SB 14

           Second Regular Session of the 124th General Assembly (2026)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
  Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2025 Regular Session of the General Assembly.
      SENATE ENROLLED ACT No. 14
    AN ACT to amend the Indiana Code concerning pensions.
    Be it enacted by the General Assembly of the State of Indiana:
    SECTION 1. IC 5-1-14-15, AS AMENDED BY P.L.146-2008,
SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 15. (a) Before July 1, 2008, a county or
municipality may issue bonds, notes, or other obligations for the
purpose of providing funds to pay pension benefits under IC 36-8-6,
IC 36-8-7, or IC 36-8-7.5.
    (b) Notwithstanding any other law:
      (1) bonds, notes, or other obligations issued for the purpose
      described in this section may have a final maturity date up to, but
      not exceeding, forty (40) years from the date of original issuance;
      and
      (2) the amount of bonds, notes, or other obligations that may be
      issued for the purpose described in this section may not exceed
      two percent (2%) of the true tax value of property located within
      the county or municipality. and
      (3) the proceeds of bonds, notes, or other obligations issued for
      the purpose described in this section may be deposited to the
      issuing county's or municipality's separate account described in
      IC 5-10.3-11-6.
    (c) This section is supplemental to all other laws but does not
relieve a county or municipality from complying with other procedural
requirements for the issuance of bonds, notes, or other obligations.
    SECTION 2. IC 5-10-1.1-1.5, AS AMENDED BY P.L.9-2024,
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SECTION 122, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 1.5. (a) The state, through the
budget agency, may shall adopt a defined contribution plan, under
Section 401(a) of the Internal Revenue Code, for the purpose of
matching all or a specified portion of state employees' contributions to
the state employees' deferred compensation plan and for any additional
purposes established by statute.
    (b) The deferred compensation committee shall be the trustee of a
plan established under subsection (a) as described in section 4 of this
chapter. A plan established under subsection (a) shall be administered
by the state comptroller as described in section 5 of this chapter.
    (c) The deferred compensation committee may approve funding
offerings for a plan established under subsection (a), which may be the
same as offerings for the state employees' deferred compensation plan.
All funds in each plan shall be separately accounted for but may be
commingled for investment purposes.
    (d) This subsection applies before January 1, 2027. Contributions
to a plan established under subsection (a) are limited to the amount of
biennial appropriations the budget agency determines are available for
any such purposes.
    (e) This subsection applies after December 31, 2026. Subject to
subsections (f) and (g), after December 31, 2026, the state shall
make contributions to the defined contribution plan established for
each state employee under subsection (a) that match, dollar for
dollar, each employee's contributions to the employee's deferred
compensation plan.
    (f) The following apply to state contributions under subsection
(e):
      (1) State contributions may not exceed twenty-eight dollars
      ($28) for each payroll warrant or payroll authorization.
      (2) State contributions are limited to the amount of biennial
      appropriations the budget agency determines are available
      for any such purposes.
      (3) Before any increase in the state contribution amount, the
      amount must be reviewed by the budget committee
      established by IC 4-12-1-3.
    (g) The budget agency may do the following in consultation with
the state comptroller:
      (1) Suspend, in extraordinary financial circumstances, the
      payment of state contributions under subsection (e).
      (2) If sufficient funds are available, resume the payment of
      state contributions following the suspension of payments
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       under subdivision (1).
       (3) If sufficient funds are available, make contributions to the
       defined contribution plan established for each state employee
       under subsection (a) in an amount equal to the contributions
       that each state employee did not receive as a result of the
       suspension of payments under subdivision (1).
    (h) The deferred compensation committee may use funds available
under the plan to hire or contract with qualified attorneys, financial
advisers, or other professional or administrative persons that the
committee believes are necessary or useful in the administration of the
plan.
    (e) (i) A plan established under subsection (a) must include
appropriate provisions concerning the plan's day to day operation and
any other provisions that are appropriate. Notwithstanding IC 22-2-6-2,
the plan may also include provisions for the use of automated voice
response units and telephonic communications, online activities, and
other technology for participant elections, directions, and services if the
technology has sufficient capacity to record and store the elections and
directions.
    (f) The state is obligated at any particular time only for the current
market value of the funding previously made to a plan established
under subsection (a).
    (g) (j) The state board of finance shall extend the plan established
under subsection (a) to any political subdivision that also elects to use
the state employees' deferred compensation plan for its employees as
authorized in section 7(b)(2) or 7(b)(3) of this chapter.
    SECTION 3. IC 5-10-1.1-7.6 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 7.6. For participants who are
subject to IC 5-10-8.5-9.7(b), the state comptroller shall transfer
from the state general fund a one (1) time contribution of funds to
each participant's defined contribution plan account under section
1.5(a) of this chapter based on the contributions the member would
have received according to IC 5-10-8.5-15 based on each member's
age and years of service. The deferred compensation committee
shall adopt any plan provisions necessary to implement this
contribution.
    SECTION 4. IC 5-10-8-8.5, AS AMENDED BY P.L.201-2023,
SECTION 78, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 8.5. (a) The retiree health benefit trust fund
is following are established to provide funding for a retiree health
benefit plan developed under IC 5-10-8.5, including to provide
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continued funding for a retiree health benefit plan for individuals
described in IC 5-10-8.5-9.7(a) and the individuals who elect to
continue in the retiree health benefit trust fund pursuant to
IC 5-10-8.5-9.7(c):
       (1) Before January 1, 2027, the retiree health benefit trust
       fund.
       (2) After December 31, 2026, the 2027 retiree health benefit
       trust fund.
The trust fund described in subdivision (1) will be terminated upon
the completion of the action required under IC 5-10-8.5-9.7.
    (b) The trust fund funds shall be administered by the INPRS. The
expenses of administering the trust fund funds shall be paid from
money in the trust fund. funds. Subject to section 8.6 of this chapter,
the trust fund consists funds consist of cigarette tax revenues deposited
in the fund funds under IC 6-7-1-28.1(6) and other appropriations,
revenues, or transfers to the trust fund funds under IC 4-12-1.
    (c) The INPRS shall invest the money in the trust fund funds not
currently needed to meet the obligations of the trust fund funds in the
same manner and with the same limitations described in IC 5-10.5-4-1
and IC 5-10.5-5-1.
