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Third Substitute S.B. 63
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8 LONG TITLE
9 General Description:
10 This bill modifies the Utah State Retirement and Insurance Benefit Act to provide for
11 modified retirement benefits for new public employees and new public safety and
12 firefighter employees.
13 Highlighted Provisions:
14 This bill:
15 . defines terms;
16 . requires that the Retirement Office report when the funded status of the trust fund
17 reaches 100% funded and requires the Retirement and Independent Entities
18 Committee to study employee compensation and benefits;
19 . provides for a "Tier I" system or plan for which an employee is eligible to
20 participate if the employee initially enters regular full-time employment before July
21 1, 2011;
22 . creates a "Tier II" retirement system and plan for which an employee is eligible to
23 participate, if the employee initially enters regular full-time employment on or after
24 July 1, 2011, and which includes a:
25 . New Public Employees' Tier II Hybrid Retirement System;
26 . New Public Employees' Tier II Defined Contribution Plan;
27 . New Public Safety and Firefighter Tier II Hybrid Retirement System; and
28 . New Public Safety and Firefighter Tier II Defined Contribution Plan;
29 . provides that all new public employees including public safety, firefighters,
30 governors, and legislators may only participate in a Tier II retirement system or
31 plan;
32 . provides that new employees may choose between the Tier II hybrid system or the
33 Tier II Defined Contribution (DC) plan except governors and legislators are only
34 eligible for the Tier II DC plan;
35 . provides that the retirement benefits for public employees Tier II hybrid system
36 employees include:
37 . full retirement benefits after 35 years of service credit;
38 . 2.5% cost-of-living adjustments on the retirement allowance;
39 . a 1.5% multiplier for each year of service;
40 . a 401(k) employer contribution;
41 . a death benefit; and
42 . a disability benefit;
43 . provides that the participating employer shall contribute for public employees Tier
44 II employees the percentage of the employee's compensation equal to the
45 corresponding Tier I system amortization rate plus 10%;
46 . provides that the total public employees' Tier II contribution credited specifically on
47 behalf of a Tier II employee is 10% of the employee's salary;
48 . provides that the retirement benefits for the public safety and firefighter Tier II
49 hybrid system employees include:
50 . full retirement benefits after 25 years of service credit;
51 . 2.5% cost-of-living adjustments on the retirement allowance;
52 . a 1.5% multiplier for each year of service;
53 . a 401(k) employer contribution;
54 . a death benefit;
55 . a line of duty death benefit; and
56 . a disability benefit;
57 . provides that the participating employer shall contribute for public safety and
58 firefighter Tier II employees the percentage of the employee's compensation equal
59 to the corresponding Tier I system amortization rate plus 12%;
60 . provides that the total Tier II contribution credited specifically on behalf of a public
61 safety and firefighter Tier II employee is 12% of the employee's salary;
62 . closes for employees who initially enter employment beginning on or after July 1,
63 2011, the:
64 . Public Employees' Contributory Retirement System;
65 . Public Employees' Noncontributory Retirement System;
66 . Public Safety Contributory Retirement System;
67 . Public Safety Noncontributory Retirement System;
68 . Firefighters' Retirement System; and
69 . Utah Governors' and Legislators' Retirement System;
70 . provides for certain exclusions from membership in the Tier II DC plan; and
71 . makes technical changes.
72 Monies Appropriated in this Bill:
73 None
74 Other Special Clauses:
75 This bill takes effect on July 1, 2010.
76 Utah Code Sections Affected:
77 AMENDS:
78 35A-4-502, as last amended by Laws of Utah 2008, Chapter 382
79 49-11-102, as last amended by Laws of Utah 2009, Chapter 101
80 49-11-401, as last amended by Laws of Utah 2005, Chapter 116
81 49-11-403, as last amended by Laws of Utah 2006, Chapter 260
82 49-11-404, as last amended by Laws of Utah 2008, Chapter 252
83 49-11-612, as last amended by Laws of Utah 2009, Chapter 101
84 49-11-801, as last amended by Laws of Utah 2008, Chapter 335
85 49-11-1001, as enacted by Laws of Utah 2006, Chapter 305
86 49-12-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
87 49-13-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
88 49-14-201, as last amended by Laws of Utah 2008, Chapter 382
89 49-14-202, as renumbered and amended by Laws of Utah 2002, Chapter 250
90 49-15-201, as last amended by Laws of Utah 2008, Chapter 382
91 49-15-202, as renumbered and amended by Laws of Utah 2002, Chapter 250
92 49-16-201, as last amended by Laws of Utah 2004, Chapter 118
93 49-16-202, as last amended by Laws of Utah 2009, Chapter 101
94 49-19-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
95 49-21-201, as last amended by Laws of Utah 2008, Chapter 252
96 49-21-403, as last amended by Laws of Utah 2008, Chapter 252
97 53-7-105, as last amended by Laws of Utah 2002, Chapter 250
98 53-13-108, as last amended by Laws of Utah 2002, Chapter 250
99 53A-1a-512, as last amended by Laws of Utah 2009, Chapter 165
100 67-22-1, as last amended by Laws of Utah 2008, Chapter 86
101 ENACTS:
102 49-11-307, Utah Code Annotated 1953
103 49-22-101, Utah Code Annotated 1953
104 49-22-102, Utah Code Annotated 1953
105 49-22-103, Utah Code Annotated 1953
106 49-22-104, Utah Code Annotated 1953
107 49-22-201, Utah Code Annotated 1953
108 49-22-202, Utah Code Annotated 1953
109 49-22-203, Utah Code Annotated 1953
110 49-22-204, Utah Code Annotated 1953
111 49-22-301, Utah Code Annotated 1953
112 49-22-302, Utah Code Annotated 1953
113 49-22-303, Utah Code Annotated 1953
114 49-22-304, Utah Code Annotated 1953
115 49-22-305, Utah Code Annotated 1953
116 49-22-306, Utah Code Annotated 1953
117 49-22-307, Utah Code Annotated 1953
118 49-22-308, Utah Code Annotated 1953
119 49-22-309, Utah Code Annotated 1953
120 49-22-401, Utah Code Annotated 1953
121 49-22-402, Utah Code Annotated 1953
122 49-22-501, Utah Code Annotated 1953
123 49-22-502, Utah Code Annotated 1953
124 49-22-601, Utah Code Annotated 1953
125 49-23-101, Utah Code Annotated 1953
126 49-23-102, Utah Code Annotated 1953
127 49-23-103, Utah Code Annotated 1953
128 49-23-104, Utah Code Annotated 1953
129 49-23-201, Utah Code Annotated 1953
130 49-23-202, Utah Code Annotated 1953
131 49-23-301, Utah Code Annotated 1953
132 49-23-302, Utah Code Annotated 1953
133 49-23-303, Utah Code Annotated 1953
134 49-23-304, Utah Code Annotated 1953
135 49-23-305, Utah Code Annotated 1953
136 49-23-306, Utah Code Annotated 1953
137 49-23-307, Utah Code Annotated 1953
138 49-23-308, Utah Code Annotated 1953
139 49-23-401, Utah Code Annotated 1953
140 49-23-402, Utah Code Annotated 1953
141 49-23-501, Utah Code Annotated 1953
142 49-23-502, Utah Code Annotated 1953
143 49-23-503, Utah Code Annotated 1953
144 49-23-601, Utah Code Annotated 1953
145
146 Be it enacted by the Legislature of the state of Utah:
147 Section 1. Section 35A-4-502 is amended to read:
148 35A-4-502. Administration of Employment Security Act.
149 (1) (a) The department shall administer this chapter through the division.
150 (b) The department may make, amend, or rescind any rules and special orders
151 necessary for the administration of this chapter.
152 (c) The division may:
153 (i) employ persons;
154 (ii) make expenditures;
155 (iii) require reports;
156 (iv) make investigations;
157 (v) make audits of any or all funds provided for under this chapter when necessary; and
158 (vi) take any other action it considers necessary or suitable to that end.
159 (d) No later than the first day of October of each year, the department shall submit to
160 the governor a report covering the administration and operation of this chapter during the
161 preceding calendar year and shall make any recommendations for amendments to this chapter
162 as the department considers proper.
163 (e) (i) The report required under Subsection (1)(d) shall include a balance sheet of the
164 moneys in the fund in which there shall be provided, if possible, a reserve against liability in
165 future years to pay benefits in excess of the then current contributions, which reserve shall be
166 set up by the division in accordance with accepted actuarial principles on the basis of statistics
167 of employment, business activity, and other relevant factors for the longest possible period.
168 (ii) Whenever the department believes that a change in contribution or benefit rates
169 will become necessary to protect the solvency of the fund, it shall promptly inform the
170 governor and the Legislature and make appropriate recommendations.
171 (2) (a) The department may make, amend, or rescind rules in accordance with Title
172 63G, Chapter 3, Utah Administrative Rulemaking Act.
173 (b) The director of the division or the director's designee may adopt, amend, or rescind
174 special orders after appropriate notice and opportunity to be heard. Special orders become
175 effective 10 days after notification or mailing to the last-known address of the individuals or
176 concerns affected thereby.
177 (3) The director of the division or the director's designee shall cause to be printed for
178 distribution to the public:
179 (a) the text of this chapter;
180 (b) the department's rules pertaining to this chapter;
181 (c) the department's annual reports to the governor required by Subsection (1)(e); and
182 (d) any other material the director of the division or the director's designee considers
183 relevant and suitable and shall furnish them to any person upon application.
184 (4) (a) The division may delegate to any person so appointed the power and authority it
185 considers reasonable and proper for the effective administration of this chapter and may bond
186 any person handling moneys or signing checks under this authority.
187 (b) The department may, when permissible under federal and state law, make
188 arrangements to voluntarily elect coverage under the United States Civil Service Retirement
189 System or a comparable private retirement plan with respect to past as well as future services of
190 individuals employed under this chapter who:
191 (i) were hired prior to October 1, 1980; and
192 (ii) have been retained by the department without significant interruption in the
193 employees' services for the department.
194 (c) An employee of the department who no longer may participate in a federal or other
195 retirement system as a result of a change in status or appropriation under this chapter may
196 purchase credit with the employee's assets from the federal or other retirement system in which
197 the employee may no longer participate in a retirement system created under:
198 (i) Title 49, Chapter 13, Public Employees' Noncontributory Retirement Act[
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201 2011; or
202 (ii) Title 49, Chapter 22, Public Employees' Tier II Contributory Retirement Act, if the
203 date of purchase under this Subsection (4)(c) is on or after July 1, 2011.
204 (5) There is created an Employment Advisory Council composed of the members listed
205 in Subsections (5)(a) and (b).
206 (a) The executive director shall appoint:
207 (i) not less than five employer representatives chosen from individuals recommended
208 by employers, employer associations, or employer groups;
209 (ii) not less than five employee representatives chosen from individuals recommended
210 by employees, employee associations, or employee groups; and
211 (iii) five public representatives chosen at large.
212 (b) The executive director or the executive director's designee shall serve as a
213 nonvoting member of the council.
214 (c) The employee representatives shall include both union and nonunion employees
215 who fairly represent the percentage in the labor force of the state.
216 (d) Employers and employees shall consider nominating members of groups who
217 historically may have been excluded from the council, such as women, minorities, and
218 individuals with disabilities.
219 (e) (i) Except as required by Subsection (5)(e)(ii), as terms of current council members
220 expire, the executive director shall appoint each new member or reappointed member to a
221 four-year term.
222 (ii) Notwithstanding the requirements of Subsection (5)(e)(i), the executive director
223 shall, at the time of appointment or reappointment, adjust the length of terms to ensure that the
224 terms of council members are staggered so that approximately half of the council is appointed
225 every two years.
226 (f) When a vacancy occurs in the membership for any reason, the replacement shall be
227 appointed for the unexpired term.
228 (g) The executive director shall terminate the term of any council member who ceases
229 to be representative as designated by the council member's original appointment.
230 (h) The council shall advise the department and the Legislature in formulating policies
231 and discussing problems related to the administration of this chapter including:
232 (i) reducing and preventing unemployment;
233 (ii) encouraging the adoption of practical methods of vocational training, retraining,
234 and vocational guidance;
235 (iii) monitoring the implementation of the Wagner-Peyser Act;
236 (iv) promoting the creation and development of job opportunities and the
237 reemployment of unemployed workers throughout the state in every possible way; and
238 (v) appraising the industrial potential of the state.
