Iowa Administrative Code › Agency 495 - Iowa Public Employees' Retirement System › Chapter 21 - Mergers › Rule 495-21.2 - Mandatory Merger Criteria

Current through Register Vol. 47, No. 3, July 24, 2024
(1) General.
			 Mergers shall meet the following criteria:
a.
			 There shall be no actuarial gain or loss to IPERS (defined as a change in the
			 unfunded accrued actuarial liability) as a result of a merger with another
			 pension plan.
b. The merging plan
			 shall defend and hold IPERS harmless from any claims by transferred members
			 with respect to employee contribution accounts, cut-back claims, tax issues,
			 and any other cause of action arising hereunder that does not result from
			 IPERS' negligence or misconduct. This indemnification shall also extend to any
			 contractual claims by the merging plan's vendors, pending or threatened
			 lawsuits or regulatory actions against the merging plan, and appeals by
			 members, retired members and beneficiaries of the merging plan.
c. Prior to the merger date, the merging plan
			 authority and IPERS shall formally agree on all material terms and conditions
			 of the merger in writing.
d. The
			 merging plan authority shall adopt by resolution a proposal to merge the
			 pension plan with and into the IPERS pension plan, with IPERS as the surviving
			 plan, which shall incorporate by reference the details of the merger expressed
			 in the merger agreement between the merging plan and IPERS. The merging plan
			 authority shall secure all other approvals necessary to the merger, and shall
			 certify to IPERS that all necessary authorizations have been
			 received.
e. All assets required to
			 fund the transfer of liabilities created under the merger shall be transferred
			 to IPERS within 120 days after the proposed effective date, plus an additional
			 amount representing a 7.5 percent interest rate (or the current rate assumed by
			 IPERS' actuary in valuing assets and liabilities) commencing on the proposed
			 effective date.
f. After the
			 merger, the merging plan authority, as a covered employer, shall determine
			 employee classifications and deduct and forward member and employer
			 contributions in the same amount as required for all IPERS covered
			 employment.
g. The merging plan
			 authority shall transfer to IPERS in a mutually agreed upon method all
			 employment records for active, inactive, and retired members and beneficiaries,
			 including all tax reporting records. In addition to employment and tax
			 reporting records, transferred electronic files shall include the same
			 enrollment information as required for IPERS covered employers' new employees.
			 Similar demographic information shall be provided to IPERS for spouses and
			 beneficiaries.
h. The merging plan
			 shall, prior to merger, in its sole discretion, make such amendments to its
			 plan documents that it deems to be necessary or appropriate to accomplish the
			 merger, provided that no such amendments shall vary the terms of the agreement
			 to merge without the express written consent of IPERS.
i. IPERS shall, prior to merger, in its sole
			 discretion, make such amendments to its plan documents that it deems to be
			 necessary or appropriate to accomplish the merger, provided that no such
			 amendments shall vary the terms of the agreement to merge without the express
			 written consent of the merging plan.
j. The transferred records of the merging
			 plan shall be treated as confidential records by IPERS as described in Iowa
			 Code section
			 97B.17.
k. The merging plan authority and its legal
			 and actuarial advisors shall determine the excess accruals, if any, owed to any
			 member of the merging plan transferred to IPERS; shall provide such members
			 with the appropriate election forms and related information; and shall take all
			 steps necessary to complete the payment of compensation to such individuals in
			 satisfaction of the obligation to protect accrued benefits under the merging
			 plan as described above.
l.
			 Excluding matters relating to the distribution of excess accruals, if any, the
			 merging plan authority, its legal counsel, and IPERS and its legal counsel
			 shall jointly develop all required communications regarding the plan merger
			 IPERS shall have sole responsibility for providing benefits estimates to the
			 merging plan members, in anticipation of the merger Following the effective
			 date of the merger, all member services shall be handled by IPERS.
m. Following the merger, transferred active,
			 inactive, and retired members and beneficiaries shall be entitled to benefits,
			 including monthly allowances, refunds, actuarial equivalent (AE), death
			 benefits and dividends as other IPERS members having the same demographic, wage
			 and service records.
n. The members
			 of the merging plan who currently have binding assignments against their
			 benefits shall continue to have those assignments administered by IPERS as
			 described in 495-Chapter 16 or as otherwise required by law.
o. The members of the merging plan currently
			 receiving disability retirement benefits must agree to have their disability
			 retirement benefits administered by IPERS as described under 495-Chapter 13, or
			 those members shall not be transferred.
p. The merging plan and IPERS shall jointly
			 agree whether the merger will be submitted to the IRS for approval.