*SB0275.3*
Reprinted
February 6, 2024
SENATE BILL No. 275
_____
DIGEST OF SB 275 (Updated February 5, 2024 4:39 pm - DI 144)
Citations Affected: IC 5-10; IC 5-10.2; IC 5-10.5; IC 5-11; IC 10-12;
IC 36-8.
Synopsis: Pension matters. Provides that a state employee may
affirmatively elect to enroll in the deferred compensation plan prior to
the auto enroll date on day 31 of the state employee's employment.
Removes a provision that sets a maximum employer surcharge for the
legislators' defined benefit plan, state excise police, gaming agent,
gaming control officer, and conservation enforcement officers'
retirement plan, public employees' retirement fund, and Indiana state
(Continued next page)
Effective: Upon passage; July 1, 2024; July 1, 2025.
Buchanan, Rogers, Niezgodski,
Walker G, Charbonneau,
Randolph Lonnie M
January 11, 2024, read first time and referred to Committee on Pensions and Labor.
January 25, 2024, reported favorably — Do Pass; reassigned to Committee on
Appropriations.
February 1, 2024, amended, reported favorably — Do Pass.
February 5, 2024, read second time, amended, ordered engrossed.
SB 275—LS 6960/DI 144 Digest Continued
teachers' retirement fund (fund). Requires the board of trustees of the
Indiana public retirement system (board) to develop the technological
and administrative capabilities sufficient to categorize fund members
into separate groups in which: (1) certain members receive a service
based thirteenth check; and (2) certain members receive a cost of living
adjustment. Requires the board to set the surcharge rates at a level to
actuarially prefund: (1) annual indexed thirteenth checks for all current
retired members and beneficiaries retired before July 1, 2025; and (2)
1% annual cost of living adjustments to future in-payment members
and beneficiaries retired on or after July 1, 2025. Provides that the
board shall not reduce the surcharge rates from the prior year. Allows
the board to increase the surcharge rates by not more than 0.1% of
payroll from the prior year. Requires certain political subdivisions to
present to the interim study committee on pension management
oversight regarding a delinquent employee retirement plan offered by
the political subdivision. Requires, effective July 1, 2025, the trustee
of the state police pension trust to maintain a supplemental allowance
reserve account for the purpose of paying postretirement benefit
adjustments. Increases the maximum date that a member or participant
of certain retirement funds can participate in the deferred retirement
option plan from 36 to 60 months. Requires the member or participant
to notify their employer if the member or participant elects to enter or
extend the deferred retirement option plan.
SB 275—LS 6960/DI 144SB 275—LS 6960/DI 144 Reprinted
February 6, 2024
Second Regular Session of the 123rd General Assembly (2024)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2023 Regular Session of the General Assembly.
SENATE BILL No. 275
A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 5-10-1.1-3.5, AS AMENDED BY THE
2 TECHNICAL CORRECTIONS BILL OF THE 2024 GENERAL
3 ASSEMBLY, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
4 UPON PASSAGE]: Sec. 3.5. (a) This section applies to an individual
5 who becomes an employee of the state after June 30, 2007.
6 (b) Unless an employee notifies the state that the employee does not
7 want to enroll in the deferred compensation plan or makes an
8 affirmative election under subsection (h), on day thirty-one (31) of
9 the employee's employment:
10 (1) the employee is automatically enrolled in the deferred
11 compensation plan; and
12 (2) the state is authorized to begin deductions as otherwise
13 allowed under this chapter.
14 (c) The auditor of state comptroller shall provide notice to an
15 employee of the provisions of this chapter. The notice provided under
16 this subsection must:
17 (1) contain a statement concerning:
SB 275—LS 6960/DI 144 2
1 (A) the purposes of;
2 (B) procedures for notifying the state that the employee does
3 not want to enroll in;
4 (C) the tax consequences of; and
5 (D) the details of the state match for employee contribution to;
6 the deferred compensation plan; and
7 (2) list the telephone number, electronic mail address, and other
8 contact information for the plan administrator.
9 (d) This subsection applies to contributions made before July 1,
10 2011. Notwithstanding IC 22-2-6, except as provided by subsection (h),
11 the state shall deduct from an employee's compensation as a
12 contribution to the deferred compensation plan established by the state
13 under this chapter an amount equal to the maximum amount of any
14 match provided by the state on behalf of the employee to a defined
15 contribution plan established under section 1.5(a) of this chapter.