239 (i) The council shall assure impartiality and freedom from political influence in the
240 solution of the problems listed in Subsection (5)(h).
241 (j) The executive director or the executive director's designee shall serve as chair of the
242 council and call the necessary meetings.
243 (k) (i) A member shall receive no compensation or benefits for the member's services,
244 but may receive per diem and expenses incurred in the performance of the member's official
245 duties at the rates established by the Division of Finance under Sections 63A-3-106 and
246 63A-3-107 .
247 (ii) A member may decline to receive per diem and expenses for the member's service.
248 (l) The department shall provide staff support to the council.
249 (6) In the discharge of the duties imposed by this chapter, the division director or the
250 director's designee as designated by department rule, may in connection with a disputed matter
251 or the administration of this chapter:
252 (a) administer oaths and affirmations;
253 (b) take depositions;
254 (c) certify to official acts; and
255 (d) issue subpoenas to compel the attendance of witnesses and the production of books,
256 papers, correspondence, memoranda, and other records necessary as evidence.
257 (7) (a) In case of contumacy by or refusal to obey a subpoena issued to any person, any
258 court of this state within the jurisdiction of which the inquiry is carried on or within the
259 jurisdiction of which the person guilty of contumacy or refusal to obey is found or resides or
260 transacts business, upon application by the director of the division or the director's designee
261 shall have jurisdiction to issue to that person an order requiring the person to appear before the
262 director or the director's designee to produce evidence, if so ordered, or give testimony
263 regarding the matter under investigation or in question. Any failure to obey that order of the
264 court may be punished by the court as contempt.
265 (b) Any person who, without just cause, fails or refuses to attend and testify or to
266 answer any lawful inquiry or to produce books, papers, correspondence, memoranda, and other
267 records, if it is in that person's power to do so, in obedience to a subpoena of the director or the
268 director's designee shall be punished as provided in Subsection 35A-1-301 (1)(b). Each day the
269 violation continues is a separate offense.
270 (c) In the event a witness asserts a privilege against self-incrimination, testimony and
271 evidence from the witness may be compelled pursuant to Title 77, Chapter 22b, Grants of
272 Immunity.
273 (8) (a) In the administration of this chapter, the division shall cooperate with the United
274 States Department of Labor to the fullest extent consistent with the provisions of this chapter
275 and shall take action, through the adoption of appropriate rules by the department and
276 administrative methods and standards, as necessary to secure to this state and its citizens all
277 advantages available under the provisions of:
278 (i) the Social Security Act that relate to unemployment compensation;
279 (ii) the Federal Unemployment Tax Act; and
280 (iii) the Federal-State Extended Unemployment Compensation Act of 1970.
281 (b) In the administration of Section 35A-4-402 , which is enacted to conform with the
282 requirements of the Federal-State Extended Unemployment Compensation Act of 1970, 26
283 U.S.C. 3304, the division shall take any action necessary to ensure that the section is
284 interpreted and applied to meet the requirements of the federal act, as interpreted by the United
285 States Department of Labor and to secure to this state the full reimbursement of the federal
286 share of extended and regular benefits paid under this chapter that are reimbursable under the
287 federal act.
288 Section 2. Section 49-11-102 is amended to read:
289 49-11-102. Definitions.
290 As used in this title:
291 (1) (a) "Active member" means a member who is employed or who has been employed
292 by a participating employer within the previous 120 days.
293 (b) "Active member" does not include retirees.
294 (2) "Actuarial equivalent" means a benefit of equal value when computed upon the
295 basis of mortality tables as recommended by the actuary and adopted by the executive director,
296 including regular interest.
297 (3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
298 adopted by the board upon which the funding of system costs and benefits are computed.
299 (4) (a) "Agency" means:
300 (i) a department, division, agency, office, authority, commission, board, institution, or
301 hospital of the state;
302 (ii) a county, municipality, school district, local district, or special service district;
303 (iii) a state college or university; or
304 (iv) any other participating employer.
305 (b) "Agency" does not include an entity listed under Subsection (4)(a)(i) that is a
306 subdivision of another entity listed under Subsection (4)(a).
307 (5) "Allowance" or "retirement allowance" means the pension plus the annuity,
308 including any cost of living or other authorized adjustments to the pension and annuity.
309 (6) "Alternate payee" means a member's former spouse or family member eligible to
310 receive payments under a Domestic Relations Order in compliance with Section 49-11-612 .
311 (7) "Amortization rate" means the board certified percent of salary required to amortize
312 the unfunded actuarial accrued liability in accordance with policies established by the board
313 upon the advice of the actuary.
314 [
315 [
316 and fixed term of office by official and duly recorded action of a participating employer whose
317 appointed position is designated in the participating employer's charter, creation document, or
318 similar document, and who earns during the first full month of the term of office $500 or more,
319 indexed as of January 1, 1990, as provided in Section 49-12-407 .
320 [
321 employer and:
322 (i) who is not entitled to merit or civil service protection and is generally considered
323 exempt from a participating employer's merit or career service personnel systems;
324 (ii) whose on-going employment status is entirely at the discretion of the person's
325 employer; or
326 (iii) who may be terminated without cause by a designated supervisor, manager, or
327 director.
328 (b) "At-will employee" does not include a career employee who has obtained a
329 reasonable expectation of continued employment based on inclusion in a participating
330 employer's merit system, civil service protection system, or career service personnel systems,
331 policies, or plans.
332 [
333 title through a relationship with or designated by a member, participant, covered individual, or
334 alternate payee of a defined contribution plan.
335 [
336 49-11-202 .
337 [
338 Board as established under Section 49-11-202 .
339 (14) "Certified contribution rate" means the board certified percent of salary paid on
340 behalf of an active member to the office to maintain the system on a financially and actuarially
341 sound basis.
342 [
343 and the member into a system or to the Utah Governors' and Legislators' Retirement Plan under
344 Chapter 19, Utah Governors' and Legislators' Retirement Act.
345 [
346 established under Section 49-11-202 .
347 [
348 Public Employees' Benefit and Insurance Program Act.
349 [
350 15, 16, 17, 18, and 19.
351 [
352 means a system or plan offered under this title to provide a specified allowance to a retiree or a
353 retiree's spouse after retirement that is based on a set formula involving one or more of the
354 following factors:
355 (a) years of service;
356 (b) final average monthly salary; or
357 (c) a retirement multiplier.
358 [
359 contribution plan or deferred compensation plan authorized under the Internal Revenue Code
360 and administered by the board.
361 [
362 the state or a combination thereof primarily engaged in educational activities or the
363 administration or servicing of educational activities, including:
364 (a) the State Board of Education and its instrumentalities;
365 (b) any institution of higher education and its branches;
366 (c) any school district and its instrumentalities;
367 (d) any vocational and technical school; and
368 (e) any entity arising out of a consolidation agreement between entities described under
369 this Subsection [
370 [
371 subdivision of the state eligible to participate in a government-sponsored retirement system
372 under federal law.
373 (b) "Employer” may also include an agency financed in whole or in part by public
374 funds.
375 [
376 employer:
377 (a) who is not eligible for service credit under Section 49-12-203 , 49-13-203 ,
378 49-14-203 , 49-15-203 , or 49-16-203 ; and
379 (b) for whom a participating employer is not required to pay contributions or
380 nonelective contributions.
381 [
382 compensation received during the final average salary period under each system by the number
383 of months in the final average salary period.
384 [
385 benefits or costs of administering a system, plan, or program.
386 [
387 participating employer for a period of at least 120 days.
388 (b) "Inactive member" does not include retirees.
389 (27) (a) "Initially entering" means hired, appointed, or elected for the first time, in
390 current service as a member with any participating employer.
391 (b) "Initially entering" does not include a person who has any prior service credit on
392 file with the office.
393 [
394 deposit with a system, the Utah Governors' and Legislators' Retirement Plan under Chapter 19,
395 Utah Governors' and Legislators' Retirement Act, or with a terminated system.
396 (b) "Member" also includes leased employees within the meaning of Section 414(n)(2)
397 of the Internal Revenue Code, if the employees have contributions on deposit with the office.
398 If leased employees constitute less than 20% of the participating employer's work force that is
399 not highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
400 "member" does not include leased employees covered by a plan described in Section 414(n)(5)
401 of the federal Internal Revenue Code.
402 [
403 system or the Utah Governors' and Legislators' Retirement Plan, including refund interest if
404 allowed by a system, and which are made by:
405 (a) the member; and
406 (b) the participating employer on the member's behalf under Section 414(h) of the
407 Internal Revenue Code.
408 [
409 employer into a participant's defined contribution account.
410 [
411 [
412 contributions on deposit with the defined contribution plans administered under this title.
413 [
414 Chapters 12, 13, 14, 15, 16, 17, and 18, or an agency financed in whole or in part by public
415 funds which is participating in a system or plan as of January 1, 2002.
416 [
417 contributions.
418 [
419 by Chapter 19, Utah Governors' and Legislators' Retirement Act, the New Public Employees'
420 Tier II Defined Contribution Plan created by Chapter 22, Part 4, Tier II Defined Contribution
421 Plan, the New Public Safety and Firefighter Tier II Defined Contribution Plan created by
422 Chapter 23, Part 4, Tier II Defined Contribution Plan, or the defined contribution plans created
423 under Section 49-11-801 .
424 [
425 cities, towns, counties, and school districts, but only if the subdivision is a juristic entity that is
426 legally separate and distinct from the state and only if its employees are not by virtue of their
427 relationship to the entity employees of the state.
428 (b) "Political subdivision" includes local districts, special service districts, or
429 authorities created by the Legislature or by local governments, including the office.
430 (c) "Political subdivision" does not include a project entity created under Title 11,
431 Chapter 13, Interlocal Cooperation Act, that was formed prior to July 1, 1987.
432 [
433 Chapter 20, Public Employees' Benefit and Insurance Program Act, or the Public Employees'
434 Long-Term Disability program created under Chapter 21, Public Employees' Long-Term
435 Disability Act.
436 [
437 public taxes or public revenue, dues or contributions paid or donated by the membership of the
438 organization, used to finance an activity whose objective is to improve, on a nonprofit basis,
439 the governmental, educational, and social programs and systems of the state or its political
440 subdivisions.
441 [
442 that meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
443 [
444 rate adopted by the board.
445 [
446 title.
447 [
448 applies for, and is entitled to receive an allowance under this title.
449 [
450 member's retirement becomes effective with the office.
451 [
452 (a) the period during which an employee is employed and compensated by a
453 participating employer and meets the eligibility requirements for membership in a system or the
454 Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are
455 paid to the office; and
456 (b) periods of time otherwise purchasable under this title.
457 [
458 Public Employees' Contributory Retirement Act, Chapter 13, Public Employees'
459 Noncontributory Retirement Act, Chapter 14, Public Safety Contributory Retirement Act,
460 Chapter 15, Public Safety Noncontributory Retirement Act, Chapter 16, Firefighters'
461 Retirement Act, Chapter 17, Judges' Contributory Retirement Act, Chapter 18, Judges'
462 Noncontributory Retirement Act, and Chapter 19, Utah Governors' and Legislators' Retirement
463 Act[
464 Part 3, Tier II Hybrid Retirement System, and the defined benefit portion of the Tier II Hybrid
465 Retirement System under Chapter 23, Part 3, Tier II Hybrid Retirement System.
466 (46) "Tier I" means a system or plan under this title for which an employee is eligible
467 to participate if the employee initially enters regular full-time employment before July 1, 2011.
468 (47) (a) "Tier II" means a system or plan under this title provided in lieu of a Tier I
469 system or plan for which an employee is eligible to participate, if the employee initially enters
470 regular full-time employment on or after July 1, 2011.
471 (b) "Tier II" includes:
472 (i) the Tier II hybrid system established under:
473 (A) Chapter 22, Part 3, Tier II Hybrid Retirement System; or
474 (B) Chapter 23, Part 3, Tier II Hybrid Retirement System; and
475 (ii) the Tier II Defined Contribution Plan (Tier II DC Plan) established under:
476 (A) Chapter 22, Part 4, Tier II Defined Contribution Plan; or
477 (B) Chapter 23, Part 4, Tier II Defined Contribution Plan.
