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IC 5-10.3-11-1
Creation; administration; revenues
Sec. 1. There is created within the public employees' retirement
fund a separate account known as the pension relief fund. This fund
is administered by the board of trustees of the public employees'
retirement fund, referred to as the "state board" in this chapter. The
pension relief fund consists of revenues received under
IC 6-7-1-28.1(4), IC 7.1-4-12-1, any appropriations to the fund, and
earnings on these revenues.
As added by Acts 1980, P.L.8, SEC.45. Amended by P.L.26-1996,
SEC.3.
IC 5-10.3-11-2
Powers and duties of state board
Sec. 2. The state board shall:
(1) make payments from the pension relief fund;
(2) administer the pension relief fund in accordance with the
powers and duties granted it in IC 5-10.3-3-7, IC 5-10.3-3-8,
and IC 5-10.3-5-3 through IC 5-10.3-5-6; and
(3) provide by rule and regulation for the implementation of this
chapter.
As added by Acts 1980, P.L.8, SEC.45.
IC 5-10.3-11-3
Payments to units of local government; restriction
Sec. 3. The pension relief fund may be used only for making
payments to cities, counties, towns, and townships, referred to as
"units of local government" in this chapter, having pension funds
established under IC 18-1-12, IC 19-1-18, IC 19-1-24, IC 19-1-25-4,
IC 19-1-30, IC 19-1-37, or IC 19-1-44. Payments received by the
units may be used only for pension payments.
As added by Acts 1980, P.L.8, SEC.45.
IC 5-10.3-11-4 Version a
Distribution; formula
Note: This version of section effective until 1-1-2009. See also
following version of this section, effective 1-1-2009.
Sec. 4. (a) Monies from the pension relief fund shall be paid
annually by the state board under the procedures specified in this
section.
(b) Before April 1 of each year, each unit of local government
must certify to the state board:
(1) the amount of payments made during the preceding year for
benefits under its pension funds covered by this chapter,
referred to in this section as "pension payments";
(2) the data determined necessary by the state board to perform
an actuarial valuation of the unit's pension funds covered by this
chapter; and
(3) the names required to prepare the list specified in subsection
(c).
A unit is ineligible to receive a distribution under this section if it
does not supply before April 1 of each year (i) the complete
information required by this subsection; or (ii) a substantial amount
of the information required if it is accompanied by an affidavit of the
chief executive officer of the unit detailing the steps which have been
taken to obtain the information and the reasons the complete
information has not been obtained. This subsection supersedes the
reporting requirement of IC 5-10-1.5 as it applies to pension funds
covered by this chapter.
(c) Before July 1 of each year, the state board shall prepare a list
of all police officers and firefighters, active, retired, and deceased if
their beneficiaries are eligible for benefits, who are members of a
police or fire pension fund that was established before May 1, 1977.
The list may not include police officers, firefighters, or their
beneficiaries for whom no future benefits will be paid. The state
board shall then compute the present value of the accrued liability to
provide the pension and other benefits to each person on the list.
(d) Before July 1 of each year, the state board shall determine the
total pension payments made by all units of local government for the
preceding year and shall estimate the total pension payments to be
made to all units in the calendar year in which the July 1 occurs and
in the following calendar year.
(e) Each calendar year, the state board shall, with respect to the
following calendar year, determine for each unit of local government
an amount (Dy). The state board shall, in two (2) equal installments
before July 1 and before October 2, distribute to each eligible unit of
local government the amount (Dy) determined for the unit with
respect to the following calendar year. The amount (Dy) shall be
determined by the following STEPS:
STEP ONE. Subtract the total distribution made to units (Dy-1) in
the preceding calendar year from the total pension payments made by
units (Py-1) in the preceding calendar year.
STEP TWO. Multiply the STEP ONE difference by (1+k) as (k)
is determined in STEP THREE.
STEP THREE. Determine the annual percentage increase (k) in
the STEP ONE difference which will allow the present value of all
future estimated distributions, as computed under STEP FOUR, from
the pension relief fund to equal the "k portion" of the pension relief
fund balance plus the present value of all future receipts to the "k
portion" of the fund, but which will not allow the "k portion" of the
pension relief fund balance to be negative. These present values shall
be determined based on the current long term actuarial assumptions.
