2015 Indiana Code TITLE 2. GENERAL ASSEMBLY ARTICLE 3.5. LEGISLATIVE RETIREMENT BENEFITS CHAPTER 5. LEGISLATORS' DEFINED CONTRIBUTION PLAN
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IC 2-3.5-5
Chapter 5. Legislators' Defined Contribution Plan
IC 2-3.5-5-1
Application
Sec. 1. This chapter applies to:
(1) each member of the general assembly who is serving on
April 30, 1989, and who files an election under IC 2-3.5-3-1(b);
and
(2) each member of the general assembly who is elected or
appointed after April 30, 1989.
As added by P.L.6-1989, SEC.1.
IC 2-3.5-5-2
Defined contribution fund; content
Sec. 2. (a) The defined contribution fund consists of the following:
(1) Each participant's contributions to the fund.
(2) Contributions made to the fund on behalf of the participants
under:
(A) section 5 of this chapter (before its repeal on January 1,
2009); or
(B) after December 31, 2008, section 5.5 of this chapter.
(3) Amounts transferred to the fund under subsections (b) and
(c).
(4) All gifts, grants, devises, and bequests in money, property,
or other form made to the fund.
(5) All earnings on investments or on deposits of the funds.
(6) All contributions or payments to the fund made in a manner
provided by the general assembly.
(b) On any July 1 following the date a participant begins
participation in the defined contribution fund, if the participant has
been before that date a member of PERF, any amount in the PERF
annuity savings account credited to the participant may at the
participant's irrevocable option be transferred one (1) time to the
defined contribution fund for the benefit of the participant. At no
other time, if the participant continues or begins to participate in
PERF, may such a transfer be made.
(c) On any July 1 following the date a participant begins
participation in the defined contribution fund, if the participant has
been before that date a member of TRF, the amount in the TRF
annuity savings account credited to the participant may at the
participant's irrevocable election be transferred one (1) time to the
defined contribution fund for the benefit of the participant. At no
other time, if the participant continues or begins to participate in
TRF, may the transfer be made.
(d) Each participant shall be credited individually with:
(1) the participant's contributions to the fund under section 4 of
this chapter, which shall be credited to the participant's account;
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(2) the contributions made to the fund on behalf of the
participant under:
(A) section 5 of this chapter (before its repeal on January 1,
2009); or
(B) after December 31, 2008, section 5.5 of this chapter;
which shall be credited to the participant's account;
(3) the amount transferred to the fund under subsections (b) and
(c), which shall be credited to the participant's account; and
(4) the net earnings on the participant's accounts, determined
under section 3 of this chapter.
As added by P.L.6-1989, SEC.1. Amended by P.L.195-1999, SEC.2
and P.L.205-1999, SEC.3; P.L.43-2007, SEC.2.
IC 2-3.5-5-3
Alternative investment programs
Sec. 3. (a) The board shall establish alternative investment
programs within the fund, based on the following requirements:
(1) The board shall maintain at least one (1) alternative
investment program that is an indexed stock fund, one (1)
alternative investment program that is a bond fund, and one (1)
alternative investment program that is a stable value fund. The
board may maintain one (1) or more alternative investment
programs that:
(A) invest in one (1) or more commingled or pooled funds
that consist in part or entirely of mortgages that qualify as
five star mortgages under the program established by
IC 24-5-23.6; or
(B) otherwise invest in mortgages that qualify as five star
mortgages under the program established by IC 24-5-23.6.
(2) The programs should represent a variety of investment
objectives.
(3) The programs may not permit a member to withdraw money
from the member's account, except as provided in section 6 of
this chapter.
(4) All administrative costs of each alternative program shall be
paid from the earnings on that program.
(5) A valuation of each member's account must be completed as
of:
(A) the last day of each quarter; or
(B) a time that the board may specify by rule.
(b) A member shall direct the allocation of the amount credited to
the member among the available alternative investment funds, subject
to the following conditions:
(1) A member may make a selection or change an existing
selection under rules established by the board. The board shall
allow a member to make a selection or change any existing
selection at least once each quarter.
(2) The board shall implement the member's selection beginning
on the first day of the next calendar quarter that begins at least
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thirty (30) days after the selection is received by the board or on
an alternate date established by the rules of the board. This date
is the effective date of the member's selection.
(3) A member may select any combination of the available
investment funds, in ten percent (10%) increments or smaller
increments that may be established by the rules of the board.
(4) A member's selection remains in effect until a new selection
is made.
(5) On the effective date of a member's selection, the board shall
reallocate the member's existing balance or balances in
accordance with the member's direction, based on the market
value on the effective date.
(6) If a member does not make an investment selection of the
alternative investment programs, the member's account shall be
invested in the board's general investment fund.
(7) All contributions to the member's account shall be allocated
as of the last day of the quarter in which the contributions are
received or at an alternate time established by the rules of the
board in accordance with the member's most recent effective
direction. The board shall not reallocate the member's account
at any other time.
