Bills › 89th General Assembly
HSB 581
Topics:K–12 educationState governmentFamilies & human services
Where it is now
- Done: IntroducedJanuary 19, 2022
- Done: SubcommitteeJanuary 19, 2022
- Done: House committeeJanuary 27, 2022
- Skipped: Passes the HouseContinued as HF 2170
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Became HF 2170 → Its progress continues under the new number. Go to HF 2170 What’s a funnel?
What’s in it
AI summary Starting in July 2022, certain teachers working in non-administrative roles will no longer count that work toward a bona fide retirement under the Iowa public employees’ retirement system. Both the retirement system and the Iowa association of school boards must send reports to the state legislature by November 2025 about how this change affects costs and effectiveness.1
Read the official explanation
This bill provides that covered employment, for purposes of determining a bona fide retirement under the Iowa public employees’ retirement system (IPERS), does not include employment as a licensed teacher by a school district for a nonadministrative position for a member whose first month of entitlement is July 2022 or later, but before July 2026. The bill provides that IPERS and the Iowa association of school boards submit separate reports to the general assembly by November 1, 2025, concerning the costs and effectiveness of the H.F. _____ provisions of the bill.
Changed since by amendment H-8047; see Amendments.
House subcommittee
Named January 19, 2022. On January 25, 2022 it recommended passage. Vote Total: 3-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
AI summary This bill raises the annual earnings limit for certain IPERS retirees and increases the compensation limit for school board members working part-time or temporary jobs. It is estimated that IPERS would pay out approximately $1.1 million in retirement benefits annually that would otherwise stay in the IPERS Trust Fund. The costs for school board member employment would be paid from existing school district resources and are expected to be minimal.3
Read the fiscal note
Description
Senate File 2266 increases the earnings limitation from $30,000 annually to $50,000 annually for retirees under the age of 65 who return to work for an Iowa Public Employees’ Retirement System (IPERS)-covered employer. The Bill also increases the limit of compensation school board members can earn through part-time or temporary district employment from $6,000 to $20,000. The Bill takes effect upon enactment.
Background
Iowa Code section 97B.48A provides that a retiree who has not reached age 65 and returns to work for an IPERS-covered employer will have the retiree’s retirement allowance reduced by $0.50 for every $1 the retiree earns over $30,000 for the remainder of the calendar year. The earnings limit was last increased from $14,000 to $30,000 during the 2002 Legislative Session (2022 Iowa Acts, Chapter 1135).
As of June 30, 2021, there were 9,484 retired, reemployed IPERS members. IPERS paid out $2.365 billion in retirement benefits in FY 2021, and the IPERS Trust Fund balance was $42.850 billion.
Assumptions
- For calendar year (CY) 2021, there were 136 IPERS members under the age of 65 who exceeded the annual $30,000 earnings limit.
- The average annual earnings of the 136 members who exceeded the limit totaled $50,000.
- The total average reduction per member was approximately $8,000, resulting in approximately $1.1 million remaining in the IPERS Trust Fund due to the penalty.
- School districts would pay the increased contract costs for services provided by board members.
Fiscal Impact
Increasing the earnings income limit to $50,000 will result in members receiving approximately $1.1 million in retirement benefits annually that under current law would have been retained in the IPERS Trust Fund. The assumed loss of reduced retirement benefits is a nominal liability to the IPERS Trust Fund of approximately 0.003%. The costs related to part-time and temporary school board member employment would be paid from existing school district resources and are anticipated to be minimal.
Sources
- Iowa Public Employees’ Retirement System (IPERS)
- IPERS FY 2021 Annual Comprehensive Financial Report
- Department of Education
- Final Fiscal Note — Income Cap, IPERS Beneficiaries · June 22, 2022
- Income Cap, IPERS Beneficiaries · February 16, 2022
- IPERS Covered Positions, Temporary Return · February 3, 2022
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