Bills › 90th General Assembly
SSB 1132
Where it is now
- Done: IntroducedFebruary 2, 2023
- Done: SubcommitteeFebruary 6, 2023
- Done: Senate committeeMarch 2, 2023
- Skipped: Passes the SenateContinued as SF 505
- Next: House committee
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Became SF 505 → Its progress continues under the new number. Go to SF 505 What’s a funnel?
What’s in it
AI summary Changes to this retirement system would allow certain retired police and fire members to apply for accidental disability benefits, including those caused by mental disorders related to their work. It also expands the medical care cities must provide to injured members and their beneficiaries and increases the amount employees contribute from their pay to fund the system. Additionally, the bill clarifies how much money a person receives if they move from an ordinary disability to an accidental disability retirement.1
Read the official explanation
This bill concerns benefits to members under the municipal fire and police retirement system established under Code chapter 411.1, concerning definitions, is amended. The bill defines an “ordinary disability beneficiary” as a member retired on an ordinary disability retirement benefit for five years or less. The bill also amends the definition of “member in good standing” to mean any member in service who has not been terminated by the employing city of the member.6(5), concerning accidental disability benefits, is amended to allow an ordinary disability beneficiary to make application to the retirement system for an accidental disability retirement benefit. _____ an accidental disability retirement if the person has become totally and permanently incapacitated as a result of injury and disease arising out of and in the course of the employment and by the actual performance of duty without regard to whether that actual performance of duty was at some definite time and place. The subsection is also amended to provide that disease for purposes of an accidental disability benefit also means any incapacitating mental disorder arising out of and in the course of the employment, or while acting, pursuant to order, outside the city by which the member is regularly employed.6(6), providing for a retirement allowance upon retirement for accidental disability, is amended to provide that an ordinary disability beneficiary who is determined to be entitled to a retirement for accidental disability on or after July 1, 2023, shall receive a retirement allowance that shall consist of the greater of an amount as determined for members receiving an accidental disability retirement or an amount equal to the disability retirement allowance previously received by the beneficiary.6(9), concerning accidental death benefits, is amended to provide that an accidental death benefit shall also be paid if the death was as a result of injury and disease arising out of and in the course of the employment or by the actual performance of duty without regard to whether that actual performance of duty was at some definite time and place.19, or other comparable process. The bill provides for the repayment of benefits paid prior to the determination of ineligibility. _____ pay beginning July 1, 2023.15, concerning cities’ requirement to provide hospitalization and medical attention for injuries or diseases while on duty, is amended to provide that such attention shall also be provided for injuries arising out of and in the course of employment.6(6). The Code section is further amended to provide that a member shall not be required to pay the cost of hospital, nursing, and medical attention required, including payment of any costs or premiums associated with any insurance policy providing coverage. The bill further provides that to be provided the cost of the hospital, nursing, and medical attention, the city shall have actual knowledge of the occurrence of an injury or disease or be provided notice of the occurrence of an injury or disease on behalf of a member or beneficiary within days from the date of the occurrence of the injury or disease. The bill provides that an action to require the city to provide the cost of the medical attention shall not be maintained unless the action is commenced before the later of two years from the date of the occurrence of the injury or disease or two years from the date the city denies a claim to provide medical attention.6(5), the bill provides that the cost of the medical attention shall not be maintained unless the action is commenced within five years from the last date of employment of the member.
Changed since by amendment H-1261; see Amendments.
Senate subcommittee
Named February 6, 2023. On February 14, 2023 it recommended amendment and passage. [].
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 expands the types of disabilities eligible for accidental disability benefits and adds a mental health evaluation for civil service applicants. The Municipal Fire and Police Retirement System of Iowa faces estimated administrative cost increases between $50,000 and $100,000 in fiscal year 2024 and between $20,000 and $50,000 annually in fiscal year 2025 and each year thereafter. The unfunded actuarial accrued liability for the retirement fund is estimated to increase by approximately $4.4 million in fiscal year 2024, and the cost to members through increased contribution rates is estimated at approximately $839,000 in fiscal year 2024. The fiscal impact on cities for additional medical costs cannot be determined at this time.3
Read the fiscal note
Description
House File 687 relates to civil service entrance evaluations and benefits for members of the Municipal Fire and Police Retirement System of Iowa (MFPRSI). The Bill expands the number of disabilities eligible for an accidental disability benefit and allows retirees who are receiving an ordinary benefit and who are within three years of retirement to apply for an accidental disability benefit. The Bill also adds a mental health evaluation to the required examination of applicants for civil service.
Background
Iowa Code chapter 400 relates to civil service and requires applicants for the positions of police officer and fire fighter to take entrance examinations to determine whether the applicant meets qualification standards. The examinations are designed to test the mental and physical ability of an applicant to perform the duties of the position.
Iowa Code chapter 411 relates to a retirement system for police officers and fire fighters. The chapter provides for the payment of pensions to retired members, members incurring disabilities, and the surviving spouses and dependents of deceased members. The chapter also relates to a disability program for police officers and fire fighters and includes standards for entrance, guidelines for ongoing fitness and wellness, disability pensions, and postdisability retirement compliance requirements.
Based on the July 1, 2022, actuarial valuation, the MFPRSI covers approximately 4,155 active members; 1,181 disabled members; 3,172 retired members and beneficiaries; and 453 vested, terminated members. The current actuarial accrued liability of the MFPRSI is $3.652 billion, the actuarial value of assets is $3.083 billion, and the unfunded actuarial liability is $568.4 million. The ratio of liabilities to assets (funded ratio) of the retirement system is 84.21%. For FY 2024, members’ estimated annual contributions at the current rate of 9.40% total $31.6 million, and cities’ estimated contributions at 22.98% total $88.4 million. Total covered payroll is $349.8 million. The average annual compensation for an active member is $84,176. Table 1 below shows the annual employer and employee contribution rates for FY 2020 to FY 2024.
