IN
Indiana House Bill HB1004

Indiana 2024 Regular Session

Indiana House Bill HB1004 Compare Versions

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1+*EH1004.1*
2+March 1, 2024
3+ENGROSSED
4+HOUSE BILL No. 1004
5+_____
6+DIGEST OF HB 1004 (Updated February 29, 2024 1:03 pm - DI 120)
7+Citations Affected: IC 5-10; IC 5-10.2; IC 5-10.5; IC 5-11; IC 10-12;
8+IC 36-8.
9+Synopsis: Pension matters. Provides that a state employee may
10+affirmatively elect to enroll in the deferred compensation plan prior to
11+the auto enroll date on day 31 of the state employee's employment.
12+(Continued next page)
13+Effective: Upon passage; July 1, 2024; July 1, 2025.
14+Cherry, Porter, Karickhoff, Meltzer, Abbott, Andrade, Aylesworth,
15+Baird, Barrett, Bartels, Bartlett, Bauer M, Behning, Borders, Boy,
16+Campbell, Carbaugh, Cash, Clere, Criswell, Davis, DeLaney, DeVon,
17+Dvorak, Engleman, Errington, Fleming, Garcia Wilburn, Genda,
18+GiaQuinta, Goodrich, Gore, Goss-Reaves, Greene, Haggard, Hall,
19+Hamilton, Harris, Hatcher, Hatfield, Heaton, Heine, Hostettler,
20+Huston, Jackson, Jeter, Johnson B, Jordan, Judy, King, Klinker,
21+Lauer, Ledbetter, Lehman, Lindauer, Lucas, Lyness, Manning, May,
22+Mayfield, McGuire, McNamara, Miller K, Moed, Morris, Morrison,
23+Moseley, Negele, O'Brien, Olthoff, Pack, Payne, Pfaff, Pierce K,
24+Pierce M, Prescott, Pressel, Pryor, Rowray, Schaibley, Shackleford,
25+Slager, Smaltz, Smith V, Snow, Soliday, Speedy, Steuerwald,
26+Summers, Sweet, Teshka, Thompson, Torr, VanNatter, Wesco, Zent,
27+Zimmerman
28+(SENATE SPONSORS — BUCHANAN, CRIDER, NIEZGODSKI, BOHACEK,
29+DERNULC)
30+January 8, 2024, read first time and referred to Committee on Ways and Means.
31+January 16, 2024, reported — Do Pass.
32+January 18, 2024, read second time, ordered engrossed.
33+January 19, 2024, engrossed.
34+January 22, 2024, read third time, passed. Yeas 97, nays 0.
35+SENATE ACTION
36+February 5, 2024, read first time and referred to Committee on Appropriations.
37+February 29, 2024, amended, reported favorably — Do Pass.
38+EH 1004—LS 7009/DI 144 Digest Continued
39+Removes a provision that sets a maximum employer surcharge for the
40+legislators' defined benefit plan, state excise police, gaming agent,
41+gaming control officer, and conservation enforcement officers'
42+retirement plan, public employees' retirement fund, and Indiana state
43+teachers' retirement fund (fund). Requires the board of trustees of the
44+Indiana public retirement system (board) to develop the technological
45+and administrative capabilities sufficient to categorize fund members
46+into separate groups in which: (1) certain members receive a service
47+based thirteenth check; and (2) certain members receive a cost of living
48+adjustment. Requires the board to set the surcharge rates at a level to
49+actuarially prefund: (1) annual indexed thirteenth checks for all current
50+retired members and beneficiaries retired before July 1, 2025; and (2)
51+1% annual cost of living adjustments to future in-payment members
52+and beneficiaries retired on or after July 1, 2025. Provides that the
53+board shall not reduce the surcharge rates from the prior year. Allows
54+the board to increase the surcharge rates by not more than 0.1% of
55+payroll from the prior year. Requires certain political subdivisions to
56+present to the interim study committee on pension management
57+oversight regarding a delinquent employee retirement plan offered by
58+the political subdivision. Requires, effective July 1, 2025, the trustee
59+of the state police pension trust to maintain a supplemental allowance
60+reserve account for the purpose of paying postretirement benefit
61+adjustments. Increases the maximum date that a member or participant
62+of certain retirement funds can participate in the deferred retirement
63+option plan from 36 to 60 months. Requires the member or participant
64+to notify their employer if the member or participant elects to enter or
65+extend the deferred retirement option plan.
66+EH 1004—LS 7009/DI 144EH 1004—LS 7009/DI 144 March 1, 2024
167 Second Regular Session of the 123rd General Assembly (2024)
268 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
369 Constitution) is being amended, the text of the existing provision will appear in this style type,
470 additions will appear in this style type, and deletions will appear in this style type.
571 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
672 provision adopted), the text of the new provision will appear in this style type. Also, the
773 word NEW will appear in that style type in the introductory clause of each SECTION that adds
874 a new provision to the Indiana Code or the Indiana Constitution.
975 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1076 between statutes enacted by the 2023 Regular Session of the General Assembly.
11-HOUSE ENROLLED ACT No. 1004
12-AN ACT to amend the Indiana Code concerning pensions.
77+ENGROSSED
78+HOUSE BILL No. 1004
79+A BILL FOR AN ACT to amend the Indiana Code concerning
80+pensions.
1381 Be it enacted by the General Assembly of the State of Indiana:
14-SECTION 1. IC 5-10-1.1-3.5, AS AMENDED BY THE
82+1 SECTION 1. IC 5-10-1.1-3.5, AS AMENDED BY THE
83+2 TECHNICAL CORRECTIONS BILL OF THE 2024 GENERAL
84+3 ASSEMBLY, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
85+4 UPON PASSAGE]: Sec. 3.5. (a) This section applies to an individual
86+5 who becomes an employee of the state after June 30, 2007.
87+6 (b) Unless an employee notifies the state that the employee does not
88+7 want to enroll in the deferred compensation plan or makes an
89+8 affirmative election under subsection (h), on day thirty-one (31) of
90+9 the employee's employment:
91+10 (1) the employee is automatically enrolled in the deferred
92+11 compensation plan; and
93+12 (2) the state is authorized to begin deductions as otherwise
94+13 allowed under this chapter.
95+14 (c) The auditor of state comptroller shall provide notice to an
96+15 employee of the provisions of this chapter. The notice provided under
97+16 this subsection must:
98+17 (1) contain a statement concerning:
99+EH 1004—LS 7009/DI 144 2
100+1 (A) the purposes of;
101+2 (B) procedures for notifying the state that the employee does
102+3 not want to enroll in;
103+4 (C) the tax consequences of; and
104+5 (D) the details of the state match for employee contribution to;
105+6 the deferred compensation plan; and
106+7 (2) list the telephone number, electronic mail address, and other
107+8 contact information for the plan administrator.
108+9 (d) This subsection applies to contributions made before July 1,
109+10 2011. Notwithstanding IC 22-2-6, except as provided by subsection (h),
110+11 the state shall deduct from an employee's compensation as a
111+12 contribution to the deferred compensation plan established by the state
112+13 under this chapter an amount equal to the maximum amount of any
113+14 match provided by the state on behalf of the employee to a defined
114+15 contribution plan established under section 1.5(a) of this chapter.
115+16 (e) This subsection applies to contributions made after June 30,
116+17 2011, and before July 1, 2013. Notwithstanding IC 22-2-6 and except
117+18 as provided by subsection (h), during the first year an employee is
118+19 enrolled under subsection (b) in the deferred compensation plan, the
119+20 state shall deduct each pay period from the employee's compensation
120+21 as a contribution to the deferred compensation plan an amount equal
121+22 to the greater of the following:
122+23 (1) The maximum amount of any match provided by the state on
123+24 behalf of the employee to a defined contribution plan established
124+25 under section 1.5(a) of this chapter.
125+26 (2) One-half percent (0.5%) of the employee's base salary.
