IC 10-12-2
    Chapter 2. Pension, Death, Disability, Survivor, and OtherBenefits

IC 10-12-2-1
Retention of service weapon; badge; identification card
    Sec. 1. (a) If an eligible employee retires after at least twenty (20)years of service, the employee may:
        (1) retain the employee's issued service weapon; and
        (2) receive a "Retired" badge in recognition of the employee'sservice to the department and the public.
    (b) Upon an eligible employee's retirement, the department shallissue to the employee an identification card that:
        (1) gives the employee's name and rank;
        (2) signifies that the employee is retired; and
        (3) notes the employee's authority to retain the employee'sservice weapon.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-2
Pension trust; commingling funds; investment of funds; report;termination
    Sec. 2. (a) The department may:
        (1) establish and operate an actuarially sound pension plangoverned by a pension trust; and
        (2) make the necessary annual contribution in order to preventany deterioration in the actuarial status of the trust fund.
    (b) The department shall make contributions to the trust fund. Anemployee beneficiary shall make contributions to the trust fundthrough authorized monthly deductions from wages.
    (c) The trust fund:
        (1) may not be commingled with any other funds; and
        (2) shall be invested only in accordance with state laws for theinvestment of trust funds, together with other investments as arespecifically designated in the pension trust.
Subject to the terms of the pension trust, the trustee, with theapproval of the department and the pension advisory board, mayestablish investment guidelines and limits on all types ofinvestments, including stocks and bonds, and take other actionnecessary to fulfill its duty as a fiduciary for the trust fund.
    (d) The trustee shall invest the trust fund assets with the samecare, skill, prudence, and diligence that a prudent person acting in alike capacity and familiar with these matters would use in theconduct of an enterprise of a similar character with similar aims.
    (e) The trustee shall diversify the trust fund's investments inaccordance with prudent investment standards. The investment of thetrust fund is subject to section 3 of this chapter.
    (f) The trustee shall receive and hold as trustee for the uses andpurposes set forth in the pension trust the funds paid by thedepartment, the employee beneficiaries, or any other person or

persons.
    (g) The trustee shall engage pension consultants to supervise andassist in the technical operation of the pension plan so that there is nodeterioration in the actuarial status of the plan.
    (h) Before October 1 of each year, the trustee, with the aid of thepension consultants, shall prepare and file a report with thedepartment and the state board of accounts. The report must includethe following with respect to the fiscal year ending on the precedingJune 30:
        SCHEDULE I. Receipts and disbursements.
        SCHEDULE II. Assets of the pension trust, listing investmentsas to book value and current market value at the end of thefiscal year.
        SCHEDULE III. List of terminations, showing cause andamount of refund.
        SCHEDULE IV. The application of actuarially computed"reserve factors" to the payroll data, properly classified for thepurpose of computing the reserve liability of the trust fund as ofthe end of the fiscal year.
        SCHEDULE V. The application of actuarially computed"current liability factors" to the payroll data, properly classifiedfor the purpose of computing the liability of the trust fund forthe end of the fiscal year.
        SCHEDULE VI. An actuarial computation of the pensionliability for all employees retired before the close of the fiscalyear.
    (i) The minimum annual contribution by the department must beof sufficient amount, as determined by the pension consultants, toprevent any deterioration in the actuarial status of the pension planduring that year. If the department fails to make the minimumcontribution for five (5) successive years, the pension trustterminates and the trust fund shall be liquidated.
    (j) Except as provided by applicable federal law, in the event ofliquidation, the department shall take the following actions:
        (1) All expenses of the pension trust must be paid.
        (2) Adequate provision must be made for continuing pensionpayments to retired persons.
        (3) Each employee beneficiary must receive the net amount paidinto the trust fund from the employee beneficiary's wages.
        (4) Any amount remaining in the pension trust after thedepartment makes the payments described in subdivisions (1)through (3) must be equitably divided among the employeebeneficiaries in proportion to the net amount paid from eachemployee beneficiary's wages into the trust fund.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-3
Qualification of trust under Internal Revenue Code; benefitlimitations
    Sec. 3. (a) The pension trust shall satisfy the qualification