The "k portion" of the pension relief fund balance is the total pension
relief fund balance less the "m portion" of the fund. The percentage
increase (k) shall be computed to the nearest one thousandth of one
percent (.001%). All years, after the year 2000, in which the receipts
to the fund plus the net pension payments by all the units equal or
exceed the total pension payments shall be ignored for the purposes
of these calculations.
STEP FOUR. Subtract the STEP TWO product from the
estimated total pension payments to be made by all units (Py) in the
calendar year for which the distribution is to be made.
STEP FIVE. Multiply the STEP FOUR difference by one-half
(1/2) of the sum of two quotients, (1) the quotient of the unit's
number of police officers and firefighters on December 31 of the
year before the year of the distribution who are members of a
pension fund established before May 1, 1977, who are retired, and
who are deceased if their beneficiaries are eligible for benefits (unit)
divided by the total number of these police officers and firefighters
(total units) on December 31 of the year before the year of the
distribution in all units plus (2) the quotient of the unit's pension
payments (payments) divided by the total pension payments (total
payments) by all units.
Expressed mathematically:
Dy = (Py - ((Py-1 - Dy-1) x (1 + k))) x 1/2
(unit/(total unit) + payment/(total payment)).
(f) If in any year the distribution made to a unit of local
government is larger than the unit's pension payments to its retirees
and their beneficiaries for that year, the excess may not be distributed
to the unit but must be transferred to the 1977 police officers' and
firefighters' pension and disability fund and the unit's contributions
to that fund shall be reduced for that year by the amount of the
transfer.
(g) If in any year after 2000, the STEP FOUR difference under
subsection (e) is smaller than the revenue to the pension relief fund
in that year, then the revenue plus interest plus the fund balance in
that year shall be used in STEP FIVE of subsection (e) instead of the
STEP FOUR difference.
(h) The state board shall have its actuary report annually on the
appropriateness of the actuarial assumptions used in determining the
distribution amount under subsection (e). At least every five (5)
years, the state board shall have its actuary recompute the value of
(k) under STEP TWO of subsection (e).
(i) Each calendar year the state board shall determine the amounts
to be allocated to the "m portion" of the pension relief fund under the
following STEPS, which shall be completed before July 1 of each
year:
STEP ONE. The state board shall determine the following:
(1) "Excess earnings", which are the state board's projection of
earnings for the calendar year from investments of the "k portion" of
the fund that exceed the amount of earnings that would have been
earned if the rate of earnings was the rate assumed by the actuary of
the state board in his calculation of (k) under STEP THREE of
subsection (e).
(2) "Prior deficit amount", which is:
(A) the amount of earnings that would have been earned
under the rate assumed by the actuary of the state board in
his calculation of (k) under STEP THREE of subsection (e);
minus
(B) the amount of earnings received;
for a calendar year after 1981 in which (B) is less than (A).
STEP TWO. The state board shall distribute to the "m portion"
the excess earnings less any prior deficit amounts.
(j) The "m portion" of the fund shall be any direct allocations
plus:
(1) amounts allocated under subsection (i); and
(2) any earnings on the "m portion" less amounts previously
distributed under subsection (l).
(k) The state board shall determine, based on actual experience
and reasonable projections, the units eligible for distribution from the
"m portion" of the pension relief fund according to the following
STEPS:
STEP ONE. Determine the amount of pension payments to be
paid by the unit in the calendar year, net of the amount of the
distribution to be received by the unit under subsection (e) in that
year, plus contributions to be made under IC 36-8-8 in that year.
STEP TWO. Divide the amount determined under STEP ONE by
the amount of the maximum permissible ad valorem property tax
levy for the unit as determined under IC 6-1.1-18.5 for the calendar
year.
STEP THREE. If the quotient determined under STEP TWO is
equal to or greater than one-tenth (0.1), the unit shall receive a
distribution under subsection (l).
(l) For a calendar year, the state board shall, before July 1 of the
year, distribute from the "m portion" of the pension relief fund to the
extent there are assets in the "m portion" to each eligible unit an
amount, not less than zero (0), determined according to the following
STEPS:
STEP ONE. For the first of consecutive years that a unit is
eligible to receive a distribution under this subsection, determine the
amount of pension payments paid by the unit in the calendar year two
(2) years preceding the calendar year net of the amount of
distributions received by the unit under subsection (e) in the calendar
year two (2) years preceding the calendar year.