16 (e) This subsection applies to contributions made after June 30,
17 2011, and before July 1, 2013. Notwithstanding IC 22-2-6 and except
18 as provided by subsection (h), during the first year an employee is
19 enrolled under subsection (b) in the deferred compensation plan, the
20 state shall deduct each pay period from the employee's compensation
21 as a contribution to the deferred compensation plan an amount equal
22 to the greater of the following:
23 (1) The maximum amount of any match provided by the state on
24 behalf of the employee to a defined contribution plan established
25 under section 1.5(a) of this chapter.
26 (2) One-half percent (0.5%) of the employee's base salary.
27 (f) This subsection applies to contributions made after June 30,
28 2013. Notwithstanding IC 22-2-6 and except as provided by subsection
29 (h), during the first year an employee is enrolled under subsection (b)
30 in the deferred compensation plan, the state shall deduct each pay
31 period from the employee's compensation as a contribution to the
32 deferred compensation plan an amount equal to the greater of the
33 following:
34 (1) The maximum amount of any match provided by the state on
35 behalf of the employee to a defined contribution plan established
36 under section 1.5(a) of this chapter.
37 (2) Two percent (2%) of the employee's base salary.
38 (g) This subsection applies to a year:
39 (1) after the first year in which an employee is enrolled in the
40 deferred compensation plan; and
41 (2) in which the employee does not affirmatively choose a
42 contribution amount under subsection (h).
SB 275—LS 6960/DI 144 3
1 The percentage of the employee's base salary used for the year in
2 subsection (e)(2) or (f)(2) to determine the employee's contribution
3 increases by one-half percent (0.5%) from the percentage determined
4 in the immediately preceding year. The maximum percentage of an
5 employee's base salary that may be deducted under this subsection is
6 five percent (5%). The contribution increase occurs on the anniversary
7 date of the employee's enrollment in the deferred compensation plan.
8 (h) An employee may affirmatively elect to enroll in the deferred
9 compensation plan in the amount described in subsections (d)
10 through (g). An employee may contribute to the deferred
11 compensation plan established by the state under this chapter an
12 amount other than the amount described in subsections (d) through (g)
13 by affirmatively choosing to contribute:
14 (1) a higher amount;
15 (2) a lower amount; or
16 (3) zero (0).
17 SECTION 2. IC 5-10-5.5-22, AS AMENDED BY P.L.145-2020,
18 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JULY 1, 2024]: Sec. 22. (a) As used in this section, "DROP" refers to
20 a deferred retirement option plan established under this section.
21 (b) As used in this section, "DROP entry date" means the date that
22 a participant's election to enter a DROP becomes effective.
23 (c) As used in this section, "DROP frozen benefit" refers to an
24 annual retirement allowance computed under section 10 of this chapter
25 based on a participant's:
26 (1) average annual salary; and
27 (2) years of creditable service;
28 on the date the participant enters the DROP.
29 (d) As used in this section, "DROP retirement date" means the
30 future retirement date selected by a participant at the time the
31 participant elects to enter the DROP.
32 (e) Only a participant who is eligible to receive an unreduced annual
33 retirement allowance immediately upon termination of employment
34 may elect to enter a DROP. A participant who elects to enter the DROP
35 must shall do the following:
36 (1) Agree to the following:
37 (1) (A) The participant shall execute an irrevocable election to
38 retire on the DROP retirement date and must remain in active
39 service until that date.
40 (2) (B) While in the DROP, the participant shall continue to
41 make contributions under section 8 of this chapter.
42 (3) (C) The participant shall select a DROP retirement date not
SB 275—LS 6960/DI 144 4
1 less than twelve (12) months and not more than:
2 (i) thirty-six (36) months after the participant's DROP entry
3 date, for a participant who executes an election described
4 in clause (A) before July 1, 2024; or
5 (ii) sixty (60) months after the participant's DROP entry
6 date, for a participant who executes an election
7 described in clause (A) after June 30, 2024.
8 (4) (D) The participant may not remain in the DROP after the
9 date the participant reaches the mandatory retirement age
10 under section 9 of this chapter.