126+27 (f) This subsection applies to contributions made after June 30,
127+28 2013. Notwithstanding IC 22-2-6 and except as provided by subsection
128+29 (h), during the first year an employee is enrolled under subsection (b)
129+30 in the deferred compensation plan, the state shall deduct each pay
130+31 period from the employee's compensation as a contribution to the
131+32 deferred compensation plan an amount equal to the greater of the
132+33 following:
133+34 (1) The maximum amount of any match provided by the state on
134+35 behalf of the employee to a defined contribution plan established
135+36 under section 1.5(a) of this chapter.
136+37 (2) Two percent (2%) of the employee's base salary.
137+38 (g) This subsection applies to a year:
138+39 (1) after the first year in which an employee is enrolled in the
139+40 deferred compensation plan; and
140+41 (2) in which the employee does not affirmatively choose a
141+42 contribution amount under subsection (h).
142+EH 1004—LS 7009/DI 144 3
143+1 The percentage of the employee's base salary used for the year in
144+2 subsection (e)(2) or (f)(2) to determine the employee's contribution
145+3 increases by one-half percent (0.5%) from the percentage determined
146+4 in the immediately preceding year. The maximum percentage of an
147+5 employee's base salary that may be deducted under this subsection is
148+6 five percent (5%). The contribution increase occurs on the anniversary
149+7 date of the employee's enrollment in the deferred compensation plan.
150+8 (h) An employee may affirmatively elect to enroll in the deferred
151+9 compensation plan in the amount described in subsections (d)
152+10 through (g). An employee may contribute to the deferred
153+11 compensation plan established by the state under this chapter an
154+12 amount other than the amount described in subsections (d) through (g)
155+13 by affirmatively choosing to contribute:
156+14 (1) a higher amount;
157+15 (2) a lower amount; or
158+16 (3) zero (0).
159+17 SECTION 2. IC 5-10-5.5-22, AS AMENDED BY P.L.145-2020,
160+18 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
161+19 JULY 1, 2024]: Sec. 22. (a) As used in this section, "DROP" refers to
162+20 a deferred retirement option plan established under this section.
163+21 (b) As used in this section, "DROP entry date" means the date that
164+22 a participant's election to enter a DROP becomes effective.
165+23 (c) As used in this section, "DROP frozen benefit" refers to an
166+24 annual retirement allowance computed under section 10 of this chapter
167+25 based on a participant's:
168+26 (1) average annual salary; and
169+27 (2) years of creditable service;
170+28 on the date the participant enters the DROP.
171+29 (d) As used in this section, "DROP retirement date" means the
172+30 future retirement date selected by a participant at the time the
173+31 participant elects to enter the DROP.
174+32 (e) Only a participant who is eligible to receive an unreduced annual
175+33 retirement allowance immediately upon termination of employment
176+34 may elect to enter a DROP. A participant who elects to enter the DROP
177+35 must shall do the following:
178+36 (1) Agree to the following:
179+37 (1) (A) The participant shall execute an irrevocable election to
180+38 retire on the DROP retirement date and must remain in active
181+39 service until that date.
182+40 (2) (B) While in the DROP, the participant shall continue to
183+41 make contributions under section 8 of this chapter.
184+42 (3) (C) The participant shall select a DROP retirement date not
185+EH 1004—LS 7009/DI 144 4
186+1 less than twelve (12) months and not more than:
187+2 (i) thirty-six (36) months after the participant's DROP entry
188+3 date, for a participant who executes an election described
189+4 in clause (A) before July 1, 2024; or
190+5 (ii) sixty (60) months after the participant's DROP entry
191+6 date, for a participant who executes an election
192+7 described in clause (A) after June 30, 2024.
193+8 (4) (D) The participant may not remain in the DROP after the
194+9 date the participant reaches the mandatory retirement age
195+10 under section 9 of this chapter.
196+11 (5) (E) The participant may make an election to enter the
197+12 DROP only once in the participant's lifetime.
198+13 (2) Notify the participant's employer of the DROP election
199+14 within thirty (30) days of the election.
200+15 (f) Notwithstanding subsection (e), a participant that entered the
201+16 DROP before July 1, 2024, and that has not exited the DROP may
202+17 elect to extend the participant's DROP retirement date up to sixty
203+18 (60) months after the participant's DROP entry date.
204+19 (g) A participant that makes the election described in subsection
205+20 (f) shall notify the participant's employer within thirty (30) days of
206+21 the election.
207+22 (f) (h) Contributions or payments provided by the general assembly
208+23 under section 4(b)(4) of this chapter continue for a participant while
209+24 the participant is in the DROP.
210+25 (g) (i) A participant shall exit the DROP on the earliest of the
211+26 following:
212+27 (1) The participant's DROP retirement date.
213+28 (2) Either:
214+29 (A) thirty-six (36) months after the participant's DROP entry
215+30 date, if the participant:
216+31 (i) executes an election described in subsection (e) before
217+32 July 1, 2024; and
218+33 (ii) does not execute an extension described in subsection
219+34 (f); or
220+35 (B) sixty (60) months after the participant's DROP entry
221+36 date, if the participant:
222+37 (i) executes an election described in subsection (e) after
223+38 June 30, 2024; or
224+39 (ii) executes an extension described in subsection (f).
225+40 (3) The participant's mandatory retirement age.
226+41 (4) The date the participant retires because of a disability as
227+42 provided by subsection (k). (m).
228+EH 1004—LS 7009/DI 144 5
229+1 (h) (j) A participant who retires on the participant's DROP
230+2 retirement date or on the date the participant retires because of a
231+3 disability as provided by subsection (k) (m) may elect to receive an
232+4 annual retirement allowance:
233+5 (1) computed under section 10 of this chapter as if the participant
234+6 had never entered the DROP; or
235+7 (2) consisting of:
236+8 (A) the DROP frozen benefit; plus
237+9 (B) an additional amount, paid as the participant elects under
238+10 subsection (i), (k), determined by multiplying:
239+11 (i) the DROP frozen benefit; by
240+12 (ii) the number of months the participant was in the DROP.
241+13 (i) (k) The participant shall elect, at the participant's retirement, to
242+14 receive the additional amount calculated under subsection (h)(2)(B)
243+15 (j)(2)(B) in one (1) of the following ways:
244+16 (1) A lump sum paid on:
245+17 (A) the participant's DROP retirement date; or
246+18 (B) the date the participant retires because of a disability as
247+19 provided by subsection (k). (m).
248+20 (2) Three (3) equal annual payments:
249+21 (A) commencing on:
250+22 (i) the participant's DROP retirement date; or
251+23 (ii) the date the participant retires because of a disability as
252+24 provided by subsection (k); (m); and
253+25 (B) thereafter paid on:
254+26 (i) the anniversary of the participant's DROP retirement
255+27 date; or
256+28 (ii) the date the participant retires because of a disability as
257+29 provided by subsection (k). (m).
258+30 (j) (l) A cost of living increase determined under section 21(c) of
259+31 this chapter does not apply to the additional amount calculated under
260+32 subsection (h)(2)(B) (j)(2)(B) at the participant's DROP retirement date
261+33 or the date the participant retires because of a disability as provided by
262+34 subsection (k). (m). No cost of living increase is applied to a DROP
263+35 frozen benefit while the participant is in the DROP. After the
264+36 participant's DROP retirement date or the date the participant retires
265+37 because of a disability as provided by subsection (k), (m), cost of living
266+38 increases determined under section 21(c) of this chapter apply to the
267+39 participant's annual retirement allowance computed under this section.
268+40 (k) (m) If a participant becomes disabled, in the line of duty or other
269+41 than in the line of duty while in the DROP, the participant's annual
270+42 retirement allowance is computed as follows:
271+EH 1004—LS 7009/DI 144 6
272+1 (1) If the participant retires because of a disability less than
273+2 twelve (12) months after the date the participant enters the DROP,
274+3 the participant's annual retirement allowance is calculated as if
275+4 the participant had never entered the DROP.