requirements in Section 401 of the Internal Revenue Code, asapplicable to the pension trust. In order to meet those requirements,the pension trust is subject to the following provisions,notwithstanding any other provision of this chapter, IC 10-12-3, orIC 10-12-4:
        (1) The pension advisory board shall distribute the corpus andincome of the pension trust to participants and theirbeneficiaries in accordance with this chapter, IC 10-12-3, andIC 10-12-4.
        (2) A part of the corpus or income of the pension trust may notbe used or diverted to any purpose other than the exclusivebenefit of the participants and their beneficiaries.
        (3) Forfeitures arising from severance of employment, death, orany other reason may not be applied to increase the benefits anyparticipant would otherwise receive under this chapter,IC 10-12-3, or IC 10-12-4.
        (4) If the pension trust is terminated or if all contributions to thepension trust are completely discontinued, the rights of eachaffected participant to the benefits accrued at the date of thetermination or discontinuance, to the extent then funded, arenonforfeitable.
        (5) All benefits paid from the pension trust shall be distributedin accordance with the requirements of Section 401(a)(9) of theInternal Revenue Code and the regulations under that section.To meet those requirements, the pension trust is subject to thefollowing provisions:
            (A) The life expectancy of a participant, the participant'sspouse, or the participant's beneficiary shall not berecalculated after the initial determination for purposes ofdetermining benefits.
            (B) If a participant dies before the distribution of theparticipant's benefits has begun, distributions to beneficiariesmust begin no later than December 31 of the calendar yearimmediately following the calendar year in which theparticipant died.
            (C) The amount of an annuity paid to a participant'sbeneficiary may not exceed the maximum determined underthe incidental death benefit requirement of the InternalRevenue Code.
        (6) The pension advisory board may not:
            (A) determine eligibility for benefits;
            (B) compute rates of contribution; or
            (C) compute benefits of participants or beneficiaries;
        in a manner that discriminates in favor of participants who areconsidered officers, supervisors, or highly compensated, asprovided under Section 401(a)(4) of the Internal Revenue Code.
        (7) Benefits paid under this chapter, IC 10-12-3, or IC 10-12-4may not exceed the maximum benefit specified by Section 415of the Internal Revenue Code.
        (8) The salary taken into account under this chapter, IC 10-12-3,

or IC 10-12-4 may not exceed the applicable amount underSection 401(a)(17) of the Internal Revenue Code.
        (9) The trustee may not engage in a transaction prohibited bySection 503(b) of the Internal Revenue Code.
    (b) Notwithstanding any other provision of this chapter orIC 10-12-3, and solely for the purposes of the benefits providedunder IC 10-12-3, the benefit limitations of Section 415 of theInternal Revenue Code shall be determined by applying theprovisions of Section 415(b)(10) of the Internal Revenue Code, asamended by the Technical and Miscellaneous Revenue Act of 1988.This section constitutes an election under Section 415(b)(10)(C) ofthe Internal Revenue Code to have Section 415(b) of the InternalRevenue Code, other than Section 415(b)(2)(G) of the InternalRevenue Code, applied without regard to Section 415(b)(2)(F) of theInternal Revenue Code to anyone who did not first become aparticipant before January 1, 1990.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-4
Mortality reserve account
    Sec. 4. The department may establish, operate, and makenecessary contributions to a mortality reserve account for thepayment of supplementary death benefits to deceased employeebeneficiaries. However, a supplementary death benefit may notexceed fourteen thousand five hundred dollars ($14,500).
As added by P.L.2-2003, SEC.3.

IC 10-12-2-5
Disability reserve account; additional department authority;disability pension payments
    Sec. 5. (a) The department may establish, operate, and makenecessary contributions to a disability reserve account for thepayment of disability expense reimbursements and disabilitypensions to employee beneficiaries with a disability. The departmentalso may do the following:
        (1) Establish, under the terms of a supplementary trustagreement, disability expense reimbursements and disabilitypensions to be paid to employee beneficiaries who incur adisability in the line of duty.
        (2) Establish, under the terms of a supplementary trustagreement, disability expense reimbursements and disabilitypensions to be paid to employee beneficiaries who incur adisability not in the line of duty.
        (3) Seek rulings from the Internal Revenue Service as to thefederal tax treatment for the line of duty disability benefitsauthorized by this section.
Except as provided in subsection (d), a monthly disability pensionmay not exceed the maximum basic pension amount. However, in thecase of disability incurred in the line of duty, an employeebeneficiary may receive not more than forty dollars ($40) per month

for each dependent parent and dependent child less than eighteen(18) years of age, in addition to the monthly disability pensionpayment under this chapter. Time in disability pension status isconsidered qualifying active service for purposes of calculating aretirement pension.
    (b) This section shall be administered in a manner that isconsistent with the Americans with Disabilities Act (42 U.S.C.12101 et seq.) and the regulations and amendments related to thatact, to the extent required by that act.
    (c) A disability payment made under this chapter is worker'scompensation instead of a payment under IC 22-3-2 throughIC 22-3-7.
    (d) A regular, paid police employee of the state police departmentwho has a permanent and total disability from a catastrophic personalinjury that:
        (1) is sustained in the line of duty after January 1, 2001; and
        (2) permanently prevents the employee from performing anygainful work;
shall receive a disability pension equal to the employee's regularsalary at the commencement of the disability. The disability pensionprovided under this subsection is provided instead of the regularmonthly disability pension. The disability pension provided underthis subsection must be increased at a rate equal to any salaryincreases the employee would have received if the employeeremained in active service.
As added by P.L.2-2003, SEC.3. Amended by P.L.99-2007, SEC.35;P.L.1-2010, SEC.52.

