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 body
specifying by departmental, occupational, or other definable
classification the employees who will become members of the fund,
a political subdivision may become a participant in the fund if the
ordinance or resolution is filed with and approved by the board.
(b) A governing body may include in its ordinance or resolution
adopted under subsection (a) a determination of the date from which
prior service for its employees will be computed. Creditable service
for these employees is determined under IC 5-10.3-7-7.5.
(c) The effective date of participation is the earlier of January 1
or July 1 after the date of approval. However, no retirement benefit
may be paid until six (6) months after the effective date of
participation. 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's
authorized 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 a
preliminary survey, at its expense, to determine the estimated cost of
participation. The board and its actuary shall give an estimate of the
costs, the benefits, and other appropriate information. However, a
governing body of a unit that is participating in the fund is not
required to request a survey, and the board and its actuary are not
required to give an estimate, when:
(1) the unit adopts a resolution or ordinance providing that
additional classifications of employees will become members
of the fund; and
(2) the actuary for the fund finds there would be no material
change in the current or continued employer contribution rate
for 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 political
subdivision becomes a participant, its governing body may make
appropriations, make payments, and do all things required by this
article. 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 for
each political subdivision. Credits and charges to these accounts
shall 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 participating
political subdivision its employer contribution rate to the fund,
computed as specified in IC 5-10.2-2, including its share of
administration expenses.
(b) The board shall determine the amount of unfunded accrued
liability of the political subdivision on the effective date of
participation. The political subdivision shall pay the amount in a
lump sum or elect to amortize the amount over a period determined
by the board.
(c) The payments by the participating political subdivisions for
the amounts in subsections (a), (b), and (d) are allocated to the
political subdivision and not to the state.
(d) If a political subdivision's account shows a deficit, the board
may require the political subdivision to make additional payments
necessary to eliminate the deficit, in addition to the employer
contributions 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. A
school corporation shall make the appropriations and payments
required 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 make
payments required by this chapter, the amount payable may be:
(1) withheld by the auditor of state from moneys payable to the
employer or subdivision and transferred to the fund; or
(2) recovered in a suit in the circuit or superior court of the
county in which the political subdivision is located. The suit
shall 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 an
application for retirement benefits; and
(2) the member's employer at the time the service credit was
earned has not made contributions for or on behalf of the
member for the service credit;
liability for the unfunded service credit shall be charged against the
employer's account and collected by the fund as provided in
subsection (a). Processing of a member's application for retirement
benefits may not be delayed by an employer's failure to make
contributions for the service credit earned by the member while the
member was employed by the employer.
(c) If the employer or political subdivision fails to file the reports
or records required by this chapter or by IC 5-10.3-7-12.5, the auditor
of state shall:
(1) withhold the penalty described in IC 5-10.3-7-12.5 from
money 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 political
subdivision" means a political subdivision that takes an action
described in subsection (b).
(b) Subject to the provisions of this section, a political subdivision
may do the following:
(1) Stop its participation in the fund and withdraw all of the
political subdivision's employees from participation in the fund.
(2) Withdraw a departmental, an occupational, or other
definable classification of employees from participation in the
fund.
(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 the
fund is effective on a termination date established by the board. The
termination date may not occur before all of the following have
occurred:
(1) The withdrawing political subdivision has provided written
notice of the following to the board:
(A) The withdrawing political subdivision's intent to cease
participation.
(B) The names of the withdrawing political subdivision's
current employees and former employees as of the date on
which the notice is provided.
(2) The expiration of:
(A) a ninety (90) day period following the filing of the
notice with the board, for a withdrawing political
subdivision that sells all of the withdrawing political
subdivision's assets or that ceases to exist as a political
subdivision; or
(B) a two (2) year period following the filing of the notice
with the board, for all other withdrawing political
subdivisions.
(3) The withdrawing political subdivision takes all actions
required in subsections (d) through (h).
