§ 5-10.2-2-1.5 — Qualification under Internal Revenue Code

Indiana § 5-10.2-2-1.5

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 10.2: PUBLIC RETIREMENT AND DISABILITY
• Ch. 2: The Retirement Funds

Text

5. Each retirement fund covered by this
article shall satisfy the qualification requirements in Section 401 of the
Internal Revenue Code, as applicable to each retirement fund. In order
to meet those requirements, each fund is subject to the following
provisions, notwithstanding any other provision of the retirement fund
law:
(1) The board shall distribute the corpus and income of the fund
to members and their beneficiaries in accordance with the
retirement fund law.
(2) No part of the corpus or income of a fund may be used for or
diverted to any purpose other than the exclusive benefit of the
members and their beneficiaries.
(3) Forfeitures arising from severance of employment, death, or
for any other reason may not be applied to increase the benefits
any member would otherwise receive under the retirement fund
law.
(4) If a fund is terminated, or if all contributions to a fund are
completely discontinued, the rights of each affected member to
the benefits accrued at the date of the termination or
discontinuance, to the extent then funded, are nonforfeitable.
(5) All benefits paid from a retirement fund shall be distributed in
accordance with the requirements of Section 401(a)(9) of the
Internal Revenue Code and the regulations under that section. In
order to meet those requirements, each retirement fund is subject
to the following provisions:
(A) The life expectancy of a member, the member's spouse, or
the member's beneficiary may not be recalculated after the
initial determination for purposes of determining benefits.
(B) If a member dies before the distribution of the member's
benefits has begun, distributions to beneficiaries must begin no
later than December 31 of the calendar year immediately
following the calendar year in which the member died.
(C) The amount of an annuity paid to a member's beneficiary
may not exceed the maximum determined under the incidental
death benefit requirement of the Internal Revenue Code.
(6) The board may not:
(A) determine eligibility for benefits;
(B) compute rates of contribution; or
(C) compute benefits of members or beneficiaries;
in a manner that discriminates in favor of members who are
considered officers, supervisors, or highly compensated, as
prohibited under Section 401(a)(4) of the Internal Revenue Code.
(7) Benefits paid under this chapter may not exceed the maximum
benefits specified by Section 415 of the Internal Revenue Code.
(8) The salary taken into account under this chapter may not
exceed the applicable amount under Section 401(a)(17) of the
Internal Revenue Code.
(9) The board may not engage in a transaction prohibited by
Section 503(b) of the Internal Revenue Code.

Legislative History

As added by P.L.55-1989, SEC.8. Amended by P.L.35-2012, SEC.30.