    (d) The trust fund is funds are considered a trust fund for purposes
of IC 4-9.1-1-7. Money may not be transferred, assigned, or otherwise
removed from the trust fund funds by the state board of finance, the
budget agency, or any other state agency, except as provided under
IC 5-10-8.5-9.7 and IC 6-7-1-28.1(6)(B).
    (e) The trust fund funds shall be established and administered in a
manner that complies with Internal Revenue Code requirements
concerning health reimbursement arrangement (HRA) trusts.
Contributions by the state to the trust fund funds are irrevocable. All
assets held in the trust fund funds must be held for the exclusive
benefit of participants of the retiree health benefit plan developed
under IC 5-10-8.5 and their beneficiaries. Subject to IC 5-10-8.5-9.7,
all assets in the trust fund: funds:
       (1) are dedicated exclusively to providing benefits to participants
       of the plan and their beneficiaries according to the terms of the
       plan; and
       (2) are exempt from levy, sale, garnishment, attachment, or other
       legal process.
    (f) Money in the trust fund funds does not revert to the state general
fund at the end of any state fiscal year.
    (g) The money in the trust fund funds is appropriated to the INPRS
for providing the retiree health benefit plan developed under
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IC 5-10-8.5.
    (h) The budget agency may transfer appropriations from federal or
dedicated funds to the retiree health benefit trust fund. trust funds.
    SECTION 5. IC 5-10-8-8.6 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 8.6. (a) This section does not apply to
cigarette tax revenues deposited in the retiree health benefit trust
fund or the 2027 retiree health benefit trust fund under
IC 6-7-1-28.1(6)(B) after December 31, 2026.
    (b) The INPRS shall do the following not later than December
31, 2026:
      (1) Determine the amount of forthcoming appropriations,
      revenues, or transfers to the retiree health benefit trust fund
      under IC 4-12-1 that are not currently needed to meet the
      obligations of the retiree health benefit plan developed under
      IC 5-10-8.5.
      (2) Provide written notice of the amount determined under
      subdivision (1) to the budget agency.
    (c) This subsection applies after December 31, 2026. Before
appropriations, revenues, or transfers under IC 4-12-1 are
deposited in the retiree health benefit trust fund, the budget agency
shall transfer the amounts determined by the INPRS under
subsection (b)(1) to the state general fund. The budget agency shall
deposit the remainder of the appropriations, revenues, or transfers
in the retiree health benefit trust fund or the 2027 retiree health
benefit trust fund.
    SECTION 6. IC 5-10-8.5-1, AS AMENDED BY P.L.229-2011,
SECTION 70, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 1. (a) Except as provided in this section, this
chapter applies to an individual who is one (1) of subsection (b), each
of the following is a participant in the retirement medical benefits
account:
      (1) An employee of the executive, legislative, or judicial branch
      of state government.
      (2) A state elected or appointed officer.
      (3) A member of the general assembly.
      (4) An elected officer paid by the state.
      (5) An officer paid by the state under IC 33-23-5-10,
      IC 33-38-5-7, or IC 33-39-6-2.
    (b) An individual described in subsection (a) other than The
following is a participant individuals are not participants in the
retirement medical benefits account:
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     (1) A conservation officer of the department of natural resources.
     (2) An employee of the state excise police.
     (3) An employee of the state police department, other than the
     following:
         (A) An employee of the state police department who waived
         coverage under a common and unified plan of self-insurance
         under IC 5-10-8-6 before July 1, 2011.
         (B) An employee of the state police department who makes an
         election under IC 5-10-8.5-9.5.
         (C) An employee of the state police department who makes an
         election under IC 5-10-8.5-9.6.
     (4) An individual who becomes employed in a position
     described in subsection (a) after March 14, 2026.
     (5) An individual whose membership in the account is
     terminated under section 9.7(b) of this chapter.
   SECTION 7. IC 5-10-8.5-9.7 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE UPON PASSAGE]: Sec. 9.7. (a) This section does not
apply to a:
     (1) retired participant or the spouse and dependents of a
     retired participant; or
     (2) participant who is eligible to receive an additional
     contribution under section 16 of this chapter.
   (b) Subject to applicable federal tax law, except as provided in
subsection (c), the following apply after December 31, 2026:
     (1) Each participant's membership in the retirement medical
     benefits account is terminated.
     (2) The amounts in each participant's subaccount are
     forfeited.
     (3) The INPRS shall do the following for each participant:
         (A) Terminate the participant's membership in the
         retirement medical benefits account.
         (B) Transfer the amounts in the participant's subaccount
         to the state general fund to be used in the manner required
         under subdivision (4).
     (4) The state comptroller shall transfer from the state general
     fund to each participant's defined contribution plan under
     IC 5-10-1.1-1.5(a) an amount equal to the balance in each
     participant's subaccount at the time the subaccount was
     forfeited under subdivision (2) in accordance with the
     amounts a member would have received under section 15 of
     this chapter based on each member's age and years of service.
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    (c) Subsection (b) does not apply to a participant who makes a
one (1) time irrevocable election to become a participant in a
successor retirement medical benefits account. An election under
this subsection must be made to the INPRS:
      (1) during the open enrollment period for state employees;
      and
      (2) not later than December 1, 2026.
    SECTION 8. IC 5-10-8.5-15, AS AMENDED BY P.L.92-2021,
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 15. (a) Except as provided in subsections (c),
(d), and (e), a participant's employer shall make contributions annually
to the account on behalf of the participant sufficient to provide the
benefit described in section 17 of this chapter. For a participant
meeting the eligibility rules set forth in section 17 of this chapter, the
amount credited to the participant's subaccount balance shall be the
sum of annual contributions and earnings for each year of service. The
amount of the contribution each fiscal year must equal or exceed the
following, based on the participant's age on the last day of the calendar
year that is in the fiscal year in which the contribution is made:
     Participant's Age in Years  Annual Contribution
                                                             Amount
           Less than 30  $ 500
           At least 30, but less than 40  $ 800
           At least 40, but less than 50  $ 1,100
           At least 50  $ 1,400
    (b) The INPRS shall determine by rule the date on which the
contributions are credited to participants' subaccounts.
    (c) A contribution under this section shall not be made after June
30, 2011, to any of the following participants:
      (1) A conservation officer of the department of natural resources.
      (2) An employee of the state excise police.