478 (48) "Unfunded actuarial accrued liability" or "UAAL":
479 (a) is determined by the system's actuary; and
480 (b) means the excess, if any, of the accrued liability of a retirement system over the
481 actuarial value of its assets.
482 [
483 that participant's defined contribution account.
484 Section 3. Section 49-11-307 is enacted to read:
485 49-11-307. Report on funded status -- Study of compensation.
486 (1) (a) The office shall report the funded status of the Utah State Retirement
487 Investment Fund to the Retirement and Independent Entities Committee created under Section
488 63E-1-201 .
489 (b) The report under Subsection (1)(a) shall be made at least annually or as requested
490 by the committee.
491 (2) (a) If the Utah State Retirement Investment Fund reaches a funded status of 100%,
492 the office shall make a report to that effect.
493 (b) The report shall be provided to the governor, the board, the president of the Senate,
494 the speaker of the House of Representatives, and to each member and staff of the Retirement
495 and Independent Entities Committee created under Section 63E-1-201 .
496 (4) Upon receipt of the report under Subsection (2)(b), the committee shall conduct a
497 study on participating employee compensation and benefits to determine the need for
498 adjustments in retirement benefits, salary, and other benefits for the recruitment and retention
499 of a qualified workforce.
500 (5) The committee shall report any findings and recommendations to the Legislative
501 Management Committee.
502 Section 4. Section 49-11-401 is amended to read:
503 49-11-401. Transfer of service credit -- Eligibility for service credit --
504 Computation of service credit -- Retirement from most recent system.
505 (1) (a) The office shall make the transfer of service credit, together with related
506 member and participating employer contributions, from one system to another upon terms and
507 conditions established by the board.
508 (b) The terms and conditions may not result in a loss of accrued benefits.
509 (2) Transfer of employment from a position covered by one system to a position
510 covered by another system does not cause the employee to lose active member status.
511 (3) In the accrual of service credit, the following provisions apply:
512 (a) A person employed and compensated by a participating employer who meets the
513 eligibility requirements for membership in a system or the Utah Governors' and Legislators'
514 Retirement Plan shall receive service credit for the term of the employment provided that all
515 required contributions are paid to the office.
516 (b) An allowance or other benefit may not accrue under this title which is based upon
517 the same period of employment as has been the basis for any retirement benefits under some
518 other public retirement system.
519 (c) The board shall fix the minimum time per day, per month, and per year upon the
520 basis of which one year of service and proportionate parts of a year shall be credited toward
521 qualification for retirement. Service may be computed on a fiscal or calendar year basis and
522 portions of years served shall be accumulated and counted as service. In any event, all of the
523 service rendered in any one fiscal or calendar year may not count for more than one year.
524 (d) Service credit shall be accrued on a fiscal or calendar year basis as determined by
525 the participating employer.
526 (e) A member may not accrue more than one year of service credit per fiscal or
527 calendar year as determined by the office.
528 (f) Fractions of years of service credit shall be accumulated and counted in proportion
529 to the work performed.
530 (4) The office may estimate the amount of service credit, compensation, or age of any
531 member, participant, or alternate payee, if information is not contained in the records.
532 (5) A member shall retire from the system which most recently covered the member.
533 (6) (a) Under no circumstances may service credit earned by a member under Chapter
534 22, New Public Employees' Tier II Contributory Retirement Act, or Chapter 23, New Public
535 Safety and Firefighter Tier II Contributory Retirement Act, be transferable to any other system
536 or plan under this title.
537 (b) Under no circumstances may service credit earned by a member under one of the
538 following systems be transferable to the system created under Chapter 22, New Public
539 Employees' Tier II Contributory Retirement Act, or under Chapter 23, New Public Safety and
540 Firefighter Tier II Contributory Retirement Act:
541 (i) Chapter 12, Public Employees' Contributory Retirement Act;
542 (ii) Chapter 13, Public Employees' Noncontributory Retirement Act;
543 (iii) Chapter 14, Public Safety Contributory Retirement Act;
544 (iv) Chapter 15, Public Safety Noncontributory Retirement Act;
545 (v) Chapter 16, Firefighters' Retirement Act; or
546 (vi) Chapter 19, Utah Governors' and Legislators' Retirement Act.
547 Section 5. Section 49-11-403 is amended to read:
548 49-11-403. Purchase of public service credit not otherwise qualifying for benefit.
549 (1) A member, a participating employer, or a member and a participating employer
550 jointly may purchase service credit equal to the period of the member's employment in the
551 following:
552 (a) United States federal employment;
553 (b) employment in a private school based in the United States, if the member received
554 an employer paid retirement benefit for the employment;
555 (c) public employment in another state or territory of the United States which qualifies
556 the member for membership in the public plan or system covering the employment, but only if
557 the member does not qualify for any retirement benefits based on the employment;
558 (d) forfeited service credit in this state if the member does not qualify for an allowance
559 based on the service credit;
560 (e) full-time public service while on an approved leave of absence;
561 (f) the period of time for which disability benefits were paid if:
562 (i) the member was receiving:
563 (A) long-term disability benefits;
564 (B) short-term disability benefits; or
565 (C) worker's compensation disability benefits; and
566 (ii) the member's employer had not entered into a benefit protection contract under
567 Section 49-11-404 during the period the member was disabled due to sickness or accident; or
568 (g) employment covered by a Teachers Insurance and Annuity Association of America
569 retirement plan if the member forfeits any retirement benefit from that retirement plan for the
570 period of employment to be purchased under this Subsection (1)(g).
571 (2) A member shall have:
572 (a) at least four years of service credit before a purchase can be made under this
573 section; and
574 (b) forfeited service credit under any other retirement system or plan based on the
575 employment for which service credit is being purchased.
576 (3) (a) To purchase credit under this section, the member, a participating employer, or a
577 member and a participating employer jointly shall make payment to the system under which the
578 member is currently covered.
579 (b) The amount of the payment shall be determined by the office based on a formula
580 that is:
581 (i) recommended by the actuary; and
582 (ii) adopted by the board.
583 (4) The purchase may be made through payroll deductions or through a lump sum
584 deposit based upon the present value of future payments.
585 (5) Total payment must be completed prior to the member's effective date of retirement
586 or service credit will be prorated in accordance with the amount paid.
587 (6) (a) If any of the factors used to determine the cost of a service credit purchase
588 change at or before the member's retirement date, the cost of the purchase shall be recalculated
589 at the time of retirement.
590 (b) If the recalculated cost exceeds the amount paid for the purchase, the member, a
591 participating employer, or a member and a participating employer jointly may:
592 (i) pay the increased cost, plus interest, to receive the full amount of service credit; or
593 (ii) not pay the increased cost and have the purchased service credit prorated.
594 (7) If the recalculated cost under Subsection (6) is less than the amount paid for the
595 purchase, the office shall refund the excess payment to the member or participating employer
596 who paid for the purchase.
597 (8) (a) The board may adopt rules under which a member may make the necessary
598 payments to the office for purchases under this title as permitted by federal law.
599 (b) The office may reject any payments if the office determines the tax status of the
600 system, plans, or programs would be jeopardized by allowing the payment.
601 (9) Account balances created under Section 49-22-303 , 49-22-401 , 49-23-302 , or
602 49-23-401 may not be used to purchase service credit for a benefit under Sections 49-22-304 ,
603 49-22-305 , 49-23-303 , and 49-23-304 .
604 Section 6. Section 49-11-404 is amended to read:
605 49-11-404. Benefit protection contract authorized -- Annual report required.
606 (1) (a) A participating employer may establish a salary protection program under which
607 its employees are paid during periods of disability.
608 (b) If a salary protection program is established, a participating employer may enter
609 into benefit protection contracts with the office.
610 (c) A salary protection program shall:
611 (i) pay benefits based on the disabled member's rate of compensation at the time of
612 disability;
613 (ii) be substantially equivalent to the long-term disability programs offered under
614 Chapter 21, Public Employees' Long-Term Disability Act; and
615 (iii) comply with requirements adopted by the board.
616 (2) A benefit protection contract shall allow:
617 (a) the disabled member to be considered an active member in a system and continue to
618 accrue service credit and salary credit based on the member's rate of pay in effect at the time
619 disability commences;
620 (b) the office to require participating employer contributions to be paid before granting
621 service credit and salary credit to the member;
622 (c) the disabled member to remain eligible during the contract period for any benefits
623 provided by the system that covers the member; and
624 (d) the benefit for the disabled member to be improved by the annual cost-of-living
625 increase factor applied to retired members of the system that covered the member on the date
626 the member is eligible to receive benefits under a benefit protection contract.
627 (3) (a) The office shall establish the manner and times when employer contributions
628 are paid.
629 (b) A failure to make the required payments is cause for the office to cancel a contract.
630 (c) Service credit and salary credit granted and accrued up to the time of cancellation
631 may not be forfeited.
632 (4) For an employee covered under Chapter 22, New Public Employees' Tier II
633 Contributory Retirement Act, or Chapter 23, New Public Safety and Firefighter Tier II
634 Contributory Retirement Act, a benefit protection contract shall allow:
635 (a) for the defined benefit portion for a member covered under Chapter 22, Part 3, Tier
636 II Hybrid Retirement System, or Chapter 23, Part 3, Tier II Hybrid Retirement System:
637 (i) the disabled member to be considered an active member in a system and continue to
638 accrue service credit and salary credit based on the member's rate of pay in effect at the time
639 disability commences;
640 (ii) the office to require participating employer contributions to be paid before granting
641 service credit and salary credit to the member;
642 (iii) the disabled member to remain eligible during the contract period for any benefits
643 provided by the system that covers the member; and
644 (iv) the benefit for the disabled member to be improved by the annual cost-of-living
645 increase factor applied to retired members of the system that covered the member on the date
646 the member is eligible to receive benefits under a benefit protection contract; and
647 (b) for the defined contribution portion for a member covered under Chapter 22, Part 3,
648 Tier II Hybrid Retirement System or Chapter 23, Part 3, Tier II Hybrid Retirement System or
649 for a participant covered under Chapter 22, Part 4, Tier II Defined Contribution Plan or Chapter
650 23, Part 4, Tier II Defined Contribution Plan, the office to require participating employers to
651 continue making the nonelective contributions on behalf of the disabled member or participant
652 in the amounts specified in Subsection 49-22-303 (1)(a), 49-22-401 (1), 49-23-302 (1)(a), or
653 49-23-401 (1).
654 [
655 under this section shall submit an annual report to the office which identifies:
656 (a) the employees receiving long-term disability benefits under policies initiated by the
657 participating employer and approved under the benefit protection contract;
658 (b) the employees that have applied for long-term disability benefits and who are
659 waiting approval; and
660 (c) the insurance carriers that are actively providing long-term disability benefits.
661 [
662 [
663 forfeited.
664 [
665 Section 7. Section 49-11-612 is amended to read:
666 49-11-612. Domestic relations order benefits -- Nonassignability of benefits or
667 payments -- Exemption from legal process.
668 (1) As used in this section, "domestic relations order benefits" means:
669 (a) an allowance;
670 (b) a defined contribution account established under [
671 (i) Chapter 11, Part 8, Defined Contribution Plans;
672 (ii) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or
673 (iii) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement
674 Act;
675 (c) a continuing monthly death benefit established under:
676 (i) [
677 (ii) [
678 (iii) [
679 (iv) [
680 (v) [
681 (vi) [
682 (d) a death benefit provided under a group insurance policy under:
683 (i) [
684 (ii) [
685 (iii) Chapter 22, Part 5, Death Benefit; or
686 (iv) Chapter 23, Part 5, Death Benefit; or
687 (e) a refund of member contributions upon termination.
688 (2) Except as provided in Subsections (3), (4), and (5), the right of any member, retiree,
689 participant, covered individual, or beneficiary to any retirement benefit, retirement payment, or
690 any other retirement right accrued or accruing under this title and the assets of the funds created
691 by this title are not subject to alienation or assignment by the member, retiree, participant, or
692 their beneficiaries and are not subject to attachment, execution, garnishment, or any other legal
693 or equitable process.
694 (3) The office may, upon the request of the retiree, deduct from the retiree's allowance
695 insurance premiums or other dues payable on behalf of the retiree, but only to those entities
696 that have received the deductions prior to February 1, 2002.
