CHAPTER 6. PARTICIPATION BY POLITICAL SUBDIVISIONS
IC 5-10.3-6
Chapter 6. Participation by Political Subdivisions
IC 5-10.3-6-1
Admission to fund
Sec. 1. (a) By ordinance or resolution of the governing bodyspecifying by departmental, occupational, or other definableclassification the employees who will become members of the fund,a political subdivision may become a participant in the fund if theordinance or resolution is filed with and approved by the board.
(b) A governing body may include in its ordinance or resolutionadopted under subsection (a) a determination of the date from whichprior service for its employees will be computed. Creditable servicefor these employees is determined under IC 5-10.3-7-7.5.
(c) The effective date of participation is the earlier of January 1or July 1 after the date of approval. However, no retirement benefitmay be paid until six (6) months after the effective date ofparticipation.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.60-1987,SEC.1.
IC 5-10.3-6-1.5
Authorized agent in third class city or town
Sec. 1.5. (a) This section applies to a third class city or a town.
(b) The clerk-treasurer of a city or town is that city's or town'sauthorized agent for all matters concerning the fund.
As added by P.L.69-1995, SEC.1.
IC 5-10.3-6-2
Preliminary survey
Sec. 2. Preliminary Survey. The governing body may request apreliminary survey, at its expense, to determine the estimated cost ofparticipation. The board and its actuary shall give an estimate of thecosts, the benefits, and other appropriate information. However, agoverning body of a unit that is participating in the fund is notrequired to request a survey, and the board and its actuary are notrequired to give an estimate, when:
(1) the unit adopts a resolution or ordinance providing thatadditional classifications of employees will become membersof the fund; and
(2) the actuary for the fund finds there would be no materialchange in the current or continued employer contribution ratefor that unit because of the additional classification.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.246-2001,SEC.10.
IC 5-10.3-6-3
Powers of governing body
Sec. 3. Powers of the Governing Body. After a politicalsubdivision becomes a participant, its governing body may make
appropriations, make payments, and do all things required by thisarticle.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-6-4
Accounts
Sec. 4. Accounts. The board shall maintain separate accounts foreach political subdivision. Credits and charges to these accountsshall be made as prescribed in IC 5-10.2-2.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-6-5
Payments to fund
Sec. 5. (a) Annually the board shall certify to each participatingpolitical subdivision its employer contribution rate to the fund,computed as specified in IC 5-10.2-2, including its share ofadministration expenses.
(b) The board shall determine the amount of unfunded accruedliability of the political subdivision on the effective date ofparticipation. The political subdivision shall pay the amount in alump sum or elect to amortize the amount over a period determinedby the board.
(c) The payments by the participating political subdivisions forthe amounts in subsections (a), (b), and (d) are allocated to thepolitical subdivision and not to the state.
(d) If a political subdivision's account shows a deficit, the boardmay require the political subdivision to make additional paymentsnecessary to eliminate the deficit, in addition to the employercontributions computed under subsections (a) and (b).
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.47-1985,SEC.6; P.L.54-1993, SEC.12.
IC 5-10.3-6-6
Appropriations and payments by school corporations
Sec. 6. Appropriations and Payments by School Corporations. Aschool corporation shall make the appropriations and paymentsrequired of participating political subdivisions from its general fund.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-6-7
Collection of payments
Sec. 7. (a) If the employer or political subdivision fails to makepayments required by this chapter, the amount payable may be:
(1) withheld by the auditor of state from moneys payable to theemployer or subdivision and transferred to the fund; or
(2) recovered in a suit in the circuit or superior court of thecounty in which the political subdivision is located. The suitshall be an action by the state on the relation of the board,prosecuted by the attorney general.
(b) If: (1) service credit is verified for a member who has filed anapplication for retirement benefits; and
(2) the member's employer at the time the service credit wasearned has not made contributions for or on behalf of themember for the service credit;
liability for the unfunded service credit shall be charged against theemployer's account and collected by the fund as provided insubsection (a). Processing of a member's application for retirementbenefits may not be delayed by an employer's failure to makecontributions for the service credit earned by the member while themember was employed by the employer.