(c) When a member transfers the amount credited to the member
from one (1) alternative investment program to another alternative
investment program, the amount credited to the member shall be
valued at the market value of the member's investment, as of the day
before the effective date of the member's selection or at an alternate
time established by the rules of the board. When a member retires,
becomes disabled, dies, or withdraws from the fund, the amount
credited to the member shall be the market value of the member's
investment as of the last day of the quarter preceding the member's
distribution or annuitization at retirement, disability, death, or
withdrawal, plus contributions received after that date or at an
alternate time established by the rules of the board.
(d) The board shall determine the value of each alternative
program in the defined contribution fund, as of the last day of each
calendar quarter, as follows:
(1) The market value shall exclude the employer contributions
and employee contributions received during the quarter ending
on the current allocation date.
(2) The market value as of the immediately preceding quarter
end date shall include the employer contributions and employee
contributions received during that preceding quarter.
(3) The market value as of the immediately preceding quarter
end date shall exclude benefits paid from the fund during the
quarter ending on the current quarter end date.
As added by P.L.6-1989, SEC.1. Amended by P.L.205-1999, SEC.4;
P.L.195-1999, SEC.3; P.L.118-2000, SEC.1; P.L.13-2001, SEC.4;
P.L.30-2009, SEC.1; P.L.165-2009, SEC.1; P.L.1-2010, SEC.1;
P.L.115-2010, SEC.1; P.L.35-2012, SEC.8.
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IC 2-3.5-5-4
Participant contributions to the fund
Sec. 4. Each participant shall make contributions to the defined
contribution fund of five percent (5%) of each payment of salary
received for services after June 30, 1989. Contributions shall be
deducted from the salary of each participant by the auditor of state.
Contributions shall be credited to the fund on the June 30 following
their deduction.
As added by P.L.6-1989, SEC.1.
IC 2-3.5-5-5
Repealed
(As added by P.L.6-1989, SEC.1. Repealed by P.L.43-2007,
SEC.13.)
IC 2-3.5-5-5.5
Contributions made to defined contribution fund after 12/31/08;
"salary"; time for making contributions; determination of
contribution percentage
Sec. 5.5. (a) This section applies to contributions to the defined
contribution fund made by the state after December 31, 2008.
(b) This subsection applies after December 31, 2008.
Notwithstanding IC 2-3.5-2-10, as used in this section, "salary"
means the total of the following amounts paid to a participant by the
state for performing legislative services in the year in which the
amounts are paid, determined without regard to any salary reduction
agreement established under Section 125 or Section 457 of the
Internal Revenue Code:
(1) Salary.
(2) Business per diem allowance and allowances paid in lieu of
the submission of claims for reimbursement (but excluding any
allowances paid for mileage).
(3) Allowances paid to officers of the house of representatives
and the senate.
(c) This subsection applies after December 31, 2008. The state
shall make a contribution to the defined contribution fund on behalf
of each participant on June 30 of each year. The amount of the
contribution is determined by multiplying the participant's salary for
that year by a percentage determined for that year by the board under
subsection (d).
(d) This subsection applies after December 31, 2008. The board
shall use the following rates in determining the percentage described
in subsection (c):
(1) The rate of the state's normal contribution for its employees
to PERF, as determined under IC 5-10.2-2-11.
(2) The rate at which the state makes contributions to annuity
savings accounts on behalf of state employees who are members
of PERF, as specified in IC 5-10.2-3-2 and IC 5-10.3-7-9.
(e) This subsection applies after December 31, 2008. The budget
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agency shall confirm the percentage determined by the board. The
percentage confirmed by the budget agency may not exceed the total
contribution rate paid that year by the state to PERF for state
employees.
As added by P.L.43-2007, SEC.3. Amended by P.L.35-2012, SEC.9.
IC 2-3.5-5-6
Termination of service; withdrawal from the fund
Sec. 6. (a) A participant who terminates service as a member of
the general assembly is entitled to withdraw both the participant's
employee contribution account and employer contribution account
from the defined contribution fund. The withdrawal shall be made not
later than the required beginning date under the Internal Revenue
Code. The amount available for the withdrawal shall be the fair
market value of the participant's accounts on the last day of the
quarter preceding the date of withdrawal plus employee contributions
deducted and employer contributions made since the last day of the
quarter preceding the date of withdrawal.
(b) The withdrawal amount shall be paid in a lump sum, a partial
lump sum, a monthly annuity as purchased by the board with the
remaining amount, or a series of monthly installment payments over
sixty (60), one hundred twenty (120), or one hundred eighty (180)
months, as elected by the participant. The forms of annuity and
installments shall be established by the board by rule, in consultation
with the system's actuary. The board shall give participants
information on these forms of payments and the effects of various
dates of withdrawal.
As added by P.L.6-1989, SEC.1. Amended by P.L.195-1999, SEC.4
and P.L.205-1999, SEC.5; P.L.13-2001, SEC.5; P.L.35-2012,
SEC.10.