11 (5) (E) The participant may make an election to enter the
12 DROP only once in the participant's lifetime.
13 (2) Notify the participant's employer of the DROP election
14 within thirty (30) days of the election.
15 (f) Notwithstanding subsection (e), a participant that entered the
16 DROP before July 1, 2024 and that has not exited the DROP may
17 elect to extend the participant's DROP retirement date up to sixty
18 (60) months after the participant's DROP entry date.
19 (g) A participant that makes the election described in subsection
20 (f) shall notify the participant's employer within thirty (30) days of
21 the election.
22 (f) (h) Contributions or payments provided by the general assembly
23 under section 4(b)(4) of this chapter continue for a participant while
24 the participant is in the DROP.
25 (g) (i) A participant shall exit the DROP on the earliest of the
26 following:
27 (1) The participant's DROP retirement date.
28 (2) Either:
29 (A) thirty-six (36) months after the participant's DROP entry
30 date, if the participant:
31 (i) executes an election described in subsection (e) before
32 July 1, 2024; and
33 (ii) does not execute an extension described in subsection
34 (f); or
35 (B) sixty (60) months after the participant's DROP entry
36 date, if the participant:
37 (i) executes an election described in subsection (e) after
38 June 30, 2024; or
39 (ii) executes an extension described in subsection (f).
40 (3) The participant's mandatory retirement age.
41 (4) The date the participant retires because of a disability as
42 provided by subsection (k). (m).
SB 275—LS 6960/DI 144 5
1 (h) (j) A participant who retires on the participant's DROP
2 retirement date or on the date the participant retires because of a
3 disability as provided by subsection (k) (m) may elect to receive an
4 annual retirement allowance:
5 (1) computed under section 10 of this chapter as if the participant
6 had never entered the DROP; or
7 (2) consisting of:
8 (A) the DROP frozen benefit; plus
9 (B) an additional amount, paid as the participant elects under
10 subsection (i), (k), determined by multiplying:
11 (i) the DROP frozen benefit; by
12 (ii) the number of months the participant was in the DROP.
13 (i) (k) The participant shall elect, at the participant's retirement, to
14 receive the additional amount calculated under subsection (h)(2)(B)
15 (j)(2)(B) in one (1) of the following ways:
16 (1) A lump sum paid on:
17 (A) the participant's DROP retirement date; or
18 (B) the date the participant retires because of a disability as
19 provided by subsection (k). (m).
20 (2) Three (3) equal annual payments:
21 (A) commencing on:
22 (i) the participant's DROP retirement date; or
23 (ii) the date the participant retires because of a disability as
24 provided by subsection (k); (m); and
25 (B) thereafter paid on:
26 (i) the anniversary of the participant's DROP retirement
27 date; or
28 (ii) the date the participant retires because of a disability as
29 provided by subsection (k). (m).
30 (j) (l) A cost of living increase determined under section 21(c) of
31 this chapter does not apply to the additional amount calculated under
32 subsection (h)(2)(B) (j)(2)(B) at the participant's DROP retirement date
33 or the date the participant retires because of a disability as provided by
34 subsection (k). (m). No cost of living increase is applied to a DROP
35 frozen benefit while the participant is in the DROP. After the
36 participant's DROP retirement date or the date the participant retires
37 because of a disability as provided by subsection (k), (m), cost of living
38 increases determined under section 21(c) of this chapter apply to the
39 participant's annual retirement allowance computed under this section.
40 (k) (m) If a participant becomes disabled, in the line of duty or other
41 than in the line of duty while in the DROP, the participant's annual
42 retirement allowance is computed as follows:
SB 275—LS 6960/DI 144 6
1 (1) If the participant retires because of a disability less than
2 twelve (12) months after the date the participant enters the DROP,
3 the participant's annual retirement allowance is calculated as if
4 the participant had never entered the DROP.