      (3) An employee of the state police department, other than the
      following:
         (A) An employee of the state police department who waived
         coverage under a common and unified plan of self-insurance
         under IC 5-10-8-6 before July 1, 2011.
         (B) An employee of the state police department who makes an
         election under IC 5-10-8.5-9.5.
         (C) An employee of the state police department who makes an
         election under IC 5-10-8.5-9.6.
    (d) For individuals who are employed on June 30, 2011, the accrued
annual contributions made in accordance with subsection (a) to an
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account described in section 14 of this chapter on behalf of the
individuals for any years the individuals were employed as described
in section 1(b)(1) through 1(b)(3) of this chapter shall be transferred to
the respective plans described in IC 5-10-8-6(a) for those individuals
and shall be used only to reduce the unfunded other post-employment
benefit (OPEB) liability of those plans and not to increase benefits or
reduce premiums.
    (e) A contribution under this section shall not be made after June
30, 2017, to a participant who on June 30, 2017:
       (1) is eligible for a normal, unreduced retirement benefit from the
       public employee retirement fund of which the participant is a
       member; and
       (2) has completed:
         (A) fifteen (15) years of service with the participant's employer;
         or
         (B) ten (10) years of service as an elected or appointed officer.
    (f) Each year, the INPRS shall:
       (1) report the assets and liabilities of the retiree health benefit
       trust fund or the 2027 retiree health benefit trust fund; and
       (2) based on the assets and liabilities of the retiree health benefit
       trust fund or the 2027 retiree health benefit trust fund,
       recommend an employer contribution amount to fund the
       participants' benefits described in section 17 of this chapter.
    SECTION 9. IC 5-10.2-4-3, AS AMENDED BY P.L.2-2007,
SECTION 93, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 3. (a) This subsection applies to a member who
retires before January 1, 2028. Except as provided in subsection (f),
(h), in computing the retirement benefit for a nonteacher member,
"average of the annual compensation" means the average annual
compensation calculated using the twenty (20) calendar quarters of
service in a position covered by the retirement fund before retirement
in which the member's annual compensation was the highest. However,
in order for a quarter to be included in the twenty (20) calendar
quarters, the nonteacher member must have performed service
throughout the calendar quarter. All twenty (20) calendar quarters do
need not have to be continuous but they must be in groups of four (4)
consecutive calendar quarters. The same calendar quarter may not be
included in two (2) different groups.
    (b) This subsection applies to a member who retires after
December 31, 2027. This subsection does not apply to a teacher
member described in subsection (d) or (e). Except as provided in
subsection (h), in computing the retirement benefit for a
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nonteacher member, "average of the annual compensation" means
average annual compensation calculated using the greater of the
following:
      (1) The five (5) calendar years of service before retirement in
      which the member's annual compensation for the calendar
      year was the highest.
      (2) The five (5) fiscal years of service before retirement in
      which the member's annual compensation for the fiscal year
      was the highest.
    (c) The following apply to the calculation under subsection (b):
      (1) A year does not qualify for inclusion in the calculation
      unless:
         (A) the year is equal to twelve (12) months; and
         (B) the member received creditable service for at least six
         (6) months throughout the year.
      (2) A calendar year begins on January 1.
      (3) A fiscal year begins on July 1.
      (4) The five (5) years need not be continuous.
    (b) (d) This subsection does not apply to a teacher member
described in subsection (c). (e). In computing the retirement benefit for
a teacher member, "average of the annual compensation" means the
average annual compensation for the five (5) years of service before
retirement in which the member's annual compensation was highest. In
order for a year to be included in the five (5) years, the teacher member
must have received for the year credit under IC 5-10.4-4-2 for at least
one-half (1/2) year of service. The five (5) years do need not have to be
continuous.
    (c) (e) This subsection applies to a member of the Indiana state
teachers' retirement fund who serves in an elected position for which
the member takes an unpaid leave of absence. In computing the
retirement benefit for a teacher member described in this subsection for
years of service to which IC 5-10.4-5-7 does not apply, "average of the
annual compensation" means the annual compensation for the one (1)
year of service before retirement in which the member's annual
compensation was highest. In order for a year to be used, the teacher
member must have received for the year credit under IC 5-10.4-4-2 for
at least one-half (1/2) year of service.
    (d) (f) Subject to IC 5-10.2-2-1.5, "annual compensation" means:
      (1) the basic salary earned by and paid to the member plus the
      amount that would have been part of that salary but for:
         (A) the state's, a school corporation's, a participating political
         subdivision's, or a state educational institution's paying the
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         member's contribution to the fund for the member; or
         (B) the member's salary reduction agreement established under
         Section 125, 403(b), or 457 of the Internal Revenue Code; and
       (2) in the case of a member described in subsection (c) (e) and for
       years of service to which IC 5-10.4-5-7 does not apply, the basic
       salary that was not paid during the year but would have been paid
       to the member during the year under the member's employment
       contracts, if the member had not taken any unpaid leave of
       absence to serve in an elected position.
The portion of a back pay award or a similar award that the board
determines is compensation under an agreement or under a judicial or
an administrative proceeding shall be allocated by the board among the
years the member earned or should have earned the compensation.
Only that portion of the award allocated to the year the award is made
is considered to have been earned during the year the award was made.
Interest on an award is not considered annual compensation for any
year.
    (e) (g) This subsection applies to a member who retires before
January 1, 2028. Compensation of not more than two thousand dollars
($2,000) received from the employer in contemplation of the member's
retirement, including severance pay, termination pay, retirement bonus,
or commutation of unused sick leave or personal leave, may be
included in the total annual compensation from which the average of
the annual compensation is determined, if it is received:
       (1) before the member ceases service; or
       (2) within twelve (12) months after the member ceases service.
    (f) (h) This subsection applies to a member of the general assembly:
       (1) who is a participant in the legislators' retirement system
       established under IC 2-3.5;
       (2) who is also a member of the public employees' retirement fund
       or the Indiana state teachers' retirement fund; and
       (3) whose years of service in the general assembly may not be
       considered in determining the average of the annual
       compensation under this section, as provided in
       IC 2-3.5-1-2(b)(2) or IC 2-3.5-3-1(c).
The board shall use the board's actuarial salary increase assumption to
project the salary for any previous year needed to determine the
average of the annual compensation.