Table 1 — Annual Contribution Rates Iowa Code section 411.8 provides that member contribution rates will be increased for any statutory changes, if the increase cannot be absorbed within the current contribution rates, up toFY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Employer Contribution Rate 24.41% 25.31% 26.18% 23.90% 22.98% Employee Contribution Rate 9.40% 9.40% 9.40% 9.40% 9.40% Total 33.81% 34.71% 35.58% 33.30% 32.38% a maximum of 11.35%. Costs are then applied 60/40 between the employer and employee. Current member contribution rates are 9.40% of pay.
The MFPRSI provides for both an ordinary and accidental disability benefit for a member in good standing with the System. The medical board determines whether a member is medically able to perform the member’s job duties. If the member is determined to be unable to perform the member’s duties, the MFPRSI decides whether the member is eligible for an ordinary or accidental disability benefit. The compensation for an ordinary disability is 50.0% of the average final compensation, whereas the compensation for an accidental disability is 60.0% of the average final compensation.
Cities are responsible for the payment of all medical costs related to MFPRSI claims under Iowa Code section 411.15. Cities cannot use workers’ compensation to cover short-term indemnity or medical cost exposure. Iowa Code section 85.1(4) states that workers’ compensation does not apply to “persons entitled to benefits pursuant to Iowa Code chapters 410 and 411.”
Assumptions
- Expanding the number of disabilities eligible for an accidental disability benefit and allowing retirees who are receiving an ordinary disability benefit and within three years of retirement to apply for an accidental disability benefit will reduce the funded ratio of the Municipal Fire and Police Retirement Fund by 0.12%, from 84.21% to 84.09%.
- Based on the most recent actuarial valuation report as of July 1, 2022, no increase in costs can be absorbed within the existing contribution rates for FY 2024. The FY 2024 employee contribution rate would need to increase from 9.40% to 9.64%, an increase of 0.24%.
- According to the MFPRSI, the total contribution rate impact of the Bill will be an increase of 0.24% to the members’ contribution rate. The provisions creating the impact include the following:
- Allowing current ordinary disability retirees within three years of retirement to apply for an accidental disability benefit will increase the total contribution rate by 0.04%.
- Permitting future ordinary disabilities to be treated as accidental disabilities due to the elimination of the definite time and place requirement will increase the total contribution rate by 0.12%.
- A 5.0% increase in total future disabilities due to the expansion of accidental disability benefits combined with accidental disability tax advantages will increase member contribution rates by 0.08%.
- All other actuarial assumptions made by the MFPRSI for annual actuarial valuations going forward will be met.
- The MFPRSI may see an increase in administrative costs related to medical exams between approximately $50,000 and $100,000 in FY 2024 and $20,000 and $50,000 in FY 2025 and each year thereafter. This includes the implementation and performance of mental health evaluations.
- Medical and administrative costs incurred by cities may increase for all injuries and diseases related to employment, regardless of the type of benefit received from the System.
- There are approximately seven ordinary disability retirements per year.
- Eliminating the link between medical costs and MFPRSI accidental disabilities and requiring medical cost coverage for cumulative injuries may result in additional medical costs being covered by city employers.
Fiscal Impact
Administrative costs for the MFPRSI associated with performing mental health evaluations and medical exams are estimated to increase between $50,000 and $100,000 in FY 2024 and between $20,000 and $50,000 annually in FY 2025 and each year thereafter. Any increased administrative costs for the MFPRSI will be paid from the Municipal Fire and Police Retirement Fund.
The unfunded actuarial accrued liability of the Municipal Fire and Police Retirement Fund is estimated to increase by approximately $4.4 million in FY 2024. The funded ratio would decrease from 84.21% to 84.09%.
Increasing members’ contribution rate from 9.40% to 9.64% is estimated to cost approximately $839,000, or $202 per employee. In subsequent fiscal years, this cost may increase based on covered payroll.
Cities under the MFPRSI are required to provide hospital, nursing, and medical attention for members of the police and fire departments. The fiscal impact of HF 687 on cities for additional medical costs cannot be determined at this time but may be significant.
Sources
- Iowa League of Cities
- Municipal Fire and Police Retirement System of Iowa Actuarial Valuation Report
- Municipal Fire and Police Retirement System of Iowa
- Legislative Services Agency
- 411 Retirement System · April 28, 2023 · $100,000
- 411 Retirement System · April 19, 2023 · $100,000
- 411 Retirement System · April 18, 2023 · $100,000
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90th General Assembly
Earlier and later bills are matched by wording or an identical title.
Tried before
This idea has been filed in 2 earlier General Assemblies. None became law, though one got through a chamber.
- HSB 268 HSB 26889th General Assembly · Renumbered as HF 797 · nearly identicalCleared committee
- HF 417 Concerning benefits relating to members of the municipal fire and police retirement system…89th General Assembly · Approved by committee · very similarCleared committee
- HF 2592 Concerning benefits under the municipal fire and police retirement system88th General Assembly · Passed House · very similarPassed a chamber
Similar bills this General Assembly
- HSB 745 HSB 74590th General Assembly · Renumbered as HF 2680Similar
Matched by wording or an identical title.