2013 Indiana Code
TITLE 5. STATE AND LOCAL ADMINISTRATION
ARTICLE 10.3. THE PUBLIC EMPLOYEES' RETIREMENT FUND
CHAPTER 12. PUBLIC EMPLOYEES' DEFINED CONTRIBUTION PLAN
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IC 5-10.3-12
Chapter 12. Public Employees' Defined Contribution Plan
IC 5-10.3-12-1
Applicability of chapter
Sec. 1. (a) Except as provided in subsection (c), this chapter
applies to an individual who, on or after the effective date of the
plan:
(1) becomes for the first time a full-time employee of the state
(as defined in IC 5-10.3-7-1(d)):
(A) in a position that would otherwise be eligible for
membership in the fund under IC 5-10.3-7; and
(B) who is paid by the auditor of state by salary warrants;
and
(2) makes the election described in section 20 of this chapter to
become a member of the plan.
(b) Except as provided in subsection (c), this chapter does not
apply to an individual who, on or after the effective date of the plan:
(1) becomes for the first time a full-time employee of the state
(as defined in IC 5-10.3-7-1(d)) in a position that would
otherwise be eligible for membership in the fund under
IC 5-10.3-7; and
(2) is employed by:
(A) a body corporate and politic of the state created by state
statute; or
(B) a state educational institution (as defined in
IC 21-7-13-32).
(c) The chief executive officer of a body or institution described
in subsection (b) may elect, by submitting a written notice of the
election to the director, to have this chapter apply to individuals who,
as employees of the body or institution, become for the first time
full-time employees of the state (as defined in IC 5-10.3-7-1(d)) in
positions that would otherwise be eligible for membership in the
fund under IC 5-10.3-7. An election under this subsection is effective
on the later of:
(1) the date the notice of the election is received by the director;
or
(2) March 1, 2013.
(d) This chapter does not apply to an individual who:
(1) before the effective date of the plan, is or was a member (as
defined in IC 5-10.3-1-5) of the fund; or
(2) on or after the effective date of the plan:
(A) except as provided in subsection (c), becomes for the
first time a full-time employee of the state (as defined in
IC 5-10.3-7-1(d)):
(i) in a position that would otherwise be eligible for
membership in the fund under IC 5-10.3-7; and
(ii) who is not paid by the auditor of state by salary
warrants; or
(B) does not elect to participate in the plan.
As added by P.L.22-2011, SEC.2. Amended by P.L.54-2013, SEC.2.
IC 5-10.3-12-2
"Account"
Sec. 2. As used in this chapter, "account" means the plan account
established for a member under section 21(b) of this chapter.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-3
"Annuity savings account"
Sec. 3. As used in this chapter, "annuity savings account" means
the annuity savings account maintained under IC 5-10.2-2-2(a)(1).
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-4
"Board"
Sec. 4. As used in this chapter, "board" has the meaning set forth
in IC 5-10.3-1-1.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-5
"Compensation"
Sec. 5. As used in this chapter, "compensation" has the meaning
set forth in IC 5-10.2-3-2(a).
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-6
"Dies in the line of duty"
Sec. 6. As used in this chapter, "dies in the line of duty" has the
meaning set forth in IC 5-10-11-2.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-7
"Effective date"
Sec. 7. As used in this chapter, "effective date" means the first day
of the month that is six (6) months after the month in which the
Internal Revenue Service issues an approval of the plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-8
"Employer"
Sec. 8. As used in this chapter, "employer" means the state.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-9
"Employer contribution subaccount"
Sec. 9. As used in this chapter, "employer contribution
subaccount" means the subaccount in a member's plan account
established under section 21(b)(2) of this chapter.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-10
"Fund"
Sec. 10. As used in this chapter, "fund" has the meaning set forth
in IC 5-10.3-1-3.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-11
"Internal Revenue Code"
Sec. 11. As used in this chapter, "Internal Revenue Code" has the
meaning set forth in IC 5-10.2-1-3.5.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-12
"Member"
Sec. 12. As used in this chapter, "member" means an individual
who has elected to participate in the plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-13
"Member contribution account"
Sec. 13. As used in this chapter, "member contribution
subaccount" means the subaccount in a member's plan account
established under section 21(b)(1) of this chapter.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-14
"Normal retirement age"
Sec. 14. As used in this chapter, "normal retirement age" for a
member means the member is at least sixty-two (62) years of age
with at least five (5) years of participation in the plan.
As added by P.L.22-2011, SEC.2. Amended by P.L.66-2013, SEC.1.
