§ 5-10.2-2-3 — Annuity savings account; guaranteed program; stable value fund program; alternative investment programs

Indiana § 5-10.2-2-3

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

Text

(a) The annuity savings account consists of:
(1) the members' contributions; and
(2) the interest credits on these contributions in the guaranteed
fund (before January 1, 2017), the gain or loss in the balance of
the member's account in the stable value fund (after December 31,
2016), or the gain or loss in market value on these contributions
in the alternative investment program, as specified in section 4 of
this chapter (before its expiration).
Each member shall be credited individually with the amount of the
member's contributions and interest credits.
(b) The board shall maintain the investment program in effect on
December 31, 1995, (referred to in this chapter as the guaranteed
program) within the annuity savings account until January 1, 2017. In
addition, the board shall establish and maintain a guaranteed program
within the 1996 account until January 1, 2017. After December 31,
2016, the board shall establish an investment fund (referred to in this
chapter as the stable value fund) that has preservation of capital as the
primary investment objective. The board may establish investment
guidelines and limits on all types of investments (including, but not
limited to, stocks and bonds) and take other actions necessary to fulfill
its duty as a fiduciary of the annuity savings account, subject to the
limitations and restrictions set forth in IC 5-10.3-5-3, IC 5-10.4-3-10,
and IC 5-10.5-5.
(c) The board shall establish alternative investment programs within
the annuity savings account of the public employees' retirement fund,
the pre-1996 account, and the 1996 account, based on the following
requirements:
(1) The board shall maintain at least one (1) alternative
investment program that is an indexed stock fund and one (1)
alternative investment program that is a bond fund. The board
may maintain one (1) or more alternative investment programs
that:
(A) invest in one (1) or more commingled or pooled funds that
consist in part or entirely of mortgages that qualify as five star
mortgages under the program established by IC 24-5-23.6; or
(B) otherwise invest in mortgages that qualify as five star
mortgages under the program established by IC 24-5-23.6.
(2) The programs should represent a variety of investment
objectives under IC 5-10.3-5-3.
(3) No program may permit a member to withdraw money from
the member's account except as provided in IC 5-10.2-3 and IC 5-10.2-4.
(4) All administrative costs of each alternative program shall be
paid from the earnings on that program or as may be determined
by the rules of the board.
(5) Except as provided in section 4(e) of this chapter (before its
expiration), a valuation of each member's account must be
completed as of:
(A) the last day of each quarter; or
(B) another time as the board may specify by rule.
(d) The board must prepare, at least annually, an analysis of the
guaranteed program (before January 1, 2017), the stable value fund
(after December 31, 2016), and each alternative investment program.
This analysis must:
(1) include a description of the procedure for selecting an
alternative investment program;
(2) be understandable by the majority of members; and
(3) include a description of prior investment performance.
(e) A member may direct the allocation of the amount credited to
the member among the guaranteed fund (before January 1, 2017), the
stable value fund (after December 31, 2016), and any available
alternative investment funds, subject to the following conditions:
(1) A member may make a selection or change an existing
selection under rules established by the board. The board shall
allow a member to make a selection or change any existing
selection at least once each quarter.
(2) The board shall implement the member's selection beginning
on the first day of the next calendar quarter that begins at least
thirty (30) days after the selection is received by the board or on
an alternate date established by the rules of the board. This date
is the effective date of the member's selection.
(3) A member may select any combination of the guaranteed fund
(before January 1, 2017), the stable value fund (after December
31, 2016), or any available alternative investment funds, in ten
percent (10%) increments or smaller increments that may be
established by the rules of the board.
(4) A member's selection remains in effect until a new selection
is made.
(5) On the effective date of a member's selection, the board shall
reallocate the member's existing balance or balances in
accordance with the member's direction, based on:
(A) for an alternative investment program balance, the market
value on the effective date;
(B) for any guaranteed program balance, the account balance on
the effective date; and
(C) for any stable value fund program balance, the balance of
the member's account on the effective date.
All contributions to the member's account shall be allocated as of
the last day of that quarter or at an alternate time established by
the rules of the board in accordance with the member's most
recent effective direction. The board shall not reallocate the
member's account at any other time.
(6) The provisions concerning the transition from the guaranteed
program to the stable value fund program are met, as set forth in
section 24 of this chapter.
(f) When a member who participates in an alternative investment
program transfers the amount credited to the member from one (1)
alternative investment program to another alternative investment
program, to the guaranteed program (before January 1, 2017), or to the
stable value fund program (after December 31, 2016), the amount
credited to the member shall be valued at the market value of the
member's investment, as of the day before the effective date of the
member's selection or at an alternate time established by the rules of
the board. When a member who participates in an alternative
investment program retires, becomes disabled, dies, or suspends
membership and withdraws from the fund, the amount credited to the
member shall be the market value of the member's investment as of the
last day of the quarter preceding the member's distribution or
annuitization at retirement, disability, death, or suspension and
withdrawal, plus contributions received after that date or at an alternate
time established by the rules of the board.
(g) This subsection applies before January 1, 2017. When a member
who participates in the guaranteed program transfers the amount
credited to the member to an alternative investment program, the
amount credited to the member in the guaranteed program is computed
without regard to market value and is based on the balance of the
member's account in the guaranteed program as of the last day of the
quarter preceding the effective date of the transfer. However, the board
may by rule provide for an alternate valuation date. When a member
who participates in the guaranteed program retires, becomes disabled,
dies, or suspends membership and withdraws from the fund, the
amount credited to the member shall be computed without regard to
market value and is based on the balance of the member's account in
the guaranteed program as of the last day of the quarter preceding the
member's distribution or annuitization at retirement, disability, death,
or suspension and withdrawal, plus any contributions received since
that date plus interest since that date. However, the board may by rule
provide for an alternate valuation date.
(h) This subsection applies after December 31, 2016. When a
member who participates in the stable value fund program transfers the
amount credited to the member from the stable value fund program to
an alternative investment program, the amount credited to the member
shall be the balance of the member's account, as of the day before the
effective date of the member's selection or at an alternate time
established by the rules of the board. When a member who participates
in the stable value fund program retires, becomes disabled, dies, or
suspends membership and withdraws from the fund, the amount
credited to the member shall be the balance of the member's account as
of the last day of the quarter preceding the member's distribution or
annuitization at retirement, disability, death, or suspension and
withdrawal, plus contributions received after that date or at an alternate
time established by the rules of the board.
As added by Acts 1977, P.L.53, SEC.2. Amended by
P.L.35-1985, SEC.4; P.L.40-1986, SEC.1; P.L.58-1987, SEC.1;
P.L.55-1989, SEC.9; P.L.54-1993, SEC.6; P.L.43-1997, SEC.2;
P.L.195-1999, SEC.9; P.L.285-2001, SEC.1; P.L.62-2005, SEC.1;
P.L.2-2006, SEC.21; P.L.165-2009, SEC.2; P.L.1-2010, SEC.17;
P.L.115-2010, SEC.3; P.L.35-2012, SEC.32; P.L.193-2016, SEC.3;
P.L.217-2017, SEC.54; P.L.86-2018, SEC.14; P.L.212-2018(ss),
SEC.12.