Iowa Admin. Code r. 495-12.3

Current through Register Vol. 47, No. 10, November 13, 2024

Rule 495-12.3 - Hybrid formula for members with more than one type of service credit

(1)Eligibility. Effective July 1, 1996, members having both regular and special service (as defined in Iowa Code section 97B.1A(22) ) shall receive the greater of the benefit amount calculated under this subrule or the benefit amount calculated under the applicable nonhybrid benefit formula.

a. Members who are vested by service as defined in Iowa Code section 97B. 1 A(25)"d" may utilize the hybrid formula.

b. The following classes of members are not eligible for the hybrid formula:

(1) Members who have only regular service credit.

(2) Members who have 22 years of special service credit.

(3) Members who have 30 years of regular service.

(4) Members who are not vested by service as defined in Iowa Code section 97B.1A(25)"d."

(2)Assumptions. IPERS shall utilize the following assumptions in calculating benefits under this rule.

a. The member's average covered wage shall be determined in the same manner as it is determined for the nonhybrid formula.

b. Increases in the benefit formula under this rule shall be determined as provided under Iowa Code section 97B.49D. The percentage multiplier shall only be increased for total years of service over 30.

c. Years of service shall be utilized as follows:

(1) Quarters which have two or more occupation class codes shall be credited as the class that has the highest reported wage for said quarter. A member shall not receive more than one quarter of credit for any calendar quarter, even though more than one type of service credit is recorded for that quarter.

(2) Quarters shall not be treated as special service quarters unless the applicable employer and employee contributions have been made.

(3)Years of service fraction not to exceed one.

a. In no event shall a member's years of service fraction under the hybrid formula exceed, in the aggregate, one.

b. If the years of service fraction does, in the aggregate, exceed one, the member's quarters of service credit shall be reduced until the member's years of service fraction equals, in the aggregate, one.

c. Service credit shall first be subtracted from the member's regular service credit and, if necessary, shall next be subtracted from the member's special service credit.

(4)Age reduction. The portion of the member's benefit calculated under this rule that is based on the member's regular service shall be subject to a reduction for early retirement. In calculating the age reduction to be applied to the portion of the member's benefit based on the member's regular service, the system shall use all quarters of service credit, including both regular and special service quarters.

(5)Calculations. A member's benefit under the hybrid formula shall be the sum of the following:

a. The applicable percentage multiplier divided by 22 times the years of special service credit times the member's high three-year average covered wage, plus

b. The applicable percentage multiplier divided by 30 times the years of regular service credit (if any) times the member's high three-year average prior to July 1, 2012, or the member's high five-year average after June 30, 2012, covered wage minus the applicable wage reduction (if any).

c. If the sum of the percentages obtained exceeds the applicable percentage multiplier for that member, the percentage obtained above for each class of service shall be subject to reduction so that the total shall not exceed the member's applicable percentage multiplier in the order specified in paragraph 12.3(3)"c."

Iowa Admin. Code r. 495-12.3

Amended by IAB April 8, 2020/Volume XLII, Number 21, effective 5/13/2020