697 (4) (a) The office shall provide for the division of domestic relations order benefits
698 with former spouses and family members under an order of a court of competent jurisdiction
699 with respect to domestic relations matters on file with the office.
700 (b) The court order shall specify the manner in which the domestic relations order
701 benefits shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
702 (c) Domestic relations order benefits split under a domestic relations order are subject
703 to the following:
704 (i) the amount to be paid or the period for which payments shall be made under the
705 original domestic relations order may not be altered if the alteration affects the actuarial
706 calculation of the allowance;
707 (ii) payments to an alternate payee shall begin at the time the member or beneficiary
708 begins receiving payments; and
709 (iii) the alternate payee shall receive payments in the same form as allowances received
710 by the member or beneficiary.
711 (d) A court order under this section may not be issued more than 12 months after the
712 death of the member.
713 (5) In accordance with federal law, the board may deduct the required amount from any
714 benefit, payment, or other right accrued or accruing to any member or beneficiary of a system,
715 plan, or program under this title to offset any amount that member or beneficiary owes to a
716 system, plan, or program administered by the board.
717 (6) The board shall make rules to implement this section.
718 Section 8. Section 49-11-801 is amended to read:
719 49-11-801. Defined contribution plans authorized -- Subject to federal and state
720 laws -- Rules to implement this provision -- Costs of administration -- Limitations on
721 eligibility -- Protection of tax status.
722 (1) (a) The board shall establish and administer defined contribution plans established
723 under the Internal Revenue Code.
724 (b) Voluntary deferrals and nonelective contributions shall be permitted according to
725 the provisions of these plans as established by the board.
726 (c) [
727 49-23-302 (2)(a), and 49-23-401 (3)(a), the defined contribution account balance is vested in the
728 participant.
729 (2) (a) Voluntary deferrals and nonelective contributions shall be posted to the
730 participant's account.
731 (b) [
732 49-23-302 (3), and 49-23-401 (4), participants may direct the investment of their account in the
733 investment options established by the board and in accordance with federal and state law.
734 (3) (a) The board may make rules and create plan documents to implement and
735 administer this section.
736 (b) The board may adopt rules under which a participant may put money into a defined
737 contribution plan as permitted by federal law.
738 (c) The office may reject any payments if the office determines the tax status of the
739 systems, plans, or programs would be jeopardized by allowing the payment.
740 (d) Costs of administration shall be paid as established by the board.
741 (4) Voluntary deferrals and nonelective contributions may be invested separately or in
742 conjunction with the Utah State Retirement Investment Fund.
743 (5) The board or office may take actions necessary to protect the tax qualified status of
744 the systems, plans, and programs under its control, including the movement of individuals from
745 defined contribution plans to defined benefit systems or the creation of excess benefit plans
746 authorized by federal law.
747 (6) The office may, at its sole discretion, correct errors made in the administration of
748 its defined contribution plans.
749 Section 9. Section 49-11-1001 is amended to read:
750 49-11-1001. Partial lump-sum payment option.
751 (1) [
752 a member may elect to receive a lump-sum payment of a portion of the member's retirement
753 allowance equal to 12 or 24 months of the member's allowance to be paid upon retirement.
754 (2) The member's allowance shall be reduced to reflect the actuarial value of the
755 lump-sum received under Subsection (1).
756 (3) A member who has received a lump-sum payment under this section is not eligible
757 for another lump-sum payment under this section.
758 (4) The board may make rules to implement this section.
759 (5) A member or participant of a system or plan under Chapter 22, New Public
760 Employees' Tier II Contributory Retirement Act, or Chapter 23, New Public Safety and
761 Firefighter Tier II Contributory Retirement Act, is not eligible to make an election under this
762 section.
763 Section 10. Section 49-12-201 is amended to read:
764 49-12-201. System membership -- Eligibility.
765 (1) A regular full-time employee of a participating employer is eligible for service
766 credit in this system upon the later of:
767 (a) the date on which the participating employer began participating in this system; or
768 (b) the effective date of employment of the regular full-time employee with the
769 participating employer.
770 (2) Beginning July 1, 1986, a person entering employment with the state and its
771 educational institutions may not participate in this system.
772 (3) Notwithstanding the provisions of Subsection (1), a person initially entering
773 employment with a participating employer on or after July 1, 2011, may not participate in this
774 system.
775 Section 11. Section 49-13-201 is amended to read:
776 49-13-201. System membership -- Eligibility.
777 (1) Beginning July 1, 1986, the state and its educational institutions shall participate in
778 this system.
779 (a) A person entering regular full-time employment with the state or its educational
780 institutions after July 1, 1986, but before July 1, 2011, is eligible for service credit in this
781 system.
782 (b) A regular full-time employee of the state or its educational institutions prior to July
783 1, 1986, may either become eligible for service credit in this system or remain eligible for
784 service in the system established under Chapter 12, Public Employees' Contributory Retirement
785 Act, by following the procedures established by the board in accordance with this chapter.
786 (2) An employer, other than the state and its educational institutions, may participate in
787 this system except that once an employer elects to participate in this system, that election is
788 irrevocable and the election must be made before July 1, 2011.
789 (a) [
790 with a participating employer which elects to participate in this system is eligible for service
791 credit in this system.
792 (b) A person in regular full-time employment with a participating employer prior to the
793 participating employer's election to participate in this system may either become eligible for
794 service credit in this system or remain eligible for service in the system established under
795 Chapter 12, Public Employees' Contributory Retirement Act, by following the procedures
796 established by the board in accordance with this chapter.
797 (3) Notwithstanding the provisions of Subsections (1) and (2), a person initially
798 entering employment with a participating employer on or after July 1, 2011, may not participate
799 in this system.
800 Section 12. Section 49-14-201 is amended to read:
801 49-14-201. System membership -- Eligibility.
802 (1) Except as provided in Section 49-15-201 , a public safety service employee of a
803 participating employer participating in this system is eligible for service credit in this system at
804 the earliest of:
805 (a) July 1, 1969, if the public safety service employee was employed by the
806 participating employer on July 1, 1969, and the participating employer was participating in this
807 system on that date;
808 (b) the date the participating employer begins participating in this system if the public
809 safety service employee was employed by the participating employer on that date; or
810 (c) the date the public safety service employee is employed by the participating
811 employer and is eligible to perform public safety service, except that a public safety service
812 employee initially entering employment with a participating employer on or after July 1, 2011,
813 may not participate in this system.
814 (2) (a) (i) A participating employer that has public safety service and firefighter service
815 employees that require cross-training and duty shall enroll those dual purpose employees in the
816 system in which the greatest amount of time is actually worked.
817 (ii) The employees shall either be full-time public safety service or full-time firefighter
818 service employees of the participating employer.
819 (b) (i) Prior to transferring a dual purpose employee from one system to another, the
820 participating employer shall receive written permission from the office.
821 (ii) The office may request documentation to verify the appropriateness of the transfer.
822 (3) The board may combine or segregate the actuarial experience of participating
823 employers in this system for the purpose of setting contribution rates.
824 (4) (a) (i) Each participating employer participating in this system shall annually
825 submit to the office a schedule indicating the positions to be covered under this system in
826 accordance with this chapter.
827 (ii) The office may require documentation to justify the inclusion of any position under
828 this system.
829 (b) If there is a dispute between the office and a participating employer or employee
830 over any position to be covered, the disputed position shall be submitted to the Peace Officer
831 Standards and Training Council established under Section 53-6-106 for determination.
832 (c) (i) The Peace Officer Standards and Training Council's authority to decide
833 eligibility for public safety service credit is limited to claims for coverage under this system for
834 time periods after July 1, 1989.
835 (ii) A decision of the Peace Officer Standards and Training Council may not be applied
836 to service credit earned in another system prior to July 1, 1989.
837 (iii) Except as provided under Subsection (4)(c)(iv), a decision of the Peace Officer
838 Standards and Training Council granting a position coverage under this system may only be
839 applied prospectively from the date of that decision.
840 (iv) A decision of the Peace Officer Standards and Training Council granting a position
841 coverage under this system may be applied retroactively only if:
842 (A) the participating employer covered other similarly situated positions under this
843 system during the time period in question; and
844 (B) the position otherwise meets all eligibility requirements for receiving service credit
845 in this system during the period for which service credit is to be granted.
846 (5) The Peace Officer Standards and Training Council may use a subcommittee to
847 provide a recommendation to the council in determining disputes between the office and a
848 participating employer or employee over a position to be covered under this system.
849 (6) The Peace Officer Standards and Training Council shall comply with Title 63G,
850 Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
851 (7) A public safety employee who is transferred or promoted to an administration
852 position not covered by this system shall continue to earn public safety service credit in this
853 system as long as the employee remains employed in the same department.
854 (8) Any employee who is reassigned to the Department of Technology Services or to
855 the Department of Human Resource Management, and who was a member of this system, shall
856 be entitled to remain a member of this system.
857 (9) (a) To determine that a position is covered under this system, the office and, if a
858 coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
859 position requires the employee to:
860 (i) place the employee's life or personal safety at risk; and
861 (ii) complete training as provided in Section 53-13-103 , 53-13-104 , or 53-13-105 .
862 (b) If a position satisfies the requirements of Subsection (9)(a), the office and the Peace
863 Officer Standards and Training Council shall consider whether or not the position requires the
864 employee to:
865 (i) perform duties that consist primarily of actively preventing or detecting crime and
866 enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
867 (ii) perform duties that consist primarily of providing community protection; and
868 (iii) respond to situations involving threats to public safety and make emergency
869 decisions affecting the lives and health of others.
870 (10) If a subcommittee is used to recommend the determination of disputes to the
871 Peace Officer Standards and Training Council, the subcommittee shall comply with the
872 requirements of Subsection (9) in making its recommendation.
873 (11) A final order of the Peace Officer Standards and Training Council regarding a
874 dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
875 Procedures Act.
876 (12) Except as provided under Subsection (13), if a participating employer's public
877 safety service employees are not covered by this system or under Chapter 15, Public Safety
878 Noncontributory Retirement Act, as of January 1, 1998, those public safety service employees
879 who may otherwise qualify for membership in this system shall, at the discretion of the
880 participating employer, remain in their current retirement system.
881 (13) (a) A public safety service employee employed by an airport police department,
882 which elects to cover its public safety service employees under the Public Safety
883 Noncontributory Retirement System under Subsection (12), may elect to remain in the public
884 safety service employee's current retirement system.
885 (b) The public safety service employee's election to remain in the current retirement
886 system under Subsection (13)(a):
887 (i) shall be made at the time the employer elects to move its public safety service
888 employees to a public safety retirement system;
889 (ii) documented by written notice to the participating employer; and
890 (iii) is irrevocable.
891 (14) Notwithstanding any other provision of this section, a person initially entering
892 employment with a participating employer on or after July 1, 2011, may not participate in this
893 system.
894 Section 13. Section 49-14-202 is amended to read:
895 49-14-202. Participation of employers -- Requirements -- Supplemental programs
896 -- Full participation in system.
897 (1) An employer that employs public safety service employees and is required by
898 Section 49-12-202 or 49-13-202 to be a participating employer in the Public Employees'
899 Contributory Retirement System or the Public Employees' Noncontributory Retirement System
900 shall cover all its public safety service employees under one of the following systems or plans:
901 (a) Chapter 12, Public Employees' Contributory Retirement Act;
902 (b) Chapter 13, Public Employees' Noncontributory Retirement Act;
903 (c) Chapter 14, Public Safety Contributory Retirement Act; [
904 (d) Chapter 15, Public Safety Noncontributory Retirement Act[
905 (e) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
906 (2) An employer that covers its public safety service employees under Subsection
907 (1)(c) is a participating employer in this system.
908 (3) If a participating employer under Subsection (1) covers any of its public safety
909 service employees under the Public Safety Contributory Retirement System or the Public
910 Safety Noncontributory Retirement System, that participating employer shall cover all of its
911 public safety service employees under one of those systems, except for a public safety service
912 employee initially entering employment with a participating employer on or after July 1, 2011.
913 (4) A participating employer may not withdraw from this system.
914 (5) In addition to their participation in the system, participating employers may provide
915 or participate in any additional public or private retirement, supplemental or defined
916 contribution plan, either directly or indirectly, for their employees.
917 (6) An employer may not elect to participate in this system after July 1, 1989.
918 Section 14. Section 49-15-201 is amended to read:
919 49-15-201. System membership -- Eligibility.