(d) With respect to retired members who have creditable service
with the withdrawing political subdivision, the withdrawing political
subdivision must contribute to the fund any additional amounts that
the board determines are necessary to provide for reserves with
sufficient assets to pay all future benefits from the fund to those
retired members. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(e) A member who is an employee of the political subdivision as
of the date of the notice under subsection (c) is vested in the pension
portion of the member's retirement benefit. The withdrawing political
subdivision must contribute to the fund the amount the board
determines is necessary to fund fully the vested benefit. The
contribution by the withdrawing political subdivision must be made
in 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 least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has fewer than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of service.
(g) With respect to members of the fund who have creditable
service with the withdrawing political subdivision and who are not
employees as of the date of the notice under subsection (c), the
withdrawing political subdivision must contribute the amount that
the board determines is necessary to fund fully the service for those
members that is attributable to service with the withdrawing political
subdivision. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(h) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a)(4) of the Internal Revenue Code of 1954, as in effect
on September 1, 1974. The board may deny a political subdivision
permission to withdraw if the denial is necessary to achieve
compliance with Section 401(a)(4) of the Internal Revenue Code of
1954, 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 health
care are terminated from employment with the state university
as a result of:
(A) a lease or other transfer of university property to a
nongovernmental entity; or
(B) a contractual arrangement with a nongovernmental entity
to perform certain state university functions;
(2) the state university requests coverage under this section
from 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The state university has requested coverage under this
section and provided written notice of the following to the
board:
(A) The intent of the state university to terminate the
employees from employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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 university
described in subsection (a) as of the date of the notice under
subsection (b) and who is listed in the notice under subsection (b) is
vested in the pension portion of the member's retirement benefit. The
state university must contribute to the fund the amount the board
determines is necessary to completely fund the vested benefit. The
contribution by the state university must be made in a lump sum or
in a series of payments determined by the board.
(d) A member who is covered by subsection (c) and who is at least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has less than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of creditable service.
(e) The board shall evaluate each withdrawal under this section to
determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 contractual
arrangement with nongovernmental entity
Sec. 8.9. (a) This section applies when certain employees of the
state in particular departmental, occupational, or other definable
classifications are terminated from employment with the state as a
result of:
(1) a lease or other transfer of state property to a
nongovernmental entity; or
(2) a contractual arrangement with a nongovernmental entity to
perform certain state functions.
(b) The governor shall request coverage under this section from
the board whenever an employee of the state is terminated as
described in subsection (a).
(c) The board must approve a request from the governor under
subsection (b) unless approval violates subsection (k), federal or
state law, or the terms of the fund.
(d) As used in this section, "early retirement" means a member is
eligible to retire with a reduced pension under IC 5-10.2-4-1, because
the 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 member
is 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 at
least ten (10) years of creditable service;
(2) the member is at least sixty (60) years of age and has at least
fifteen (15) years of creditable service; or
(3) the member's age in years plus the member's years of service
is 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The governor has requested coverage under this section and
provided written notice of the following to the board:
(A) The intent of the state to terminate the employees from
employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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) with
at least twenty-four (24) months of creditable service as of the
date 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 board
determines is necessary to completely fund the vested benefit. The
contribution by the state must be made in a lump sum or in a series
of payments determined by the board. The benefit for the member
shall be computed under IC 5-10.2-4-4 using the member's actual
years of creditable service.
(h) A member who is covered by subsection (g) and who is at
least sixty-five (65) years of age as of the date of the notice under
subsection (f) may elect to retire under IC 5-10.2-4-1 even if the
member has less than ten (10) years of service. The benefit for the
member shall be computed under IC 5-10.2-4-4 using the member's
actual years of creditable service.
(i) A member who is covered by subsection (f) and who, as of the
date of the notice under subsection (f), is less than twenty-four (24)
months from being eligible for normal or early retirement under
IC 5-10.2-4-1 may elect to retire by purchasing the service credit
needed for retirement under the following conditions:
(1) The state shall contribute to the fund an amount determined
under IC 5-10.2-3-1.2 and payable from the sources described
in subsection (j) sufficient to pay the member's contributions
required for the member's purchase of the service credit the
member needs to retire.