IC 5-10.3-12-15
"Plan"
Sec. 15. As used in this chapter, "plan" refers to the public
employees' defined contribution plan established by section 18 of
this chapter.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-16
"Years of participation"
Sec. 16. As used in this chapter, "years of participation" means all
periods of participation in the plan in a covered position, plus any
additional service for which this chapter provides years of
participation credit.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-17
Applicability of other laws
Sec. 17. Except as otherwise provided in this chapter or by federal
law, and subject to the board obtaining the approval of the Internal
Revenue Service as described in section 18(b) of this chapter, the
provisions of IC 5-10.3 that apply to the annuity savings account
apply to an account established under this chapter.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-18
Establishment and administration of plan; Internal Revenue
Service approval
Sec. 18. (a) The public employees' defined contribution plan is
established for the purpose of providing amounts funded by an
employer and a member for the use of the member or the member's
beneficiaries or survivors after the member's retirement.
(b) The board shall adopt provisions to implement the plan
established under subsection (a) as follows:
(1) The board shall initially offer the plan using the annuity
savings account, subject to obtaining the approval of the
Internal Revenue Service in a manner satisfactory to the board
to preserve the qualified status of the plan and the fund. The
plan as provided under this subdivision is a component within
the fund.
(2) If the approval of the Internal Revenue Service to offer the
plan using the annuity savings account cannot be obtained in a
manner satisfactory to the board, the board shall offer the plan
as a separate fund under Section 401(a) or another applicable
section of the Internal Revenue Code.
(c) The board shall administer the plan.
(d) The board may adopt a plan document that it considers
appropriate or necessary to administer the plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-19
Authorization to request Internal Revenue Service rulings or
determination letters
Sec. 19. The board may request from the Internal Revenue Service
any rulings or determination letters that the board considers
necessary or appropriate in order to implement or administer the
plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-20
Plan membership; election; fund membership
Sec. 20. (a) An individual who, on or after the effective date of
the plan, becomes for the first time a full-time employee of the state
(as defined in IC 5-10.3-7-1(d)) in a position that would otherwise be
eligible for membership in the fund under IC 5-10.3-7 may elect to
become a member of the plan. An election under this section:
(1) must be made in writing;
(2) must be filed with the board, on a form prescribed by the
board; and
(3) is irrevocable.
(b) An individual who does not elect to become a member of the
plan becomes a member (as defined in IC 5-10.3-1-5) of the fund.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-21
Plan; member accounts; rollover accounts
Sec. 21. (a) The plan consists of the following:
(1) Each member's contributions to the plan under section 23 of
this chapter.
(2) Contributions made by an employer to the plan on behalf of
each member under section 24 of this chapter.
(3) Rollovers to the plan by a member under section 29 of this
chapter.
(4) All earnings on investments or deposits of the plan.
(5) All contributions or payments to the plan made in the
manner provided by the general assembly.
(b) The plan shall establish an account for each member. A
member's account consists of two (2) subaccounts credited
individually as follows:
(1) The member contribution subaccount consists of:
(A) the member's contributions to the plan under section 23
of this chapter; and
(B) the net earnings on the contributions described in clause
(A) as determined under section 22 of this chapter.
(2) The employer contribution subaccount consists of:
(A) the employer's contributions made on behalf of the
member to the plan under section 24 of this chapter; and
(B) the earnings on the contributions described in clause (A)
as determined under section 22 of this chapter.
The board may combine the two (2) subaccounts established under
this subsection into a single account, if the board determines that a
single account is administratively appropriate and permissible under
applicable law.
(c) If a member makes rollover contributions under section 29 of
this chapter, the plan shall establish a rollover account as a separate
subaccount within the member's account.
As added by P.L.22-2011, SEC.2. Amended by P.L.6-2012, SEC.30;
P.L.35-2012, SEC.84.
IC 5-10.3-12-22
Alternative investment programs; requirements and rules;
administrative fees
Sec. 22. (a) Subject to the board obtaining the approval of the
Internal Revenue Service as described in section 18(b) of this
chapter, the board shall establish the alternative investment programs
(as described by IC 5-10.2-2-3 and IC 5-10.2-2-4) within the annuity
savings account as the initial alternative investment programs for the
plan, except that the board shall maintain at least one (1) alternative
investment program that is a stable value fund. If the board considers
it necessary or appropriate, the board may establish different or
additional alternative investment programs for the plan. However, the
guaranteed program (as defined in IC 5-10.2-2-3) shall not be offered
as an investment option under the plan.
(b) The requirements and rules that apply to the alternative
investment programs within the annuity savings account are the
initial requirements and rules that apply to the alternative investment
programs within the plan, including the following:
(1) The board's investment guidelines and limits for the
alternative investment programs.
(2) A member's selection of and changes to the member's
investment options.
