CHAPTER 2. PENSION, DEATH, DISABILITY, SURVIVOR, AND OTHER BENEFITS
IC 10-12-2
Chapter 2. Pension, Death, Disability, Survivor, and Other
Benefits
IC 10-12-2-1
Retention of service weapon; badge; identification card
Sec. 1. (a) If an eligible employee retires after at least twenty (20)
years of service, the employee may:
(1) retain the employee's issued service weapon; and
(2) receive a "Retired" badge in recognition of the employee's
service to the department and the public.
(b) Upon an eligible employee's retirement, the department shall
issue to the employee an identification card that:
(1) gives the employee's name and rank;
(2) signifies that the employee is retired; and
(3) notes the employee's authority to retain the employee's
service weapon.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-2
Pension trust; commingling funds; investment of funds; report;
termination
Sec. 2. (a) The department may:
(1) establish and operate an actuarially sound pension plan
governed by a pension trust; and
(2) make the necessary annual contribution in order to prevent
any deterioration in the actuarial status of the trust fund.
(b) The department shall make contributions to the trust fund. An
employee beneficiary shall make contributions to the trust fund
through authorized monthly deductions from wages.
(c) The trust fund:
(1) may not be commingled with any other funds; and
(2) shall be invested only in accordance with state laws for the
investment of trust funds, together with other investments as are
specifically designated in the pension trust.
Subject to the terms of the pension trust, the trustee, with the
approval of the department and the pension advisory board, may
establish investment guidelines and limits on all types of
investments, including stocks and bonds, and take other action
necessary to fulfill its duty as a fiduciary for the trust fund.
(d) The trustee shall invest the trust fund assets with the same
care, skill, prudence, and diligence that a prudent person acting in a
like capacity and familiar with these matters would use in the
conduct of an enterprise of a similar character with similar aims.
(e) The trustee shall diversify the trust fund's investments in
accordance with prudent investment standards. The investment of the
trust fund is subject to section 3 of this chapter.
(f) The trustee shall receive and hold as trustee for the uses and
purposes set forth in the pension trust the funds paid by the
department, the employee beneficiaries, or any other person or
persons.
(g) The trustee shall engage pension consultants to supervise and
assist in the technical operation of the pension plan so that there is no
deterioration in the actuarial status of the plan.
(h) Before October 1 of each year, the trustee, with the aid of the
pension consultants, shall prepare and file a report with the
department and the state board of accounts. The report must include
the following with respect to the fiscal year ending on the preceding
June 30:
SCHEDULE I. Receipts and disbursements.
SCHEDULE II. Assets of the pension trust, listing investments
as to book value and current market value at the end of the
fiscal year.
SCHEDULE III. List of terminations, showing cause and
amount of refund.
SCHEDULE IV. The application of actuarially computed
"reserve factors" to the payroll data, properly classified for the
purpose of computing the reserve liability of the trust fund as of
the end of the fiscal year.
SCHEDULE V. The application of actuarially computed
"current liability factors" to the payroll data, properly classified
for the purpose of computing the liability of the trust fund for
the end of the fiscal year.
SCHEDULE VI. An actuarial computation of the pension
liability for all employees retired before the close of the fiscal
year.
(i) The minimum annual contribution by the department must be
of sufficient amount, as determined by the pension consultants, to
prevent any deterioration in the actuarial status of the pension plan
during that year. If the department fails to make the minimum
contribution for five (5) successive years, the pension trust
terminates and the trust fund shall be liquidated.
(j) Except as provided by applicable federal law, in the event of
liquidation, the department shall take the following actions:
(1) All expenses of the pension trust must be paid.
(2) Adequate provision must be made for continuing pension
payments to retired persons.
(3) Each employee beneficiary must receive the net amount paid
into the trust fund from the employee beneficiary's wages.
(4) Any amount remaining in the pension trust after the
department makes the payments described in subdivisions (1)
through (3) must be equitably divided among the employee
beneficiaries in proportion to the net amount paid from each
employee beneficiary's wages into the trust fund.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-3
Qualification of trust under Internal Revenue Code; benefit
limitations
Sec. 3. (a) The pension trust shall satisfy the qualification
requirements in Section 401 of the Internal Revenue Code, as
applicable to the pension trust. In order to meet those requirements,
the pension trust is subject to the following provisions,
notwithstanding any other provision of this chapter, IC 10-12-3, or
IC 10-12-4:
(1) The pension advisory board shall distribute the corpus and
income of the pension trust to participants and their
beneficiaries in accordance with this chapter, IC 10-12-3, and
IC 10-12-4.
(2) A part of the corpus or income of the pension trust may not
be used or diverted to any purpose other than the exclusive
benefit of the participants and their beneficiaries.
(3) Forfeitures arising from severance of employment, death, or
any other reason may not be applied to increase the benefits any
participant would otherwise receive under this chapter,
IC 10-12-3, or IC 10-12-4.