5 (2) If the participant retires because of a disability at least twelve
6 (12) months after the date the participant enters the DROP, the
7 participant's annual retirement allowance is calculated under this
8 section, and the participant's retirement date is the date the
9 member retires because of a disability rather than the participant's
10 DROP retirement date.
11 (l) (n) If, before payment of the participant's annual retirement
12 allowance begins, the participant dies in the line of duty or other than
13 in the line of duty, death benefits are payable to the participant's
14 surviving spouse. If there is no surviving spouse, the death benefits
15 must be divided equally among the participant's surviving children. If
16 there are no surviving children, the death benefits are paid to the
17 participant's parents. If there are no surviving parents, the death
18 benefits are paid to the participant's estate. The death benefits are
19 determined as follows:
20 (1) If the participant dies less than twelve (12) months after the
21 date the participant enters the DROP, the death benefits are
22 calculated as if the participant had never entered the DROP.
23 (2) If the participant dies at least twelve (12) months after the date
24 the participant enters the DROP, the death benefits consist of both
25 of the following:
26 (A) At the election of the survivor or survivors to whom the
27 benefit is payable, the benefit calculated under subsection
28 (h)(2)(B) (j)(2)(B) is paid in either:
29 (i) a lump sum; or
30 (ii) three (3) equal annual payments, the first as soon as
31 practicable after the date of the participant's death, the
32 second on the first anniversary of the participant's death, and
33 the third on the second anniversary of the participant's death.
34 (B) A benefit is paid on the DROP frozen benefit under the
35 terms of the retirement plan created by this chapter.
36 (m) (o) Except as provided under subsections (k) (m) and (l), (n),
37 the annual retirement allowance for a participant who exits the DROP
38 for any reason other than retirement on the participant's DROP
39 retirement date is calculated as if the participant had never entered the
40 DROP.
41 SECTION 3. IC 5-10.2-12-3, AS ADDED BY P.L.127-2018,
42 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
SB 275—LS 6960/DI 144 7
1 UPON PASSAGE]: Sec. 3. (a) For 2019 and each year thereafter, the
2 contribution rate established by the board for each employer shall
3 include a surcharge determined by the board
4 (1) that is paid to the supplemental allowance reserve account of
5 the applicable fund or plan. and
6 (2) that does not exceed one percent (1%) of the employer's
7 payroll that is attributable to employees who are:
8 (A) members of the public employees' retirement fund;
9 (B) members of the 1996 account of the Indiana state teachers'
10 retirement fund; and
11 (C) participants in the state excise police, gaming agent,
12 gaming control officer, and conservation enforcement officers'
13 retirement plan.
14 The board shall determine an equivalent amount to be included in the
15 general fund appropriations for the supplemental allowance reserve
16 accounts of the legislators' defined benefit plan and, subject to
17 IC 5-10.4-2-5, the pre-1996 account of the Indiana state teachers'
18 retirement fund.
19 (b) The surcharge described in subsection (a) shall be paid in the
20 same manner as other employer contributions required under
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.
22 SECTION 4. IC 5-10.5-4-7 IS ADDED TO THE INDIANA CODE
23 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
24 UPON PASSAGE]: Sec. 7. (a) For purposes of this section, "fund"
25 means the public employees' retirement fund, Indiana state
26 teachers' retirement fund, legislators' defined benefit plan, and
27 state excise police, gaming agent, gaming control officer, and
28 conservation enforcement officers' retirement plan.
29 (b) The board shall develop the technological and administrative
30 capabilities sufficient to categorize fund members into separate
31 groups in which:
32 (1) certain members receive a service based thirteenth check;
33 and
34 (2) certain members receive a cost of living adjustment.
35 SECTION 5. IC 5-10.5-4-8 IS ADDED TO THE INDIANA CODE
36 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
37 1, 2025]: Sec. 8. (a) The board shall set the surcharge rates under
38 IC 5-10.2-12-3 at a level to actuarially prefund:
39 (1) annual indexed thirteenth checks for all current retired
40 members and beneficiaries retired before July 1, 2025; and
41 (2) one percent (1%) annual cost of living adjustments to
42 future in-payment members and beneficiaries retired on or
SB 275—LS 6960/DI 144 8
1 after July 1, 2025.
2 (b) The board shall not reduce the surcharge rates under
3 IC 5-10.2-12-3 from the prior year.
4 (c) The board may increase the surcharge rates under
5 IC 5-10.2-12-3 by not more than one-tenth percent (0.1%) of
6 payroll from the prior year.
7 (d) This section expires December 31, 2029.