IC 2-3.5-5-7
Death of participant; designated beneficiaries; surviving spouse;
dependent children
Sec. 7. (a) This section applies to a participant who dies while a
member of the general assembly, or who dies after terminating
service as a member of the general assembly and prior to
withdrawing the participant's account from the defined contribution
fund. The participant's employee contribution account and the
participant's employer contribution account shall be paid to a
beneficiary or the beneficiaries designated on a form prescribed by
the board. The amount paid shall be the fair market value of the
participant's accounts on the last day of the quarter preceding the date
of payment, plus employee contributions deducted and employer
contributions made since the last day of the quarter preceding the
date of payment. If there is no properly designated beneficiary, or if
no beneficiary survives the participant, the participant's accounts
shall be paid to:
(1) the surviving spouse of the participant;
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(2) if there is no surviving spouse, a surviving dependent or the
surviving dependents of the participant; or
(3) if there is no surviving spouse and no surviving dependent,
the estate of the participant.
(b) Amounts payable under this section shall be paid in a lump
sum, a partial lump sum, a monthly annuity as purchased by the
board with the remaining amount, or a series of monthly installment
payments over sixty (60) months, as elected by the recipient. The
forms of annuity and installments available shall be established by
the board by rule, in consultation with the system's actuary.
As added by P.L.6-1989, SEC.1. Amended by P.L.195-1999, SEC.5
and P.L.205-1999, SEC.6; P.L.13-2001, SEC.6; P.L.35-2012,
SEC.11.
IC 2-3.5-5-8
Biennial appropriation
Sec. 8. (a) For purposes of this chapter, there is appropriated for
each biennium the following sums of money:
(1) From the state general fund, the amount required to equal the
contributions specified in:
(A) section 5 of this chapter (before its repeal on January 1,
2009); or
(B) after December 31, 2008, section 5.5 of this chapter.
(2) From the state general fund, the amount required for
administration of this chapter.
(b) The biennial appropriation provided in this section shall be
credited to the defined contribution fund annually in the month of
July of each year of the biennium, based on the amounts specified in
subsection (a).
As added by P.L.6-1989, SEC.1. Amended by P.L.43-2007, SEC.4.
IC 2-3.5-5-9
Exemptions; criminal taking of state property
Sec. 9. All benefits and assets in the defined contribution fund are
exempt from levy, sale, garnishment, attachment, or other legal
process. However, a participant's benefits may be transferred to
reimburse the state for loss resulting from the participant's criminal
taking of state property if the board receives adequate proof of the
loss. The loss must be proven by conviction of a felony or
misdemeanor.
As added by P.L.6-1989, SEC.1.
IC 2-3.5-5-10
Assignment of benefits
Sec. 10. A participant or beneficiary may not assign any payment
under this chapter except for:
(1) premiums on a life, hospitalization, surgical, or medical
group insurance plan maintained in part by a state agency; and
(2) dues to an association that proves to the board's satisfaction
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that the association has as members at least twenty percent
(20%) of the retired participants in the legislators' defined
benefit plan.
As added by P.L.6-1989, SEC.1.
IC 2-3.5-5-11
Loans
Sec. 11. Before January 1, 2002, the board shall adopt rules
establishing procedures for making loans to a participant from the
participant's employee contribution account and employer
contribution account within the defined contribution fund. Rules
adopted under this section must comply with the requirements of
Section 72(p) of the Internal Revenue Code and must apply to each
participant in the plan, regardless of whether the participant is serving
in the general assembly at the time of the loan. A loan made in
accordance with rules adopted under this section is not considered the
receipt of retirement benefits for purposes of IC 5-10-8-1.
As added by P.L.184-2001, SEC.1. Amended by P.L.35-2012,
SEC.12.
IC 2-3.5-5-12
Rollover distributions
Sec. 12. (a) To the extent permitted by the Internal Revenue Code
and the applicable regulations, the fund may accept, on behalf of any
active member, a rollover distribution from any of the following:
(1) A qualified plan described in Section 401(a) or Section
403(a) of the Internal Revenue Code.
(2) An annuity contract or account described in Section 403(b)
of the Internal Revenue Code.
(3) An eligible plan that is maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a state
or political subdivision of a state under Section 457(b) of the
Internal Revenue Code.
(4) An individual retirement account or annuity described in
Section 408(a) or Section 408(b) of the Internal Revenue Code.
(b) Any amounts rolled over under subsection (a) must be
accounted for in a "rollover account" that is separate from the
member's account.
(c) A member may direct the investment of the member's rollover
account into any alternative investment option that the board may
make available to the member's rollover account under section 3 of
this chapter.
(d) A member may withdraw the member's rollover account from
the fund in a lump sum at any time before retirement. At retirement,
the member may withdraw the member's rollover account in
accordance with the retirement options that are available for the
member's account.
As added by P.L.61-2002, SEC.1.
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