(3) The valuation of a member's account.
(4) The allocation and payment of administrative expenses for
the alternative investment programs.
(c) If the board considers it necessary or appropriate, the board
may establish different or additional requirements and rules that
apply to the alternative investment programs within the plan.
(d) The board shall determine the appropriate administrative fees
to be charged to the member accounts.
As added by P.L.22-2011, SEC.2. Amended by P.L.6-2012, SEC.31.
IC 5-10.3-12-23
Member contributions; rate; crediting; employer pick-up and
payment
Sec. 23. (a) Each member's contribution to the plan is equal to
three percent (3%) of the member's compensation. The state shall pay
the member's contribution on behalf of each member of the plan each
year.
(b) Member contributions will be credited to the member's
account as specified in IC 5-10.2-3.
(c) Although designated as employee contributions, the
contributions made under subsection (a) are picked up and paid by
the state as the employer in lieu of the contributions being paid by
the employee in accordance with section 414(h)(2) of the Internal
Revenue Code. A member may not receive any amounts paid by the
state under this section directly instead of having the amounts paid
to the plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-24
Employer contributions; rate determination; amounts credited;
minimum rate; electronic submission of contributions
Sec. 24. (a) The state shall make employer contributions to the
plan based on the rate determined under this section.
(b) The employer's contribution rate for the plan shall be equal to
the employer's contribution rate for the fund as determined by the
board under IC 5-10.2-2-11(b). The amount credited from the
employer's contribution rate to the member's account shall not be
greater than the normal cost of the fund. Any amount not credited to
the member's account shall be applied to the unfunded accrued
liability of the fund as determined under IC 5-10.2-2-11(a)(3) and
IC 5-10.2-2-11(a)(4).
(c) The state's minimum contribution under this section is equal
to three percent (3%) of the compensation of all members of the plan.
(d) The state shall submit the employer contributions determined
under this section as provided in IC 5-10.2-2-12.5.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-25
Member contributions belong to member; vesting schedule for
employer contributions; forfeiture of amounts not vested
Sec. 25. (a) Member contributions and net earnings on the
member contributions in the member contribution subaccount belong
to the member at all times and do not belong to the state.
(b) A member is vested in the employer contribution subaccount
in accordance with the following schedule:
Years of participation in the
Vested percentage of
plan
employer contributions
and earnings
1
20%
2
40%
3
60%
4
80%
5
100%
For purposes of vesting in the employer contribution subaccount,
only a member's full years of participation in the plan may be
counted.
(c) The amount that a member may withdraw from the member's
account is limited to the vested portion of the account.
(d) A member who attains normal retirement age is fully vested
in all amounts in the member's account.
(e) If a member separates from service with the state before the
member is fully vested in the employer contribution subaccount, the
amount in the employer contribution subaccount that is not vested is
forfeited as of the date the member separates from service.
(f) Amounts forfeited under subsection (e) must be used to reduce
the state's unfunded accrued liability of the fund as determined under
IC 5-10.2-2-11(a)(3) and IC 5-10.2-2-11(a)(4).
(g) A member may not earn creditable service (as defined in
IC 5-10.2-3-1(a)) under the plan.
As added by P.L.22-2011, SEC.2. Amended by P.L.6-2012, SEC.32.
IC 5-10.3-12-26
Member accounts; withdrawals; forms of payment
Sec. 26. (a) Subject to the provisions of the Internal Revenue
Code applicable to qualified plan distributions, a member who:
(1) terminates service in a covered position; and
(2) does not perform any service in a position covered by the
fund for at least thirty (30) days after the date on which the
member terminates service;
is entitled to withdraw amounts in the member's account to the extent
the member is vested in the account. A member must make a
required withdrawal from the member's account not later than the
required beginning date under the Internal Revenue Code.
(b) The member may elect to have withdrawals paid as:
(1) a lump sum;
(2) a direct rollover to another eligible retirement plan; or
(3) if the member has attained normal retirement age, a monthly
annuity in accordance with the rules of the board.
(c) The board may establish a minimum account balance or a
minimum monthly payment amount in order for a member to select
the monthly annuity option. The board shall establish the forms of
annuity by rule, in consultation with the board's actuary. The board
shall give members information about these forms of payment and
any information required by federal law to accompany such
distributions.
(d) Unless otherwise required by federal or state law, the
requirements and rules that apply to the distribution of the annuity
savings account apply to distributions from a member's account.
As added by P.L.22-2011, SEC.2. Amended by P.L.6-2012, SEC.33;
P.L.66-2013, SEC.2.