8 SECTION 6. IC 5-11-20-1.5 IS ADDED TO THE INDIANA CODE
9 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
10 UPON PASSAGE]: Sec. 1.5. As used in this chapter, "delinquent
11 political subdivision" means a political subdivision offering an
12 employee retirement plan described in section 3(b) of this chapter
13 that:
14 (1) received less than ninety-five percent (95%) of the
15 actuarially determined contribution for the immediately
16 preceding fiscal year, as determined by the system or its
17 agent; or
18 (2) was less than fifty percent (50%) funded at any time
19 during the immediately preceding fiscal year, as determined
20 by the system or its agent.
21 SECTION 7. IC 5-11-20-2.5 IS ADDED TO THE INDIANA CODE
22 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
23 UPON PASSAGE]: Sec. 2.5. As used in this chapter, "system"
24 refers to the Indiana public retirement system established by
25 IC 5-10.5-2-1.
26 SECTION 8. IC 5-11-20-6 IS ADDED TO THE INDIANA CODE
27 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
28 UPON PASSAGE]: Sec. 6. (a) On June 15 of each year, the system
29 shall send a delinquency notice to a delinquent political
30 subdivision. The delinquency notice must inform the delinquent
31 political subdivision that:
32 (1) an employee retirement plan offered by the delinquent
33 political subdivision:
34 (A) received less than ninety-five percent (95%) of the
35 actuarially determined contribution for the immediately
36 preceding fiscal year, as determined by the system or its
37 agent; or
38 (B) was less than fifty percent (50%) funded at any time
39 during the immediately preceding fiscal year, as
40 determined by the system or its agent; and
41 (2) the delinquent political subdivision must take the steps
42 described in subsection (b).
SB 275—LS 6960/DI 144 9
1 (b) After receiving the notice described in subsection (a), a
2 political subdivision shall make a presentation that includes a
3 remediation plan to the interim study committee on pension
4 management oversight (established by IC 2-5-1.3-4) regarding the
5 delinquent employee retirement plan described in subsection (a).
6 SECTION 9. IC 10-12-7 IS ADDED TO THE INDIANA CODE AS
7 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
8 1, 2025]:
9 Chapter 7. Supplemental Allowance Reserve Account
10 Sec. 1. For purposes of this chapter, "account" means the
11 supplemental allowance reserve account described in section 2 of
12 this chapter.
13 Sec. 2. (a) The trustee shall maintain a supplemental allowance
14 reserve account for the purpose of paying postretirement benefit
15 adjustments, including:
16 (1) postretirement benefit increases;
17 (2) thirteenth checks; and
18 (3) other benefit changes or adjustments;
19 granted by the general assembly to employee beneficiaries after
20 June 30, 2025.
21 (b) For purposes of subsection (a), "postretirement benefit
22 adjustments" does not include a supplemental pension benefit
23 under IC 10-12-5.
24 Sec. 3. The account consists of amounts appropriated or
25 transferred to the account by the general assembly.
26 Sec. 4. The trustee may not:
27 (1) deposit money in the account; or
28 (2) transfer money to the account.
29 SECTION 10. IC 36-8-8.5-10 IS AMENDED TO READ AS
30 FOLLOWS [EFFECTIVE JULY 1, 2024]: Sec. 10. A member who
31 elects to enter the DROP shall do the following:
32 (1) Agree to the following:
33 (1) (A) The member shall execute an irrevocable election to
34 retire on the DROP retirement date and shall remain in active
35 service until that date.
36 (2) (B) While in the DROP, the member shall continue to
37 make contributions to the applicable fund under the provisions
38 of that fund.
39 (3) (C) The member shall elect a DROP retirement date not
40 less than twelve (12) months and not more than:
41 (i) thirty-six (36) months after the member's DROP entry
42 date, for a member who executes an election described in
SB 275—LS 6960/DI 144 10
1 clause (A) before July 1, 2024; or
2 (ii) sixty (60) months after the member's DROP entry
3 date, for a member who executes an election described in
4 clause (A) after June 30, 2024.
5 (4) (D) The member may not remain in the DROP after the
6 date the member reaches any mandatory retirement age that
7 may apply to the member.
8 (5) (E) The member may make an election to enter the DROP
9 only once in the member's lifetime.