920 (1) (a) A public safety service employee employed by the state after July 1, 1989, but
921 before July 1, 2011, is eligible for service credit in this system.
922 (b) A public safety service employee employed by the state prior to July 1, 1989, may
923 either elect to receive service credit in this system or continue to receive service credit under
924 the system established under Chapter 14, Public Safety Contributory Retirement Act, by
925 following the procedures established by the board under this chapter.
926 (2) (a) Public safety service employees of a participating employer other than the state
927 that elected on or before July 1, 1989, to remain in the Public Safety Contributory Retirement
928 System shall be eligible only for service credit in that system.
929 (b) (i) A participating employer other than the state that elected on or before July 1,
930 1989, to participate in this system shall, have allowed, prior to July 1, 1989, a public safety
931 service employee to elect to participate in either this system or the Public Safety Contributory
932 Retirement System.
933 (ii) Except as expressly allowed by this title, the election of the public safety service
934 employee is final and may not be changed.
935 (c) A public safety service employee hired by a participating employer other than the
936 state after July 1, 1989, but before July 1, 2011, shall become a member in this system.
937 (d) A public safety service employee of a participating employer other than the state
938 who began participation in this system after July 1, 1989, but before July 1, 2011, is only
939 eligible for service credit in this system.
940 (e) A person initially entering employment with a participating employer on or after
941 July 1, 2011, may not participate in this system.
942 (3) (a) (i) A participating employer that has public safety service and firefighter service
943 employees that require cross-training and duty shall enroll those dual purpose employees in the
944 system in which the greatest amount of time is actually worked.
945 (ii) The employees shall either be full-time public safety service or full-time firefighter
946 service employees of the participating employer.
947 (b) (i) Prior to transferring a dual purpose employee from one system to another, the
948 participating employer shall receive written permission from the office.
949 (ii) The office may request documentation to verify the appropriateness of the transfer.
950 (4) The board may combine or segregate the actuarial experience of participating
951 employers in this system for the purpose of setting contribution rates.
952 (5) (a) (i) Each participating employer participating in this system shall annually
953 submit to the office a schedule indicating the positions to be covered under this system in
954 accordance with this chapter.
955 (ii) The office may require documentation to justify the inclusion of any position under
956 this system.
957 (b) If there is a dispute between the office and a participating employer or employee
958 over any position to be covered, the disputed position shall be submitted to the Peace Officer
959 Standards and Training Council established under Section 53-6-106 for determination.
960 (c) (i) The Peace Officer Standards and Training Council's authority to decide
961 eligibility for public safety service credit is limited to claims for coverage under this system for
962 time periods after July 1, 1989.
963 (ii) A decision of the Peace Officer Standards and Training Council may not be applied
964 to service credit earned in another system prior to July 1, 1989.
965 (iii) Except as provided under Subsection (5)(c)(iv), a decision of the Peace Officer
966 Standards and Training Council granting a position coverage under this system may only be
967 applied prospectively from the date of that decision.
968 (iv) A decision of the Peace Officer Standards and Training Council granting a position
969 coverage under this system may be applied retroactively only if:
970 (A) the participating employer covered other similarly situated positions under this
971 system during the time period in question; and
972 (B) the position otherwise meets all eligibility requirements for receiving service credit
973 in this system during the period for which service credit is to be granted.
974 (6) The Peace Officer Standards and Training Council may use a subcommittee to
975 provide a recommendation to the council in determining disputes between the office and a
976 participating employer or employee over a position to be covered under this system.
977 (7) The Peace Officer Standards and Training Council shall comply with Title 63G,
978 Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
979 (8) A public safety service employee who is transferred or promoted to an
980 administration position not covered by this system shall continue to earn public safety service
981 credit in this system as long as the employee remains employed in the same department.
982 (9) Any employee who is reassigned to the Department of Technology Services or to
983 the Department of Human Resource Management, and who was a member in this system, shall
984 be entitled to remain a member in this system.
985 (10) (a) To determine that a position is covered under this system, the office and, if a
986 coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
987 position requires the employee to:
988 (i) place the employee's life or personal safety at risk; and
989 (ii) complete training as provided in Section 53-13-103 , 53-13-104 , or 53-13-105 .
990 (b) If a position satisfies the requirements of Subsection (10)(a), the office and Peace
991 Officer Standards and Training Council shall consider whether the position requires the
992 employee to:
993 (i) perform duties that consist primarily of actively preventing or detecting crime and
994 enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
995 (ii) perform duties that consist primarily of providing community protection; and
996 (iii) respond to situations involving threats to public safety and make emergency
997 decisions affecting the lives and health of others.
998 (11) If a subcommittee is used to recommend the determination of disputes to the
999 Peace Officer Standards and Training Council, the subcommittee shall comply with the
1000 requirements of Subsection (10) in making its recommendation.
1001 (12) A final order of the Peace Officer Standards and Training Council regarding a
1002 dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
1003 Procedures Act.
1004 (13) Except as provided under Subsection (14), if a participating employer's public
1005 safety service employees are not covered by this system under Chapter 14, Public Safety
1006 Contributory Retirement Act, as of January 1, 1998, those public safety service employees who
1007 may otherwise qualify for membership in this system shall, at the discretion of the participating
1008 employer, remain in their current retirement system.
1009 (14) (a) A public safety service employee employed by an airport police department,
1010 which elects to cover its public safety service employees under the Public Safety
1011 Noncontributory Retirement System under Subsection (13), may elect to remain in the public
1012 safety service employee's current retirement system.
1013 (b) The public safety service employee's election to remain in the current retirement
1014 system under Subsection (14)(a):
1015 (i) shall be made at the time the employer elects to move its public safety service
1016 employees to a public safety retirement system;
1017 (ii) documented by written notice to the participating employer; and
1018 (iii) is irrevocable.
1019 (15) Notwithstanding any other provision of this section, a person initially entering
1020 employment with a participating employer on or after July 1, 2011, may not participate in this
1021 system.
1022 Section 15. Section 49-15-202 is amended to read:
1023 49-15-202. Participation of employers -- Requirements -- Admission -- Full
1024 participation in system -- Supplemental programs authorized.
1025 (1) An employer that employs public safety service employees and is required by
1026 Section 49-12-202 or 49-13-202 to be a participating employer in the Public Employees'
1027 Contributory Retirement System or the Public Employees' Noncontributory Retirement System
1028 shall cover all its public safety service employees under one of the following systems or plans:
1029 (a) Chapter 12, Public Employees' Contributory Retirement Act;
1030 (b) Chapter 13, Public Employees' Noncontributory Retirement Act;
1031 (c) Chapter 14, Public Safety Contributory Retirement Act; [
1032 (d) Chapter 15, Public Safety Noncontributory Retirement Act[
1033 (e) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
1034 (2) An employer that covers its public safety employees under Subsection (1)(d) is a
1035 participating employer in this system.
1036 (3) If a participating employer under Subsection (1) covers any of its public safety
1037 service employees under the Public Safety Contributory Retirement System or the Public
1038 Safety Noncontributory Retirement System, that participating employer shall cover all of its
1039 public safety service employees under one of those systems, except for a public safety service
1040 employee initially entering employment with a participating employer beginning on or after
1041 July 1, 2011.
1042 (4) (a) [
1043 may by resolution of its governing body apply for coverage of its public safety service
1044 employees by this system.
1045 (b) Upon approval of the board, the employer shall become a participating employer in
1046 this system subject to this title.
1047 (5) If a participating employer purchases service credit on behalf of employees for
1048 service rendered prior to the participating employer's admission to this system, the service
1049 credit must be purchased in a nondiscriminatory manner on behalf of all current and former
1050 employees who were eligible for service credit at the time service was rendered.
1051 (6) A participating employer may not withdraw from this system.
1052 (7) In addition to their participation in the system, participating employers may provide
1053 or participate in any additional public or private retirement, supplemental or defined
1054 contribution plan, either directly or indirectly, for their employees.
1055 Section 16. Section 49-16-201 is amended to read:
1056 49-16-201. System membership -- Eligibility.
1057 (1) A firefighter service employee who performs firefighter service for an employer
1058 participating in this system is eligible for service credit in this system upon the earliest of:
1059 (a) July 1, 1971, if the firefighter service employee was employed by the participating
1060 employer on July 1, 1971, and the participating employer was participating in this system on
1061 that date;
1062 (b) the date the participating employer begins participating in this system if the
1063 firefighter service employee was employed by the participating employer on that date; or
1064 (c) the date the firefighter service employee is hired to perform firefighter services for a
1065 participating employer, if the firefighter initially enters employment before July 1, 2011.
1066 (2) (a) (i) A participating employer that has public safety service and firefighter service
1067 employees that require cross-training and duty shall enroll the dual purpose employees in the
1068 system in which the greatest amount of time is actually worked.
1069 (ii) The employees shall either be full-time public safety service or full-time firefighter
1070 service employees of the participating employer.
1071 (b) (i) Prior to transferring a dual purpose employee from one system to another, the
1072 participating employer shall receive written permission from the office.
1073 (ii) The office may request documentation to verify the appropriateness of the transfer.
1074 (3) (a) A person hired by a regularly constituted fire department on or after July 1,
1075 1971, who does not perform firefighter service is not eligible for service credit in this system.
1076 (b) The nonfirefighter service employee shall become a member of the system for
1077 which the nonfirefighter service employee qualifies for service credit.
1078 (c) The service credit exclusion under this Subsection (3) may not be interpreted to
1079 prohibit the assignment of a disabled or partially disabled firefighter to a nonfirefighter service
1080 position.
1081 (d) If Subsection (3)(c) applies, the firefighter service employee remains eligible for
1082 service credit in this system.
1083 (4) An allowance or other benefit may not be granted under this system that is based
1084 upon the same service for benefits received under some other system.
1085 (5) Service as a volunteer firefighter is not eligible for service credit in this system.
1086 (6) An employer that maintains a regularly constituted fire department is eligible to
1087 participate in this system.
1088 (7) Beginning July 1, 2011, a person initially entering employment with a participating
1089 employer may not participate in this system.
1090 Section 17. Section 49-16-202 is amended to read:
1091 49-16-202. Participation of employers -- Full participation in system --
1092 Supplemental programs authorized.
1093 (1) An employer that employs firefighter service employees and is required by Section
1094 49-12-202 or 49-13-202 to be a participating employer in the Public Employees' Contributory
1095 Retirement System or the Public Employees' Noncontributory Retirement System shall cover
1096 all of its firefighter service employees under one of the following systems or plans:
1097 (a) Chapter 12, Public Employees' Contributory Retirement Act;
1098 (b) Chapter 13, Public Employees' Noncontributory Retirement Act; [
1099 (c) Chapter 16, Firefighters' Retirement Act[
1100 (d) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
1101 (2) Any employer that covers its firefighter service employees under Subsection (1)(c)
1102 is a participating employer in this system.
1103 (3) If a participating employer under Subsection (1) covers any of its firefighter service
1104 employees under the Firefighters' Retirement System, that participating employer shall cover
1105 all of its firefighter service employees under that system, except for a firefighter service
1106 employee initially entering employment with a participating employer on or after July 1, 2011.
1107 (4) (a) [
1108 may, by resolution of its governing body submitted to the board, apply for coverage of its
1109 firefighter service employees by this system.
1110 (b) Upon approval of the board, the employer shall become a participating employer in
1111 this system subject to this title.
1112 (5) A participating employer may not withdraw from this system.
1113 (6) In addition to their participation in the system, participating employers may provide
1114 or participate in any additional public or private retirement, supplemental or defined
1115 contribution plan, either directly or indirectly, for their firefighter service employees.
1116 Section 18. Section 49-19-201 is amended to read:
1117 49-19-201. Plan participation -- Eligibility.
1118 (1) Governors and legislators who enter office before July 1, 2011, are eligible for
1119 service credit in this plan during their term of service in their elected position.
1120 (2) A governor or legislator initially entering office on or after July 1, 2011:
1121 (a) may not participate in this system;
1122 (b) is only eligible to participate in the Tier II Defined Contribution Plan established
1123 under Chapter 22, Part 4, Tier II Defined Contribution Plan; and
1124 (c) is not eligible to participate in the Tier II hybrid retirement system established under
1125 Chapter 22, Part 3, Tier II Hybrid Retirement System.
1126 Section 19. Section 49-21-201 is amended to read:
1127 49-21-201. Program membership -- Eligibility.