276+5 (2) If the participant retires because of a disability at least twelve
277+6 (12) months after the date the participant enters the DROP, the
278+7 participant's annual retirement allowance is calculated under this
279+8 section, and the participant's retirement date is the date the
280+9 member retires because of a disability rather than the participant's
281+10 DROP retirement date.
282+11 (l) (n) If, before payment of the participant's annual retirement
283+12 allowance begins, the participant dies in the line of duty or other than
284+13 in the line of duty, death benefits are payable to the participant's
285+14 surviving spouse. If there is no surviving spouse, the death benefits
286+15 must be divided equally among the participant's surviving children. If
287+16 there are no surviving children, the death benefits are paid to the
288+17 participant's parents. If there are no surviving parents, the death
289+18 benefits are paid to the participant's estate. The death benefits are
290+19 determined as follows:
291+20 (1) If the participant dies less than twelve (12) months after the
292+21 date the participant enters the DROP, the death benefits are
293+22 calculated as if the participant had never entered the DROP.
294+23 (2) If the participant dies at least twelve (12) months after the date
295+24 the participant enters the DROP, the death benefits consist of both
296+25 of the following:
297+26 (A) At the election of the survivor or survivors to whom the
298+27 benefit is payable, the benefit calculated under subsection
299+28 (h)(2)(B) (j)(2)(B) is paid in either:
300+29 (i) a lump sum; or
301+30 (ii) three (3) equal annual payments, the first as soon as
302+31 practicable after the date of the participant's death, the
303+32 second on the first anniversary of the participant's death, and
304+33 the third on the second anniversary of the participant's death.
305+34 (B) A benefit is paid on the DROP frozen benefit under the
306+35 terms of the retirement plan created by this chapter.
307+36 (m) (o) Except as provided under subsections (k) (m) and (l), (n),
308+37 the annual retirement allowance for a participant who exits the DROP
309+38 for any reason other than retirement on the participant's DROP
310+39 retirement date is calculated as if the participant had never entered the
311+40 DROP.
312+41 SECTION 3. IC 5-10.2-12-3, AS ADDED BY P.L.127-2018,
313+42 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
314+EH 1004—LS 7009/DI 144 7
315+1 UPON PASSAGE]: Sec. 3. (a) For 2019 and each year thereafter, the
316+2 contribution rate established by the board for each employer shall
317+3 include a surcharge determined by the board
318+4 (1) that is paid to the supplemental allowance reserve account of
319+5 the applicable fund or plan. and
320+6 (2) that does not exceed one percent (1%) of the employer's
321+7 payroll that is attributable to employees who are:
322+8 (A) members of the public employees' retirement fund;
323+9 (B) members of the 1996 account of the Indiana state teachers'
324+10 retirement fund; and
325+11 (C) participants in the state excise police, gaming agent,
326+12 gaming control officer, and conservation enforcement officers'
327+13 retirement plan.
328+14 The board shall determine an equivalent amount to be included in the
329+15 general fund appropriations for the supplemental allowance reserve
330+16 accounts of the legislators' defined benefit plan and, subject to
331+17 IC 5-10.4-2-5, the pre-1996 account of the Indiana state teachers'
332+18 retirement fund.
333+19 (b) The surcharge described in subsection (a) shall be paid in the
334+20 same manner as other employer contributions required under
335+21 IC 5-10-5.5-4, IC 5-10.2-2-12.5, IC 5-10.3-7-12.5, and IC 5-10.4-7-6.
336+22 SECTION 4. IC 5-10.5-4-7 IS ADDED TO THE INDIANA CODE
337+23 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
338+24 UPON PASSAGE]: Sec. 7. (a) For purposes of this section, "fund"
339+25 means the Indiana public employees' retirement fund, Indiana
340+26 state teachers' retirement fund, legislators' defined benefit plan,
341+27 and state excise police, gaming agent, gaming control officer, and
342+28 conservation enforcement officers' retirement plan.
343+29 (b) The board shall develop the technological and administrative
344+30 capabilities sufficient to categorize fund members into separate
345+31 groups in which:
346+32 (1) certain members receive a service based thirteenth check;
347+33 and
348+34 (2) certain members receive a cost of living adjustment.
349+35 SECTION 5. IC 5-10.5-4-8 IS ADDED TO THE INDIANA CODE
350+36 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
351+37 1, 2025]: Sec. 8. (a) The board shall set the surcharge rates under
352+38 IC 5-10.2-12-3 at a level to actuarially prefund:
353+39 (1) annual indexed thirteenth checks for all current retired
354+40 members and beneficiaries retired before July 1, 2025; and
355+41 (2) one percent (1%) annual cost of living adjustments to
356+42 future in-payment members and beneficiaries retired on or
357+EH 1004—LS 7009/DI 144 8
358+1 after July 1, 2025.
359+2 (b) The board shall not reduce the surcharge rates under
360+3 IC 5-10.2-12-3 from the prior year.
361+4 (c) The board may increase the surcharge rates under
362+5 IC 5-10.2-12-3 by not more than one-tenth percent (0.1%) of
363+6 payroll from the prior year.
364+7 (d) This section expires December 31, 2029.
365+8 SECTION 6. IC 5-11-20-1.5 IS ADDED TO THE INDIANA CODE
366+9 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
367+10 UPON PASSAGE]: Sec. 1.5. As used in this chapter, "delinquent
368+11 political subdivision" means a political subdivision offering an
369+12 employee retirement plan described in section 3(b) of this chapter
370+13 that:
371+14 (1) received less than ninety-five percent (95%) of the
372+15 actuarially determined contribution for the immediately
373+16 preceding fiscal year, as determined by the system or its
374+17 agent; or
375+18 (2) was less than fifty percent (50%) funded at any time
376+19 during the immediately preceding fiscal year, as determined
377+20 by the system or its agent.
378+21 SECTION 7. IC 5-11-20-2.5 IS ADDED TO THE INDIANA CODE
379+22 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
380+23 UPON PASSAGE]: Sec. 2.5. As used in this chapter, "system"
381+24 refers to the Indiana public retirement system established by
382+25 IC 5-10.5-2-1.
383+26 SECTION 8. IC 5-11-20-6 IS ADDED TO THE INDIANA CODE
384+27 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
385+28 UPON PASSAGE]: Sec. 6. (a) On June 15 of each year, the system
386+29 shall send a delinquency notice to a delinquent political
387+30 subdivision. The delinquency notice must inform the delinquent
388+31 political subdivision that:
389+32 (1) an employee retirement plan offered by the delinquent
390+33 political subdivision:
391+34 (A) received less than ninety-five percent (95%) of the
392+35 actuarially determined contribution for the immediately
393+36 preceding fiscal year, as determined by the system or its
394+37 agent; or
395+38 (B) was less than fifty percent (50%) funded at any time
396+39 during the immediately preceding fiscal year, as
397+40 determined by the system or its agent; and
398+41 (2) the delinquent political subdivision must take the steps
399+42 described in subsection (b).
400+EH 1004—LS 7009/DI 144 9
401+1 (b) After receiving the notice described in subsection (a), a
402+2 political subdivision shall make a presentation that includes a
403+3 remediation plan to the interim study committee on pension
404+4 management oversight (established by IC 2-5-1.3-4) regarding the
405+5 delinquent employee retirement plan described in subsection (a).
406+6 SECTION 9. IC 10-12-7 IS ADDED TO THE INDIANA CODE AS
407+7 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
408+8 1, 2025]:
409+9 Chapter 7. Supplemental Allowance Reserve Account
410+10 Sec. 0.5. This chapter applies to the state police pre-1987 benefit
411+11 system covered by IC 10-12-3 and the state police 1987 benefit
412+12 system covered by IC 10-12-4.
413+13 Sec. 1. For purposes of this chapter, "account" means the
414+14 supplemental allowance reserve account described in section 2 of
415+15 this chapter.