STEP TWO. For the first of consecutive years that a unit is
eligible to receive a distribution under this subsection, divide the
amount determined under STEP ONE by the amount of the
maximum permissible ad valorem property tax levy for the unit as
determined under IC 6-1.1-18.5 for the calendar year two (2) years
preceding the calendar year.
STEP THREE. For the first and all subsequent consecutive years
that a unit is eligible to receive a distribution under this subsection,
multiply the amount of the maximum permissible ad valorem
property tax levy for the unit as determined under IC 6-1.1-18.5 for
the calendar year by the quotient determined under STEP TWO.
STEP FOUR. Subtract the amount determined under STEP
THREE from the amount of pension payments to be paid by the unit
in the calendar year, net of distributions to be received under
subsection (e) for the calendar year.
As added by Acts 1980, P.L.8, SEC.45. Amended by Acts 1982,
P.L.39, SEC.1; P.L.25-1994, SEC.8; P.L.26-1996, SEC.4;
P.L.38-2001, SEC.1.
IC 5-10.3-11-4 Version b
Certification of information to state board; determination of total
pension payments
Note: This version of section effective 1-1-2009. See also
preceding version of this section, effective until 1-1-2009.
Sec. 4. (a) Monies from the pension relief fund shall be paid
annually by the state board under the procedures specified in this
section.
(b) Each year, before a date set by the state board, each unit of
local government must certify to the state board:
(1) the amount of payments made during the preceding year for
benefits under its pension funds covered by this chapter,
referred to in this section as "pension payments";
(2) the data determined necessary by the state board to perform
an actuarial valuation of the unit's pension funds covered by this
chapter;
(3) the names required to prepare the list specified in subsection
(c); and
(4) any other information that is necessary for the state board to
make distributions to units under this chapter.
A unit is ineligible to receive a distribution under this section if it
does not supply the complete information required by this subsection
or a substantial amount of the information required if it is
accompanied by an affidavit of the chief executive officer of the unit
detailing the steps which have been taken to obtain the information
and the reasons the complete information has not been obtained. This
subsection supersedes the reporting requirement of IC 5-10-1.5 as it
applies to pension funds covered by this chapter.
(c) Each year, before a date set by the state board, the state board
shall prepare a list of all police officers and firefighters, active,
retired, and deceased if their beneficiaries are eligible for benefits,
who are members of a police or fire pension fund that was
established before May 1, 1977. The list may not include police
officers, firefighters, or their beneficiaries for whom no future
benefits will be paid. The state board shall then compute the present
value of the accrued liability to provide the pension and other
benefits to each person on the list.
(d) Each year, before a date set by the state board, the state board
shall determine the total pension payments made by all units of local
government for the preceding year and shall estimate the total
pension payments to be made to all units in the calendar year in
which the July 1 occurs and in the following calendar year.
As added by Acts 1980, P.L.8, SEC.45. Amended by Acts 1982,
P.L.39, SEC.1; P.L.25-1994, SEC.8; P.L.26-1996, SEC.4;
P.L.38-2001, SEC.1; P.L.146-2008, SEC.35.
IC 5-10.3-11-4.5 Version a
Additional distributions
Note: This version of section effective until 1-1-2009. See also
following repeal of this section, effective 1-1-2009.
Sec. 4.5. In addition to the requirements of section 4 of this
chapter, each year the state board shall distribute from the pension
relief fund to each unit of local government, in two (2) equal
installments on or before June 30 and on or before October 1, an
amount determined under the following STEPS:
STEP ONE: For each surviving spouse in the unit who is a
surviving spouse of a member of the 1925 fund, the 1937 fund,
or the 1953 fund who dies after December 31, 1988, determine
the greater of thirty percent (30%) of the monthly pay of a first
class patrolman or firefighter or fifty-five percent (55%) of the
monthly benefit the deceased member was receiving or was
entitled to receive on the date of the member's death. However,
if the deceased member was not entitled to a benefit because the
member had not completed twenty (20) years of service, for the
purposes of computing the amount under this STEP, the
member's benefit is considered to be fifty percent (50%) of the
monthly salary of a first class patrolman or first class
firefighter.
STEP TWO: Subtract thirty percent (30%) of the salary of a
first class patrolman or first class firefighter.
As added by P.L.47-1988, SEC.1. Amended by P.L.55-1989, SEC.24;
P.L.1-1994, SEC.19; P.L.118-2000, SEC.3.