1128 (1) The state shall cover all of its eligible employees under this chapter.
1129 (2) Public safety service employees, as defined in Sections 49-14-102 [
1130 49-15-102 , and 49-23-102 shall be covered under this chapter or a substantially similar
1131 long-term disability program in accordance with the provisions of Section 49-14-601 [
1132 49-15-601 [
1133 (3) Beginning on July 1, 2011, firefighter service employees, as defined in Section
1134 49-23-102 , initially entering employment on or after July 1, 2011, and volunteer firefighters, as
1135 defined in Section 49-23-102 , shall be covered under this chapter or a substantially similar
1136 long-term disability program in accordance with the provisions of Section 49-23-601 .
1137 [
1138 coverage for their eligible employees under this chapter.
1139 [
1140 all of its eligible employees shall be covered.
1141 [
1142 requires any employer to cover its eligible employees under this chapter.
1143 [
1144 (a) firefighter service employees, as defined under Section 49-16-102 , that initially
1145 entered employment prior to July 1, 2011; and
1146 (b) legislators.
1147 Section 20. Section 49-21-403 is amended to read:
1148 49-21-403. Termination of disability benefits -- Calculation of retirement benefit.
1149 (1) An eligible employee covered by this chapter and eligible for service credit under a
1150 system, or a participant in the Tier II Defined Contribution Plan, created in Chapter 22, Part 4,
1151 Tier II Defined Contribution Plan, or Chapter 23, Part 4, Tier II Defined Contribution Plan,
1152 including an eligible employee who relinquishes rights to retirement benefits under Section
1153 49-11-619 , who applies and is qualified for a monthly disability benefit shall receive a monthly
1154 disability benefit until the earlier of:
1155 (a) the date the eligible employee is no longer disabled;
1156 (b) the date the eligible employee has accumulated:
1157 (i) 20 years of service credit if the eligible employee is covered by Chapter 14, Public
1158 Safety Contributory Retirement Act, or Chapter 15, Public Safety Noncontributory Retirement
1159 Act;
1160 (ii) 25 years of service credit if the eligible employee is covered by Chapter 17, Judges'
1161 Contributory Retirement Act, or Chapter 18, Judges' Noncontributory Retirement Act; [
1162 (iii) 30 years of service credit if the eligible employee is covered by Chapter 12, Public
1163 Employees' Contributory Retirement Act, or Chapter 13, Public Employees' Noncontributory
1164 Retirement Act; [
1165 (iv) 35 years of service credit if the eligible employee is covered by the defined benefit
1166 portion under Chapter 22, Part 3, Tier II Hybrid Retirement System, or is covered by the
1167 defined contribution plan under Chapter 22, Part 4, Tier II Defined Contribution Plan; or
1168 (v) 25 years of service credit if the eligible employee is covered by the defined benefit
1169 portion under Chapter 23, Part 3, Tier II Hybrid Retirement System, or is covered by the
1170 defined contribution plan under Chapter 23, Part 4, Tier II Defined Contribution Plan; or
1171 (c) the date the eligible employee has received a monthly disability benefit for the
1172 following applicable time periods:
1173 (i) if the eligible employee is under age 60, the monthly disability benefit is payable
1174 until age 65;
1175 (ii) if the eligible employee is 60 or 61 years of age on the date of disability, the
1176 monthly disability benefit is payable for five years;
1177 (iii) if the eligible employee is 62 or 63 years of age on the date of disability, the
1178 monthly disability benefit is payable for four years;
1179 (iv) if the eligible employee is 64 or 65 years of age on the date of disability, the
1180 monthly disability benefit is payable for three years;
1181 (v) if the eligible employee is 66, 67, or 68 years of age on the date of disability, the
1182 monthly disability benefit is payable for two years; and
1183 (vi) if the eligible employee is 69 years of age or older on the date of disability, the
1184 monthly disability benefit is payable for one year.
1185 (2) (a) Upon termination of a monthly disability benefit, an eligible employee eligible
1186 for service credit under a system may retire under the requirements of the system which
1187 covered the eligible employee on the date of disability.
1188 (b) The final average salary used in the calculation of the allowance shall be based on
1189 the annual rate of pay on the date of disability, improved by the annual cost-of-living increase
1190 factor applied to retirees of the system which covered the eligible employee on the date of
1191 disability.
1192 (3) An eligible employee who is eligible for service credit in a system, but has
1193 relinquished rights to an allowance under Section 49-11-619 , may receive the benefits the
1194 eligible employee would have received by being eligible for service credit in the system
1195 covering the eligible employee on the date of disability, except for the accrual of service credit,
1196 in accordance with this title.
1197 (4) An eligible employee receiving a monthly disability benefit who has service credit
1198 from two or more systems may not combine service credits under Section 49-11-405 in
1199 qualifying for retirement, unless the eligible employee would receive a greater allowance by
1200 combining the service credits.
1201 (5) A monthly disability benefit payable to an eligible employee who is not eligible for
1202 service credit under a system shall terminate at the earliest of:
1203 (a) the date the eligible employee would be eligible for an unreduced allowance;
1204 (b) the date the eligible employee has received a monthly disability benefit for the
1205 applicable time period as set forth in Subsection (1)(b); or
1206 (c) the date the eligible employee receives a reduced allowance.
1207 Section 21. Section 49-22-101 is enacted to read:
1208
1209
1210
1211 49-22-101. Title.
1212 This chapter is known as the "New Public Employees' Tier II Contributory Retirement
1213 Act."
1214 Section 22. Section 49-22-102 is enacted to read:
1215 49-22-102. Definitions.
1216 As used in this chapter:
1217 (1) (a) Except as provided in Subsection (1)(c), "compensation" means the total
1218 amount of payments made by a participating employer to a member of this system for services
1219 rendered to the participating employer, including:
1220 (i) bonuses;
1221 (ii) cost-of-living adjustments;
1222 (iii) other payments currently includable in gross income and that are subject to Social
1223 Security deductions, including any payments in excess of the maximum amount subject to
1224 deduction under Social Security law;
1225 (iv) amounts that the member authorizes to be deducted or reduced for salary deferral
1226 or other benefits authorized by federal law; and
1227 (v) member contributions.
1228 (b) "Compensation" for purposes of this chapter may not exceed the amount allowed
1229 under Internal Revenue Code, Section 401(a)(17).
1230 (c) "Compensation" does not include:
1231 (i) the monetary value of remuneration paid in kind, including a residence or use of
1232 equipment;
1233 (ii) the cost of any employment benefits paid for by the participating employer;
1234 (iii) compensation paid to a temporary employee or an employee otherwise ineligible
1235 for service credit;
1236 (iv) any payments upon termination, including accumulated vacation, sick leave
1237 payments, severance payments, compensatory time payments, or any other special payments; or
1238 (v) any allowances or payments to a member for costs or expenses paid by the
1239 participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
1240 housing costs, insurance costs, equipment costs, and dependent care costs.
1241 (d) The executive director may determine if a payment not listed under this Subsection
1242 (1) falls within the definition of compensation.
1243 (2) "Corresponding Tier I system" means the system or plan that would have covered
1244 the member if the member had initially entered employment before July 1, 2011.
1245 (3) "Final average salary" means the amount computed by averaging the highest five
1246 years of annual compensation preceding retirement subject to Subsections (3)(a), (b), (c), and
1247 (d).
1248 (a) Except as provided in Subsection (3)(b), the percentage increase in annual
1249 compensation in any one of the years used may not exceed the previous year's compensation by
1250 more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power
1251 of the dollar during the previous year, as measured by a United States Bureau of Labor
1252 Statistics Consumer Price Index average as determined by the board.
1253 (b) In cases where the participating employer provides acceptable documentation to the
1254 office, the limitation in Subsection (3)(a) may be exceeded if:
1255 (i) the member has transferred from another agency; or
1256 (ii) the member has been promoted to a new position.
1257 (c) If the member retires more than six months from the date of termination of
1258 employment, the member is considered to have been in service at the member's last rate of pay
1259 from the date of the termination of employment to the effective date of retirement for purposes
1260 of computing the member's final average salary only.
1261 (d) If the member has less than five years of service credit in this system, final average
1262 salary means the average annual compensation paid to the member during the full period of
1263 service credit.
1264 (4) "Participating employer" means an employer which meets the participation
1265 requirements of:
1266 (a) Sections 49-12-201 and 49-12-202 ;
1267 (b) Sections 49-13-201 and 49-13-202 ;
1268 (c) Section 49-19-201 ; or
1269 (d) Section 49-22-201 or 49-22-202 .
1270 (5) (a) "Regular full-time employee" means an employee whose term of employment
1271 for a participating employer contemplates continued employment during a fiscal or calendar
1272 year and whose employment normally requires an average of 20 hours or more per week,
1273 except as modified by the board, and who receives benefits normally provided by the
1274 participating employer.
1275 (b) "Regular full-time employee" includes:
1276 (i) a teacher whose term of employment for a participating employer contemplates
1277 continued employment during a school year and who teaches half-time or more;
1278 (ii) a classified school employee whose employment normally requires an average of
1279 20 hours per week or more for a participating employer, regardless of benefits provided;
1280 (iii) an officer, elective or appointive, who earns during the first full month of the term
1281 of office $500 or more, indexed as of January 1, 1990, as provided in Section 49-22-309 ;
1282 (iv) a faculty member or employee of an institution of higher education who is
1283 considered full-time by that institution of higher education; and
1284 (v) an individual who otherwise meets the definition of this Subsection (5) who
1285 performs services for a participating employer through a professional employer organization or
1286 similar arrangement.
1287 (c) "Regular full-time employee" does not include:
1288 (i) a firefighter service employee as defined in Section 49-23-102 ; or
1289 (ii) a public safety service employee as defined in Section 49-23-102 .
1290 (6) "System" means the New Public Employees' Tier II Contributory Retirement
1291 System created under this chapter.
1292 (7) "Years of service credit" means:
1293 (a) a period, consisting of 12 full months as determined by the board;
1294 (b) a period determined by the board, whether consecutive or not, during which a
1295 regular full-time employee performed services for a participating employer, including any time
1296 the regular full-time employee was absent on a paid leave of absence granted by a participating
1297 employer or was absent in the service of the United States government on military duty as
1298 provided by this chapter; or
1299 (c) the regular school year consisting of not less than eight months of full-time service
1300 for a regular full-time employee of an educational institution.
1301 Section 23. Section 49-22-103 is enacted to read:
1302 49-22-103. Creation of system.
1303 (1) There is created for members employed by a participating employer the "New
1304 Public Employees' Tier II Contributory Retirement System."
1305 (2) The New Public Employees' Tier II Contributory Retirement System includes:
1306 (a) the Tier II hybrid retirement system created in Part 3, Tier II Hybrid Retirement
1307 System; and
1308 (b) the Tier II defined contribution plan created in Part 4, Tier II Defined Contribution
1309 Plan.
1310 Section 24. Section 49-22-104 is enacted to read:
1311 49-22-104. Creation of trust fund.
1312 (1) There is created the "New Public Employees' Tier II Contributory Retirement Trust
1313 Fund" for the purpose of paying the benefits and costs of administering the defined benefit
1314 portion of this system.
1315 (2) The fund shall consist of all money paid into it, including interest, in accordance
1316 with this chapter, whether in the form of cash, securities, or other assets, and of all money
1317 received from any other source.
1318 (3) Custody, management, and investment of the fund shall be governed by Chapter 11,
1319 Utah State Retirement Systems Administration.
1320 Section 25. Section 49-22-201 is enacted to read:
1321
1322 49-22-201. System membership -- Eligibility.
1323 (1) Beginning July 1, 2011, a participating employer shall participate in this system.
1324 (2) (a) A person entering regular full-time employment with a participating employer
1325 on or after July 1, 2011, is eligible:
1326 (i) as a member for service credit and defined contributions under the Tier II hybrid
1327 retirement system established by Part 3, Tier II Hybrid Retirement System; or
1328 (ii) as a participant for defined contributions under the Tier II defined contribution plan
1329 established by Part 4, Tier II Defined Contribution Plan.