416+16 Sec. 2. (a) The trustee shall maintain a supplemental allowance
417+17 reserve account for the purpose of paying postretirement benefit
418+18 adjustments, including:
419+19 (1) postretirement benefit increases;
420+20 (2) thirteenth checks; and
421+21 (3) other benefit changes or adjustments;
422+22 granted by the general assembly to employee beneficiaries after
423+23 June 30, 2025.
424+24 (b) For purposes of subsection (a), "postretirement benefit
425+25 adjustments" does not include a supplemental pension benefit
426+26 under IC 10-12-5.
427+27 Sec. 3. The account consists of amounts appropriated or
428+28 transferred to the account by the general assembly.
429+29 Sec. 4. The trustee may not:
430+30 (1) deposit money in the account; or
431+31 (2) transfer money to the account.
432+32 SECTION 10. IC 36-8-8.5-10 IS AMENDED TO READ AS
433+33 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 10. A member who
434+34 elects to enter the DROP shall do the following:
435+35 (1) Agree to the following:
436+36 (1) (A) The member shall execute an irrevocable election to
437+37 retire on the DROP retirement date and shall remain in active
438+38 service until that date.
439+39 (2) (B) While in the DROP, the member shall continue to
440+40 make contributions to the applicable fund under the provisions
441+41 of that fund.
442+42 (3) (C) The member shall elect a DROP retirement date not
443+EH 1004—LS 7009/DI 144 10
444+1 less than twelve (12) months and not more than:
445+2 (i) thirty-six (36) months after the member's DROP entry
446+3 date, for a member who executes an election described in
447+4 clause (A) before July 1, 2024; or
448+5 (ii) sixty (60) months after the member's DROP entry
449+6 date, for a member who executes an election described in
450+7 clause (A) after June 30, 2024.
451+8 (4) (D) The member may not remain in the DROP after the
452+9 date the member reaches any mandatory retirement age that
453+10 may apply to the member.
454+11 (5) (E) The member may make an election to enter the DROP
455+12 only once in the member's lifetime.
456+13 (2) Notify the member's employer of the DROP election
457+14 within thirty (30) days of the election.
458+15 SECTION 11. IC 36-8-8.5-10.5 IS ADDED TO THE INDIANA
459+16 CODE AS A NEW SECTION TO READ AS FOLLOWS
460+17 [EFFECTIVE JULY 1, 2024]: Sec. 10.5. (a) Notwithstanding section
461+18 10 of this chapter, a member that entered the DROP before July 1,
462+19 2024, and that has not exited the DROP may elect to extend the
463+20 member's DROP retirement date up to sixty (60) months after the
464+21 member's DROP entry date.
465+22 (b) A member that makes the election described in subsection
466+23 (a) shall notify the member's employer within thirty (30) days of
467+24 the election.
468+25 SECTION 12. IC 36-8-8.5-14, AS AMENDED BY P.L.156-2020,
469+26 SECTION 147, IS AMENDED TO READ AS FOLLOWS
470+27 [EFFECTIVE JULY 1, 2024]: Sec. 14. (a) Subject to subsection (b), a
471+28 member who enters the DROP established by this chapter shall exit the
472+29 DROP at the earliest of:
473+30 (1) the member's DROP retirement date;
474+31 (2) either:
475+32 (A) thirty-six (36) months after the member's DROP entry
476+33 date, if the member:
477+34 (i) executes an election described in section 10 of this
478+35 chapter before July 1, 2024; and
479+36 (ii) does not execute an extension described in section
480+37 10.5 of this chapter; or
481+38 (B) sixty (60) months after the member's DROP entry date,
482+39 if the member:
483+40 (i) executes an election described in section 10 of this
484+41 chapter after June 30, 2024; or
485+42 (ii) executes an extension described in section 10.5 of this
486+EH 1004—LS 7009/DI 144 11
487+1 chapter;
488+2 (3) the mandatory retirement age applicable to the member, if
489+3 any; or
490+4 (4) the date the member retires because of a disability as provided
491+5 under section 16.5(d) of this chapter.
492+6 (b) A member of the 1925 fund, the 1937 fund, or the 1953 fund
493+7 who enters the DROP established by this chapter must exit the DROP
494+8 on the date the authority of the board of trustees of the Indiana public
495+9 retirement system to distribute from the pension relief fund established
496+10 under IC 5-10.3-11-1 to units of local government (described in
497+11 IC 5-10.3-11-3) amounts determined under IC 5-10.3-11-4.7 expires.
498+12 SECTION 13. An emergency is declared for this act.
499+EH 1004—LS 7009/DI 144 12
500+COMMITTEE REPORT
501+Mr. Speaker: Your Committee on Ways and Means, to which was
502+referred House Bill 1004, has had the same under consideration and
503+begs leave to report the same back to the House with the
504+recommendation that said bill do pass.
505+(Reference is to HB 1004 as introduced.)
506+THOMPSON
507+Committee Vote: Yeas 23, Nays 0
508+_____
509+COMMITTEE REPORT
510+Madam President: The Senate Committee on Appropriations, to
511+which was referred Engrossed House Bill No. 1004, has had the same
512+under consideration and begs leave to report the same back to the
513+Senate with the recommendation that said bill be AMENDED as
514+follows:
515+Delete the title and insert the following:
516+A BILL FOR AN ACT to amend the Indiana Code concerning
517+pensions.
518+Page 1, delete lines 1 through 18, begin a new paragraph and insert:
519+"SECTION 1. IC 5-10-1.1-3.5, AS AMENDED BY THE
15520 TECHNICAL CORRECTIONS BILL OF THE 2024 GENERAL
16521 ASSEMBLY, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17522 UPON PASSAGE]: Sec. 3.5. (a) This section applies to an individual
18523 who becomes an employee of the state after June 30, 2007.
19524 (b) Unless an employee notifies the state that the employee does not
20525 want to enroll in the deferred compensation plan or makes an
21526 affirmative election under subsection (h), on day thirty-one (31) of
22527 the employee's employment:
23528 (1) the employee is automatically enrolled in the deferred
24529 compensation plan; and
25530 (2) the state is authorized to begin deductions as otherwise
26531 allowed under this chapter.
27532 (c) The auditor of state comptroller shall provide notice to an
28533 employee of the provisions of this chapter. The notice provided under
29534 this subsection must:
30535 (1) contain a statement concerning:
31536 (A) the purposes of;
32537 (B) procedures for notifying the state that the employee does
538+EH 1004—LS 7009/DI 144 13
33539 not want to enroll in;
34540 (C) the tax consequences of; and
35541 (D) the details of the state match for employee contribution to;
36-HEA 1004 — CC 1 2
37542 the deferred compensation plan; and
38543 (2) list the telephone number, electronic mail address, and other
39544 contact information for the plan administrator.
40545 (d) This subsection applies to contributions made before July 1,
41546 2011. Notwithstanding IC 22-2-6, except as provided by subsection (h),
42547 the state shall deduct from an employee's compensation as a
43548 contribution to the deferred compensation plan established by the state
44549 under this chapter an amount equal to the maximum amount of any
45550 match provided by the state on behalf of the employee to a defined
46551 contribution plan established under section 1.5(a) of this chapter.
47552 (e) This subsection applies to contributions made after June 30,
48553 2011, and before July 1, 2013. Notwithstanding IC 22-2-6 and except
49554 as provided by subsection (h), during the first year an employee is
50555 enrolled under subsection (b) in the deferred compensation plan, the
51556 state shall deduct each pay period from the employee's compensation
52557 as a contribution to the deferred compensation plan an amount equal
53558 to the greater of the following:
54559 (1) The maximum amount of any match provided by the state on
55560 behalf of the employee to a defined contribution plan established
56561 under section 1.5(a) of this chapter.
57562 (2) One-half percent (0.5%) of the employee's base salary.
