LEGISLATIVE SERVICES AGENCY OFFICE OF FISCAL AND MANAGEMENT ANALYSIS 200 W. Washington St., Suite 301 Indianapolis, IN 46204 (317) 233-0696 iga.in.gov FISCAL IMPACT STATEMENT LS 6075 NOTE PREPARED: Jan 10, 2022 BILL NUMBER: SB 78 BILL AMENDED: SUBJECT: 1977 Pension and Disability Fund. FIRST AUTHOR: Sen. Boots BILL STATUS: 2 nd Reading - 1 st House FIRST SPONSOR: FUNDS AFFECTED: GENERAL IMPACT: State & Local XDEDICATED FEDERAL Summary of Legislation: This bill provides that after July 1, 2022, if the board of trustees of the Indiana Public Retirement System (INPRS) determines that a new police officer or firefighter in the Public Employees' Retirement Fund (PERF) should be a member of the 1977 Fund (‘77 Fund), the system board shall require the employer to transfer the member into the ‘77 Fund and contribute the amount that the INPRS board determines is necessary to fund fully the member's service credit in the ‘77 Fund for all service earned as a police officer or firefighter in PERF. It provides that a police officer or firefighter who is an active member of the ‘77 Fund with an employer that participates in the ‘77 Fund, separates from that employer, and more than 180 days after the date of the separation becomes employed as a full-time police officer or firefighter with the same or a second employer that participates in the ‘77 Fund, is a member of the ‘77 Fund without meeting the age limitations under certain circumstances. (The introduced version of this bill was prepared by the Interim Study Committee on Pension Management Oversight.) Effective Date: July 1, 2022. Explanation of State Expenditures: The bill may increase workload for INPRS to determine if new police officers or fire fighters should be in the ‘77 Fund rather than in PERF and enforce the transfer of individuals from PERF to the ‘77 Fund. The costs of administering the ‘77 Fund are paid from the fund. Explanation of State Revenues: If the bill results in increased membership in the ‘77 Fund and reduced membership in PERF, the ‘77 Fund would receive increased revenues in the form of additional employer contributions while PERF would see reduced revenues from employer contributions. [This would be coupled with an increase in liabilities to pay future pension benefits for the members of the ‘77 Fund and reduced liabilities for PERF.] SB 78 1 Explanation of Local Expenditures: If additional police officers and fire fighters are placed into the ‘77 Fund rather than into PERF, the employing police and fire departments would pay higher employer contributions for these employees. The employer contribution rates for the ‘77 Fund is 17.5% of wages for CY 2022 while the rate for PERF is 11.2% of wages. Explanation of Local Revenues: State Agencies Affected: Indiana Public Retirement System. Local Agencies Affected: Local police and fire departments. Information Sources: Interim Study Committee on Pension Management Oversight, October 7, 2021 Meeting, https://iga.in.gov/information/archives/2021/video/committee_i_pension_management_oversight_interim _study_committee_on/ INPRS. 2021-2022 Employer Contribution Rates for the Indiana Public Retirement System Pension Plans, https://www.in.gov/inprs/employers/employer-communication/er-contribution-rate-info/ Fiscal Analyst: Camille Tesch, 317-232-5293. SB 78 2