10 (2) Notify the member's employer of the DROP election
11 within thirty (30) days of the election.
12 SECTION 11. IC 36-8-8.5-10.5 IS ADDED TO THE INDIANA
13 CODE AS A NEW SECTION TO READ AS FOLLOWS
14 [EFFECTIVE JULY 1, 2024]: Sec. 10.5. (a) Notwithstanding section
15 10 of this chapter, a member that entered the DROP before July 1,
16 2024 and that has not exited the DROP may elect to extend the
17 member's DROP retirement date up to sixty (60) months after the
18 member's DROP entry date.
19 (b) A member that makes the election described in subsection
20 (a) shall notify the member's employer within thirty (30) days of
21 the election.
22 SECTION 12. IC 36-8-8.5-14, AS AMENDED BY P.L.156-2020,
23 SECTION 147, IS AMENDED TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2024]: Sec. 14. (a) Subject to subsection (b), a
25 member who enters the DROP established by this chapter shall exit the
26 DROP at the earliest of:
27 (1) the member's DROP retirement date;
28 (2) either:
29 (A) thirty-six (36) months after the member's DROP entry
30 date, if the member:
31 (i) executes an election described in section 10 of this
32 chapter before July 1, 2024; and
33 (ii) does not execute an extension described in section
34 10.5 of this chapter; or
35 (B) sixty (60) months after the member's DROP entry date,
36 if the member:
37 (i) executes an election described in section 10 of this
38 chapter after June 30, 2024; or
39 (ii) executes an extension described in section 10.5 of this
40 chapter;
41 (3) the mandatory retirement age applicable to the member, if
42 any; or
SB 275—LS 6960/DI 144 11
1 (4) the date the member retires because of a disability as provided
2 under section 16.5(d) of this chapter.
3 (b) A member of the 1925 fund, the 1937 fund, or the 1953 fund
4 who enters the DROP established by this chapter must exit the DROP
5 on the date the authority of the board of trustees of the Indiana public
6 retirement system to distribute from the pension relief fund established
7 under IC 5-10.3-11-1 to units of local government (described in
8 IC 5-10.3-11-3) amounts determined under IC 5-10.3-11-4.7 expires.
9 SECTION 13. An emergency is declared for this act.
SB 275—LS 6960/DI 144 12
COMMITTEE REPORT
Madam President: The Senate Committee on Pensions and Labor,
to which was referred Senate Bill No. 275, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill DO PASS and be reassigned to the
Senate Committee on Appropriations.
(Reference is to SB 275 as introduced.)
ROGERS, Chairperson
Committee Vote: Yeas 10, Nays 0
_____
COMMITTEE REPORT
Madam President: The Senate Committee on Appropriations, to
which was referred Senate Bill No. 275, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
"SECTION 1. IC 5-10-1.1-3.5, AS AMENDED BY THE
TECHNICAL CORRECTIONS BILL OF THE 2024 GENERAL
ASSEMBLY, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3.5. (a) This section applies to an individual
who becomes an employee of the state after June 30, 2007.
(b) Unless an employee notifies the state that the employee does not
want to enroll in the deferred compensation plan or makes an
affirmative election under subsection (h), on day thirty-one (31) of
the employee's employment:
(1) the employee is automatically enrolled in the deferred
compensation plan; and
(2) the state is authorized to begin deductions as otherwise
allowed under this chapter.
(c) The auditor of state comptroller shall provide notice to an
employee of the provisions of this chapter. The notice provided under
this subsection must:
(1) contain a statement concerning:
(A) the purposes of;
(B) procedures for notifying the state that the employee does
not want to enroll in;
SB 275—LS 6960/DI 144 13
(C) the tax consequences of; and
(D) the details of the state match for employee contribution to;
the deferred compensation plan; and
(2) list the telephone number, electronic mail address, and other
contact information for the plan administrator.
(d) This subsection applies to contributions made before July 1,
2011. Notwithstanding IC 22-2-6, except as provided by subsection (h),
the state shall deduct from an employee's compensation as a
contribution to the deferred compensation plan established by the state
under this chapter an amount equal to the maximum amount of any
match provided by the state on behalf of the employee to a defined
contribution plan established under section 1.5(a) of this chapter.