(2) The maximum amount of creditable service that the state
may purchase for a member under this subsection is twenty-four
(24) months.
(3) The benefit for the member shall be computed under
IC 5-10.2-4-4 using the member's actual years of creditable
service plus all other service for which the fund gives credit,
including the creditable service purchased under this
subsection.
(j) The amounts that the state is required to contribute to the fund
under subsection (i) must come from the following sources:
(1) If the state receives monetary payments under the lease or
contractual arrangement described in subsection (a), the
proceeds of the monetary payments received by the state. The
state may not require, as a condition of the transaction to
transfer state property or have certain state functions performed
by a nongovernmental entity, that the nongovernmental entity
directly or indirectly pay the amounts that the state is required
to contribute under subsection (i).
(2) If the state does not receive any monetary payments under
the lease or contractual arrangement described in subsection (a),
any remaining appropriations made to the state department,
agency, or other entity terminating the employees described in
subsection (a).
(3) If the sources described in subdivisions (1) and (2) do not
fully fund the amounts that the state is required to contribute to
the fund under subsection (i), the board shall request that the
general assembly appropriate the amount necessary to fully
fund the state's required contribution under subsection (i) in the
next biennial state budget.
(k) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 Retirement
Systems. If a political subdivision has a retirement system for its
employees, it must conduct a referendum, at which seventy-five
percent (75%) of all active and retired members vote for
participation, before it may follow the procedures in this chapter for
participation. 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 a
retirement system becomes a participant, the moneys and securities
in the retirement system shall be transferred to the fund. If the
securities to be transferred are not acceptable to the board, they shall
be converted to cash, which shall be transferred to the fund.
(b) Moneys received by the fund shall first be applied to set up a
reserve equal to the present value of benefits payable to retired
members. The excess of the moneys shall be used to offset the charge
to the political subdivision for unfunded accrued liability for active
members.
(c) If there are insufficient funds for the reserve required in
subsection (b) of this section, then the political subdivision shall pay
the fund, either in a single payment or in installment payments
approved by the board, the amount needed to establish the reserve.
If the political subdivision is unable to make any payment, the board
may reduce proportionately each benefit payable to retired members.
(d) The liabilities of a retirement system which is transferred to
the fund are not liabilities of the fund, except as provided by
agreement 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.)
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 body
specifying by departmental, occupational, or other definable
classification the employees who will become members of the fund,
a political subdivision may become a participant in the fund if the
ordinance or resolution is filed with and approved by the board.
(b) A governing body may include in its ordinance or resolution
adopted under subsection (a) a determination of the date from which
prior service for its employees will be computed. Creditable service
for these employees is determined under IC 5-10.3-7-7.5.
(c) The effective date of participation is the earlier of January 1
or July 1 after the date of approval. However, no retirement benefit
may be paid until six (6) months after the effective date of
participation. 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's
authorized 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 a
preliminary survey, at its expense, to determine the estimated cost of
participation. The board and its actuary shall give an estimate of the
costs, the benefits, and other appropriate information. However, a
governing body of a unit that is participating in the fund is not
required to request a survey, and the board and its actuary are not
required to give an estimate, when:
(1) the unit adopts a resolution or ordinance providing that
additional classifications of employees will become members
of the fund; and
(2) the actuary for the fund finds there would be no material
change in the current or continued employer contribution rate
for 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 political
subdivision becomes a participant, its governing body may make
appropriations, make payments, and do all things required by this
article. 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 for
each political subdivision. Credits and charges to these accounts
shall 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 participating
political subdivision its employer contribution rate to the fund,
computed as specified in IC 5-10.2-2, including its share of
administration expenses.
(b) The board shall determine the amount of unfunded accrued
liability of the political subdivision on the effective date of
participation. The political subdivision shall pay the amount in a
lump sum or elect to amortize the amount over a period determined
by the board.