IC 5-10.3-12-27
Member accounts; beneficiary or survivor withdrawals; forms of
payment
Sec. 27. (a) If a member dies:
(1) while in service in a position covered by the plan but not in
the line of duty; or
(2) after terminating service in a position covered by the plan
but before withdrawing the member's account;
to the extent that the member is vested, the member's account shall
be paid to the beneficiary or beneficiaries designated by the member
on a form prescribed by the board. The amount paid shall be valued
as provided in IC 5-10.2-2-3 and IC 5-10.2-2-4. The board shall
invest the total amount in the member’s account in the stable value
fund not later than thirty (30) days after receiving notification of a
member’s death.
(b) If there is no properly designated beneficiary, or if no
beneficiary survives the member, the member's account shall be paid
to:
(1) the surviving spouse of the member;
(2) if there is not a surviving spouse, the surviving dependent or
dependents of the member in equal shares; or
(3) if there is not a surviving spouse or dependent, the member's
estate.
(c) The beneficiary or beneficiaries designated under subsection
(a) or a survivor determined under subsection (b) may elect to have
the member's account paid as:
(1) a lump sum;
(2) a direct rollover to another eligible retirement plan; or
(3) a monthly annuity in accordance with rules of the board.
A monthly annuity is an option only on or after the beneficiary or
survivor attains sixty-two (62) years of age. The board shall establish
the forms of annuity by rule, in consultation with the board's actuary.
Further, the board may establish a minimum account balance or a
minimum monthly payment amount that is required in order for a
beneficiary or survivor to select the monthly annuity option.
(d) If a member dies in the line of duty while in service in a
covered position, the designated beneficiary or beneficiaries or the
surviving spouse or dependents, as applicable, are entitled to
payment of the member’s account as provided in this section. In
addition, if the member was not fully vested in the employer
contribution subaccount, the account is deemed to be fully vested for
purposes of withdrawal under this section.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-28
Plan exempt from legal process; assignment of payments
Sec. 28. (a) All assets in the plan are exempt from levy, sale,
garnishment, attachment, or other legal process.
(b) A member, beneficiary, or survivor may not assign any
payment under this chapter except for the following:
(1) Premiums on a life, hospitalization, surgical, or medical
group insurance plan maintained in part by a state agency.
(2) Dues to an association that proves to the board's satisfaction
that the association has as members at least twenty percent
(20%) of the retired members in the plan.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-29
Rollover contributions; rollover accounts
Sec. 29. (a) To the extent permitted by the Internal Revenue Code
and the applicable regulations and guidance, the plan may accept, on
behalf of any member who is employed in a covered position, 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 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 in the plan. The member shall be fully vested in
the member’s rollover 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 22 of
this chapter.
(d) A member may withdraw the member's rollover account from
the plan in a lump sum or direct a rollover to an eligible retirement
plan at any time. Upon attainment of normal retirement age, in
addition to these payment options, the member may withdraw the
member's rollover account as a monthly annuity as established by the
board in accordance with the annuity options that are available for
the member's account in the plan. A member must make a required
withdrawal from the member’s account in the plan not later than the
required beginning date under the Internal Revenue Code.
As added by P.L.22-2011, SEC.2.
IC 5-10.3-12-30
Member accounts; disability withdrawals; forms of payment
Sec. 30. (a) If a member becomes disabled while in a covered
position, subject to any federal law limitations concerning qualified
plan distributions and the member furnishing proof of the member's
qualification for Social Security disability benefits to the board, to
the extent that the member is vested, the member may make a
withdrawal from the member's account.
(b) The member may elect to have the withdrawal paid as:
(1) a lump sum;
(2) a direct rollover to another eligible retirement plan; or
(3) a monthly annuity in accordance with the rules of the board.
(c) The board may establish a minimum account balance or a
minimum monthly payment amount in order for a member to select
the monthly annuity option.
As added by P.L.22-2011, SEC.2. Amended by P.L.6-2012, SEC.34.
IC 5-10.3-12-31
Effect of reemployment on plan participation
Sec. 31. (a) If a member of the plan separates from employment
with the state and later returns to state employment in a position
covered by the plan, the member is entitled to receive credit for the
member's years of participation in the plan before the member's
separation. However, any amounts forfeited by the member under
section 25(e) of this chapter may not be restored to the member's
account.
(b) An individual who elected under section 20 of this chapter to
become a member of the plan resumes membership in the plan upon
the individual's return to state employment.
(c) An individual who did not elect to become a member of the
plan resumes membership in the fund.
(d) An individual who returns to state employment having had an
opportunity to make an election under section 20 of this chapter
during an earlier period of state employment is not entitled to a
second opportunity to make an election under section 20 of this
chapter.
As added by P.L.22-2011, SEC.2.
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