(c) If the employer or political subdivision fails to file the reportsor records required by this chapter or by IC 5-10.3-7-12.5, the auditorof state shall:
(1) withhold the penalty described in IC 5-10.3-7-12.5 frommoney payable to the employer or the political subdivision; and
(2) transfer the penalty to the fund.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.195-1999,SEC.20; P.L.115-2009, SEC.11.
IC 5-10.3-6-8
Withdrawal of political subdivision
Sec. 8. (a) As used in this section, "withdrawing politicalsubdivision" means a political subdivision that takes an actiondescribed in subsection (b).
(b) Subject to the provisions of this section, a political subdivisionmay do the following:
(1) Stop its participation in the fund and withdraw all of thepolitical subdivision's employees from participation in the fund.
(2) Withdraw a departmental, an occupational, or otherdefinable classification of employees from participation in thefund.
(3) Stop the political subdivision's participation in the fund by:
(A) selling all of the political subdivision's assets; or
(B) ceasing to exist as a political subdivision.
(c) The withdrawal of a political subdivision's participation in thefund is effective on a termination date established by the board. Thetermination date may not occur before all of the following haveoccurred:
(1) The withdrawing political subdivision has provided writtennotice of the following to the board:
(A) The withdrawing political subdivision's intent to ceaseparticipation.
(B) The names of the withdrawing political subdivision'scurrent employees and former employees as of the date onwhich the notice is provided.
(2) The expiration of:
(A) a ninety (90) day period following the filing of thenotice with the board, for a withdrawing politicalsubdivision that sells all of the withdrawing political
subdivision's assets or that ceases to exist as a politicalsubdivision; or
(B) a two (2) year period following the filing of the noticewith the board, for all other withdrawing politicalsubdivisions.
(3) The withdrawing political subdivision takes all actionsrequired in subsections (d) through (h).
(d) With respect to retired members who have creditable servicewith the withdrawing political subdivision, the withdrawing politicalsubdivision must contribute to the fund any additional amounts thatthe board determines are necessary to provide for reserves withsufficient assets to pay all future benefits from the fund to thoseretired members. The contribution by the withdrawing politicalsubdivision must be made in a lump sum or in a series of paymentsdetermined by the board.
(e) A member who is an employee of the political subdivision asof the date of the notice under subsection (c) is vested in the pensionportion of the member's retirement benefit. The withdrawing politicalsubdivision must contribute to the fund the amount the boarddetermines is necessary to fund fully the vested benefit. Thecontribution by the withdrawing political subdivision must be madein a lump sum or in a series of payments determined by the board.
(f) A member who is covered by subsection (e) and who is at leastsixty-five (65) years of age may elect to retire under IC 5-10.2-4-1even if the member has fewer than ten (10) years of service. Thebenefit for the member shall be computed under IC 5-10.2-4-4 usingthe member's actual years of service.
(g) With respect to members of the fund who have creditableservice with the withdrawing political subdivision and who are notemployees as of the date of the notice under subsection (c), thewithdrawing political subdivision must contribute the amount thatthe board determines is necessary to fund fully the service for thosemembers that is attributable to service with the withdrawing politicalsubdivision. The contribution by the withdrawing politicalsubdivision must be made in a lump sum or in a series of paymentsdetermined by the board.
(h) The board shall evaluate each withdrawal under this sectionto determine if the withdrawal affects the fund's compliance withSection 401(a)(4) of the Internal Revenue Code of 1954, as in effecton September 1, 1974. The board may deny a political subdivisionpermission to withdraw if the denial is necessary to achievecompliance with Section 401(a)(4) of the Internal Revenue Code of1954, as in effect on September 1, 1974.
As added by Acts 1977, P.L.53, SEC.3. Amended by P.L.28-1984,SEC.5; P.L.22-1993, SEC.4.
