Bill Text: IA HSB666 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act establishing a deferred retirement option plan for members of the public safety peace officers' retirement, accident, and disability system, and including implementation provisions.
Spectrum: Committee Bill
Status: (Introduced) 2024-02-13 - Subcommittee recommends passage. Vote Total: 3-0. [HSB666 Detail]
Download: Iowa-2023-HSB666-Introduced.html
House
Study
Bill
666
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
STATE
GOVERNMENT
BILL
BY
CHAIRPERSON
BLOOMINGDALE)
A
BILL
FOR
An
Act
establishing
a
deferred
retirement
option
plan
1
for
members
of
the
public
safety
peace
officers’
2
retirement,
accident,
and
disability
system,
and
including
3
implementation
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
NEW
SECTION
.
97A.6C
Deferred
retirement
option
1
plan.
2
1.
For
purposes
of
this
section,
unless
the
context
3
otherwise
requires:
4
a.
“Applicable
percentage”
means
that
percentage,
not
5
greater
than
one
hundred
percentage
points,
equal
to
fifty-two
6
percentage
points
plus
two
percentage
points
for
each
month
for
7
the
period
between
the
eligible
member’s
plan
eligibility
month
8
and
the
month
the
eligible
member
commences
membership
in
the
9
plan.
10
b.
“Drop
benefit”
means,
for
a
participant,
an
amount
11
credited
to
the
participant’s
account
each
applicable
month
12
equal
to
the
member’s
applicable
percentage
multiplied
by
the
13
member’s
participant
retirement
amount.
14
c.
“Eligible
member”
means
a
member
who
has
attained
15
fifty-five
years
of
age
with
at
least
twenty-two
years
of
16
membership
service.
17
d.
“Participant
account”
means
an
administrative
record
18
maintained
by
the
system
reflecting
the
participant’s
19
accumulated
drop
benefit.
20
e.
“Participant
retirement
amount”
means
the
amount
equal
21
to
the
monthly
retirement
allowance
the
eligible
member
would
22
have
received
under
section
97A.6
if
the
member
retired
on
the
23
date
the
eligible
member
commenced
participation
in
the
plan,
24
based
on
earnings
through
the
previous
full
quarter
of
earnable
25
compensation
earned
by
the
member.
26
f.
“Plan”
means
the
deferred
retirement
option
plan
27
established
by
this
section.
28
g.
“Plan
eligibility
month”
means
the
first
full
calendar
29
month
in
which
the
participant
is
an
eligible
member.
30
2.
a.
An
eligible
member
may
elect
to
participate
in
the
31
deferred
retirement
option
plan
as
provided
in
this
section.
32
To
participate
in
the
plan,
the
eligible
member
shall
be
33
employed
in
a
nonsupervisory
position
or
shall
be
approved
to
34
be
employed
in
a
nonsupervisory
position
upon
participation
in
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the
plan,
notwithstanding
any
provision
of
law
to
the
contrary,
1
by
the
department
of
public
safety
upon
recommendation
of
the
2
state
police
officers
council
labor
union
for
peace
officers.
3
A
decision
by
an
eligible
member
to
participate
in
the
plan
4
is
irrevocable.
Upon
commencing
membership
in
the
plan,
the
5
member
shall
remain
an
active
member
of
the
system
and
employed
6
in
a
nonsupervisory
position
and
shall
have
credited
to
a
7
participant
account
on
behalf
of
the
member
from
the
retirement
8
fund
as
established
in
section
97A.8
for
each
month
the
member
9
participates
in
the
plan
the
member’s
drop
benefit.
The
10
amounts
credited
shall
be
invested
by
the
system
in
risk-free
11
assets
of
a
short-term
nature,
and
interest
and
earnings
shall
12
not
be
credited
to
the
member’s
participant
account
but
shall
13
remain
with
the
retirement
fund
established
in
section
97A.8.
14
In
addition,
the
readjustment
of
pensions
under
section
97A.6,
15
subsection
14,
shall
not
apply
to
a
participant’s
drop
benefit
16
or
to
amounts
credited
to
the
member’s
participant
account.
17
b.