58563 (f) This subsection applies to contributions made after June 30,
59564 2013. Notwithstanding IC 22-2-6 and except as provided by subsection
60565 (h), during the first year an employee is enrolled under subsection (b)
61566 in the deferred compensation plan, the state shall deduct each pay
62567 period from the employee's compensation as a contribution to the
63568 deferred compensation plan an amount equal to the greater of the
64569 following:
65570 (1) The maximum amount of any match provided by the state on
66571 behalf of the employee to a defined contribution plan established
67572 under section 1.5(a) of this chapter.
68573 (2) Two percent (2%) of the employee's base salary.
69574 (g) This subsection applies to a year:
70575 (1) after the first year in which an employee is enrolled in the
71576 deferred compensation plan; and
72577 (2) in which the employee does not affirmatively choose a
73578 contribution amount under subsection (h).
74579 The percentage of the employee's base salary used for the year in
75580 subsection (e)(2) or (f)(2) to determine the employee's contribution
581+EH 1004—LS 7009/DI 144 14
76582 increases by one-half percent (0.5%) from the percentage determined
77583 in the immediately preceding year. The maximum percentage of an
78584 employee's base salary that may be deducted under this subsection is
79-HEA 1004 — CC 1 3
80585 five percent (5%). The contribution increase occurs on the anniversary
81586 date of the employee's enrollment in the deferred compensation plan.
82587 (h) An employee may affirmatively elect to enroll in the deferred
83588 compensation plan in the amount described in subsections (d)
84589 through (g). An employee may contribute to the deferred
85590 compensation plan established by the state under this chapter an
86591 amount other than the amount described in subsections (d) through (g)
87592 by affirmatively choosing to contribute:
88593 (1) a higher amount;
89594 (2) a lower amount; or
90595 (3) zero (0).
91596 SECTION 2. IC 5-10-5.5-22, AS AMENDED BY P.L.145-2020,
92597 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
93598 JULY 1, 2024]: Sec. 22. (a) As used in this section, "DROP" refers to
94599 a deferred retirement option plan established under this section.
95600 (b) As used in this section, "DROP entry date" means the date that
96601 a participant's election to enter a DROP becomes effective.
97602 (c) As used in this section, "DROP frozen benefit" refers to an
98603 annual retirement allowance computed under section 10 of this chapter
99604 based on a participant's:
100605 (1) average annual salary; and
101606 (2) years of creditable service;
102607 on the date the participant enters the DROP.
103608 (d) As used in this section, "DROP retirement date" means the
104609 future retirement date selected by a participant at the time the
105610 participant elects to enter the DROP.
106611 (e) Only a participant who is eligible to receive an unreduced annual
107612 retirement allowance immediately upon termination of employment
108613 may elect to enter a DROP. A participant who elects to enter the DROP
109614 must shall do the following:
110615 (1) Agree to the following:
111616 (1) (A) The participant shall execute an irrevocable election to
112617 retire on the DROP retirement date and must remain in active
113618 service until that date.
114619 (2) (B) While in the DROP, the participant shall continue to
115620 make contributions under section 8 of this chapter.
116621 (3) (C) The participant shall select a DROP retirement date not
117622 less than twelve (12) months and not more than:
118623 (i) thirty-six (36) months after the participant's DROP entry
624+EH 1004—LS 7009/DI 144 15
119625 date, for a participant who executes an election described
120626 in clause (A) before July 1, 2024; or
121627 (ii) sixty (60) months after the participant's DROP entry
122-HEA 1004 — CC 1 4
123628 date, for a participant who executes an election
124629 described in clause (A) after June 30, 2024.
125630 (4) (D) The participant may not remain in the DROP after the
126631 date the participant reaches the mandatory retirement age
127632 under section 9 of this chapter.
128633 (5) (E) The participant may make an election to enter the
129634 DROP only once in the participant's lifetime.
130635 (2) Notify the participant's employer of the DROP election
131636 within thirty (30) days of the election.
132637 (f) Notwithstanding subsection (e), a participant that entered the
133638 DROP before July 1, 2024, and that has not exited the DROP may
134639 elect to extend the participant's DROP retirement date up to sixty
135640 (60) months after the participant's DROP entry date.
136641 (g) A participant that makes the election described in subsection
137642 (f) shall notify the participant's employer within thirty (30) days of
138643 the election.
139644 (f) (h) Contributions or payments provided by the general assembly
140645 under section 4(b)(4) of this chapter continue for a participant while
141646 the participant is in the DROP.
142647 (g) (i) A participant shall exit the DROP on the earliest of the
143648 following:
144649 (1) The participant's DROP retirement date.
145650 (2) Either:
146651 (A) thirty-six (36) months after the participant's DROP entry
147652 date, if the participant:
148653 (i) executes an election described in subsection (e) before
149654 July 1, 2024; and
150655 (ii) does not execute an extension described in subsection
151656 (f); or
152657 (B) sixty (60) months after the participant's DROP entry
153658 date, if the participant:
154659 (i) executes an election described in subsection (e) after
155660 June 30, 2024; or
156661 (ii) executes an extension described in subsection (f).
157662 (3) The participant's mandatory retirement age.
158663 (4) The date the participant retires because of a disability as
159664 provided by subsection (k). (m).
160665 (h) (j) A participant who retires on the participant's DROP
161666 retirement date or on the date the participant retires because of a
667+EH 1004—LS 7009/DI 144 16
162668 disability as provided by subsection (k) (m) may elect to receive an
163669 annual retirement allowance:
164670 (1) computed under section 10 of this chapter as if the participant
165-HEA 1004 — CC 1 5
166671 had never entered the DROP; or
167672 (2) consisting of:
168673 (A) the DROP frozen benefit; plus
169674 (B) an additional amount, paid as the participant elects under
170675 subsection (i), (k), determined by multiplying:
171676 (i) the DROP frozen benefit; by
172677 (ii) the number of months the participant was in the DROP.
173678 (i) (k) The participant shall elect, at the participant's retirement, to
174679 receive the additional amount calculated under subsection (h)(2)(B)
175680 (j)(2)(B) in one (1) of the following ways:
176681 (1) A lump sum paid on:
177682 (A) the participant's DROP retirement date; or
178683 (B) the date the participant retires because of a disability as
179684 provided by subsection (k). (m).
180685 (2) Three (3) equal annual payments:
181686 (A) commencing on:
182687 (i) the participant's DROP retirement date; or
183688 (ii) the date the participant retires because of a disability as
184689 provided by subsection (k); (m); and
185690 (B) thereafter paid on:
186691 (i) the anniversary of the participant's DROP retirement
187692 date; or
188693 (ii) the date the participant retires because of a disability as
189694 provided by subsection (k). (m).
190695 (j) (l) A cost of living increase determined under section 21(c) of
191696 this chapter does not apply to the additional amount calculated under
192697 subsection (h)(2)(B) (j)(2)(B) at the participant's DROP retirement date
193698 or the date the participant retires because of a disability as provided by
194699 subsection (k). (m). No cost of living increase is applied to a DROP
195700 frozen benefit while the participant is in the DROP. After the
196701 participant's DROP retirement date or the date the participant retires
197702 because of a disability as provided by subsection (k), (m), cost of living
198703 increases determined under section 21(c) of this chapter apply to the
199704 participant's annual retirement allowance computed under this section.
200705 (k) (m) If a participant becomes disabled, in the line of duty or other
201706 than in the line of duty while in the DROP, the participant's annual
202707 retirement allowance is computed as follows:
203708 (1) If the participant retires because of a disability less than
204709 twelve (12) months after the date the participant enters the DROP,
710+EH 1004—LS 7009/DI 144 17
205711 the participant's annual retirement allowance is calculated as if
206712 the participant had never entered the DROP.