IC 5-10.3-6-8.5
Certain state university employees involved in health care
Sec. 8.5. (a) This section only applies if:
(1) certain employees of a state university in a departmental,
occupational, or other definable classification involved in healthcare are terminated from employment with the state universityas a result of:
(A) a lease or other transfer of university property to anongovernmental entity; or
(B) a contractual arrangement with a nongovernmental entityto perform certain state university functions;
(2) the state university requests coverage under this sectionfrom the board; and
(3) the board approves the request.
(b) The withdrawal of the employees described in subsection (a)from the fund is effective on a termination date established by theboard. The board may not establish a termination date that occursbefore all of the following have occurred:
(1) The state university has requested coverage under thissection and provided written notice of the following to theboard:
(A) The intent of the state university to terminate theemployees from employment.
(B) The names of the terminated employees as of the datethat the termination is to occur.
(2) The expiration of a thirty (30) day period following thefiling of the notice with the board.
(3) The state university fully complies with subsection (c).
(c) A member who is an employee of the state universitydescribed in subsection (a) as of the date of the notice undersubsection (b) and who is listed in the notice under subsection (b) isvested in the pension portion of the member's retirement benefit. Thestate university must contribute to the fund the amount the boarddetermines is necessary to completely fund the vested benefit. Thecontribution by the state university must be made in a lump sum orin a series of payments determined by the board.
(d) A member who is covered by subsection (c) and who is at leastsixty-five (65) years of age may elect to retire under IC 5-10.2-4-1even if the member has less than ten (10) years of service. Thebenefit for the member shall be computed under IC 5-10.2-4-4 usingthe member's actual years of creditable service.
(e) The board shall evaluate each withdrawal under this section todetermine if the withdrawal affects the fund's compliance withSection 401(a) of the Internal Revenue Code of 1954, as in effect onSeptember 1, 1974. The board may deny an employee permission towithdraw if the denial is necessary to achieve compliance withSection 401(a) of the Internal Revenue Code of 1954, as in effect onSeptember 1, 1974.
As added by P.L.38-1996, SEC.1.
IC 5-10.3-6-8.9
State employee terminations resulting from lease or contractualarrangement with nongovernmental entity
Sec. 8.9. (a) This section applies when certain employees of the
state in particular departmental, occupational, or other definableclassifications are terminated from employment with the state as aresult of:
(1) a lease or other transfer of state property to anongovernmental entity; or
(2) a contractual arrangement with a nongovernmental entity toperform certain state functions.
(b) The governor shall request coverage under this section fromthe board whenever an employee of the state is terminated asdescribed in subsection (a).
(c) The board must approve a request from the governor undersubsection (b) unless approval violates subsection (k), federal orstate law, or the terms of the fund.
(d) As used in this section, "early retirement" means a member iseligible to retire with a reduced pension under IC 5-10.2-4-1, becausethe member:
(1) is at least fifty (50) years of age; and
(2) has at least fifteen (15) years of creditable service.
(e) As used in this section, "normal retirement" means a memberis eligible to retire under IC 5-10.2-4-1, because:
(1) the member is at least sixty-five (65) years of age and has atleast ten (10) years of creditable service;
(2) the member is at least sixty (60) years of age and has at leastfifteen (15) years of creditable service; or
(3) the member's age in years plus the member's years of serviceis at least eighty-five (85) and the member is at least fifty-five(55) years of age.
(f) The withdrawal of the employees described in subsection (a)from the fund is effective on a termination date established by theboard. The board may not establish a termination date that occursbefore all of the following have occurred:
(1) The governor has requested coverage under this section andprovided written notice of the following to the board:
(A) The intent of the state to terminate the employees fromemployment.
(B) The names of the terminated employees as of the datethat the termination is to occur.
(2) The expiration of a thirty (30) day period following thefiling of the notice with the board.
(3) The state complies with subsections (g) and (i).
(g) A member who:
(1) is an employee of the state described in subsection (a) withat least twenty-four (24) months of creditable service as of thedate of the notice under subsection (f); and
(2) is listed in the notice under subsection (f);
is vested in the pension portion of the member's retirement benefit.The state must contribute to the fund the amount the boarddetermines is necessary to completely fund the vested benefit. Thecontribution by the state must be made in a lump sum or in a seriesof payments determined by the board. The benefit for the member
shall be computed under IC 5-10.2-4-4 using the member's actualyears of creditable service.
