Iowa Administrative Code › Agency 495 - Iowa Public Employees' Retirement System › Chapter 32 - Qualified Benefits Arrangement › Rule 495-32.1 - Qualified Benefits Arrangement

Current through Register Vol. 47, No. 3, July 24, 2024
This rule establishes a separate unfunded qualified benefits
				arrangement (QBA) as provided for in Iowa Code section 97B.491. This
				arrangement is established for the sole purpose of enabling IPERS to continue
				to apply the same formula for determining benefits payable to all employees
				covered by the retirement system created under Iowa Code chapter 97B, including
				those whose benefits are limited by Section 415 of the Internal Revenue
				Code.
(1) The agency shall administer
			 the QBA. The agency has full discretionary authority to determine all questions
			 arising in connection with the QBA, including its interpretation and any
			 factual questions arising under the QBA. Further, the agency has full authority
			 to make modifications to the benefits payable under the QBA as may be necessary
			 to maintain the QBA's qualification under Section 415(m) of the Internal
			 Revenue Code.
(2) All members,
			 retired members, and beneficiaries of the agency are eligible to participate in
			 the QBA if their benefits would exceed the limitation imposed by Section 415 of
			 the Internal Revenue Code. Participation is determined for each plan year, and
			 participation shall cease for any plan year in which the benefit of a retiree
			 or beneficiary is not limited by Section 415 of the Internal Revenue
			 Code.
(3) On and after the
			 effective date of the QBA, the agency shall pay to each eligible retiree and
			 beneficiary a supplemental pension benefit equal to the difference between the
			 retiree's or beneficiary's monthly benefit otherwise payable from the agency
			 prior to any reduction or limitation because of Section 415 of the Internal
			 Revenue Code and the actual monthly benefit payable from the agency as limited
			 by Section 415. The agency shall compute and pay the supplemental pension
			 benefits in the same form, at the same time, and to the same persons as such
			 benefits would have otherwise been paid as a monthly pension under the agency
			 except for the IRC Section 415 limitations.
(4) The agency shall determine the amount of
			 benefits that cannot be provided under the agency because of the limitations of
			 Section 415 of the Internal Revenue Code, and the amount of contributions that
			 must be made to the QBA as a separate fund within the retirement fund created
			 in Iowa Code section
			 97B.7.
			 If applicable, fees for the actuary's service shall be paid by the applicable
			 employers.
(5) Contributions shall
			 not be accumulated under this QBA to pay future supplemental pension benefits.
			 Instead, each payment of contributions by the applicable employer that would
			 otherwise be made to the agency shall be reduced by the amount necessary to pay
			 supplemental pension benefits and administrative expenses of the QBA. The
			 employer shall pay to this QBA the contributions necessary to pay the required
			 supplemental pension payments, and these contributions will be deposited in a
			 separate fund which is a portion of the retirement fund established under Iowa
			 Code section
			 97B.7
			 and administered by the agency. This fund is intended to be exempt from federal
			 income tax under Sections 115 and 415(m) of the Internal Revenue Code. The
			 agency shall pay the required supplemental pension benefits to the member out
			 of the employer contributions so transferred. The employer contributions
			 otherwise required under the terms of Iowa Code sections 97B.I1, 97B.49B and
			 97B.49C shall be divided into those contributions required to pay supplemental
			 pension benefits hereunder, and those contributions paid into and accumulated
			 in the retirement fund created at Iowa Code section
			 97B.7
			 to pay the maximum benefits permitted. Employer contributions made to a
			 separate fund to provide supplemental pension benefits shall not be commingled
			 with the contributions paid into and accumulated in the retirement fund created
			 at Iowa Code section
			 97B.7.
			 The supplemental pension benefit liability shall be funded on a
			 plan-year-to-plan-year basis. Any assets of the separate QBA fund not used for
			 paying benefits for a current plan year shall be used, as determined by the
			 agency, for the payment of administrative expenses of the QBA for the plan
			 year.
(6) A member cannot elect to
			 defer the receipt of all or any part of the payments due under this
			 QBA.
(7) Payments under this rule
			 are exempt from garnishment, assignment, attachment, alienation, judgments, and
			 other legal processes to the same extent as provided under Iowa Code section
			 97B.39.
(8) Nothing herein shall be construed as
			 providing for assets to be held in trust or escrow or any form of asset
			 segregation for members, retirees, or beneficiaries. To the extent any person
			 acquires the right to receive benefits under this QBA, the right shall be no
			 greater than the right of any unsecured general creditor of the state of
			 Iowa.
(9) This QBA is a portion of
			 a governmental plan as defined in Section 414(d) of the Internal Revenue Code,
			 is intended to meet the requirements of Internal Revenue Code Sections 115 and
			 415(m), and shall be so interpreted and administered.
(10) amounts deducted from employer
			 contributions and deposited in the separate QBA fund shall not reduce the
			 amounts that are to be credited to employer contribution accounts under Iowa
			 Code sections
			 97B.11,
			 97B.49B and
			 97B.49C.
This rule is intended to implement Iowa Code section
				97B.491.