five (45) days after receiving the local
board's recommendation, the default determination on whether the
covered impairment is one described under subsection (b)(1) will
be the determination made by PERF's medical authority. An
objection to this determination may be filed in accordance with the
provisions of subsection (g).
(i) A determination that a member's covered impairment is one
described under subsection (b)(1) will apply only on a prospective
basis beginning on January 1 of the calendar year in which the
determination is made. The amount of the benefit will not be
changed as a result of this determination.
(j) A fund member or survivor of a fund member described in
subsection (a) must file an application under this section no later
than two (2) years after the date the PERF board notifies the fund
members and survivors described in subsection (a) that the board
has received a favorable ruling from the Internal Revenue Service.
The PERF board will provide notice of receipt of a favorable ruling
within thirty (30) days of its receipt.
(k) This section expires July 1, 2021.
SOURCE: IC 36-8-8-24.8; (11)HE1048.1.3. -->
SECTION 3. IC 36-8-8-24.8, AS ADDED BY P.L.99-2010,
SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 24.8. (a) This section does not apply to a fund
member who elects to enter the DROP (as defined in IC 36-8-8.5-4)
under IC 36-8-8.5 after June 30, 2011.
(b) This subsection applies to a fund member who enters the
DROP (as defined in IC 36-8-8.5-4) before July 1, 2011, and:
(1) does not, before July 1, 2011, exit the DROP as provided
in IC 36-8-8.5-14; or
(2) before July 1, 2011, exits the DROP without retiring.
A fund member to whom this subsection applies may elect to
receive a partial lump sum distribution under this section. If a fund
member makes an election under this subsection and has not exited
the DROP, the fund member shall exit the DROP on the date the
fund member's election under this subsection is effective. The
retirement benefits of a fund member who makes an election under
this subsection are calculated as if the fund member had never
entered the DROP.
Benefits paid under this section are subject to section 2.5 of
As used in this section, "partial lump sum distribution"
means the amount calculated under subsection
After June 30, 2010, a fund member may elect to receive at
retirement a partial lump sum distribution if the fund member meets all
of the following requirements on the date of the election:
(1) The fund member is in active service.
(2) The fund member qualifies for a retirement fund benefit
payment under section 10(b) of this chapter.
A fund member's election under subsection
(1) must be in writing;
(2) must be filed with the PERF board, on a form prescribed by
the PERF board; and
(3) is irrevocable.
The partial lump sum distribution for a fund member who
makes an election described in subsection
is determined in
STEP TWO of the following formula:
STEP ONE: Determine the lesser of the following:
(A) The fund member's years of service for which the fund
member has received service credit in the fund.
(B) Thirty-two (32).
STEP TWO: Multiply the STEP ONE amount by the fund
member's monthly benefit calculated under section 11(b) of this
The monthly benefit of a fund member who receives a partial
lump sum distribution under this section is actuarially reduced by
subtracting an amount determined by dividing the partial lump sum
distribution amount determined in subsection
by a rate,
determined by the actuary for the fund, that is:
(1) based on the age of the fund member and, if applicable, the
age of the fund member's spouse at the time the fund member
elects to take the partial lump sum distribution; and
(2) computed to result in a monthly benefit amount that has an
actuarial present value that approximates the partial lump sum
(h) (i) A fund member who makes an election described in
subsection (d) (e) must elect to receive the partial lump sum
distribution determined in subsection (f) (g) as:
(1) a lump sum paid not later than thirty (30) days after the fund
member's retirement date; or
(2) three (3) equal annual payments commencing not later than
thirty (30) days after the fund member's retirement date and
thereafter paid on the anniversary of the fund member's retirement
(i) (j)This section expires July 1, 2012.
SOURCE: IC 36-8-8.5-14; (11)HE1048.1.4. -->
SECTION 4. IC 36-8-8.5-14, AS AMENDED BY P.L.148-2007,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: 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;
(3) the mandatory retirement age applicable to the member, if
(4) the date the member retires because of a disability as provided
under section 16.5(d) of this chapter; or
(5) the date determined under IC 36-8-8-24.8.
(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 4-4-11-15.1; IC 5-1.5-2-10; IC 5-13-12-3.1; IC 5-20-1-
4.1; IC 8-10-1-7.1; IC 9-15-2-2.2; IC 10-15-2-11; IC 14-12-1-10.1; IC
14-13-1-14.5; IC 15-13-2-13; IC 21-11-9-3; IC 26-4-3-10; IC 27-1-
; (11)HE1048.1.5. -->
SECTION 5. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2011]: IC 4-4-11-15.1; IC 5-1.5-2-10; IC 5-13-12-3.1;
IC 5-20-1-4.1; IC 8-10-1-7.1; IC 9-15-2-2.2; IC 10-15-2-11;
IC 14-12-1-10.1; IC 14-13-1-14.5; IC 15-13-2-13; IC 21-11-9-3;
IC 26-4-3-10; IC 27-1-29-27.1.
SOURCE: ; (11)HE1048.1.6. -->
SECTION 6. [EFFECTIVE UPON PASSAGE] (a) As used in this
SECTION, "participant" has the meaning set forth in
(b) As used in this SECTION, "plan" refers to the state excise
police, gaming agent, gaming control officer, and conservation
enforcement officers' retirement plan established by IC 5-10-5.5-2.
(c) Not later than October 1, 2011, the board of trustees of the
public employees' retirement fund shall pay the amount
determined under subsection (d) to a plan participant (or to a
survivor or beneficiary of a plan participant) who retired or was
disabled on or before December 1, 2009, and who was entitled to
receive a monthly benefit on July 1, 2010. The amount is not an
increase in the annual retirement allowance.
(d) The amount paid under this SECTION to a plan participant
(or to a survivor or beneficiary of a plan participant) who meets
the requirements of subsection (c) is determined as follows:
If a Plan Participant's Creditable The Amount Is
Less than ten (10) years $125
(only in the case of a plan participant
receiving disability retirement benefits)
At least ten (10) years,
but less than twenty (20) years $235
At least twenty (20) years,
but less than thirty (30) years $325
At least thirty (30) years $400
(e) The creditable service used to determine the amount paid to
a plan participant (or a survivor or beneficiary of a plan
participant) under this SECTION is the creditable service that was
used to compute the plan participant's retirement allowance under
IC 5-10-5.5-10 and IC 5-10-5.5-12 except that partial years of
creditable service may not be used to determine the amount paid
under this SECTION.
(f) This SECTION expires January 1, 2012.
SOURCE: ; (11)HE1048.1.7. -->
SECTION 7. An emergency is declared for this act.
HEA 1048 _ Concur
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