(c) The payments by the participating political subdivisions for
the amounts in subsections (a), (b), and (d) are allocated to the
political subdivision and not to the state.
(d) If a political subdivision's account shows a deficit, the board
may require the political subdivision to make additional payments
necessary to eliminate the deficit, in addition to the employer
contributions 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. A
school corporation shall make the appropriations and payments
required 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 make
payments required by this chapter, the amount payable may be:
(1) withheld by the auditor of state from moneys payable to the
employer or subdivision and transferred to the fund; or
(2) recovered in a suit in the circuit or superior court of the
county in which the political subdivision is located. The suit
shall 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 an
application for retirement benefits; and
(2) the member's employer at the time the service credit was
earned has not made contributions for or on behalf of the
member for the service credit;
liability for the unfunded service credit shall be charged against the
employer's account and collected by the fund as provided in
subsection (a). Processing of a member's application for retirement
benefits may not be delayed by an employer's failure to make
contributions for the service credit earned by the member while the
member was employed by the employer.
(c) If the employer or political subdivision fails to file the reports
or records required by this chapter or by IC 5-10.3-7-12.5, the auditor
of state shall:
(1) withhold the penalty described in IC 5-10.3-7-12.5 from
money 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 political
subdivision" means a political subdivision that takes an action
described in subsection (b).
(b) Subject to the provisions of this section, a political subdivision
may do the following:
(1) Stop its participation in the fund and withdraw all of the
political subdivision's employees from participation in the fund.
(2) Withdraw a departmental, an occupational, or other
definable classification of employees from participation in the
fund.
(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 the
fund is effective on a termination date established by the board. The
termination date may not occur before all of the following have
occurred:
(1) The withdrawing political subdivision has provided written
notice of the following to the board:
(A) The withdrawing political subdivision's intent to cease
participation.
(B) The names of the withdrawing political subdivision's
current employees and former employees as of the date on
which the notice is provided.
(2) The expiration of:
(A) a ninety (90) day period following the filing of the
notice with the board, for a withdrawing political
subdivision that sells all of the withdrawing political
subdivision's assets or that ceases to exist as a political
subdivision; or
(B) a two (2) year period following the filing of the notice
with the board, for all other withdrawing political
subdivisions.
(3) The withdrawing political subdivision takes all actions
required in subsections (d) through (h).
(d) With respect to retired members who have creditable service
with the withdrawing political subdivision, the withdrawing political
subdivision must contribute to the fund any additional amounts that
the board determines are necessary to provide for reserves with
sufficient assets to pay all future benefits from the fund to those
retired members. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(e) A member who is an employee of the political subdivision as
of the date of the notice under subsection (c) is vested in the pension
portion of the member's retirement benefit. The withdrawing political
subdivision must contribute to the fund the amount the board
determines is necessary to fund fully the vested benefit. The
contribution by the withdrawing political subdivision must be made
in 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 least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has fewer than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of service.
(g) With respect to members of the fund who have creditable
service with the withdrawing political subdivision and who are not
employees as of the date of the notice under subsection (c), the
withdrawing political subdivision must contribute the amount that
the board determines is necessary to fund fully the service for those
members that is attributable to service with the withdrawing political
subdivision. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(h) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a)(4) of the Internal Revenue Code of 1954, as in effect
on September 1, 1974. The board may deny a political subdivision
permission to withdraw if the denial is necessary to achieve
compliance with Section 401(a)(4) of the Internal Revenue Code of
1954, 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 health
care are terminated from employment with the state university
as a result of:
(A) a lease or other transfer of university property to a
nongovernmental entity; or
(B) a contractual arrangement with a nongovernmental entity
to perform certain state university functions;
(2) the state university requests coverage under this section
from 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The state university has requested coverage under this
section and provided written notice of the following to the
board:
(A) The intent of the state university to terminate the
employees from employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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 university
described in subsection (a) as of the date of the notice under
subsection (b) and who is listed in the notice under subsection (b) is
vested in the pension portion of the member's retirement benefit. The
state university must contribute to the fund the amount the board
determines is necessary to completely fund the vested benefit. The
contribution by the state university must be made in a lump sum or
in a series of payments determined by the board.