    SECTION 10. IC 5-10.2-4-3.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 3.2. (a) This section applies to the
calculation of the average of the annual compensation under
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section 3 of this chapter for members who retire after December
31, 2027.
   (b) For purposes of this section, "compensation received in
contemplation of retirement" means compensation that:
     (1) a member received:
        (A) during the member's last year of service; and
        (B) after the member's last year of service; and
     (2) is greater than one hundred twenty percent (120%) of the
     compensation the member received during the year
     immediately before the member's last year of service.
   (c) For a member who:
     (1) retires after December 31, 2027; and
     (2) served in a covered position during the entire year before
     the member's last year of service;
compensation received in contemplation of retirement is excluded
from the average of the annual compensation.
   (d) For purposes of this section, a year must begin on January
1 or July 1 on the same basis as the average of the annual
compensation.
   SECTION 11. IC 5-10.3-7-1, AS AMENDED BY P.L.92-2019,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 1. (a) This section does not apply to:
     (1) members of the general assembly; or
     (2) employees covered by section 3 of this chapter.
   (b) As used in this section, "employees of the state" includes:
     (1) employees of the judicial circuits whose compensation is paid
     from state funds;
     (2) elected and appointed state officers;
     (3) prosecuting attorneys and deputy prosecuting attorneys of the
     judicial circuits, whose compensation is paid in whole or in part
     from state funds, including participants in the prosecuting
     attorneys retirement fund established under IC 33-39-7;
     (4) employees in the classified service;
     (5) employees of any state department, institution, board,
     commission, office, agency, court, or division of state government
     receiving state appropriations and having the authority to certify
     payrolls from appropriations or from a trust fund held by the
     treasurer of state or by any department;
     (6) employees of any state agency that is a body politic and
     corporate;
     (7) except as provided under IC 5-10.5-7-4, employees of the
     board of trustees of the Indiana public retirement system;
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      (8) persons who:
        (A) are employed by the state;
        (B) have been classified as federal employees by the United
        States Secretary of Agriculture; and
        (C) are excluded from coverage as federal employees by the
        federal Social Security program under 42 U.S.C. 410;
      (9) the directors and employees of county offices of family and
      children; and
      (10) members and employees of the state lottery commission.
   (c) An employee of the state or of a participating political
subdivision who:
      (1) became a full-time employee of the state or of a participating
      political subdivision in a covered position; and
      (2) had not become a member of the fund;
before April 1, 1988, shall on April 1, 1988, become a member of the
fund unless the employee is excluded from membership under section
2 of this chapter.
   (d) Except as otherwise provided, any individual who becomes a
full-time employee of the state or of a participating political
subdivision in a covered position after March 31, 1988, becomes a
member of the fund on the date the individual's employment begins
unless the individual is excluded from membership under section 2 of
this chapter.
   (e) An individual:
      (1) who becomes a full-time employee of a political subdivision
      in a covered position after June 30, 2015;
      (2) who is employed by a political subdivision that has elected in
      an ordinance or resolution adopted under IC 5-10.3-6-1 and
      approved by the board to require an employee in the covered
      position to become a member of the fund; and
      (3) who is not excluded from membership under section 2 of this
      chapter;
becomes a member of the fund on the date the individual's employment
begins.
   (f) An individual:
      (1) who becomes a full-time employee of a political subdivision
      in a covered position after an ordinance or resolution described in
      subdivision (2) that is adopted by the political subdivision has
      been approved by the board;
      (2) who is employed by a political subdivision that has elected in
      an ordinance or resolution adopted under IC 5-10.3-6-1 and
      approved by the board:
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        (A) to allow an employee in the covered position to become a
        member of the fund or a member of the public employees'
        defined contribution plan at the discretion of the employee; and
        (B) to require an employee in a covered position to make an
        election under IC 5-10.3-12-20.5 in order to become a member
        of the plan;
      (3) who does not make an election under IC 5-10.3-12-20.5 to
      become a member of the public employees' defined contribution
      plan; and
      (4) who is not excluded from membership under section 2 of this
      chapter;
becomes a member of the fund on the date the individual's employment
begins.
    (g) An individual:
      (1) who becomes a full-time employee of a political subdivision
      in a covered position after an ordinance or resolution described in
      subdivision (2) that is adopted by the political subdivision has
      been approved by the board;
      (2) who is employed by a political subdivision that has elected in
      an ordinance or resolution adopted under IC 5-10.3-6-1 and
      approved by the board:
        (A) to allow an employee in the covered position to become a
        member of the fund or the public employees' defined
        contribution plan at the discretion of the employee; and
        (B) to require an employee to make an election under section
        1.1 of this chapter in order to become a member of the fund;
      (3) who does make an election under section 1.1 of this chapter to
      become a member of the fund; and
      (4) who is not excluded from membership under section 2 of this
      chapter;
becomes a member of the fund on the date the individual's employment
begins.
    (h) An individual who makes an election to participate in the
fund under IC 5-10.3-12-33 becomes a member of the fund on the
date the board receives the election.
    SECTION 12. IC 5-10.3-7-4.3, AS ADDED BY P.L.209-2016,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 4.3. (a) A member of the fund who is also a
member of the public employees' defined contribution plan may
purchase and claim years of service credit in the fund subject to the
following requirements:
      (1) The member has at least one (1) year of credited service in the
SEA 14 — CC 1
                                   14
     fund.
     (2) The member has at least ten (10) years of combined in:
        (A) credited service in a covered position in the fund; and
        (B) years of participation in a covered position in the plan;
     before the member may claim the years of service credit.
     (3) After acquiring one (1) year of credited service in the fund and
     before the member retires, the member must make the following
     contributions to the fund:
        (A) Contributions that are equal to the product of the following:
          (i) The member's salary at the time the member makes a
          contribution for the service credit.
          (ii) A percentage rate, as determined by the actuary of the
          fund, based on the age of the member at the time the member
          makes a contribution for service credit and computed to result
          in a contribution amount that approximates the actuarial
          present value of the benefit attributable to the service credit
          purchased.
          (iii) The number of years of service credit that the member
          intends to purchase.
        (B) Contributions for any accrued interest, at a rate determined
        by the actuary of the fund, for the period from the member's
        initial membership in the fund to the date payment is made by
        the member.