207713 (2) If the participant retires because of a disability at least twelve
208-HEA 1004 — CC 1 6
209714 (12) months after the date the participant enters the DROP, the
210715 participant's annual retirement allowance is calculated under this
211716 section, and the participant's retirement date is the date the
212717 member retires because of a disability rather than the participant's
213718 DROP retirement date.
214719 (l) (n) If, before payment of the participant's annual retirement
215720 allowance begins, the participant dies in the line of duty or other than
216721 in the line of duty, death benefits are payable to the participant's
217722 surviving spouse. If there is no surviving spouse, the death benefits
218723 must be divided equally among the participant's surviving children. If
219724 there are no surviving children, the death benefits are paid to the
220725 participant's parents. If there are no surviving parents, the death
221726 benefits are paid to the participant's estate. The death benefits are
222727 determined as follows:
223728 (1) If the participant dies less than twelve (12) months after the
224729 date the participant enters the DROP, the death benefits are
225730 calculated as if the participant had never entered the DROP.
226731 (2) If the participant dies at least twelve (12) months after the date
227732 the participant enters the DROP, the death benefits consist of both
228733 of the following:
229734 (A) At the election of the survivor or survivors to whom the
230735 benefit is payable, the benefit calculated under subsection
231736 (h)(2)(B) (j)(2)(B) is paid in either:
232737 (i) a lump sum; or
233738 (ii) three (3) equal annual payments, the first as soon as
234739 practicable after the date of the participant's death, the
235740 second on the first anniversary of the participant's death, and
236741 the third on the second anniversary of the participant's death.
237742 (B) A benefit is paid on the DROP frozen benefit under the
238743 terms of the retirement plan created by this chapter.
239744 (m) (o) Except as provided under subsections (k) (m) and (l), (n),
240745 the annual retirement allowance for a participant who exits the DROP
241746 for any reason other than retirement on the participant's DROP
242747 retirement date is calculated as if the participant had never entered the
243748 DROP.
244749 SECTION 3. IC 5-10.2-12-3, AS ADDED BY P.L.127-2018,
245750 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
246751 UPON PASSAGE]: Sec. 3. (a) For 2019 and each year thereafter, the
247752 contribution rate established by the board for each employer shall
753+EH 1004—LS 7009/DI 144 18
248754 include a surcharge determined by the board
249755 (1) that is paid to the supplemental allowance reserve account of
250756 the applicable fund or plan. and
251-HEA 1004 — CC 1 7
252757 (2) that does not exceed one percent (1%) of the employer's
253758 payroll that is attributable to employees who are:
254759 (A) members of the public employees' retirement fund;
255760 (B) members of the 1996 account of the Indiana state teachers'
256761 retirement fund; and
257762 (C) participants in the state excise police, gaming agent,
258763 gaming control officer, and conservation enforcement officers'
259764 retirement plan.
260765 The board shall determine an equivalent amount to be included in the
261766 general fund appropriations for the supplemental allowance reserve
262767 accounts of the legislators' defined benefit plan and, subject to
263768 IC 5-10.4-2-5, the pre-1996 account of the Indiana state teachers'
264769 retirement fund.
265770 (b) The surcharge described in subsection (a) shall be paid in the
266771 same manner as other employer contributions required under
267-IC 5-10-5.5-4, IC 5-10.2-2-12.5, IC 5-10.3-7-12.5, and IC 5-10.4-7-6.
268-SECTION 4. IC 5-10.5-4-7 IS ADDED TO THE INDIANA CODE
772+IC 5-10-5.5-4, IC 5-10.2-2-12.5, IC 5-10.3-7-12.5, and IC 5-10.4-7-6.".
773+Page 2, delete lines 1 through 21, begin a new paragraph and insert:
774+"SECTION 4. IC 5-10.5-4-7 IS ADDED TO THE INDIANA CODE
269775 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
270-UPON PASSAGE]: Sec. 7. (a) For purposes of this section, "fund"
271-means the Indiana public employees' retirement fund, Indiana
272-state teachers' retirement fund, legislators' defined benefit plan,
273-and state excise police, gaming agent, gaming control officer, and
274-conservation enforcement officers' retirement plan.
776+UPON PASSAGE]: Sec. 7. (a) For purposes of this section,".
777+Page 2, line 22, delete "SECTION,".
778+Page 2, line 22, delete "refers to" and insert "means".
779+Page 2, line 23, delete "fund established by IC 5-10.3-2-1." and
780+insert "fund, Indiana state teachers' retirement fund, legislators'
781+defined benefit plan, and state excise police, gaming agent, gaming
782+control officer, and conservation enforcement officers' retirement
783+plan.
275784 (b) The board shall develop the technological and administrative
276785 capabilities sufficient to categorize fund members into separate
277786 groups in which:
278787 (1) certain members receive a service based thirteenth check;
279788 and
280789 (2) certain members receive a cost of living adjustment.
281790 SECTION 5. IC 5-10.5-4-8 IS ADDED TO THE INDIANA CODE
282791 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
283792 1, 2025]: Sec. 8. (a) The board shall set the surcharge rates under
284793 IC 5-10.2-12-3 at a level to actuarially prefund:
285794 (1) annual indexed thirteenth checks for all current retired
286795 members and beneficiaries retired before July 1, 2025; and
796+EH 1004—LS 7009/DI 144 19
287797 (2) one percent (1%) annual cost of living adjustments to
288798 future in-payment members and beneficiaries retired on or
289799 after July 1, 2025.
290800 (b) The board shall not reduce the surcharge rates under
291801 IC 5-10.2-12-3 from the prior year.
292802 (c) The board may increase the surcharge rates under
293803 IC 5-10.2-12-3 by not more than one-tenth percent (0.1%) of
294-HEA 1004 — CC 1 8
295804 payroll from the prior year.
296805 (d) This section expires December 31, 2029.
297806 SECTION 6. IC 5-11-20-1.5 IS ADDED TO THE INDIANA CODE
298807 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
299-UPON PASSAGE]: Sec. 1.5. (a) As used in this chapter, "delinquent
808+UPON PASSAGE]: Sec. 1.5. As used in this chapter, "delinquent
300809 political subdivision" means a political subdivision offering an
301810 employee retirement plan described in section 3(b) of this chapter
302811 that:
303-(1) received less than the actuarially determined contribution
304-for at least three (3) out of the last five (5) immediately
305-preceding fiscal years, as determined by the system or its
812+(1) received less than ninety-five percent (95%) of the
813+actuarially determined contribution for the immediately
814+preceding fiscal year, as determined by the system or its
306815 agent; or
307816 (2) was less than fifty percent (50%) funded at any time
308817 during the immediately preceding fiscal year, as determined
309818 by the system or its agent.
310-(b) As used in this chapter, "delinquent political subdivision"
311-does not include a political subdivision offering an employee
312-retirement plan described in section 3(b) of this chapter that:
313-(1) satisfies subsection (a)(1) or (a)(2) but is subject to an
314-existing court order requiring the political subdivision to fund
315-the plan benefits; or
316-(2) satisfies subsection (a)(1) or (a)(2) but was established
317-some time during the last five (5) immediately preceding fiscal
318-years.
319-(c) A police benefit fund qualifies as a delinquent political
320-subdivision if it satisfies subsection (a)(1). A police benefit fund
321-does not qualify as a delinquent political subdivision if it satisfies
322-subsection (a)(2) but does not satisfy subsection (a)(1).
323819 SECTION 7. IC 5-11-20-2.5 IS ADDED TO THE INDIANA CODE
324820 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
325821 UPON PASSAGE]: Sec. 2.5. As used in this chapter, "system"
326822 refers to the Indiana public retirement system established by
327823 IC 5-10.5-2-1.
328824 SECTION 8. IC 5-11-20-6 IS ADDED TO THE INDIANA CODE
329825 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
330-UPON PASSAGE]: Sec. 6. (a) On or before June 15 of each year,
331-the system shall send a delinquency notice to a delinquent political
826+UPON PASSAGE]: Sec. 6. (a) On June 15 of each year, the system
827+shall send a delinquency notice to a delinquent political
332828 subdivision. The delinquency notice must inform the delinquent
333829 political subdivision that:
334830 (1) an employee retirement plan offered by the delinquent
335831 political subdivision:
336832 (A) received less than ninety-five percent (95%) of the
337-HEA 1004 — CC 1 9
338833 actuarially determined contribution for the immediately
339834 preceding fiscal year, as determined by the system or its
340835 agent; or
341836 (B) was less than fifty percent (50%) funded at any time
342837 during the immediately preceding fiscal year, as
343838 determined by the system or its agent; and
839+EH 1004—LS 7009/DI 144 20
344840 (2) the delinquent political subdivision must take the steps
345841 described in subsection (b).
