411.8 - METHOD OF FINANCING.

        411.8  METHOD OF FINANCING.         All the assets of the retirement system created and established by      this chapter shall be credited to the fire and police retirement      fund, which is hereby created.  As used in this section, "fund"      means the fire and police retirement fund.         1.  All moneys for the payment of all pensions and other benefits      payable from contributions made by the participating cities, the      state, and the members shall be accumulated in the fund.  The refunds      and benefits for all members and beneficiaries shall be payable from      the fund.  Contributions to and payments from the fund shall be as      follows:         a.  On account of each member there shall be paid annually      into the fund by the participating cities an amount equal to a      certain percentage of the earnable compensation of the member to be      known as the "normal contribution".  The rate percent of such      contribution shall be fixed on the basis of the liabilities of the      retirement system as shown by annual actuarial valuations.         b. (1)  On the basis of the actuarial methods and assumptions,      rate of interest, and of the mortality, interest and other tables      adopted by the system, the actuary engaged by the system to make each      valuation required by this chapter pursuant to the requirements of      section 411.5, shall immediately after making such valuation,      determine the normal contribution rate.  Except as otherwise provided      in this lettered paragraph, the "normal contribution rate" shall      be the rate percent of the earnable compensation of all members equal      to the rate required by the system to discharge its liabilities,      stated as a percentage of the earnable compensation of all members,      and reduced by the employee contribution rate provided in paragraph      "f" of this subsection and the contribution rate representing the      state appropriation made as provided in section 411.20.  However, the      normal contribution rate shall not be less than seventeen percent.         (2)  The normal contribution rate shall be determined by the      actuary after each valuation.         c.  The total amount payable in each year to the fund shall be      not less than the rate percent known as the normal contribution rate      of the total compensation earnable by all members during the year,      but the aggregate payment by the participating cities must be      sufficient when combined with the amount in the fund to provide the      pensions and other benefits payable out of the fund during the then      current year.         d.  All lump-sum death benefits on account of death in active      service payable from contributions of the said cities shall be paid      from the fund.         e.  Reserved.         f.  Except as otherwise provided in paragraph "h":         (1)  An amount equal to three and one-tenth percent of each      member's compensation from the earnable compensation of the member      shall be paid to the fund for the fiscal year beginning July 1, 1989.         (2)  An amount equal to four and one-tenth percent of each      member's compensation from the earnable compensation of the member      shall be paid to the fund for the fiscal year beginning July 1, 1990.         (3)  An amount equal to five and one-tenth percent of each      member's compensation from the earnable compensation of the member      shall be paid to the fund for the fiscal year beginning July 1, 1991.         (4)  An amount equal to six and one-tenth percent of each member's      compensation from the earnable compensation of the member shall be      paid to the fund for the fiscal year beginning July 1, 1992.         (5)  An amount equal to seven and one-tenth percent of each      member's compensation from the earnable compensation of the member      shall be paid to the fund for the fiscal year beginning July 1, 1993.         (6)  An amount equal to eight and one-tenth percent of each      member's compensation from the earnable compensation of the member      shall be paid to the fund for the fiscal period beginning July 1,      1994, through December 31, 1994, and an amount equal to eight and      thirty-five hundredths percent of each member's compensation from the      earnable compensation of the member shall be paid to the fund for the      fiscal period beginning January 1, 1995, through June 30, 1995.         (7)  An amount equal to nine and thirty-five hundredths percent of      each member's compensation from the earnable compensation of the      member shall be paid to the fund for the fiscal year beginning July      1, 1995.         (8)  Beginning July 1, 1996, and each fiscal year thereafter, an      amount equal to the member's contribution rate times each member's      compensation shall be paid to the fund from the earnable compensation      of the member.  For the purposes of this subparagraph, the member's      contribution rate shall be nine and thirty-five hundredths percent      or, beginning July 1, 2009, nine and four-tenths percent.  However,      the system shall increase the member's contribution rate as necessary      to cover any increase in cost to the system resulting from statutory      changes which are enacted by any session of the general assembly      meeting after January 1, 1991, if the increase cannot be absorbed      within the contribution rates otherwise established pursuant to this      paragraph, but subject to a maximum employee contribution rate of      eleven and three-tenths percent or, beginning July 1, 2009, eleven      and thirty-five hundredths percent.  The contribution rate increases      specified in 1994 Iowa Acts, ch. 1183, pursuant to this chapter and      chapter 97A shall be the only member contribution rate increases for      these systems resulting from the statutory changes enacted in 1994      Iowa Acts, ch. 1183, and shall apply only to the fiscal periods      specified in 1994 Iowa Acts, ch. 1183.  