1330 (b) A person entering regular full-time employment with a participating employer on or
1331 after July 1, 2011, shall:
1332 (i) make an election to participate in the system created under this chapter within 30
1333 days from the date of employment:
1334 (A) as a member for service credit and defined contributions under the Tier II Hybrid
1335 Retirement System established by Part 3, Tier II Hybrid Retirement System; or
1336 (B) as a participant for defined contributions under the Tier II defined contribution plan
1337 established by Part 4, Tier II Defined Contribution Plan; and
1338 (ii) submit to the office notification of the member's election under Subsection (2)(b)(i)
1339 in a manner approved by the office.
1340 (c) An election made by a person entering regular full-time employment with a
1341 participating employer under this Subsection (2) is irrevocable.
1342 (d) If no election is made under Subsection (2)(b)(i), the person shall become a
1343 member eligible for service credit and defined contributions under the Tier II Hybrid
1344 Retirement System established by Part 3, Tier II Hybrid Retirement System.
1345 (3) Notwithstanding the provisions of this section, a governor or legislator initially
1346 entering office on or after July 1, 2011:
1347 (a) is only eligible to participate in the Tier II defined contribution plan established
1348 under Chapter 22, Part 4, Tier II Defined Contribution Plan; and
1349 (b) is not eligible to participate in the Tier II hybrid retirement system established
1350 under Chapter 22, Part 3, Tier II Hybrid Retirement System.
1351 Section 26. Section 49-22-202 is enacted to read:
1352 49-22-202. Participation of employers -- Limitations -- Exclusions -- Admission
1353 requirements.
1354 (1) Unless excluded under Subsection (2), an employer is a participating employer and
1355 may not withdraw from participation in this system.
1356 (2) An employer that is a charter school sponsored by the State Board of Education or a
1357 school district may be excluded from participation in this system if the charter school makes an
1358 election of nonparticipation in accordance with Section 53A-1a-512 unless the charter school
1359 makes a one-time, irrevocable retraction of the election of nonparticipation in accordance with
1360 Subsection 53A-1a-512 (9).
1361 (3) (a) An employer may, by resolution of its governing body, apply for admission to
1362 this system.
1363 (b) Upon approval of the resolution by the board, the employer is a participating
1364 employer in this system and is subject to this title.
1365 (4) If a participating employer purchases service credit on behalf of regular full-time
1366 employees for service rendered prior to the participating employer's admission to this system,
1367 the service credit shall be purchased in a nondiscriminatory manner on behalf of all current and
1368 former regular full-time employees who were eligible for service credit at the time service was
1369 rendered.
1370 Section 27. Section 49-22-203 is enacted to read:
1371 49-22-203. Exclusions from membership in system.
1372 The following employees are not eligible for service credit in this system:
1373 (1) An employee whose employment status is temporary in nature due to the nature or
1374 the type of work to be performed, provided that:
1375 (a) if the term of employment exceeds six months and the employee otherwise qualifies
1376 for service credit in this system, the participating employer shall report and certify to the office
1377 that the employee is a regular full-time employee effective the beginning of the seventh month
1378 of employment; and
1379 (b) if an employee, previously terminated prior to becoming eligible for service credit
1380 in this system, is reemployed within three months of termination by the same participating
1381 employer, the participating employer shall report and certify to the office that the member is a
1382 regular full-time employee when the total of the periods of employment equals six months and
1383 the employee otherwise qualifies for service credit in this system.
1384 (2) (a) A current or future employee of an institution of higher education who holds, or
1385 is entitled to hold, under Section 49-22-204 , a retirement annuity contract with the Teachers'
1386 Insurance and Annuity Association of America or with any other public or private system,
1387 organization, or company during any period in which required contributions based on
1388 compensation have been paid on behalf of the employee by the employer.
1389 (b) The employee, upon cessation of the participating employer contributions, shall
1390 immediately become eligible for service credit in this system.
1391 (3) An employee serving as an exchange employee from outside the state.
1392 (4) An employee of the Department of Workforce Services who is covered under
1393 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act.
1394 Section 28. Section 49-22-204 is enacted to read:
1395 49-22-204. Higher education employees' eligibility requirements -- Election
1396 between different retirement plans -- Classification requirements -- Transfer between
1397 systems.
1398 (1) (a) Regular full-time employees of institutions of higher education who are eligible
1399 to participate in either this system or in a retirement annuity contract with the Teachers'
1400 Insurance and Annuity Association of America or with any other public or private system,
1401 organization, or company, designated by the Board of Regents, shall, not later than January 1,
1402 1979, elect to participate exclusively in this system or in an annuity contract allowed under this
1403 Subsection (1)(a).
1404 (b) The election is final, and no right exists to make any further election.
1405 (2) (a) A regular full-time employee hired by an institution of higher education after
1406 January 1, 1979, may participate only in the retirement plan which attaches to the person's
1407 employment classification.
1408 (b) Each institution of higher education shall prepare or amend existing employment
1409 classifications, under the direction of the Board of Regents, so that each classification is
1410 assigned with either:
1411 (i) this system;
1412 (ii) the Teachers' Insurance and Annuity Association of America; or
1413 (iii) another public or private system, organization, or company designated by the
1414 Board of Regents.
1415 (3) A regular full-time employee hired by an institution of higher education on or after
1416 July 1, 2011, whose employment classification requires participation in this system may elect
1417 to continue participation in this system upon change to an employment classification which
1418 requires participation in:
1419 (a) an annuity plan with the Teachers' Insurance and Annuity Association of America;
1420 or
1421 (b) another public or private system, organization, or company designated by the Board
1422 of Regents.
1423 (4) A regular full-time employee hired by an institution of higher education on or after
1424 July 1, 2011, whose employment classification requires participation in this system shall
1425 participate in this system.
1426 Section 29. Section 49-22-301 is enacted to read:
1427
1428 49-22-301. Contributions.
1429 (1) Participating employers and members shall jointly pay the certified contribution
1430 rates to the office to maintain the defined benefit portion of this system on a financially and
1431 actuarially sound basis.
1432 (2) (a) A participating employer shall pay up to 10% of compensation toward the
1433 certified contribution rate to the office for the defined benefit portion of this system.
1434 (b) A member shall pay the amount, if any, of the certified contribution rate for the
1435 defined benefit portion of this system that exceeds 10% to the office.
1436 (c) In addition to the percent specified under Subsection (2)(a), the participating
1437 employer shall pay the corresponding Tier I system amortization rate of the employee's
1438 compensation to the office to be applied to the employer's corresponding Tier I system liability.
1439 (3) A participating employer may not elect to pay all or part of the required member
1440 contributions under Subsection (2)(b), in addition to the required participating employer
1441 contributions.
1442 (4) (a) A member contribution is credited by the office to the account of the individual
1443 member.
1444 (b) This amount, together with refund interest, is held in trust for the payment of
1445 benefits to the member or the member's beneficiaries.
1446 (c) A member contribution is vested and nonforfeitable.
1447 (5) (a) Each member is considered to consent to payroll deductions of member
1448 contributions.
1449 (b) The payment of compensation less these payroll deductions is considered full
1450 payment for services rendered by the member.
1451 (6) Benefits provided under the defined benefit portion of the Tier II Hybrid
1452 Retirement System created under this part may not be increased unless the actuarial funded
1453 ratios of all systems under this title reach 100%.
1454 Section 30. Section 49-22-302 is enacted to read:
1455 49-22-302. Purchase of service credit.
1456 A member who works 20 or more hours per week for a participating employer
1457 participating in this system, but who does not meet other eligibility requirements for service
1458 credit, may purchase the service credit in accordance with Section 49-11-403 .
1459 Section 31. Section 49-22-303 is enacted to read:
1460 49-22-303. Defined contribution benefit established -- Contribution by employer
1461 and employee -- Vesting of contributions -- Plans to be separate -- Tax-qualified status of
1462 plans.
1463 (1) (a) A participating employer shall make a nonelective contribution on behalf of
1464 each regular full-time employee who is a member of this system in an amount equal to 10%
1465 minus the contribution rate paid by the employer pursuant to Subsection 49-22-301 (2)(a) of the
1466 member's compensation to a defined contribution plan qualified under Section 401(k) of the
1467 Internal Revenue Code which:
1468 (i) is sponsored by the board; and
1469 (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
1470 (b) The member may make additional payments to:
1471 (i) the qualified 401(k) plan which receives the employer contribution described in this
1472 Subsection (1); or
1473 (ii) at the member's option, another defined contribution plan established by the
1474 participating employer.
1475 (2) (a) The total amount contributed by the participating employer under Subsection
1476 (1)(a) vests to the member's benefit after four years of employment from the date of
1477 employment.
1478 (b) The total amount contributed by the member under Subsection (1)(b) vests to the
1479 member's benefit immediately and is nonforfeitable.
1480 (3) (a) Contributions made by a participating employer under Subsection (1)(a) shall be
1481 invested in a default option selected by the board until the member is vested in accordance with
1482 Subsection (2)(a).
1483 (b) A member may direct the investment of contributions made by a participating
1484 employer under Subsection (1)(a) only after the contributions have vested in accordance with
1485 Subsection (2)(a).
1486 (c) A member may direct the investment of contributions made by the member under
1487 Subsection (1)(b).
1488 (4) No loans shall be available from contributions made by a participating employer
1489 under Subsection (1)(a).
1490 (5) No hardship distributions shall be available from contributions made by a
1491 participating employer under Subsection (1)(a).
1492 (6) (a) Except as provided in Subsection (6)(b), if a member terminates employment
1493 with a participating employer prior to the vesting period described in Subsection (2)(a), all
1494 contributions made by a participating employer on behalf of the member under Subsection
1495 (1)(a) are subject to forfeiture.
1496 (b) If a member who terminates employment with a participating employer prior to the
1497 vesting period described in Subsection (2)(a) subsequently enters employment with the same or
1498 another participating employer within 10 years of the termination date of the previous
1499 employment:
1500 (i) all contributions made by the previous participating employer on behalf of the
1501 member shall be reinstated upon the member's completion of the vesting period under
1502 Subsection (2)(a); and
1503 (ii) the length of time that the member worked with the previous employer shall be
1504 included in determining whether the member has completed the vesting period under
1505 Subsection (2)(a).
1506 (c) The board shall establish a forfeiture account and shall specify the uses of the
1507 forfeiture account, which may include an offset against employer contributions made under this
1508 section.
1509 (7) The board may request from any other qualified 401(k) plan under Subsection (1)
1510 or (2) any relevant information pertaining to the maintenance of its tax qualification under the
1511 Internal Revenue Code.
1512 (8) The board may take any action which in its judgment is necessary to maintain the
1513 tax-qualified status of its 401(k) defined contribution plan under federal law.
1514 Section 32. Section 49-22-304 is enacted to read:
1515 49-22-304. Defined benefit eligibility for an allowance -- Date of retirement --
1516 Qualifications.
1517 (1) A member is qualified to receive an allowance from this system when:
1518 (a) before the member's retirement date, the member ceases actual work for a
1519 participating employer in this system and provides evidence of the termination;
1520 (b) the member has submitted to the office a notarized retirement application form that
1521 states the member's proposed retirement date; and
1522 (c) one of the following conditions is met as of the member's retirement date:
1523 (i) the member has accrued at least four years of service credit and has attained an age
1524 of 65 years;
1525 (ii) the member has accrued at least 10 years of service credit and has attained an age
1526 of 62 years;
1527 (iii) the member has accrued at least 20 years of service credit and has attained an age
1528 of 60 years; or
1529 (iv) the member has accrued at least 35 years of service credit.
1530 (2) (a) The member's retirement date:
1531 (i) shall be the 1st or the 16th day of the month, as selected by the member;
1532 (ii) shall be on or after the date of termination; and
1533 (iii) may not be more than 90 days before or after the date the application is received by
1534 the office.
1535 (b) A member may not be employed by a participating employer in the system
1536 established by this chapter on the retirement date selected under Subsection (2)(a)(i).
1537 Section 33. Section 49-22-305 is enacted to read:
1538 49-22-305. Defined benefit service retirement plans -- Calculation of retirement
1539 allowance -- Social Security limitations.
1540 (1) (a) The retirees of this system may choose from the six retirement options described
1541 in this section.
1542 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
1543 calculation.
1544 (2) The Option One benefit is an annual allowance calculated as follows:
1545 (a) If the retiree is at least 65 years of age or has accrued at least 35 years of service
1546 credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
1547 by the number of years of service credit accrued on and after July 1, 2011.