346842 (b) After receiving the notice described in subsection (a), a
347843 political subdivision shall make a presentation that includes a
348844 remediation plan to the interim study committee on pension
349845 management oversight (established by IC 2-5-1.3-4) regarding the
350846 delinquent employee retirement plan described in subsection (a).
351847 SECTION 9. IC 10-12-7 IS ADDED TO THE INDIANA CODE AS
352848 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
353849 1, 2025]:
354-Chapter 7. Supplemental Allowance Reserve Account
355-Sec. 0.5. This chapter applies to the state police pre-1987 benefit
356-system covered by IC 10-12-3 and the state police 1987 benefit
357-system covered by IC 10-12-4.
358-Sec. 1. For purposes of this chapter, "account" means the
850+Chapter 7. Supplemental Allowance Reserve Account".
851+Page 2, delete lines 24 through 42.
852+Delete page 3.
853+Page 4, delete lines 1 through 20.
854+Page 4, line 21, delete "(c) Not later than October 1, 2024, the
855+trustee shall pay from the" and insert "Sec. 0.5. This chapter applies
856+to".
857+Page 4, line 22, delete "trust fund to each employee beneficiary of".
858+Page 4, line 23, delete "who:".
859+Page 4, delete lines 24 through 39.
860+Page 4, line 40, delete "trust fund to each employee beneficiary of"
861+and insert "and".
862+Page 4, line 41, delete "who:" and insert ".".
863+Page 4, delete line 42, begin a new paragraph and insert:
864+"Sec. 1. For purposes of this chapter, "account" means the
359865 supplemental allowance reserve account described in section 2 of
360866 this chapter.
361-Sec. 2. (a) The trustee shall maintain a separate supplemental
362-allowance reserve account for both the state police pre-1987 benefit
363-system under IC 10-12-3 and the state police 1987 benefit system
364-under IC 10-12-4 for the purpose of paying postretirement benefit
867+Sec. 2. (a) The trustee shall maintain a supplemental allowance
868+reserve account for the purpose of paying postretirement benefit
365869 adjustments, including:
366-(1) postretirement benefit increases; and
367-(2) thirteenth checks;
870+(1) postretirement benefit increases;
871+(2) thirteenth checks; and
872+(3) other benefit changes or adjustments;
368873 granted by the general assembly to employee beneficiaries after
369874 June 30, 2025.
370875 (b) For purposes of subsection (a), "postretirement benefit
371876 adjustments" does not include a supplemental pension benefit
372877 under IC 10-12-5.
373878 Sec. 3. The account consists of amounts appropriated or
374879 transferred to the account by the general assembly.
375880 Sec. 4. The trustee may not:
376881 (1) deposit money in the account; or
882+EH 1004—LS 7009/DI 144 21
377883 (2) transfer money to the account.
378884 SECTION 10. IC 36-8-8.5-10 IS AMENDED TO READ AS
379885 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 10. A member who
380-HEA 1004 — CC 1 10
381886 elects to enter the DROP shall do the following:
382887 (1) Agree to the following:
383888 (1) (A) The member shall execute an irrevocable election to
384889 retire on the DROP retirement date and shall remain in active
385890 service until that date.
386891 (2) (B) While in the DROP, the member shall continue to
387892 make contributions to the applicable fund under the provisions
388893 of that fund.
389894 (3) (C) The member shall elect a DROP retirement date not
390895 less than twelve (12) months and not more than:
391896 (i) thirty-six (36) months after the member's DROP entry
392897 date, for a member who executes an election described in
393898 clause (A) before July 1, 2024; or
394899 (ii) sixty (60) months after the member's DROP entry
395900 date, for a member who executes an election described in
396901 clause (A) after June 30, 2024.
397902 (4) (D) The member may not remain in the DROP after the
398903 date the member reaches any mandatory retirement age that
399904 may apply to the member.
400905 (5) (E) The member may make an election to enter the DROP
401906 only once in the member's lifetime.
402907 (2) Notify the member's employer of the DROP election
403908 within thirty (30) days of the election.
404909 SECTION 11. IC 36-8-8.5-10.5 IS ADDED TO THE INDIANA
405910 CODE AS A NEW SECTION TO READ AS FOLLOWS
406911 [EFFECTIVE JULY 1, 2024]: Sec. 10.5. (a) Notwithstanding section
407912 10 of this chapter, a member that entered the DROP before July 1,
408913 2024, and that has not exited the DROP may elect to extend the
409914 member's DROP retirement date up to sixty (60) months after the
410915 member's DROP entry date.
411916 (b) A member that makes the election described in subsection
412917 (a) shall notify the member's employer within thirty (30) days of
413918 the election.
414919 SECTION 12. IC 36-8-8.5-14, AS AMENDED BY P.L.156-2020,
415920 SECTION 147, IS AMENDED TO READ AS FOLLOWS
416921 [EFFECTIVE JULY 1, 2024]: Sec. 14. (a) Subject to subsection (b), a
417922 member who enters the DROP established by this chapter shall exit the
418923 DROP at the earliest of:
419924 (1) the member's DROP retirement date;
925+EH 1004—LS 7009/DI 144 22
420926 (2) either:
421927 (A) thirty-six (36) months after the member's DROP entry
422928 date, if the member:
423-HEA 1004 — CC 1 11
424929 (i) executes an election described in section 10 of this
425930 chapter before July 1, 2024; and
426931 (ii) does not execute an extension described in section
427932 10.5 of this chapter; or
428933 (B) sixty (60) months after the member's DROP entry date,
429934 if the member:
430935 (i) executes an election described in section 10 of this
431936 chapter after June 30, 2024; or
432937 (ii) executes an extension described in section 10.5 of this
433938 chapter;
434939 (3) the mandatory retirement age applicable to the member, if
435940 any; or
436941 (4) the date the member retires because of a disability as provided
437942 under section 16.5(d) of this chapter.
438943 (b) A member of the 1925 fund, the 1937 fund, or the 1953 fund
439944 who enters the DROP established by this chapter must exit the DROP
440945 on the date the authority of the board of trustees of the Indiana public
441946 retirement system to distribute from the pension relief fund established
442947 under IC 5-10.3-11-1 to units of local government (described in
443948 IC 5-10.3-11-3) amounts determined under IC 5-10.3-11-4.7 expires.
444-SECTION 13. [EFFECTIVE JULY 1, 2024] (a) As used in this
445-SECTION, "fund" refers to the Indiana state teachers' retirement
446-fund established by IC 5-10.4-2-1.
447-(b) As used in this SECTION, "supplemental allowance reserve
448-account" refers to the applicable supplemental allowance reserve
449-account established by IC 5-10.2-2-2(c)(3).
450-(c) Not later than October 1, 2024, the supplemental allowance
451-reserve account shall pay the amount determined under subsection
452-(d) to a member of the fund (or to a survivor or beneficiary of a
453-member) who retired or was disabled on or before December 1,
454-2023, and who is entitled to receive a monthly benefit on July 1,
455-2024. The amount is not an increase in the pension portion of the
456-monthly benefit.
457-(d) The amount paid under subsection (c) to a member of the
458-fund (or to a survivor or beneficiary of a member) who meets the
459-requirements of subsection (c) is determined as follows:
460-If a Member's Creditable The Amount Is:
461-Service Is:
462-At least 5 years, but less than 10 years $150
463-At least 10 years, but less than 20 years $275
464-At least 20 years, but less than 30 years $375
465-At least 30 years $450
466-HEA 1004 — CC 1 12
467-(e) The creditable service used to determine the amount paid to
468-a member (or to a survivor or beneficiary of a member) under
469-subsection (c) is the creditable service that was used to compute the
470-member's retirement benefit under IC 5-10.2-4-4, except that
471-partial years of creditable service may not be used to determine the
472-amount paid under subsection (c).
