All the assets of the retirement system shall be held as one fund.

1. 1.

   1. (1) The employing board shall cause to be deducted from the compensation of each member at every payroll period four percent of his compensation, and the amounts so deducted shall be transferred to the board of trustees and credited to the individual account of each member from whose compensation the deduction was made. In determining the amount earnable by a member in any payroll period, the board of trustees may consider the rate of earnable compensation payable to such member on the first day of the payroll period as continuing throughout such payroll period; it may omit deduction from compensation for any period less than a full payroll period if the employee was not a member on the first day of the payroll period; and to facilitate the making of the deductions, it may modify the deduction required of any member by such amount as shall not exceed one-tenth of one percent of the compensation upon the basis of which such deduction was made.
   2. (2) The deductions provided for herein are declared to be a part of the salary of the member and the making of such deductions shall constitute payments by the member out of his salary or earnings and such deductions shall be made notwithstanding that the minimum compensation provided by law for any member shall be reduced thereby. Every member shall be deemed to consent to the deductions made and provided for herein, and shall receipt for his full salary or compensation, and the making of said deductions and the payment of salary or compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for services rendered during the period covered by the payment except as to benefits provided by sections 169.410 to 169.540.
   3. (3) The employing board may elect to pay member contributions required by this section as an employer pick up of employee contributions under section 414(h)(2) of the Internal Revenue Code of 1986, as amended, and such contributions picked up by the employing board shall be treated as contributions made by members for all purposes of sections 169.410 to 169.540.
2. 2. Should a retirant receiving a retirement benefit pursuant to sections 169.410 to 169.540 be restored to active service and again become a member of the retirement system there shall be credited to his individual account an amount equal to the excess, if any, of his accumulated contributions at retirement over the total retirement allowances paid to him.

3. 3.

   1. (1) There shall be paid annually to the retirement system by the school district an amount equal to a certain percentage of the total compensation of all members to be known as the "normal cost contribution", and an additional amount equal to a percentage of such compensation to be known as the "accrued liability contribution". The rates percent of such contributions shall be fixed on the basis of the liabilities of the retirement system as shown by actuarial valuations. The retirement system shall make similar contributions for the members who are employees of the system.
   2. (2) On the basis of such actuarial assumptions as shall be adopted by the board of trustees, the actuary engaged by the board of trustees to make each valuation required during the period over which the accrued liability contribution is payable, at the time of making a valuation, shall determine the uniform and constant percentage of the compensation of all members in service, which, if contributed throughout their remaining period of active service, would be sufficient to provide for the payment of any pension payable on their account. The normal cost contribution rate shall be the rate percent of the compensation of all members obtained by deducting from the total liabilities of the fund the amount of assets in hand to the credit of the fund plus the amount of unfunded accrued liability and dividing the remainder by one percent of the present value of the prospective future compensation of all members in service as computed on the basis of the actuarial assumptions adopted by the board of trustees. The rate percent so determined shall be known as the "normal cost contribution rate".
   3. (3) At the first valuation following December 31, 1980, the actuary engaged by the board of trustees shall compute the accrued liability for retirement allowance and other benefits on account of all members and beneficiaries which is not dischargeable by the assets of the retirement system, less the expense and contingency reserve, and by the value of the prospective normal cost contributions payable on account of such members during the remainder of their active service at the normal cost contribution rate then in force, and such accrued liability not so dischargeable shall be known as the "initial unfunded accrued liability". A calculation shall then be made to determine the level annual amount required to liquidate the initial unfunded accrued liability not later than October 13, 2011. At each valuation following December 31, 1980, the actuary will determine any increases or decreases in the accrued liability resulting from either changes in actuarial assumptions or changes in the benefits under sections 169.410 to 169.540. Such increases or decreases in the accrued liability will be determined by the actuary under the entry age normal-frozen initial liability cost method. The amount so obtained shall be known as a "supplement" to the unfunded accrued liability. A calculation shall then be made to determine the level annual amount required to liquidate the supplement to the unfunded accrued liability by the end of fifty years from the end of the year in which the supplement is created. The level annual amounts required to liquidate the initial unfunded accrued liability and each supplement to the unfunded accrued liability are added together, and the amount so obtained shall be expressed as a percentage of the total earnable compensation of all members in service. This percentage of such total compensation shall be known as the "accrued liability contribution rate", and shall be payable until the unfunded accrued liability has been liquidated. Provided that the board may authorize a redetermination by the actuary of the unfunded accrued liability contribution rate within the limitation that the unfunded accrued liability will be amortized not later than the end of the fifty years from October 13, 1961, or the end of the year in which the supplement to the unfunded accrued liability was credited.
   4. (4) The accrued liability contribution shall be discontinued as soon as assets of the retirement system, less the expense and contingency reserve, shall equal the present value as actuarially computed and approved by the board of trustees of the total liabilities of the retirement system, less the present value computed on the basis of the normal cost contribution rate then in force of the prospective normal cost contributions to be received on account of members who are at that time in service.
4. 4. The expense and contingency reserve shall be a reserve for investment contingencies and estimated expenses of administration of the retirement system as determined annually by the board of trustees.
5. 5. Gifts, devises, bequests and legacies may be accepted by the board of trustees to be held and invested as a part of the assets of the retirement system and shall not be separately accounted for except where specific direction for the use of a gift is made by a donor.

(L. 1943 p. 805 § 9, A.L. 1951 p. 513, A.L. 1953 pp. 438, 496, A.L. 1957 p. 462, A.L. 1961 p. 384, A.L. 1967 p. 263, A.L. 1978 S.B. 542, A.L. 1981 H.B. 33, et al., A.L. 1987 H.B. 558, et al., A.L. 1989 S.B. 146)

Effective 6-14-89