(e) This subsection applies to contributions made after June 30,
2011, and before July 1, 2013. Notwithstanding IC 22-2-6 and except
as provided by subsection (h), during the first year an employee is
enrolled under subsection (b) in the deferred compensation plan, the
state shall deduct each pay period from the employee's compensation
as a contribution to the deferred compensation plan an amount equal
to the greater of the following:
(1) The maximum amount of any match provided by the state on
behalf of the employee to a defined contribution plan established
under section 1.5(a) of this chapter.
(2) One-half percent (0.5%) of the employee's base salary.
(f) This subsection applies to contributions made after June 30,
2013. Notwithstanding IC 22-2-6 and except as provided by subsection
(h), during the first year an employee is enrolled under subsection (b)
in the deferred compensation plan, the state shall deduct each pay
period from the employee's compensation as a contribution to the
deferred compensation plan an amount equal to the greater of the
following:
(1) The maximum amount of any match provided by the state on
behalf of the employee to a defined contribution plan established
under section 1.5(a) of this chapter.
(2) Two percent (2%) of the employee's base salary.
(g) This subsection applies to a year:
(1) after the first year in which an employee is enrolled in the
deferred compensation plan; and
(2) in which the employee does not affirmatively choose a
contribution amount under subsection (h).
The percentage of the employee's base salary used for the year in
subsection (e)(2) or (f)(2) to determine the employee's contribution
increases by one-half percent (0.5%) from the percentage determined
SB 275—LS 6960/DI 144 14
in the immediately preceding year. The maximum percentage of an
employee's base salary that may be deducted under this subsection is
five percent (5%). The contribution increase occurs on the anniversary
date of the employee's enrollment in the deferred compensation plan.
(h) An employee may affirmatively elect to enroll in the deferred
compensation plan in the amount described in subsections (d)
through (g). An employee may contribute to the deferred
compensation plan established by the state under this chapter an
amount other than the amount described in subsections (d) through (g)
by affirmatively choosing to contribute:
(1) a higher amount;
(2) a lower amount; or
(3) zero (0).".
Page 6, delete lines 2 through 17, begin a new paragraph and insert:
"SECTION 5. IC 5-10.5-4-8 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2025]: Sec. 8. (a) The board shall set the surcharge rates under
IC 5-10.2-12-3 at a level to actuarially prefund:
(1) annual indexed thirteenth checks for all current retired
members and beneficiaries retired before July 1, 2025; and
(2) one percent (1%) annual cost of living adjustments to
future in-payment members and beneficiaries retired on or
after July 1, 2025.
(b) The board shall not reduce the surcharge rates under
IC 5-10.2-12-3 from the prior year.
(c) The board may increase the surcharge rates under
IC 5-10.2-12-3 by not more than one-tenth percent (0.1%) of
payroll from the prior year.
(d) This section expires December 31, 2029.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 275 as printed January 26, 2024.)
MISHLER, Chairperson
Committee Vote: Yeas 11, Nays 2.
_____
SENATE MOTION
Madam President: I move that Senate Bill 275 be amended to read
SB 275—LS 6960/DI 144 15
as follows:
Page 9, between lines 5 and 6, begin a new paragraph and insert:
"SECTION 9. IC 10-12-7 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]:
Chapter 7. Supplemental Allowance Reserve Account
Sec. 1. For purposes of this chapter, "account" means the
supplemental allowance reserve account described in section 2 of
this chapter.
Sec. 2. (a) The trustee shall maintain a supplemental allowance
reserve account for the purpose of paying postretirement benefit
adjustments, including:
(1) postretirement benefit increases;
(2) thirteenth checks; and
(3) other benefit changes or adjustments;
granted by the general assembly to employee beneficiaries after
June 30, 2025.
(b) For purposes of subsection (a), "postretirement benefit
adjustments" does not include a supplemental pension benefit
under IC 10-12-5.
Sec. 3. The account consists of amounts appropriated or
transferred to the account by the general assembly.
Sec. 4. The trustee may not:
(1) deposit money in the account; or
(2) transfer money to the account.".
Renumber all SECTIONS consecutively.
(Reference is to SB 275 as printed February 2, 2024.)
BUCHANAN
SB 275—LS 6960/DI 144