Iowa House Bill HSB666

Iowa 2023-2024 Regular Session

• Introduced: 2/6/24
• Refer: 2/6/24

Caption

A bill for an act establishing a deferred retirement option plan for members of the public safety peace officers' retirement, accident, and disability system, and including implementation provisions.

Impact

The implementation of the DROP plan could significantly affect the landscape of public safety employment by incentivizing individuals to extend their careers, thus enhancing the experience level of personnel within the system. By allowing members to defer their retirement benefits, the plan aims to maintain a stable workforce during critical years of service. However, this can introduce complexities regarding the funding of retirement benefits, as the actuarial costs associated with continued accruals can impact contributions required from members and participating municipalities.

Summary

House Study Bill 666 establishes a Deferred Retirement Option Plan (DROP) specifically for members of the Public Safety Peace Officers Retirement, Accident, and Disability System (PORS) in Iowa. This bill allows eligible members, who are at least 55 years old and have completed 22 years of service, to continue working for a specified duration while deferring retirement. It provides a mechanism that enables these workers to accumulate a deferred retirement allowance, which is credited to a participant account, and ultimately received when they retire. The structure of the plan is designed to encourage retention of experienced personnel within public safety roles.

Contention

Concerns may arise about the financial implications of this plan, especially regarding its potential to increase the actuarial costs for the pension system. The bill includes provisions for adjustments to member contribution rates should the actuary conclude that the plan's establishment negatively affects system costs. This aspect may prompt discussions about the sustainability of the fund, particularly in the context of managing the long-term safety and financial health of the retirement system for public safety officers.