(h) A member who is covered by subsection (g) and who is atleast sixty-five (65) years of age as of the date of the notice undersubsection (f) may elect to retire under IC 5-10.2-4-1 even if themember has less than ten (10) years of service. The benefit for themember shall be computed under IC 5-10.2-4-4 using the member'sactual years of creditable service.
(i) A member who is covered by subsection (f) and who, as of thedate of the notice under subsection (f), is less than twenty-four (24)months from being eligible for normal or early retirement underIC 5-10.2-4-1 may elect to retire by purchasing the service creditneeded for retirement under the following conditions:
(1) The state shall contribute to the fund an amount determinedunder IC 5-10.2-3-1.2 and payable from the sources describedin subsection (j) sufficient to pay the member's contributionsrequired for the member's purchase of the service credit themember needs to retire.
(2) The maximum amount of creditable service that the statemay purchase for a member under this subsection is twenty-four(24) months.
(3) The benefit for the member shall be computed underIC 5-10.2-4-4 using the member's actual years of creditableservice plus all other service for which the fund gives credit,including the creditable service purchased under thissubsection.
(j) The amounts that the state is required to contribute to the fundunder subsection (i) must come from the following sources:
(1) If the state receives monetary payments under the lease orcontractual arrangement described in subsection (a), theproceeds of the monetary payments received by the state. Thestate may not require, as a condition of the transaction totransfer state property or have certain state functions performedby a nongovernmental entity, that the nongovernmental entitydirectly or indirectly pay the amounts that the state is requiredto contribute under subsection (i).
(2) If the state does not receive any monetary payments underthe lease or contractual arrangement described in subsection (a),any remaining appropriations made to the state department,agency, or other entity terminating the employees described insubsection (a).
(3) If the sources described in subdivisions (1) and (2) do notfully fund the amounts that the state is required to contribute tothe fund under subsection (i), the board shall request that thegeneral assembly appropriate the amount necessary to fullyfund the state's required contribution under subsection (i) in thenext biennial state budget.
(k) The board shall evaluate each withdrawal under this sectionto determine if the withdrawal affects the fund's compliance withSection 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission towithdraw if the denial is necessary to achieve compliance withSection 401(a) of the Internal Revenue Code of 1954, as in effect onSeptember 1, 1974.
As added by P.L.47-2006, SEC.3 and P.L.158-2006, SEC.3.
IC 5-10.3-6-9
Participation of political subdivision with retirement system
Sec. 9. Participation of Political Subdivision with RetirementSystems. If a political subdivision has a retirement system for itsemployees, it must conduct a referendum, at which seventy-fivepercent (75%) of all active and retired members vote forparticipation, before it may follow the procedures in this chapter forparticipation.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-6-10
Transfer of assets
Sec. 10. Transfer of Assets. (a) If a political subdivision with aretirement system becomes a participant, the moneys and securitiesin the retirement system shall be transferred to the fund. If thesecurities to be transferred are not acceptable to the board, they shallbe converted to cash, which shall be transferred to the fund.
(b) Moneys received by the fund shall first be applied to set up areserve equal to the present value of benefits payable to retiredmembers. The excess of the moneys shall be used to offset the chargeto the political subdivision for unfunded accrued liability for activemembers.
(c) If there are insufficient funds for the reserve required insubsection (b) of this section, then the political subdivision shall paythe fund, either in a single payment or in installment paymentsapproved by the board, the amount needed to establish the reserve.If the political subdivision is unable to make any payment, the boardmay reduce proportionately each benefit payable to retired members.
(d) The liabilities of a retirement system which is transferred tothe fund are not liabilities of the fund, except as provided byagreement between the fund and the political subdivision.
As added by Acts 1977, P.L.53, SEC.3.
IC 5-10.3-6-11
Repealed
(Repealed by P.L.16-1986, SEC.85.)