Bill Text: IA SSB3140 | 2017-2018 | 87th General Assembly | Introduced

---

Bill Title: A bill for an act relating to municipal utility retirement systems.

Spectrum: Committee Bill

Status: (N/A - Dead) 2018-02-07 - Subcommittee recommends passage. [SSB3140 Detail]

Download: Iowa-2017-SSB3140-Introduced.html

---

Senate Study Bill 3140 - Introduced
SENATE FILE _____
BY (PROPOSED COMMITTEE ON
LOCAL GOVERNMENT BILL BY
CHAIRPERSON GARRETT)
A BILL FOR
An Act relating to municipal utility retirement systems.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 6150XC (3) 87
ec/rn

S.F. _____
Section 1. Section 97B.1A, subsection 8, paragraph a, Code
2018, is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (11A) Persons with service under this
chapter who are employed by a municipal utility, other than a
municipal water utility or waterworks, that has established
a pension and annuity retirement system for its employees
pursuant to chapter 412, and who are covered under this chapter
at the time of commencement of employment with the municipal
utility.
Sec. 2. Section 97B.1A, Code 2018, is amended by adding the
following new subsection:
NEW SUBSECTION . 15A. “Municipal utility” means a public
utility as defined in section 412.5.
Sec. 3. Section 97B.42C, Code 2018, is amended to read as
follows:
97B.42C Retirement system merger.
A municipal water utility or waterworks that has established
a pension and annuity retirement system for its employees
pursuant to chapter 412 , or a school district that has
established a pension and annuity retirement system for its
employees pursuant to chapter 294 , may adopt a resolution to
authorize the merger of its pension and annuity retirement
system with and into the Iowa public employees’ retirement
system. The system is authorized, but is not required, to
accept such a proposal. The governing body of the municipal
water utility or waterworks or school district and the Iowa
public employees’ retirement system shall, acting in their
fiduciary capacities, mutually determine the terms and
conditions of such a merger, including any additional funds
necessary to fund the service credits being transferred to the
Iowa public employees’ retirement system, and either party
may decline the merger if they cannot agree on such terms and
conditions. The system shall adopt such rules as it deems
necessary and prudent to effectuate mergers as provided by this
section .
-1-
LSB 6150XC (3) 87
ec/rn 1/ 3

S.F. _____
Sec. 4. Section 412.4, Code 2018, is amended to read as
follows:
412.4 Payments and investments.
The council, board of waterworks trustees, or other board
or commission, whichever is authorized by law to manage and
operate any such waterworks, or other municipally owned and
operated public utility, shall have the right and power to
contract with any legal reserve insurance company authorized to
conduct its business in the state, or any bank located in Iowa
having trust powers for the investment of funds contributed to
an annuity or pension system, for the payment of the pensions
or annuities provided in such pension or annuity retirement
system, and may pay the premiums or make the contribution of
such contract out of the fund provided in section 412.2 . Funds
shall be invested in accordance with the investment policy for
the retirement fund, as established by the governing body of
the public utility. In establishing the investment policy,
the council, board, or commission shall be governed by the
standards set forth in section 97B.7A . However, permissible
investments shall be limited to those investments authorized in
section 12B.10, subsection 5 , and investments in diversified
commingled investment funds holding only publicly traded
securities and under the management of an investment advisor
registered with the federal securities and exchange commission
under the Investment Advisor Act of 1940. Funds contributed
to a bank pursuant to such a contract shall be invested in
the manner prescribed in section 633.123A or chapter 633A,
subchapter IV, part 3 , and may be commingled with and invested
as a part of a common or master fund managed for the benefit of
more than one public utility.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to municipal utility retirement systems.
Code section 97B.1A(8), defining employees for purposes of
-2-
LSB 6150XC (3) 87
ec/rn 2/ 3

S.F. _____
mandatory membership in the Iowa public employees’ retirement
system (IPERS), is amended. Currently, the definition of
“employee” identifies certain categories of employees who have
the ability to opt out of mandatory membership in IPERS under
certain circumstances. The bill includes in this category
persons with service under IPERS who are also covered under
IPERS at the time they commence employment with a municipal
utility, other than a municipal water utility or waterworks,
that has established its own pension system.
Code section 97B.1A is also amended by providing that the
term “municipal utility” means a public utility as defined in
Code section 412.5.
Code section 97B.42C, concerning retirement system mergers,
is amended to authorize a merger with IPERS by any municipal
utility with a pension system for its employees under
Code chapter 412 and not just a municipal water utility or
waterworks with a pension system established under Code chapter
412.
Code section 412.4, concerning investments authorized by a
pension system established under Code chapter 412, is amended
to eliminate the provision limiting permissible investments
to those investments authorized in Code section 12B.10(5)
and certain other diversified investment funds. The bill
also eliminates a provision prescribing how certain funds
contributed to a bank may be invested.
-3-
LSB 6150XC (3) 87
ec/rn 3/ 3