(d) A member who is covered by subsection (c) and who is at least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has less than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of creditable service.
(e) The board shall evaluate each withdrawal under this section to
determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 contractual
arrangement with nongovernmental entity
Sec. 8.9. (a) This section applies when certain employees of the
state in particular departmental, occupational, or other definable
classifications are terminated from employment with the state as a
result of:
(1) a lease or other transfer of state property to a
nongovernmental entity; or
(2) a contractual arrangement with a nongovernmental entity to
perform certain state functions.
(b) The governor shall request coverage under this section from
the board whenever an employee of the state is terminated as
described in subsection (a).
(c) The board must approve a request from the governor under
subsection (b) unless approval violates subsection (k), federal or
state law, or the terms of the fund.
(d) As used in this section, "early retirement" means a member is
eligible to retire with a reduced pension under IC 5-10.2-4-1, because
the 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 member
is 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 at
least ten (10) years of creditable service;
(2) the member is at least sixty (60) years of age and has at least
fifteen (15) years of creditable service; or
(3) the member's age in years plus the member's years of service
is 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The governor has requested coverage under this section and
provided written notice of the following to the board:
(A) The intent of the state to terminate the employees from
employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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) with
at least twenty-four (24) months of creditable service as of the
date 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 board
determines is necessary to completely fund the vested benefit. The
contribution by the state must be made in a lump sum or in a series
of payments determined by the board. The benefit for the member
shall be computed under IC 5-10.2-4-4 using the member's actual
years of creditable service.
(h) A member who is covered by subsection (g) and who is at
least sixty-five (65) years of age as of the date of the notice under
subsection (f) may elect to retire under IC 5-10.2-4-1 even if the
member has less than ten (10) years of service. The benefit for the
member shall be computed under IC 5-10.2-4-4 using the member's
actual years of creditable service.
(i) A member who is covered by subsection (f) and who, as of the
date of the notice under subsection (f), is less than twenty-four (24)
months from being eligible for normal or early retirement under
IC 5-10.2-4-1 may elect to retire by purchasing the service credit
needed for retirement under the following conditions:
(1) The state shall contribute to the fund an amount determined
under IC 5-10.2-3-1.2 and payable from the sources described
in subsection (j) sufficient to pay the member's contributions
required for the member's purchase of the service credit the
member needs to retire.
(2) The maximum amount of creditable service that the state
may purchase for a member under this subsection is twenty-four
(24) months.
(3) The benefit for the member shall be computed under
IC 5-10.2-4-4 using the member's actual years of creditable
service plus all other service for which the fund gives credit,
including the creditable service purchased under this
subsection.
(j) The amounts that the state is required to contribute to the fund
under subsection (i) must come from the following sources:
(1) If the state receives monetary payments under the lease or
contractual arrangement described in subsection (a), the
proceeds of the monetary payments received by the state. The
state may not require, as a condition of the transaction to
transfer state property or have certain state functions performed
by a nongovernmental entity, that the nongovernmental entity
directly or indirectly pay the amounts that the state is required
to contribute under subsection (i).
(2) If the state does not receive any monetary payments under
the lease or contractual arrangement described in subsection (a),
any remaining appropriations made to the state department,
agency, or other entity terminating the employees described in
subsection (a).
(3) If the sources described in subdivisions (1) and (2) do not
fully fund the amounts that the state is required to contribute to
the fund under subsection (i), the board shall request that the
general assembly appropriate the amount necessary to fully
fund the state's required contribution under subsection (i) in the
next biennial state budget.
(k) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 Retirement
Systems. If a political subdivision has a retirement system for its
employees, it must conduct a referendum, at which seventy-five
percent (75%) of all active and retired members vote for
participation, before it may follow the procedures in this chapter for
participation. 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 a
retirement system becomes a participant, the moneys and securities
in the retirement system shall be transferred to the fund. If the
securities to be transferred are not acceptable to the board, they shall
be converted to cash, which shall be transferred to the fund.