IC 10-12-2-6
Dependent's pension reserve account
    Sec. 6. (a) The department may establish, operate, and makenecessary contributions to a dependent's pension reserve account forthe payment of pensions to dependent parents, surviving spouses, anddependent unmarried children of employee beneficiaries who arekilled in the line of duty.
    (b) The maximum monthly pension amount payable to dependentmothers, dependent fathers, and surviving spouses:
        (1) may not exceed the then current basic monthly pensionamount paid to retirees; and
        (2) shall cease with the last payment before the dependentparent's or surviving spouse's death.
    (c) Except as provided in subsections (d) through (f), themaximum monthly pension amount payable to each dependentunmarried child may not exceed thirty percent (30%) of the currentbasic monthly pension amount paid to retirees. The payment shallcease with the last payment before the child's marriage or nineteenthbirthday, whichever occurs first.
    (d) The total monthly pension amount paid to all dependentunmarried children of an employee beneficiary may not exceed thecurrent basic monthly amount paid to retirees.    (e) Each unmarried dependent child who is at least nineteen (19)years of age but less than twenty-three (23) years of age is eligible toreceive a pension payment while enrolled as a full-time student in aschool, college, or university.
    (f) A dependent child, married or unmarried, of an employeebeneficiary who is killed in the line of duty is eligible to attend anyIndiana state supported college or university tuition free.
    (g) All dependent mothers, dependent fathers, surviving spouses,and dependent children who received a dependent pension on June30, 1969, shall receive a pension calculated as provided by thissection beginning on July 1, 1969. Any surviving spouse electing to,or who has previously elected to, receive joint survivorship benefitsinstead of pension payments is eligible to receive the full pensionbenefit.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-7
Police benefit fund; duties of trustee; appropriations
    Sec. 7. (a) The:
        (1) mortality reserve account referred to in section 4 of thischapter;
        (2) disability reserve account referred to in section 5 of thischapter; and
        (3) dependent pension reserve account referred to in section 6of this chapter;
may be commingled and operated as one (1) fund, known as thepolice benefit fund, under the terms of a supplementary trustagreement between the department and the trustee for the exclusivebenefit of employee beneficiaries and their dependents.
    (b) The trustee shall receive and hold as trustee for the uses andpurposes set out in the supplementary trust agreement all funds paidto it as the trustee by the department or by any other person orpersons.
    (c) The trustee shall hold, invest, and reinvest the police benefitfund in:
        (1) investments that trust funds are permitted to invest in underIndiana law; and
        (2) other investments as may be specifically designated in thesupplementary trust agreement.
    (d) The trustee, with the assistance of the pension engineers, shall,not more than ninety (90) days after the close of the fiscal year,prepare and file with the department and the department of insurancea detailed annual report showing receipts, disbursements, casehistories, and recommendations as to the contributions required tokeep the program in operation.
    (e) Contributions by the department to the police benefit fundshall be provided in the general appropriations to the department.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-8 Actuarial soundness of pension trust; inspection of books andaccounts
    Sec. 8. (a) The department of insurance shall approve the actuarialsoundness of the pension trust and the general method of operationof the police benefit fund before the police benefit fund beginsoperation.
    (b) In addition to the annual report required by subsection (d), thedepartment's books, reports, and accounts shall be open to inspectionby the department of insurance at all times.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-9
Transfer of funds to police benefit fund; rewards and fees
    Sec. 9. (a) Except as provided in subsection (b), a member of thedepartment may not accept:
        (1) a fee for the performance of an act in the line of duty; or
        (2) a reward offered for the apprehension or conviction of anyperson or persons or for the recovery of any property.
    (b) Any fee or reward to which a member of the departmentwould be entitled except for the provisions of subsection (a) shall bepaid to the police benefit fund.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-10
Encumbering shares of benefits before payment
    Sec. 10. (a) A person entitled to, having an interest in, or sharinga pension or benefit from the trust funds does not, before the actualpayment of the pension or benefit, have the right to anticipate, sell,assign, pledge, mortgage, or otherwise dispose of or encumber thepension or benefit.
    (b) A person's interest, share, pension, or benefit, before the actualpayment of the interest, share, pension, or benefit, may not be:
        (1) used to satisfy the debts or liabilities of the person entitledto the interest, share, pension, or benefit;
        (2) subject to attachment, garnishment, execution, or levy orsale on judicial proceedings; or
        (3) transferred by any means, voluntarily or involuntarily.
    (c) The trustee may pay from the trust fund the amounts that thetrustee determines are proper and necessary expenses of the trustfund.
As added by P.L.2-2003, SEC.3.

IC 10-12-2-11
College and university tuition exemption
    Sec. 11. The child or spouse of an employee beneficiary who hasa permanent and total disability from a catastrophic personal injurythat was sustained in the line of duty and permanently prevents theemployee beneficiary from performing any gainful work may not berequired to pay tuition or mandatory fees at any state supportedcollege, university, or technical school if:        (1) the child is less than twenty-three (23) years of age and is afull-time student pursuing a prescribed course of study; or
        (2) the spouse is pursuing a prescribed course of study towardan undergraduate degree.
As added by P.L.2-2003, SEC.3. Amended by P.L.99-2007, SEC.36.