Upon
termination
of
an
eligible
member’s
participation
18
in
the
plan,
the
eligible
member
shall
be
deemed
to
be
retired
19
under
the
system
as
of
that
date
for
purposes
of
the
system
20
and
shall
begin
receiving
a
retirement
allowance
equal
to
21
the
member’s
participant
retirement
amount
or
such
optional
22
retirement
benefits,
based
upon
that
amount,
pursuant
to
23
section
97A.6A.
In
addition,
the
eligible
member
shall
receive
24
the
moneys
credited
to
the
member’s
participant
account
while
25
participating
in
the
plan.
The
eligible
member
shall
select,
26
upon
written
application
to
the
system,
whether
to
receive
27
the
amount
in
the
member’s
participant
account
in
the
form
28
of
a
lump
sum
distribution
or
as
a
rollover
to
an
eligible
29
retirement
plan
as
defined
in
section
97A.6B.
30
c.
If
an
eligible
member
terminates
participation
in
the
31
plan
prior
to
the
date
selected
by
the
member
upon
commencing
32
membership
in
the
plan
and
the
termination
is
not
due
to
the
33
death
or
disability
of
the
member
under
this
chapter,
then
34
the
system
shall
assess
a
twenty-five
percent
penalty
on
the
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amount
credited
to
the
member’s
participant
account
prior
to
1
distributing
the
amount
to
the
member.
The
penalty
amount
2
shall
be
transferred
to
and
remain
with
the
retirement
fund.
3
3.
To
participate
in
the
plan,
an
eligible
member
shall
4
make
written
application
to
the
system.
The
application
shall
5
include
the
following:
6
a.
The
month
the
eligible
member
intends
to
commence
7
participation
in
the
plan.
8
b.
The
eligible
member’s
selection
of
a
plan
termination
9
date.
The
plan
termination
date
shall
be
either
three,
10
four,
or
five
years
after
the
date
the
eligible
member
11
commences
membership
in
the
plan.
However,
for
the
two-year
12
period
beginning
with
the
first
of
the
month
following
the
13
implementation
date
of
this
section,
an
eligible
member
between
14
sixty-two
and
sixty-four
years
of
age
may
also
select
a
plan
15
termination
date
that
is
one
or
two
years
after
the
date
the
16
eligible
member
commences
membership
in
the
plan.
17
c.
Verification
by
the
department
that
the
eligible
member
18
is
in
a
nonsupervisory
position
or
has
been
approved
by
the
19
department
upon
recommendation
of
the
state
police
officers
20
council
labor
union
for
peace
officers
to
be
employed
in
a
21
nonsupervisory
position
upon
participation
in
the
plan.
22
4.
Participation
in
the
plan
by
an
eligible
member
does
not
23
guarantee
continued
employment.
Contributions
required
from
24
members
and
participating
cities
shall
continue
based
on
the
25
earnable
compensation
of
an
eligible
member
participating
in
26
the
plan.
However,
contributions
made
while
an
eligible
member
27
participates
in
the
plan
shall
remain
with
the
retirement
fund
28
and
shall
not
be
subject
to
a
withdrawal
of
contributions
under
29
section
97A.16.
30
5.
The
system’s
actuary,
while
making
the
annual
valuation
31
of
the
assets
and
liabilities
of
the
retirement
fund,
shall
32
determine
whether
establishment
and
operation
of
the
plan
33
created
in
this
section
has
resulted
in
an
increased
actuarial
34
cost
to
the
system.
If
the
actuary
determines
that
the
plan
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has
resulted
in
an
increased
actuarial
cost
to
the
system,
1
then,
notwithstanding
any
provision
of
section
97A.8
to
the
2
contrary,
the
system
shall
increase
the
members’
contribution
3
rate
as
necessary
to
cover
the
increased
cost
of
the
plan
4
created
in
this
section.
5
6.
This
section
shall
not
be
implemented
until
the
board
of
6
trustees
adopts
rules
providing
for
the
administration
of
this
7
section
which
include
the
implementation
date
of
the
plan.
8
EXPLANATION
9
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
10
the
explanation’s
substance
by
the
members
of
the
general
assembly.