   (b) A member who:
     (1) who terminates employment before becoming eligible to
     receive a monthly allowance; or
     (2) who receives a monthly allowance for the same service from
     another tax supported public employee retirement plan other than
     under the federal Social Security Act;
may withdraw the personal contributions made under this section plus
accumulated interest after submitting an application for a refund to the
fund in the manner prescribed by the board.
   (c) The following apply to the purchase of service credit under this
section:
     (1) The board may allow a member to make periodic payments of
     the contributions required for the purchase of service credit in the
     fund.
     (2) A member may elect to make a transfer of the vested portion
     of the member's annuity savings account balance attributable to
     participation in the public employees' defined contribution plan
     to purchase service credit in the fund.
     (3) The board may deny an application for the purchase of service
SEA 14 — CC 1
                                  15
     credit in the fund if the purchase would exceed the limitations
     under Section 415 of the Internal Revenue Code.
     (4) A member may not claim the service credit for the purpose of
     determining eligibility or computing benefits unless the member
     has made all the payments required for the purchase of the service
     credit.
   (d) To the extent permitted by the Internal Revenue Code and
applicable regulations, the fund may accept, on behalf of a fund
member who is purchasing service credit under this section, a
rollover of a distribution from any of the following:
     (1) A qualified plan described in Section 401(a) or 403(a) of
     the Internal Revenue Code.
     (2) An annuity contract or account described in Section 403(b)
     of the Internal Revenue Code.
     (3) An eligible plan that is maintained by a state, a political
     subdivision of a state, or an agency or instrumentality of a
     state or a political subdivision of a state under Section 457(b)
     of the Internal Revenue Code.
     (4) An individual retirement account or annuity described in
     Section 408(a) or 408(b) of the Internal Revenue Code.
   (e) To the extent permitted by the Internal Revenue Code and
applicable regulations, the fund may accept, on behalf of a member
who is purchasing service credit under this section, a trustee to
trustee transfer from any of the following:
     (1) An annuity contract or account described in Section 403(b)
     of the Internal Revenue Code.
     (2) An eligible deferred compensation plan under Section
     457(b) of the Internal Revenue Code.
   (f) The member's employer may pay all or a part of the
member's contributions required for purchase of service credit
under this section. In that event, the actuary shall determine the
amortization, and subsections (b), (c)(1), (c)(4), and (d) do not
apply.
   SECTION 13. IC 5-10.3-11-3, AS AMENDED BY P.L.27-2019,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 3. The pension relief fund may be used only for
making payments to cities, counties, towns, and townships, referred to
as "units of local government" in this chapter, having pension funds
established under IC 18-1-12, IC 19-1-18, IC 19-1-24, IC 19-1-25-4,
IC 19-1-30, IC 19-1-37, or IC 19-1-44 (all before their repeal),
IC 36-8-6, IC 36-8-7, or IC 36-8-7.5, and paying reasonable
administrative expenses approved by the state board. Payments
SEA 14 — CC 1
                                  16
received by the units may be used only for
      (1) pension payments from a pension fund listed in this section.
      or
      (2) withdrawals under section 6 of this chapter.
    SECTION 14. IC 5-10.3-11-6 IS REPEALED [EFFECTIVE JULY
1, 2026]. Sec. 6. (a) The state board shall maintain separate accounts
for each unit of local government for purposes of this section. The
accounts are separate and distinct accounts within the public
employees' retirement fund and the pension relief fund.
    (b) A unit of local government may do the following:
      (1) Make deposits at any time to the separate account established
      for the unit under this section.
      (2) Withdraw once each year from the unit's separate account all
      or a part of the balance in the account to pay pension benefits
      under IC 36-8-6, IC 36-8-7, or IC 36-8-7.5.
      (3) Direct the state board at any time to pay from the unit's
      separate account all or a part of either or both of the following:
         (A) The unit's employer contributions under IC 36-8-8-6.
         (B) The contributions paid by the unit for a member under
         IC 36-8-8-8(a).
    SECTION 15. IC 5-10.3-12-25, AS AMENDED BY P.L.241-2015,
SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 25. (a) Member contributions and net
earnings on the member contributions in the member contribution
subaccount belong to the member at all times and do not belong to any
employer.
    (b) A member is vested in the employer contribution subaccount in
accordance with the following schedule:
      Years of participation in the        Vested percentage of
                  plan  employer contributions
                                               and earnings
                    1  20%
                    2  40%
                    3  60%
                    4  80%
                    5  100%
For purposes of vesting in the employer contribution subaccount, only
a member's full years of participation in the plan may be counted.
    (c) The amount that a member may withdraw from the member's
account is limited to the vested portion of the account.
    (d) A member who attains normal retirement age is fully vested in
all amounts in the member's account.
SEA 14 — CC 1
                                   17
   (e) If a member separates from service with the member's employer
before the member is fully vested in the employer contribution
subaccount, the amount in the employer contribution subaccount that
is not vested is forfeited as of the date the member separates from
service.
   (f) Amounts forfeited under subsection (e) must be used to reduce
the unfunded accrued liability of the fund as determined under
IC 5-10.2-2-11(a)(3) and IC 5-10.2-2-11(a)(4). as determined by the
board.
   (g) A member may not earn creditable service (as defined in
IC 5-10.2-3-1(a)) under the plan.
   SECTION 16. IC 5-10.3-12-33 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 33. (a) This section applies
notwithstanding sections 20, 20.3, 20.5, and 31 of this chapter.
   (b) An employer that participates in the fund may allow a
member who is fully vested in the employer contribution
subaccount under section 25(b) of this chapter to make an election
to participate in the fund.
   (c) The following apply to an election made under subsection
(b):
      (1) The election must be made:
        (A) within a time; and
        (B) in a form and manner;
      approved by the board.
      (2) An employee who makes an election becomes a member of
      the fund on the date described in IC 5-10.3-7-1(h).
      (3) The election is irrevocable.
   (d) A member who does not make an election under subsection
(b) remains a member of the plan. The failure to make an election
under subsection (b) is irrevocable.