IC 5-10.3-11-4.5 Version b
Repealed
(Repealed by P.L.146-2008, SEC.814.)
Note: This repeal of section effective 1-1-2009. See also
preceding version of this section, effective until 1-1-2009.
IC 5-10.3-11-4.7 Version a
Additional distributions to local governmental unit
Note: This version of section effective until 1-1-2009. See also
following version of this section, effective 1-1-2009.
Sec. 4.7. (a) In addition to the amounts distributed under sections
4 and 4.5 of this chapter, each year the state board shall distribute
from the pension relief fund to each unit of local government an
amount determined under the following STEPS:
STEP ONE: Determine the amount of the total pension
payments to be made by the unit in the calendar year, as
estimated by the state board under section 4 of this chapter.
STEP TWO: Determine the result of:
(A) the STEP ONE result; multiplied by
(B) fifty percent (50%).
STEP THREE: Determine the amount to be distributed in the
current calendar year to the unit of local government under
section 4 of this chapter.
STEP FOUR: Determine the greater of zero (0) or the result of:
(A) the STEP TWO result; minus
(B) the STEP THREE result.
(b) The state board shall make the distributions under subsection
(a) in two (2) equal installments before July 1 and before October 2
of each year.
(c) This section expires January 1, 2011.
As added by P.L.38-2001, SEC.2. Amended by P.L.28-2006, SEC.1;
P.L.234-2007, SEC.277.
IC 5-10.3-11-4.7 Version b
IC 5-10.3-11-5
IC 5-10.3-11-6 Version a
employees' retirement fund and the pension relief fund; and
IC 5-10.3-11-6 Version b
Distributions to units of local government
Note: This version of section effective 1-1-2009. See also
preceding version of this section, effective until 1-1-2009.
Sec. 4.7. (a) In 2009 and each year thereafter, the state board shall
distribute from the pension relief fund to each unit of local
government the total amount of pension, disability, and survivor
benefit payments from the 1925 police pension fund (IC 36-8-6), the
1937 firefighters' pension fund (IC 36-8-7), and the 1953 police
pension fund (IC 36-8-7.5) to be made by the unit in the calendar
year, as estimated by the state board under section 4 of this chapter,
after subtracting any distributions to the unit from the public deposit
insurance fund that will be used for benefit payments.
(b) The state board shall make the distributions under subsection
(a) in two (2) equal installments before July 1 and before October 2
of each year.
As added by P.L.38-2001, SEC.2. Amended by P.L.28-2006, SEC.1;
P.L.234-2007, SEC.277; P.L.146-2008, SEC.36.
Annual report
Sec. 5. At least annually the state board shall report in writing to
each affected unit of local government the following information:
(1) The projected pension payments for the next twenty (20)
years.
(2) The present value of the total future projected pension
payments.
As added by Acts 1980, P.L.8, SEC.45. Amended by P.L.47-1985,
SEC.7; P.L.26-1996, SEC.5.
Separate accounts
Note: This version of section effective until 1-1-2009. See also
following version of this section, effective 1-1-2009.
Sec. 6. (a) The state board shall maintain separate accounts for
each unit of local government for purposes of this section. The
accounts:
(1) are separate and distinct accounts within the public
(2) are not part of the "k portion" or "m portion" of the pension
relief fund.
(b) A unit of local government may do the following:
(1) Make deposits at any time to the separate account
established for the unit under this section.
(2) Withdraw once each year from the unit's separate account
all or a part of the balance in the account to pay pension
benefits under IC 36-8-6, IC 36-8-7, or IC 36-8-7.5.
As added by P.L.38-2001, SEC.3.
Separate accounts
Note: This version of section effective 1-1-2009. See also
preceding version of this section, effective until 1-1-2009.
Sec. 6. (a) The state board shall maintain separate accounts for
each unit of local government for purposes of this section. The
accounts are separate and distinct accounts within the public
employees' retirement fund and the pension relief fund.
(b) A unit of local government may do the following:
(1) Make deposits at any time to the separate account
established for the unit under this section.
(2) Withdraw once each year from the unit's separate account
all or a part of the balance in the account to pay pension
benefits under IC 36-8-6, IC 36-8-7, or IC 36-8-7.5.
As added by P.L.38-2001, SEC.3. Amended by P.L.146-2008,
SEC.37.
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