(4) If the pension trust is terminated or if all contributions to the
pension trust are completely discontinued, the rights of each
affected participant to the benefits accrued at the date of the
termination or discontinuance, to the extent then funded, are
nonforfeitable.
(5) All benefits paid from the pension trust shall be distributed
in accordance with the requirements of Section 401(a)(9) of the
Internal Revenue Code and the regulations under that section.
To meet those requirements, the pension trust is subject to the
following provisions:
(A) The life expectancy of a participant, the participant's
spouse, or the participant's beneficiary shall not be
recalculated after the initial determination for purposes of
determining benefits.
(B) If a participant dies before the distribution of the
participant's benefits has begun, distributions to beneficiaries
must begin no later than December 31 of the calendar year
immediately following the calendar year in which the
participant died.
(C) The amount of an annuity paid to a participant's
beneficiary may not exceed the maximum determined under
the incidental death benefit requirement of the Internal
Revenue Code.
(6) The pension advisory board may not:
(A) determine eligibility for benefits;
(B) compute rates of contribution; or
(C) compute benefits of participants or beneficiaries;
in a manner that discriminates in favor of participants who are
considered officers, supervisors, or highly compensated, as
provided under Section 401(a)(4) of the Internal Revenue Code.
(7) Benefits paid under this chapter, IC 10-12-3, or IC 10-12-4
may not exceed the maximum benefit specified by Section 415
of the Internal Revenue Code.
(8) The salary taken into account under this chapter, IC 10-12-3,
or IC 10-12-4 may not exceed the applicable amount under
Section 401(a)(17) of the Internal Revenue Code.
(9) The trustee may not engage in a transaction prohibited by
Section 503(b) of the Internal Revenue Code.
(b) Notwithstanding any other provision of this chapter or
IC 10-12-3, and solely for the purposes of the benefits provided
under IC 10-12-3, the benefit limitations of Section 415 of the
Internal Revenue Code shall be determined by applying the
provisions of Section 415(b)(10) of the Internal Revenue Code, as
amended by the Technical and Miscellaneous Revenue Act of 1988.
This section constitutes an election under Section 415(b)(10)(C) of
the Internal Revenue Code to have Section 415(b) of the Internal
Revenue Code, other than Section 415(b)(2)(G) of the Internal
Revenue Code, applied without regard to Section 415(b)(2)(F) of the
Internal Revenue Code to anyone who did not first become a
participant before January 1, 1990.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-4
Mortality reserve account
Sec. 4. The department may establish, operate, and make
necessary contributions to a mortality reserve account for the
payment of supplementary death benefits to deceased employee
beneficiaries. However, a supplementary death benefit may not
exceed fourteen thousand five hundred dollars ($14,500).
As added by P.L.2-2003, SEC.3.
IC 10-12-2-5
Disability reserve account; additional department authority;
disability pension payments
Sec. 5. (a) The department may establish, operate, and make
necessary contributions to a disability reserve account for the
payment of disability expense reimbursements and disability
pensions to employee beneficiaries with a disability. The department
also may do the following:
(1) Establish, under the terms of a supplementary trust
agreement, disability expense reimbursements and disability
pensions to be paid to employee beneficiaries who incur a
disability in the line of duty.
(2) Establish, under the terms of a supplementary trust
agreement, disability expense reimbursements and disability
pensions to be paid to employee beneficiaries who incur a
disability not in the line of duty.
(3) Seek rulings from the Internal Revenue Service as to the
federal tax treatment for the line of duty disability benefits
authorized by this section.
Except as provided in subsection (d), a monthly disability pension
may not exceed the maximum basic pension amount. However, in the
case of disability incurred in the line of duty, an employee
beneficiary may receive not more than forty dollars ($40) per month
for each dependent parent and dependent child less than eighteen
(18) years of age, in addition to the monthly disability pension
payment under this chapter. Time in disability pension status is
considered qualifying active service for purposes of calculating a
retirement pension.
(b) This section shall be administered in a manner that is
consistent with the Americans with Disabilities Act (42 U.S.C.
12101 et seq.) and the regulations and amendments related to that
act, to the extent required by that act.
(c) A disability payment made under this chapter is worker's
compensation instead of a payment under IC 22-3-2 through
IC 22-3-7.
(d) A regular, paid police employee of the state police department
who has a permanent and total disability from a catastrophic personal
injury that:
(1) is sustained in the line of duty after January 1, 2001; and
(2) permanently prevents the employee from performing any
gainful work;
shall receive a disability pension equal to the employee's regular
salary at the commencement of the disability. The disability pension
provided under this subsection is provided instead of the regular
monthly disability pension. The disability pension provided under
this subsection must be increased at a rate equal to any salary
increases the employee would have received if the employee
remained in active service.
As added by P.L.2-2003, SEC.3. Amended by P.L.99-2007, SEC.35;
P.L.1-2010, SEC.52.
IC 10-12-2-6
Dependent's pension reserve account
Sec. 6. (a) The department may establish, operate, and make
necessary contributions to a dependent's pension reserve account for
the payment of pensions to dependent parents, surviving spouses, and
dependent unmarried children of employee beneficiaries who are
killed in the line of duty.