   SECTION 17. IC 5-10.4-4-1, AS AMENDED BY P.L.104-2022,
SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 1. (a) The members of the fund include:
      (1) legally qualified and regularly employed teachers in the public
      schools;
      (2) persons employed by a governing body, who were qualified
      before their election or appointment;
      (3) legally qualified and regularly employed teachers at Ball State
      University, Indiana State University, University of Southern
      Indiana, and Vincennes University;
      (4) legally qualified and regularly employed teachers in a state
SEA 14 — CC 1
                                  18
      educational institution whose teachers devote their entire time to
      teaching;
      (5) legally qualified and regularly employed teachers in state
      benevolent, charitable, or correctional institutions;
      (6) legally qualified and regularly employed teachers in an
      experimental school in a state university who teach elementary or
      high school students;
      (7) as determined by the board, certain instructors serving in a
      state educational institution extension division not covered by a
      state retirement law;
      (8) employees and officers of the department of education and of
      the fund who were qualified before their election or appointment;
      (9) a person who:
        (A) is employed as a nurse appointed under IC 20-34-3-6 by a
        school corporation located in a city having a population of more
        than sixty-nine thousand (69,000) and less than sixty-nine
        thousand five hundred (69,500); and
        (B) participated in the fund before December 31, 1991, in the
        position described in clause (A); and
      (10) persons who are employed by the fund.
   (b) Teachers in any state institution who accept the benefits of a
state supported retirement benefit system comparable to the fund's
benefits may not come under the fund unless permitted by law or the
rules of the board.
   (c) The members of the fund do not include substitute teachers who
have not obtained an associate degree or a baccalaureate degree.
   (d) Except as provided in IC 5-10.4-8-18, the members of the fund
do not include individuals who participate in the teachers' defined
contribution plan under IC 5-10.4-8.
   (e) An individual who makes an election to participate in the
fund under IC 5-10.4-8-18 becomes a member of the fund on the
date the board receives the election.
   SECTION 18. IC 5-10.4-4-2.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 2.3. (a) A member of the fund
who is also a member of the teachers' defined contribution plan
may purchase and claim years of service credit in the fund subject
to the following requirements:
      (1) The member has at least one (1) year of credited service in
      the fund.
      (2) The member has at least ten (10) years combined in:
        (A) credited service in a covered position in the fund; and
SEA 14 — CC 1
                                 19
        (B) years of participation in a covered position in the plan;
      before the member may claim the years of service credit.
      (3) Before the member retires, the member must make the
      following contributions to the fund:
        (A) Contributions that are equal to the product of the
        following:
           (i) The member's salary at the time the member makes a
           contribution for the service credit.
           (ii) A percentage rate, as determined by the actuary of the
           fund, based on the age of the member at the time the
           member makes a contribution for service credit and
           computed to result in a contribution amount that
           approximates the actuarial present value of the benefit
           attributable to the service credit purchased.
           (iii) The number of years of service credit that the
           member intends to purchase.
        (B) Contributions for any accrued interest, at a rate
        determined by the actuary of the fund, for the period from
        the member's initial membership in the fund to the date
        payment is made by the member.
   (b) A member who:
      (1) terminates employment before becoming eligible to receive
      a monthly allowance; or
      (2) receives a monthly allowance for the same service from
      another tax supported public employee retirement plan other
      than under the federal Social Security Act;
may withdraw the personal contributions made under this section
plus accumulated interest after submitting an application for a
refund to the fund in the manner prescribed by the board.
   (c) The following apply to the purchase of service credit under
this section:
      (1) The board may allow a member to make periodic
      payments of the contributions required for the purchase of
      service credit in the fund.
      (2) A member may elect to make a transfer of the vested
      portion of the member's annuity savings account balance
      attributable to participation in the public employees' defined
      contribution plan to purchase service credit in the fund.
      (3) The board may deny an application for the purchase of
      service credit in the fund if the purchase would exceed the
      limitations under Section 415 of the Internal Revenue Code.
      (4) A member may not claim the service credit for the purpose
SEA 14 — CC 1
                                 20
     of determining eligibility or computing benefits unless the
     member has made all the payments required for the purchase
     of the service credit.
   (d) To the extent permitted by the Internal Revenue Code and
applicable regulations, the fund may accept, on behalf of a fund
member who is purchasing service credit under this section, a
rollover of a distribution from any of the following:
     (1) A qualified plan described in Section 401(a) or 403(a) of
     the Internal Revenue Code.
     (2) An annuity contract or account described in Section 403(b)
     of the Internal Revenue Code.
     (3) An eligible plan that is maintained by a state, a political
     subdivision of a state, or an agency or instrumentality of a
     state or a political subdivision of a state under Section 457(b)
     of the Internal Revenue Code.
     (4) An individual retirement account or annuity described in
     Section 408(a) or 408(b) of the Internal Revenue Code.
   (e) To the extent permitted by the Internal Revenue Code and
applicable regulations, the fund may accept, on behalf of a member
who is purchasing service credit under this section, a trustee to
trustee transfer from any of the following:
     (1) An annuity contract or account described in Section 403(b)
     of the Internal Revenue Code.
     (2) An eligible deferred compensation plan under Section
     457(b) of the Internal Revenue Code.
   (f) The member's employer may pay all or a part of the
member's contributions required for purchase of service credit
under this section. In that event, the actuary shall determine the
amortization, and subsections (b), (c)(1), (c)(4), and (d) do not
apply.
   SECTION 19. IC 5-10.4-8-18 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2026]: Sec. 18. (a) This section applies
notwithstanding sections 6 and 17 of this chapter.
   (b) A member who is fully vested in the employer contribution
subaccount under section 11 of this chapter may make an election
to participate in the fund.
   (c) The following apply to an election made under subsection
(b):
     (1) The election must be made:
       (A) within a time; and
       (B) in a form and manner;
SEA 14 — CC 1
                                   21
      approved by the board.
      (2) An employee who makes an election under subsection (b)
      becomes a member of the fund on the date described in
      IC 5-10.4-4-1(e).
      (3) The election is irrevocable.
    (d) A member who does not make an election under subsection
(b) remains a member of the plan. The failure to make an election
under subsection (b) is irrevocable.
    SECTION 20. IC 5-11-20-6, AS ADDED BY P.L.129-2024,
SECTION 8 AND P.L.136-2024, SECTION 5, IS AMENDED TO
READ AS FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 6. (a) On or
before June 15 of each year, the system shall send a delinquency notice
to a delinquent political subdivision. The delinquency notice must
inform the delinquent political subdivision that: of the following:
      (1) An employee retirement plan offered by the delinquent
      political subdivision:
        (A) received less than ninety-five percent (95%) of the
        actuarially determined contribution for at least three (3) out of
        the last five (5) immediately preceding fiscal year, years, as
        determined by the system or its agent; or
        (B) was less than fifty percent (50%) funded at any time during
        the immediately preceding fiscal year, as determined by the
        system or its agent. and
      (2) That the delinquent political subdivision must take the steps
      described in comply with subsection (b).