473-(f) If two (2) or more survivors or beneficiaries of a member are
474-entitled to an amount paid under subsection (c), the amount shall
475-be allocated to the survivors or beneficiaries in shares using the
476-same percentages as the percentages determined under
477-IC 5-10.2-3-7.5 or IC 5-10.4-4-10 to pay the monthly benefit to the
478-survivors or beneficiaries.
479-(g) This SECTION applies notwithstanding IC 5-10.2-12-4(b).
480-(h) This SECTION expires July 1, 2025.
481-SECTION 14. [EFFECTIVE JULY 1, 2024] (a) As used in this
482-SECTION, "fund" refers to the Indiana public employees'
483-retirement fund established by IC 5-10.3-2-1.
484-(b) As used in this SECTION, "supplemental allowance reserve
485-account" refers to the supplemental allowance reserve account
486-established by IC 5-10.2-2-2(a)(3).
487-(c) Not later than October 1, 2024, the supplemental allowance
488-reserve account shall pay the amount determined under subsection
489-(d) to a member of the fund (or to a survivor or beneficiary of a
490-member) who retired or was disabled on or before December 1,
491-2023, and who is entitled to receive a monthly benefit on July 1,
492-2024. The amount is not an increase in the pension portion of the
493-monthly benefit.
494-(d) The amount paid under subsection (c) to a member of the
495-fund (or to a survivor or beneficiary of a member) who meets the
496-requirements of subsection (c) is determined as follows:
497-If a Member's Creditable The Amount Is:
498-Service Is:
499-At least 5 years, but less than 10 years $150
500-At least 10 years, but less than 20 years $275
501-At least 20 years, but less than 30 years $375
502-At least 30 years $450
503-(e) The creditable service used to determine the amount paid to
504-a member (or to a survivor or beneficiary of a member) under
505-subsection (c) is the creditable service that was used to compute the
506-member's retirement benefit under IC 5-10.2-4-4, except that
507-partial years of creditable service may not be used to determine the
508-amount paid under subsection (c).
509-HEA 1004 — CC 1 13
510-(f) If two (2) or more survivors or beneficiaries of a member are
511-entitled to an amount paid under subsection (c), the amount shall
512-be allocated to the survivors or beneficiaries in shares using the
513-same percentages as the percentages determined under
514-IC 5-10.2-3-7.5 or IC 5-10.3-8-15 to pay the monthly benefit to the
515-survivors or beneficiaries.
516-(g) This SECTION applies notwithstanding IC 5-10.2-12-4(b).
517-(h) This SECTION expires July 1, 2025.
518-SECTION 15. [EFFECTIVE JULY 1, 2024] (a) As used in this
519-SECTION, "participant" has the meaning set forth in
520-IC 5-10-5.5-1.
521-(b) As used in this SECTION, "plan" refers to the state excise
522-police, gaming agent, gaming control officer, and conservation
523-enforcement officers' retirement plan created by IC 5-10-5.5-2.
524-(c) As used in this SECTION, "supplemental allowance reserve
525-account" refers to the supplemental allowance reserve account
526-established by IC 5-10-5.5-4(c).
527-(d) Not later than October 1, 2024, the supplemental allowance
528-reserve account shall pay the amount determined under subsection
529-(e) to a plan participant (or to a survivor or beneficiary of a plan
530-participant) who retired or was disabled on or before December 1,
531-2023, and who is entitled to receive a monthly benefit on July 1,
532-2024. The amount is not an increase in the annual retirement
533-allowance.
534-(e) The amount paid under subsection (d) to a plan participant
535-(or to a survivor or beneficiary of a plan participant) who meets
536-the requirements of subsection (d) is determined as follows:
537-If a Plan Participant's Creditable The Amount Is:
538-Service Is:
539-At least 5 years, but less than 10 years $150
540-At least 10 years, but less than 20 years $275
541-At least 20 years, but less than 30 years $375
542-At least 30 years $450
543-(f) The creditable service used to determine the amount paid to
544-a plan participant (or to a survivor or beneficiary of a plan
545-participant) under subsection (d) is the creditable service that was
546-used to compute the plan participant's retirement allowance under
547-IC 5-10-5.5-10 and IC 5-10-5.5-12, except that partial years of
548-creditable service may not be used to determine the amount paid
549-under subsection (d).
550-(g) If two (2) or more survivors or beneficiaries of a plan
551-participant are entitled to an amount paid under subsection (d), the
552-HEA 1004 — CC 1 14
553-amount shall be allocated to the survivors or beneficiaries in shares
554-using the same percentages as the percentages determined under
555-IC 5-10-5.5-16 to pay the monthly benefit to the survivors or
556-beneficiaries.
557-(h) This SECTION applies notwithstanding IC 5-10.2-12-4(b).
558-(i) This SECTION expires July 1, 2025.
559-SECTION 16. [EFFECTIVE JULY 1, 2024] (a) As used in this
560-SECTION, "trustee" has the meaning set forth in IC 10-12-1-10.
561-(b) As used in this SECTION, "trust fund" has the meaning set
562-forth in IC 10-12-1-11.
563-(c) Not later than October 1, 2024, the trustee shall pay from the
564-trust fund to each employee beneficiary of the state police pre-1987
565-benefit system covered by IC 10-12-3 who:
566-(1) retired or was disabled before July 2, 2023; and
567-(2) is entitled to receive a monthly benefit as of September 1,
568-2024;
569-an amount equal to one percent (1%) of the maximum basic annual
570-pension amount payable to a retired state police employee in the
571-grade of trooper who has completed twenty (20) years of service as
572-of July 1, 2024, as calculated under IC 10-12-3-7.
573-(d) The amount paid under this SECTION is not an increase in
574-the monthly pension amount of an employee beneficiary.
575-(e) This SECTION applies notwithstanding IC 5-10.2-12-4(b).
576-(f) This SECTION expires July 1, 2025.
577-SECTION 17. [EFFECTIVE JULY 1, 2024] (a) As used in this
578-SECTION, "trustee" has the meaning set forth in IC 10-12-1-10.
579-(b) As used in this SECTION, "trust fund" has the meaning set
580-forth in IC 10-12-1-11.
581-(c) Not later than October 1, 2024, the trustee shall pay from the
582-trust fund to each employee beneficiary of the state police 1987
583-benefit system covered by IC 10-12-4 who:
584-(1) retired or was disabled after June 30, 1987, and before
585-July 2, 2023; and
586-(2) is entitled to receive a monthly benefit as of September 1,
587-2024;
588-an amount equal to one percent (1%) of the maximum basic annual
589-pension amount payable to a retired state police employee in the
590-grade of trooper who has completed twenty-five (25) years of
591-service as of July 1, 2024, as calculated under IC 10-12-4-7.
592-(d) The amount paid under this SECTION is not an increase in
593-the monthly pension amount of an employee beneficiary.
594-(e) This SECTION applies notwithstanding IC 5-10.2-12-4(b).
595-HEA 1004 — CC 1 15
596-(f) This SECTION expires July 1, 2025.
597-SECTION 18. An emergency is declared for this act.
598-HEA 1004 — CC 1 Speaker of the House of Representatives
599-President of the Senate
600-President Pro Tempore
601-Governor of the State of Indiana
602-Date: Time:
603-HEA 1004 — CC 1
949+SECTION 13. An emergency is declared for this act.".
950+Page 5, delete lines 1 through 11.
951+Renumber all SECTIONS consecutively.
952+and when so amended that said bill do pass.
953+(Reference is to HB 1004 as printed January 16, 2024.)
954+MISHLER, Chairperson
955+Committee Vote: Yeas 7, Nays 6.
956+EH 1004—LS 7009/DI 144