(b) The maximum monthly pension amount payable to dependent
mothers, dependent fathers, and surviving spouses:
(1) may not exceed the then current basic monthly pension
amount paid to retirees; and
(2) shall cease with the last payment before the dependent
parent's or surviving spouse's death.
(c) Except as provided in subsections (d) through (f), the
maximum monthly pension amount payable to each dependent
unmarried child may not exceed thirty percent (30%) of the current
basic monthly pension amount paid to retirees. The payment shall
cease with the last payment before the child's marriage or nineteenth
birthday, whichever occurs first.
(d) The total monthly pension amount paid to all dependent
unmarried children of an employee beneficiary may not exceed the
current basic monthly amount paid to retirees.
(e) Each unmarried dependent child who is at least nineteen (19)
years of age but less than twenty-three (23) years of age is eligible to
receive a pension payment while enrolled as a full-time student in a
school, college, or university.
(f) A dependent child, married or unmarried, of an employee
beneficiary who is killed in the line of duty is eligible to attend any
Indiana state supported college or university tuition free.
(g) All dependent mothers, dependent fathers, surviving spouses,
and dependent children who received a dependent pension on June
30, 1969, shall receive a pension calculated as provided by this
section beginning on July 1, 1969. Any surviving spouse electing to,
or who has previously elected to, receive joint survivorship benefits
instead of pension payments is eligible to receive the full pension
benefit.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-7
Police benefit fund; duties of trustee; appropriations
Sec. 7. (a) The:
(1) mortality reserve account referred to in section 4 of this
chapter;
(2) disability reserve account referred to in section 5 of this
chapter; and
(3) dependent pension reserve account referred to in section 6
of this chapter;
may be commingled and operated as one (1) fund, known as the
police benefit fund, under the terms of a supplementary trust
agreement between the department and the trustee for the exclusive
benefit of employee beneficiaries and their dependents.
(b) The trustee shall receive and hold as trustee for the uses and
purposes set out in the supplementary trust agreement all funds paid
to it as the trustee by the department or by any other person or
persons.
(c) The trustee shall hold, invest, and reinvest the police benefit
fund in:
(1) investments that trust funds are permitted to invest in under
Indiana law; and
(2) other investments as may be specifically designated in the
supplementary trust agreement.
(d) The trustee, with the assistance of the pension engineers, shall,
not more than ninety (90) days after the close of the fiscal year,
prepare and file with the department and the department of insurance
a detailed annual report showing receipts, disbursements, case
histories, and recommendations as to the contributions required to
keep the program in operation.
(e) Contributions by the department to the police benefit fund
shall be provided in the general appropriations to the department.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-8
Actuarial soundness of pension trust; inspection of books and
accounts
Sec. 8. (a) The department of insurance shall approve the actuarial
soundness of the pension trust and the general method of operation
of the police benefit fund before the police benefit fund begins
operation.
(b) In addition to the annual report required by subsection (d), the
department's books, reports, and accounts shall be open to inspection
by the department of insurance at all times.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-9
Transfer of funds to police benefit fund; rewards and fees
Sec. 9. (a) Except as provided in subsection (b), a member of the
department may not accept:
(1) a fee for the performance of an act in the line of duty; or
(2) a reward offered for the apprehension or conviction of any
person or persons or for the recovery of any property.
(b) Any fee or reward to which a member of the department
would be entitled except for the provisions of subsection (a) shall be
paid to the police benefit fund.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-10
Encumbering shares of benefits before payment
Sec. 10. (a) A person entitled to, having an interest in, or sharing
a pension or benefit from the trust funds does not, before the actual
payment of the pension or benefit, have the right to anticipate, sell,
assign, pledge, mortgage, or otherwise dispose of or encumber the
pension or benefit.
(b) A person's interest, share, pension, or benefit, before the actual
payment of the interest, share, pension, or benefit, may not be:
(1) used to satisfy the debts or liabilities of the person entitled
to the interest, share, pension, or benefit;
(2) subject to attachment, garnishment, execution, or levy or
sale on judicial proceedings; or
(3) transferred by any means, voluntarily or involuntarily.
(c) The trustee may pay from the trust fund the amounts that the
trustee determines are proper and necessary expenses of the trust
fund.
As added by P.L.2-2003, SEC.3.
IC 10-12-2-11
College and university tuition exemption
Sec. 11. The child or spouse of an employee beneficiary who has
a permanent and total disability from a catastrophic personal injury
that was sustained in the line of duty and permanently prevents the
employee beneficiary from performing any gainful work may not be
required to pay tuition or mandatory fees at any state supported
college, university, or technical school if:
(1) the child is less than twenty-three (23) years of age and is a
full-time student pursuing a prescribed course of study; or
(2) the spouse is pursuing a prescribed course of study toward
an undergraduate degree.
As added by P.L.2-2003, SEC.3. Amended by P.L.99-2007, SEC.36.