(b) Moneys received by the fund shall first be applied to set up a
reserve equal to the present value of benefits payable to retired
members. The excess of the moneys shall be used to offset the charge
to the political subdivision for unfunded accrued liability for active
members.
(c) If there are insufficient funds for the reserve required in
subsection (b) of this section, then the political subdivision shall pay
the fund, either in a single payment or in installment payments
approved by the board, the amount needed to establish the reserve.
If the political subdivision is unable to make any payment, the board
may reduce proportionately each benefit payable to retired members.
(d) The liabilities of a retirement system which is transferred to
the fund are not liabilities of the fund, except as provided by
agreement 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.)
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 body
specifying by departmental, occupational, or other definable
classification the employees who will become members of the fund,
a political subdivision may become a participant in the fund if the
ordinance or resolution is filed with and approved by the board.
(b) A governing body may include in its ordinance or resolution
adopted under subsection (a) a determination of the date from which
prior service for its employees will be computed. Creditable service
for these employees is determined under IC 5-10.3-7-7.5.
(c) The effective date of participation is the earlier of January 1
or July 1 after the date of approval. However, no retirement benefit
may be paid until six (6) months after the effective date of
participation. 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's
authorized 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 a
preliminary survey, at its expense, to determine the estimated cost of
participation. The board and its actuary shall give an estimate of the
costs, the benefits, and other appropriate information. However, a
governing body of a unit that is participating in the fund is not
required to request a survey, and the board and its actuary are not
required to give an estimate, when:
(1) the unit adopts a resolution or ordinance providing that
additional classifications of employees will become members
of the fund; and
(2) the actuary for the fund finds there would be no material
change in the current or continued employer contribution rate
for 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 political
subdivision becomes a participant, its governing body may make
appropriations, make payments, and do all things required by this
article. 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 for
each political subdivision. Credits and charges to these accounts
shall 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 participating
political subdivision its employer contribution rate to the fund,
computed as specified in IC 5-10.2-2, including its share of
administration expenses.
(b) The board shall determine the amount of unfunded accrued
liability of the political subdivision on the effective date of
participation. The political subdivision shall pay the amount in a
lump sum or elect to amortize the amount over a period determined
by the board.
(c) The payments by the participating political subdivisions for
the amounts in subsections (a), (b), and (d) are allocated to the
political subdivision and not to the state.
(d) If a political subdivision's account shows a deficit, the board
may require the political subdivision to make additional payments
necessary to eliminate the deficit, in addition to the employer
contributions 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. A
school corporation shall make the appropriations and payments
required 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 make
payments required by this chapter, the amount payable may be:
(1) withheld by the auditor of state from moneys payable to the
employer or subdivision and transferred to the fund; or
(2) recovered in a suit in the circuit or superior court of the
county in which the political subdivision is located. The suit
shall 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 an
application for retirement benefits; and
(2) the member's employer at the time the service credit was
earned has not made contributions for or on behalf of the
member for the service credit;
liability for the unfunded service credit shall be charged against the
employer's account and collected by the fund as provided in
subsection (a). Processing of a member's application for retirement
benefits may not be delayed by an employer's failure to make
contributions for the service credit earned by the member while the
member was employed by the employer.
(c) If the employer or political subdivision fails to file the reports
or records required by this chapter or by IC 5-10.3-7-12.5, the auditor
of state shall:
(1) withhold the penalty described in IC 5-10.3-7-12.5 from
money 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 political
subdivision" means a political subdivision that takes an action
described in subsection (b).
(b) Subject to the provisions of this section, a political subdivision
may do the following:
(1) Stop its participation in the fund and withdraw all of the
political subdivision's employees from participation in the fund.
(2) Withdraw a departmental, an occupational, or other
definable classification of employees from participation in the
fund.
