Indiana Bill Would Allow Public Sector DC Plan

The Indiana Senate is considering legislation that would allow Hoosier State public sector employers, and their employees, to participate in a public employees’ defined contribution plan. The House passed HB 1481 on Feb. 25.

The measure provides that a political subdivision of Indiana that participates in the existing public employees’ retirement fund could participate in the public employees’ DC plan. To do so, that vicinity’s governing body would have to adopt an ordinance or resolution that is filed with, and approved by, the Indiana public retirement system’s board of trustees.

The bill also provides that individuals who begin working for participating political subdivisions may become part of the DC plan. Those who do not would become participants in the public employees’ retirement fund.

The measure also would create a teachers’ DC plan. The procedure is the same: a school corporation would need to adopt a resolution to that effect, which would then have to be filed with, and approved by, the Indiana public retirement system’s board of trustees. As for individual teachers, the bill provides that:

• individual who begins employment with a participating school corporation as a teacher may elect to become a member of the teachers’ plan;
• if a teacher hired by a participating school corporation does not make an election to become a member of the teachers' plan, he or she becomes a member of the Indiana state teachers’ retirement fund (TRF); and
• a retired member of the fund or TRF may change the member’s beneficiary, if the member and the member’s designated beneficiary are no longer in a relationship that caused the member to make the original beneficiary designation.

The bill is before the Senate Committee on Pensions and Labor.