11
This
bill
establishes
a
deferred
retirement
option
plan
12
(DROP
plan)
for
members
of
the
public
safety
peace
officers’
13
retirement,
accident,
and
disability
system
(PORS).
14
New
Code
section
97A.6C
establishes
a
DROP
plan
for
eligible
15
members
of
PORS.
16
The
new
Code
section
provides
that
members
of
PORS
who
are
17
at
least
55
years
of
age,
have
at
least
22
years
of
service,
18
and
who
are
employed
in
a
nonsupervisory
position
or
have
been
19
approved
by
the
department
of
public
safety
upon
recommendation
20
of
the
state
police
officers
council
labor
union
to
be
employed
21
in
a
nonsupervisory
position
are
eligible
to
participate
in
the
22
DROP
plan.
The
DROP
plan
provides
that
an
eligible
member
can
23
delay
retirement,
continue
working
in
a
nonsupervisory
position
24
for
a
set
number
of
additional
years,
and
have
a
portion
of
the
25
retirement
allowance
they
otherwise
would
have
received
if
they
26
had
retired
instead
of
participating
in
the
DROP
plan
deposited
27
in
an
account
that
is
then
distributed
to
them
when
they
28
eventually
retire.
However,
the
member’s
retirement
allowance
29
is
set
at
the
time
the
member
enters
the
DROP
plan.
30
Prior
to
participating
in
the
DROP
plan,
a
member
shall
31
submit
an
application
to
the
system
indicating
when
they
intend
32
to
start
participation
in
the
DROP
plan
and
when
they
intend
33
to
terminate
their
participation
in
the
plan
and
retire,
and
34
verifying
that
the
member
is
in
a
nonsupervisory
position
or
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has
been
approved
to
be
employed
in
a
nonsupervisory
position
1
upon
participation
in
the
DROP
plan.
The
bill
permits
an
2
eligible
member
to
elect
to
participate
in
the
DROP
plan
for
3
three,
four,
or
five
years.
However,
for
the
two-year
period
4
beginning
on
the
implementation
date
of
this
Code
section,
an
5
eligible
member
between
the
ages
of
62
and
64
can
elect
to
6
participate
in
the
DROP
plan
and
terminate
their
participation
7
in
one
or
two
years.
8
Upon
electing
to
participate
in
the
DROP
plan,
the
eligible
9
member
continues
to
work
but
has
a
portion
of
the
retirement
10
allowance
they
would
have
received
if
they
had
decided
to
11
retire
credited
to
an
account.
The
amount
credited
is
equal
12
to
a
percentage
of
the
retirement
allowance
they
would
have
13
received.
The
percentage
rate
is
determined
by
starting
with
14
52
percent
and
adding
2
percent
per
month,
up
to
a
maximum
of
15
100
percent,
based
upon
the
number
of
months
between
the
month
16
the
member
first
became
eligible
to
participate
in
the
DROP
17
plan
and
the
month
the
member
actually
participates.
The
bill
18
provides
that
the
amount
deposited
in
the
member’s
account
does
19
not
accrue
interest
or
dividends.
Upon
termination
from
the
20
DROP
plan,
the
eligible
member
begins
to
receive
a
retirement
21
allowance
based
upon
the
amount
the
member
would
have
received
22
when
the
member
commenced
participation
in
the
DROP
plan
plus
23
the
amount
in
the
member’s
account.
If
the
member
terminates
24
participation
in
the
plan
prior
to
the
date
set
by
the
member
25
and
the
termination
is
not
due
to
the
member’s
death
or
26
disability,
PORS
shall
withhold
25
percent
of
the
amount
in
the
27
account
as
a
penalty.
The
bill
provides
that
participation
in
28
the
DROP
plan
does
not
guarantee
continued
employment.
29
The
new
Code
section
also
provides
that
if
the
PORS
actuary
30
determines
that
the
DROP
plan
has
increased
the
actuarial
cost
31
of
the
system,
the
contribution
rate
paid
by
members
shall
be
32
increased
to
cover
this
increased
cost.
The
new
Code
section
33
further
provides
that
the
DROP
plan
shall
not
be
implemented
34
until
the
board
of
trustees
adopts
rules
providing
for
the
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