(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 the
fund is effective on a termination date established by the board. The
termination date may not occur before all of the following have
occurred:
(1) The withdrawing political subdivision has provided written
notice of the following to the board:
(A) The withdrawing political subdivision's intent to cease
participation.
(B) The names of the withdrawing political subdivision's
current employees and former employees as of the date on
which the notice is provided.
(2) The expiration of:
(A) a ninety (90) day period following the filing of the
notice with the board, for a withdrawing political
subdivision that sells all of the withdrawing political
subdivision's assets or that ceases to exist as a political
subdivision; or
(B) a two (2) year period following the filing of the notice
with the board, for all other withdrawing political
subdivisions.
(3) The withdrawing political subdivision takes all actions
required in subsections (d) through (h).
(d) With respect to retired members who have creditable service
with the withdrawing political subdivision, the withdrawing political
subdivision must contribute to the fund any additional amounts that
the board determines are necessary to provide for reserves with
sufficient assets to pay all future benefits from the fund to those
retired members. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(e) A member who is an employee of the political subdivision as
of the date of the notice under subsection (c) is vested in the pension
portion of the member's retirement benefit. The withdrawing political
subdivision must contribute to the fund the amount the board
determines is necessary to fund fully the vested benefit. The
contribution by the withdrawing political subdivision must be made
in 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 least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has fewer than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of service.
(g) With respect to members of the fund who have creditable
service with the withdrawing political subdivision and who are not
employees as of the date of the notice under subsection (c), the
withdrawing political subdivision must contribute the amount that
the board determines is necessary to fund fully the service for those
members that is attributable to service with the withdrawing political
subdivision. The contribution by the withdrawing political
subdivision must be made in a lump sum or in a series of payments
determined by the board.
(h) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a)(4) of the Internal Revenue Code of 1954, as in effect
on September 1, 1974. The board may deny a political subdivision
permission to withdraw if the denial is necessary to achieve
compliance with Section 401(a)(4) of the Internal Revenue Code of
1954, 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 health
care are terminated from employment with the state university
as a result of:
(A) a lease or other transfer of university property to a
nongovernmental entity; or
(B) a contractual arrangement with a nongovernmental entity
to perform certain state university functions;
(2) the state university requests coverage under this section
from 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The state university has requested coverage under this
section and provided written notice of the following to the
board:
(A) The intent of the state university to terminate the
employees from employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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 university
described in subsection (a) as of the date of the notice under
subsection (b) and who is listed in the notice under subsection (b) is
vested in the pension portion of the member's retirement benefit. The
state university must contribute to the fund the amount the board
determines is necessary to completely fund the vested benefit. The
contribution by the state university must be made in a lump sum or
in a series of payments determined by the board.
(d) A member who is covered by subsection (c) and who is at least
sixty-five (65) years of age may elect to retire under IC 5-10.2-4-1
even if the member has less than ten (10) years of service. The
benefit for the member shall be computed under IC 5-10.2-4-4 using
the member's actual years of creditable service.
(e) The board shall evaluate each withdrawal under this section to
determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 contractual
arrangement with nongovernmental entity
Sec. 8.9. (a) This section applies when certain employees of the
state in particular departmental, occupational, or other definable
classifications are terminated from employment with the state as a
result of:
(1) a lease or other transfer of state property to a
nongovernmental entity; or
(2) a contractual arrangement with a nongovernmental entity to
perform certain state functions.
(b) The governor shall request coverage under this section from
the board whenever an employee of the state is terminated as
described in subsection (a).
(c) The board must approve a request from the governor under
subsection (b) unless approval violates subsection (k), federal or
state law, or the terms of the fund.
(d) As used in this section, "early retirement" means a member is
eligible to retire with a reduced pension under IC 5-10.2-4-1, because
the 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 member
is 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 at
least ten (10) years of creditable service;
(2) the member is at least sixty (60) years of age and has at least
fifteen (15) years of creditable service; or
(3) the member's age in years plus the member's years of service
is 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 the
board. The board may not establish a termination date that occurs
before all of the following have occurred:
(1) The governor has requested coverage under this section and
provided written notice of the following to the board:
(A) The intent of the state to terminate the employees from
employment.