After the employee      contribution reaches eleven and three-tenths percent or eleven and      thirty-five hundredths percent, as applicable, sixty percent of the      additional cost of such statutory changes shall be paid by employers      under paragraph "c" and forty percent of the additional cost      shall be paid by employees under this paragraph.         g.  The system shall certify to the superintendent of public      safety as defined in this chapter and the superintendent of public      safety as defined in this chapter shall cause to be deducted from the      earnable compensation of each member the contribution required under      this subsection and shall forward the contributions to the system for      recording and for deposit in the fund.         The deductions provided for under this paragraph shall be made      notwithstanding that the minimum compensation provided by law for any      member is reduced.  Every member is deemed to consent to the      deductions made under this paragraph.         h.  Notwithstanding the provisions of paragraph "f", the      following transition percentages apply to members' contributions as      specified:         (1)  For members who on July 1, 1990, have attained the age of      forty-nine years or more, an amount equal to nine and one-tenth      percent of each member's compensation from the earnable compensation      of the member shall be paid to the fund for the fiscal period      beginning July 1, 1990, through October 15, 1992, and commencing      October 16, 1992, and for each subsequent fiscal period, the rates      specified in paragraph "f", subparagraphs (4) through (8), shall      apply.         (2)  For members who on July 1, 1990, have attained the age of      forty-eight years but have not attained the age of forty-nine years,      an amount equal to eight and one-tenth percent shall be paid for the      fiscal year beginning July 1, 1990, and an amount equal to nine and      one-tenth percent shall be paid for the fiscal period beginning July      1, 1991, through October 15, 1992, and commencing October 16, 1992,      and for each subsequent fiscal period, the rates specified in      paragraph "f", subparagraphs (4) through (8), shall apply.         (3)  For members who on July 1, 1990, have attained the age of      forty-seven years but have not attained the age of forty-eight years,      an amount equal to seven and one-tenth percent shall be paid for the      fiscal year beginning July 1, 1990, an amount equal to eight and      one-tenth percent shall be paid for the fiscal year beginning July 1,      1991, and an amount equal to nine and one-tenth percent shall be paid      for the fiscal period beginning July 1, 1992, through October 15,      1992, and commencing October 16, 1992, and for each subsequent fiscal      period, the rates specified in paragraph "f", subparagraphs (4)      through (8), shall apply.         (4)  For members who on July 1, 1990, have attained the age of      forty-six years but have not attained the age of forty-seven years,      an amount equal to six and one-tenth percent shall be paid for the      fiscal year beginning July 1, 1990, an amount equal to seven and      one-tenth percent shall be paid for the fiscal year beginning July 1,      1991, an amount equal to eight and one-tenth percent shall be paid      for the fiscal period beginning July 1, 1992, through October 15,      1992, and commencing October 16, 1992, and for each subsequent fiscal      period, the rates specified in paragraph "f", subparagraphs (4)      through (8), shall apply.         (5)  For members who on July 1, 1990, have attained the age of      forty-five years but have not attained the age of forty-six years, an      amount equal to five and one-tenth percent shall be paid for the      fiscal year beginning July 1, 1990, an amount equal to six and      one-tenth percent shall be paid for the fiscal year beginning July 1,      1991, and an amount equal to seven and one-tenth percent shall be      paid for the fiscal period beginning July 1, 1992, through October      15, 1992.  Commencing October 16, 1992, and for each subsequent      fiscal period, the rates specified in paragraph "f",      subparagraphs (4) through (8), shall apply.         i. (1)  Notwithstanding paragraph "g" or other provisions      of this chapter, beginning January 1, 1995, for federal income tax      purposes, and beginning January 1, 1999, for state income tax      purposes, member contributions required under paragraph "f" or      "h" which are picked up by the city shall be considered employer      contributions for federal and state income tax purposes, and each      city shall pick up the member contributions to be made under      paragraph "f" or "h" by its employees.  Each city shall pick      up these contributions by reducing the salary of each of its      employees covered by this chapter by the amount which each employee      is required to contribute under paragraph "f" or "h" and      shall pay the amount picked up in lieu of the member contributions to      the board of trustees for recording and deposit in the fund.         (2)  Member contributions picked up by each city under      subparagraph (1) shall be treated as employer contributions for      federal and state income tax purposes only and for all other purposes      of this chapter shall be treated as employee contributions and deemed      part of the employee's earnable compensation or salary.         2.  Annually the board of trustees shall budget the amount of      money necessary during the ensuing year to provide for the expense of      operation of the retirement system.  The operating expenses shall be      financed from the income derived from the system's investments.      Investment management expenses shall be charged directly to the      investment income of the system.  
         Section History: Early Form
         [C35, § 6326-f8; C39, § 6326.10; C46, 50, 54, 58, 62, 66, 71,      73, 75, 77, 79, 81, § 411.8; 82 Acts, ch 1261, § 41] 
         Section History: Recent Form
         90 Acts, ch 1240, § 69--77; 92 Acts, ch 1201, § 70; 94 Acts, ch      1183, §74--76; 98 Acts, ch 1174, §4, 6; 2008 Acts, ch 1171, §51; 2009      Acts, ch 41, §122; 2009 Acts, ch 99, §4         Referred to in § 384.6, 411.5, 411.6, 411.6C, 411.7, 411.9,      411.11, 411.23, 411.30, 411.36, 411.38, 411.40