    (b) After receiving the notice described in subsection (a), a political
subdivision shall make a presentation that includes a remediation plan
to the interim study committee on pension management oversight
(established by IC 2-5-1.3-4) regarding the delinquent employee
retirement plan described in subsection (a).
    SECTION 21. IC 6-7-1-28.1, AS AMENDED BY P.L.213-2025,
SECTION 86, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 28.1. The taxes, registration fees, fines, or
penalties collected under this chapter shall be deposited in the
following manner:
      (1) One and seventy-six hundredths percent (1.76%) of the money
      shall be deposited in a fund to be known as the cigarette tax fund.
      (2) The following amount of the money shall be deposited in the
      state general fund:
        (A) After June 30, 2011, and before July 1, 2013, sixty and
        twenty-four hundredths percent (60.24%).
        (B) After June 30, 2013, and before July 1, 2023, fifty-six and
SEA 14 — CC 1
                                   22
        twenty-four hundredths percent (56.24%).
        (C) After June 30, 2023, fifty-six and eighty-four hundredths
        percent (56.84%).
        (D) After June 30, 2025, twenty-three and sixty-seven
        hundredths percent (23.67%).
      (3) Two and twenty-six hundredths percent (2.26%) of the money
      shall be deposited into the pension relief fund established in
      IC 5-10.3-11.
      (4) Eleven and twenty-six hundredths percent (11.26%) of the
      money shall be deposited in the healthy Indiana plan trust fund
      established by IC 12-15-44.2-17.
      (5) Fifty-nine and thirty-eight hundredths percent (59.38%) of the
      money shall be deposited in the state general fund for the purpose
      of paying appropriations for Medicaid—Current Obligations.
      (6) The following amount of the money shall be deposited in the
      state retiree health benefit trust fund established by IC 5-10-8-8.5
      as follows:
        (A) Before July 1, 2011, five and seventy-four hundredths
        percent (5.74%).
        (B) After June 30, 2011, and before July 1, 2013, zero percent
        (0%).
        (C) After June 30, 2013, four percent (4%).
        (D) After June 30, 2025, one and sixty-seven hundredths
        percent (1.67%).
        (A) After June 30, 2025, and before July 1, 2026, one and
        sixty-seven hundredths percent (1.67%) shall be deposited
        in the state retiree health benefit trust fund established by
        IC 5-10-8-8.5.
        (B) After June 30, 2026, and before July 1, 2027, one and
        sixty-seven hundredths percent (1.67%) or the amount
        determined by the budget agency shall be deposited in the
        state retiree health benefit trust fund or the 2027 retiree
        health benefit trust fund established by IC 5-10-8-8.5. If the
        budget agency determines that less than one and sixty-seven
        hundredths percent (1.67%) should be deposited in the trust
        funds, the remainder shall be transferred to the state
        general fund.
        (C) After June 30, 2027, one and sixty-seven hundredths
        percent (1.67%) of the money shall be deposited in the state
        general fund.
The money in the cigarette tax fund, the healthy Indiana plan trust fund,
or the pension relief fund at the end of a fiscal year does not revert to
SEA 14 — CC 1
                                   23
the state general fund. However, if in any fiscal year, the amount
allocated to a fund under subdivision (1) is less than the amount
received in fiscal year 1977, then that fund shall be credited with the
difference between the amount allocated and the amount received in
fiscal year 1977, and the allocation for the fiscal year to the fund under
subdivision (2) shall be reduced by the amount of that difference.
Money deposited under subdivisions (5) through (6) may not be used
for any purpose other than the purpose stated in the subdivision.
    SECTION 22. IC 22-2-6-2, AS AMENDED BY P.L.147-2019,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 2. (a) Any assignment of the wages of an
employee is valid only if all of the following conditions are satisfied:
      (1) The assignment is:
        (A) in writing;
        (B) signed by the employee personally;
        (C) by its terms revocable at any time by the employee upon
        written notice to the employer; and
        (D) agreed to in writing by the employer.
      (2) An executed copy of the assignment is delivered to the
      employer within ten (10) days after its execution.
      (3) The assignment is made for a purpose described in subsection
      (b).
    (b) A wage assignment under this section may be made for the
purpose of paying any of the following:
      (1) Premium on a policy of insurance obtained for the employee
      by the employer.
      (2) Pledge or contribution of the employee to a charitable or
      nonprofit organization.
      (3) Purchase price of bonds or securities, issued or guaranteed by
      the United States.
      (4) Purchase price of shares of stock, or fractional interests in
      shares of stock, of the employing company, or of a company
      owning the majority of the issued and outstanding stock of the
      employing company, whether purchased from such company, in
      the open market or otherwise. However, if such shares are to be
      purchased on installments pursuant to a written purchase
      agreement, the employee has the right under the purchase
      agreement at any time before completing purchase of such shares
      to cancel said agreement and to have repaid promptly the amount
      of all installment payments which theretofore have been made.
      (5) Dues to become owing by the employee to a labor
      organization of which the employee is a member.
SEA 14 — CC 1
                                24
   (6) Purchase price of merchandise, goods, or food offered by the
   employer and sold to the employee, for the employee's benefit,
   use, or consumption, at the written request of the employee.
   (7) Amount of a loan made to the employee by the employer and
   evidenced by a written instrument executed by the employee
   subject to the amount limits set forth in section 4(c) of this
   chapter.
   (8) Contributions, assessments, or dues of the employee to a
   hospital service or a surgical or medical expense plan or to an
   employees' association, trust, or plan existing for the purpose of
   paying pensions or other benefits to said employee or to others
   designated by the employee.
   (9) Payment to any credit union, nonprofit organizations, or
   associations of employees of such employer organized under any
   law of this state or of the United States.
   (10) Payment to any person or organization regulated under the
   Uniform Consumer Credit Code (IC 24-4.5) for deposit or credit
   to the employee's account by electronic transfer or as otherwise
   designated by the employee.
   (11) Premiums on policies of insurance and annuities purchased
   by the employee on the employee's life.