(B) The names of the terminated employees as of the date
that the termination is to occur.
(2) The expiration of a thirty (30) day period following the
filing 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) with
at least twenty-four (24) months of creditable service as of the
date 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 board
determines is necessary to completely fund the vested benefit. The
contribution by the state must be made in a lump sum or in a series
of payments determined by the board. The benefit for the member
shall be computed under IC 5-10.2-4-4 using the member's actual
years of creditable service.
(h) A member who is covered by subsection (g) and who is at
least sixty-five (65) years of age as of the date of the notice under
subsection (f) may elect to retire under IC 5-10.2-4-1 even if the
member has less than ten (10) years of service. The benefit for the
member shall be computed under IC 5-10.2-4-4 using the member's
actual years of creditable service.
(i) A member who is covered by subsection (f) and who, as of the
date of the notice under subsection (f), is less than twenty-four (24)
months from being eligible for normal or early retirement under
IC 5-10.2-4-1 may elect to retire by purchasing the service credit
needed for retirement under the following conditions:
(1) The state shall contribute to the fund an amount determined
under IC 5-10.2-3-1.2 and payable from the sources described
in subsection (j) sufficient to pay the member's contributions
required for the member's purchase of the service credit the
member needs to retire.
(2) The maximum amount of creditable service that the state
may purchase for a member under this subsection is twenty-four
(24) months.
(3) The benefit for the member shall be computed under
IC 5-10.2-4-4 using the member's actual years of creditable
service plus all other service for which the fund gives credit,
including the creditable service purchased under this
subsection.
(j) The amounts that the state is required to contribute to the fund
under subsection (i) must come from the following sources:
(1) If the state receives monetary payments under the lease or
contractual arrangement described in subsection (a), the
proceeds of the monetary payments received by the state. The
state may not require, as a condition of the transaction to
transfer state property or have certain state functions performed
by a nongovernmental entity, that the nongovernmental entity
directly or indirectly pay the amounts that the state is required
to contribute under subsection (i).
(2) If the state does not receive any monetary payments under
the lease or contractual arrangement described in subsection (a),
any remaining appropriations made to the state department,
agency, or other entity terminating the employees described in
subsection (a).
(3) If the sources described in subdivisions (1) and (2) do not
fully fund the amounts that the state is required to contribute to
the fund under subsection (i), the board shall request that the
general assembly appropriate the amount necessary to fully
fund the state's required contribution under subsection (i) in the
next biennial state budget.
(k) The board shall evaluate each withdrawal under this section
to determine if the withdrawal affects the fund's compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 1, 1974. The board may deny an employee permission to
withdraw if the denial is necessary to achieve compliance with
Section 401(a) of the Internal Revenue Code of 1954, as in effect on
September 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 Retirement
Systems. If a political subdivision has a retirement system for its
employees, it must conduct a referendum, at which seventy-five
percent (75%) of all active and retired members vote for
participation, before it may follow the procedures in this chapter for
participation. 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 a
retirement system becomes a participant, the moneys and securities
in the retirement system shall be transferred to the fund. If the
securities to be transferred are not acceptable to the board, they shall
be converted to cash, which shall be transferred to the fund.
(b) Moneys received by the fund shall first be applied to set up a
reserve equal to the present value of benefits payable to retired
members. The excess of the moneys shall be used to offset the charge
to the political subdivision for unfunded accrued liability for active
members.
(c) If there are insufficient funds for the reserve required in
subsection (b) of this section, then the political subdivision shall pay
the fund, either in a single payment or in installment payments
approved by the board, the amount needed to establish the reserve.
If the political subdivision is unable to make any payment, the board
may reduce proportionately each benefit payable to retired members.
(d) The liabilities of a retirement system which is transferred to
the fund are not liabilities of the fund, except as provided by
agreement 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.)
