Iowa Administrative Code › Agency 495 - Iowa Public Employees' Retirement System › Chapter 15 - Dividends › Rule 495-15.2 - Favorable Experience Dividend (FED) Under Iowa Code Section 97b.49f (2)

Current through Register Vol. 47, No. 3, July 24, 2024
For members retiring on and after July 1, 1990, dividends are
				payable as follows.
(1)
Allocation of favorable experience.
The system shall,
			 following the first annual actuarial evaluation in which IPERS is found to be
			 fully funded, determine by rule the allocation of the system's favorable
			 actuarial experience, if any, between the reserve account created under Iowa
			 Code section
			 97B.49F(2)
			  and the remainder of the retirement fund.
Effective July 1,2006, IPERS shall in no event credit amounts
				attributable to favorable experience to the FED reserve account, unless IPERS
				is fully funded and will remain fully funded after such amounts are credited to
				the FED reserve account. "Fully funded" means that the funded ratio as
				determined under Iowa Code section 97B.1A (11 A) remains at least 100 percent
				following the allocation of favorable experience to the FED reserve
				account.
(2)
Determination of applicable percentage.
The system shall have
			 sole discretion to determine the applicable percentages that will be used in
			 calculating favorable experience dividends payable under this rule, if any,
			 subject to the actuary's certification that the resulting favorable experience
			 dividends meet the requirements of Iowa Code section
			 97B.49F(2)
			  and this rule.
a. The system's annual applicable percentage
			 target for calculating dividends under Iowa Code section
			 97B.49F(2)
			  shall be equal to the applicable percentage
			 used in calculating dividends payable to retired members under Iowa Code
			 section
			 97B.49F(1).
			 Notwithstanding the foregoing, the system may set a greater or lesser
			 applicable percentage for calculating dividends under this rule depending on
			 the funding adequacy of the reserve account. In no event shall the applicable
			 percentage exceed 3 percent.
b. In
			 determining the annual applicable percentage, the system shall consider, but
			 not be limited to, the value of the reserve account, distributions made from
			 the reserve account in previous years, and the likelihood of future credits to
			 and distributions from the reserve account. The system shall make its annual
			 applicable percentage decisions using at least a rolling five-year
			 period.
c. If for any year the
			 system cannot afford an applicable percentage equal to that payable to retired
			 members under Iowa Code section
			 97B.49F(1),
			 the system may use applicable percentages in succeeding years that are higher
			 than those used in calculating dividends for retired members under Iowa Code
			 section
			 97B.49F(1)
			  (but not in excess of 3 percent).
d. An applicable percentage in excess of the
			 applicable percentage declared under Iowa Code section
			 97B.49F(1)
			  made for catch-up purposes shall not reduce
			 the funding of the reserve account below the amount the system's actuary
			 determines is necessary to pay the maximum favorable experience dividend for
			 each of the next five years, based on reasonable actuarial
			 assumptions.