   (12) The purchase price of shares or fractional interest in shares
   in one (1) or more mutual funds.
   (13) A judgment owed by the employee if the payment:
      (A) is made in accordance with an agreement between the
      employee and the creditor; and
      (B) is not a garnishment under IC 34-25-3.
   (14) The purchase, rental, or use of uniforms, shirts, pants, or
   other job-related job related clothing at an amount not to exceed
   the direct cost paid by an employer to an external vendor for those
   items.
   (15) The purchase of equipment or tools necessary to fulfill the
   duties of employment at an amount not to exceed the direct cost
   paid by an employer to an external vendor for those items.
   (16) Reimbursement for education or employee skills training.
   However, a wage assignment may not be made if the education or
   employee skills training benefits were provided, in whole or in
   part, through an economic development incentive from any
   federal, state, or local program.
   (17) An advance for:
      (A) payroll; or
      (B) vacation;
SEA 14 — CC 1
                                  25
      pay.
      (18) The employee's drug education and addiction treatment
      services under IC 12-23-23.
      (19) Voluntary contributions of the employee to a federal tax
      deferred retirement account for employees of a political
      subdivision provided the account:
         (A) is in the name of the employee;
         (B) is under the direction and control of the employee; and
         (C) immediately vests with the employee.
    (c) The interest rate charged on amounts loaned or advanced to an
employee and repaid under subsection (b) may not exceed the bank
prime loan interest rate as reported by the Board of Governors of the
Federal Reserve System or any successor rate, plus four percent (4%).
    (d) The total amount of wages subject to assignment under
subsection (b)(14) and (b)(15) may not exceed the lesser of:
      (1) two thousand five hundred dollars ($2,500) per year; or
      (2) five percent (5%) of the employee's weekly disposable
      earnings (as defined in IC 24-4.5-5-105(1)(a)).
    (e) Except as provided under 29 CFR Parts 1910, 1915, 1917, 1918,
and 1926, an employee shall not be charged or subject to a wage
assignment under subsection (b)(14) or (b)(15) for protective
equipment including personal protective equipment identified under 29
CFR Parts 1910, 1915, 1917, 1918, and 1926.
    (f) A wage assignment may be made for the purpose of paying
voluntary contributions described in subsection (b)(19) without
meeting the conditions set forth in subsection (a). An employee may
opt out of a wage assignment under this subsection at any time by
providing written notice to the employer.
    SECTION 23. IC 36-8-8-3, AS AMENDED BY P.L.135-2024,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
UPON PASSAGE]: Sec. 3. (a) If a town establishes a board of
metropolitan police commissioners, or if a town becomes a city, the
municipality shall participate in the 1977 fund and shall enroll all
full-time police officers and firefighters in the 1977 fund. However, if
a police officer or former marshal is a member of the public employees'
retirement fund, the police officer or former marshal may continue as
a member of that fund instead of the 1977 fund. Notwithstanding the
age requirements under section 7(a) of this chapter, a police officer or
former marshal employed by a municipality at the time the
municipality enters the 1977 fund under this section shall be a member
of the 1977 fund unless the municipality elects to require a police
officer or former marshal elects to continue as a member of the public
SEA 14 — CC 1
                                     26
employees' retirement fund. A person may become a member of the
1977 fund under this subsection without meeting the age limitation
under section 7(a) of this chapter only if the person satisfies:
       (1) any aptitude, physical agility, or physical and mental standards
       established by a local board under IC 36-8-3.2; and
       (2) the minimum standards that are:
         (A) adopted by the system board under section 19 of this
         chapter; and
         (B) in effect on the date the person becomes a member of the
         1977 fund.
Credit for prior service of a person who becomes a member of the 1977
fund under this subsection shall be determined under section 18 or 18.1
of this chapter. No service credit beyond that allowed under section 18
or 18.1 of this chapter may be recognized under the 1977 fund.
    (b) If a unit did not establish a 1937 fund for its firefighters, the unit
may participate in the public employees' retirement fund or it may
participate in the 1977 fund. If a unit established a 1937 fund for its
firefighters, the unit is and shall remain a participant in the 1977 fund.
    (c) A unit that:
       (1) has not established a pension fund for its firefighters; or
       (2) is participating in the public employees' retirement fund under
       subsection (b);
may participate in the 1977 fund upon approval by the fiscal body,
notwithstanding IC 5-10.3-6-8. A unit that participates in the 1977 fund
under this subsection must comply with section 21 of this chapter.
However, if the unit may elect to require a police officer or firefighter
who is a member of the public employees' retirement fund the police
officer or firefighter may to continue as a member of that fund instead
of the 1977 fund.
    (d) If a unit that participates in the 1977 fund provides longevity
increases, the amount of the longevity increase provided in a year must
be greater than or equal to the amount of the longevity increase
provided in the previous year.
    (e) An airport authority may participate in the 1977 fund. An airport
authority that participates in the 1977 fund under this subsection must
comply with section 21 of this chapter. However, if the airport
authority may elect to require a police officer or firefighter who is a
member of the public employees' retirement fund the police officer or
firefighter may to continue as a member of that fund instead of the
1977 fund.
    (f) A school corporation or charter school that:
       (1) employs a school resource officer; or
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                                  27
      (2) enters into a contract or memorandum of understanding with
      a:
         (A) local law enforcement agency;
         (B) private entity; or
         (C) nonprofit corporation;
      to employ a school resource officer;
may participate in the 1977 fund. A school corporation or charter
school that participates in the 1977 fund under this subsection or
subsection (g) must comply with section 21.5 of this chapter. However,
if the school corporation or charter school may elect to require a
school resource officer who is a member of the public employees'
retirement fund the school resource officer may to continue as a
member of that fund instead of the 1977 fund.
    (g) A school resource officer hired or rehired after June 30, 2024,
who is a member of the 1977 fund shall remain in the 1977 fund.
    SECTION 24. IC 36-8-8-16, AS AMENDED BY P.L.28-2008,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 16. (a) Benefits paid under this section are subject
to section 2.5 of this chapter.
    (b) The heirs or estate of a fund member is entitled to receive at
least twelve thousand dollars ($12,000) fifteen thousand dollars
($15,000) upon the fund member's death.
    SECTION 25. An emergency is declared for this act.
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President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date:  Time:
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