1548 (b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
1549 actuarial amount for each year of retirement from age 60 to age 65, unless the member has 35
1550 or more years of accrued credit in which event no reduction is made to the allowance.
1551 (c) (i) Years of service includes any fractions of years of service to which the retiree
1552 may be entitled.
1553 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
1554 service credit is within 1/10 of one year of the total years of service credit required for
1555 retirement, the retiree shall be considered to have the total years of service credit required for
1556 retirement.
1557 (d) An Option One allowance is only payable to the member during the member's
1558 lifetime.
1559 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
1560 by reducing an Option One benefit based on actuarial computations to provide the following:
1561 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
1562 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
1563 member contributions, the remaining balance of the retiree's member contributions shall be
1564 paid in accordance with Sections 49-11-609 and 49-11-610 .
1565 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
1566 retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
1567 the lifetime of the retiree's lawful spouse at the time of retirement.
1568 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
1569 retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance is
1570 paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
1571 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
1572 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
1573 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
1574 retiree's life, beginning on the last day of the month following the month in which the lawful
1575 spouse dies.
1576 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
1577 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
1578 of initial retirement under Option One shall be paid to the retiree for the remainder of the
1579 retiree's life, beginning on the last day of the month following the month in which the lawful
1580 spouse dies.
1581 (4) Periods of employment which are exempt from this system under Subsection
1582 49-22-203 (1)(b) may be purchased by the member for the purpose of retirement only if all
1583 benefits from the Teachers' Insurance and Annuity Association of America or any other public
1584 or private system or organization based on this period of employment are forfeited.
1585 (5) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
1586 date, the retirement is canceled and the death shall be considered as that of a member before
1587 retirement.
1588 (b) Any payments made to the retiree shall be deducted from the amounts due to the
1589 beneficiary.
1590 (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
1591 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
1592 is no court order filed in the matter.
1593 Section 34. Section 49-22-306 is enacted to read:
1594 49-22-306. Allowance payable by lump-sum payment.
1595 (1) If a retiree's allowance, as computed under this chapter, amounts to $25 or less, the
1596 allowance may be settled by the office by making a lump-sum payment of an amount
1597 actuarially equivalent to the allowance.
1598 (2) A payment made under this section constitutes a full and complete settlement of the
1599 retiree's claim against this system.
1600 Section 35. Section 49-22-307 is enacted to read:
1601 49-22-307. Lump-sum death benefit for retiree and spouse.
1602 (1) (a) Upon retirement, a retiree may elect to have the office deduct an actuarially
1603 determined amount from the retiree's allowance to provide a lump-sum benefit payable to a
1604 beneficiary upon the death of the retiree.
1605 (b) Upon retirement, a retiree may also elect to have an actuarially determined amount
1606 deducted from the retiree's allowance to provide a lump-sum death benefit payable to a
1607 beneficiary upon the death of the retiree's lawful spouse at the time of retirement.
1608 (c) The board may make rules for the administration of this lump-sum death benefit.
1609 (2) (a) For a retiree who pays for a lump-sum death benefit under this section through a
1610 reduction of an allowance, benefits shall be paid in accordance with Sections 49-11-609 and
1611 49-11-610 .
1612 (b) If the retiree chooses Option Three, Four, Five, or Six, and a lump-sum death
1613 benefit is payable after the death of the retiree, the allowance shall be restored to its original
1614 amount.
1615 (3) (a) A retiree may elect to cancel the lump-sum death benefit under this section.
1616 (b) The cancellation under this Subsection (3) is irrevocable.
1617 (c) Upon cancellation, the allowance shall be restored to its original amount and
1618 benefits under this section may not be paid.
1619 Section 36. Section 49-22-308 is enacted to read:
1620 49-22-308. Defined benefit annual cost-of-living adjustment.
1621 (1) The office shall make an annual cost-of-living adjustment to:
1622 (a) an original allowance paid under Section 49-22-305 , if the allowance has been paid
1623 for at least one year; and
1624 (b) an original payment made to an alternate payee under a domestic relations order, if
1625 the payment is to be paid as a percentage of the allowance rather than a specific dollar amount.
1626 (2) (a) The original allowance shall be increased by the annual increase in the
1627 Consumer Price Index up to a maximum of 2.5%.
1628 (b) Annual increases in the Consumer Price Index in excess of 2.5% shall be
1629 accumulated and used in subsequent adjustments when the annual increase in the Consumer
1630 Price Index is less than 2.5%.
1631 (3) The Consumer Price Index used in calculating adjustments shall be a United States
1632 Bureau of Labor Statistics Consumer Price Index average as determined by the board.
1633 (4) The cost-of-living adjustment made under this section may not decrease the
1634 allowance.
1635 Section 37. Section 49-22-309 is enacted to read:
1636 49-22-309. Purchase of service credit -- Conditions -- Cost -- Nondiscrimination
1637 policy.
1638 (1) (a) A member may purchase or a member and a participating employer may jointly
1639 purchase a maximum of five years of service credit which cannot otherwise be purchased under
1640 this title.
1641 (b) At a minimum, the years of service credit purchased shall be sufficient to allow the
1642 member to meet the retirement eligibility requirements of this system with no actuarial
1643 reduction.
1644 (c) The member's retirement date shall be immediately after the purchase of years of
1645 service credit.
1646 (d) The member shall pay at least 5% of the cost of the purchase.
1647 (e) To qualify for a purchase of service credit under this section, the member shall:
1648 (i) have at least five years of service credit; and
1649 (ii) otherwise meet federal eligibility requirements.
1650 (2) The purchase price for the years of service credit shall be calculated and paid for as
1651 provided in Section 49-11-403 .
1652 (3) Prior to making any purchase of years of service credit under this section, a
1653 participating employer shall adopt a purchase policy that includes nondiscriminatory
1654 participation standards for all regular full-time employees.
1655 (4) Only members retiring from this system may purchase service credit under this
1656 section.
1657 Section 38. Section 49-22-401 is enacted to read:
1658
1659 49-22-401. Contributions -- Rates.
1660 (1) Up to the amount allowed by federal law, the participating employer shall
1661 contribute 10% of the participant's compensation to a defined contribution plan.
1662 (2) (a) The participating employer shall contribute the 10% nonelective contribution
1663 described in Subsection (1) to a defined contribution plan qualified under Section 401(k) of the
1664 Internal Revenue Code which:
1665 (i) is sponsored by the board; and
1666 (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
1667 (b) The member may make additional payments to:
1668 (i) the qualified 401(k) plan which receives the employer contribution described in this
1669 Subsection (2); or
1670 (ii) at the member's option, another defined contribution plan established by the
1671 participating employer.
1672 (c) In addition to the percent specified under Subsection (2)(a), the participating
1673 employer shall pay the corresponding Tier I system amortization rate of the employee's
1674 compensation to the office to be applied to the employer's corresponding Tier I system liability.
1675 (3) (a) The total amount contributed by the participating employer under Subsection
1676 (2)(a) vests to the member's benefit after four years of employment from the date of
1677 employment.
1678 (b) The total amount contributed by the member under Subsection (2)(b) vests to the
1679 member's benefit immediately and is nonforfeitable.
1680 (4) (a) Contributions made by a participating employer under Subsection (2)(a) shall be
1681 invested in a default option selected by the board until the member is vested in accordance with
1682 Subsection (3)(a).
1683 (b) A member may direct the investment of contributions made by a participating
1684 employer under Subsection (2)(a) only after the contributions have vested in accordance with
1685 Subsection (3)(a).
1686 (c) A member may direct the investment of contributions made by the member under
1687 Subsection (3)(b).
1688 (5) No loans shall be available from contributions made by a participating employer
1689 under Subsection (2)(a).
1690 (6) No hardship distributions shall be available from contributions made by a
1691 participating employer under Subsection (2)(a).
1692 (7) (a) Except as provided in Subsection (7)(b), if a member terminates employment
1693 with a participating employer prior to the vesting period described in Subsection (3)(a), all
1694 contributions made by a participating employer on behalf of the member under Subsection
1695 (2)(a) are subject to forfeiture.
1696 (b) If a member who terminates employment with a participating employer prior to the
1697 vesting period described in Subsection (3)(a) subsequently enters employment with the same or
1698 another participating employer within 10 years of the termination date of the previous
1699 employment:
1700 (i) all contributions made by the previous participating employer on behalf of the
1701 member shall be reinstated upon the member's completion of the vesting period under
1702 Subsection (3)(a); and
1703 (ii) the length of time that the member worked with the previous employer shall be
1704 included in determining whether the member has completed the vesting period under
1705 Subsection (3)(a).
1706 (c) The board shall establish a forfeiture account and shall specify the uses of the
1707 forfeiture account, which may include an offset against employer contributions made under this
1708 section.
1709 (8) The board may request from any other qualified 401(k) plan under Subsection (2)
1710 any relevant information pertaining to the maintenance of its tax qualification under the
1711 Internal Revenue Code.
1712 (9) The board may take any action which in its judgment is necessary to maintain the
1713 tax-qualified status of its 401(k) defined contribution plan under federal law.
1714 Section 39. Section 49-22-402 is enacted to read:
1715 49-22-402. Defined contribution distributions for disabled members.
1716 For a person who is disabled and receives contributions under Subsection
1717 49-11-404 (4)(b), the disabled member may begin receiving distributions from the defined
1718 contributions made by the participating employer on behalf of the disabled member when the
1719 person would have been eligible to retire if the person was covered by the defined benefit
1720 portion of the Tier II Hybrid Retirement System under Part 3, Tier II Hybrid Retirement
1721 System.
1722 Section 40. Section 49-22-501 is enacted to read:
1723
1724 49-22-501. Death benefit by means of group insurance policy -- Eligibility for
1725 death benefit -- Benefit calculation -- Payment of claim.
1726 (1) The office shall provide a death benefit through the purchase of a group insurance
1727 policy for members of this system.
1728 (2) The board shall make rules to administer the death benefit provided by this section
1729 and may, in accordance with federal law, establish:
1730 (a) benefit levels;
1731 (b) classes of members; and
1732 (c) a living benefit option.
1733 (3) This death benefit is payable when:
1734 (a) the member dies prior to the member's retirement date or dies under circumstances
1735 which Subsection 49-22-305 (5) requires to be treated as the death of a member before
1736 retirement;
1737 (b) the office receives acceptable proof of death; and
1738 (c) benefits are not payable under Section 49-22-307 .
1739 (4) The death benefit payable to the beneficiary under this section is a lump-sum
1740 payment consisting of:
1741 (a) the return of any member contributions under this chapter; plus
1742 (b) a percentage of the final average salary of the member to be determined by the
1743 board.
1744 (5) Any amount of a living benefit option paid to the member prior to death shall be
1745 deducted from the benefit payable to the beneficiary.
1746 (6) The cost of the death benefit shall be paid by the participating employer in addition
1747 to the contribution rate established under Section 49-22-301 or 49-22-401 .
1748 (7) The portion of the death benefit provided under Subsection (4)(b) may not be paid
1749 to the beneficiary of an inactive member unless the death of the member occurs either:
1750 (a) within a period of 120 days after the last day of work for which the person received
1751 compensation; or
1752 (b) while the member is still physically or mentally incapacitated from performance of
1753 duties, if the incapacity has been continuous since the last day of work for which compensation
1754 was received.
1755 (8) The death benefit provided under Subsection (4)(b) shall be paid in accordance
1756 with Sections 49-11-609 and 49-11-610 .
1757 (9) The death benefit paid to the beneficiary of an inactive member, except as
1758 otherwise provided under Subsection (7), is a lump-sum return of the member's member
1759 contributions.
1760 (10) Payment of the death benefit by the office constitutes a full settlement of any
1761 beneficiary's claim against the office and the office is not liable for any further or additional
1762 claims or assessments on behalf of the member.
1763 (11) Unless otherwise specified in a written document filed with the office, death
1764 benefits payable to beneficiaries shall be in accordance with the order of precedence
1765 established under Title 75, Chapter 2, Intestate Succession and Wills.
1766 (12) A death benefit under this section may not be paid on behalf of a retiree under this
1767 system.
1768 Section 41. Section 49-22-502 is enacted to read:
1769 49-22-502. Death of married members -- Service retirement benefits to surviving
1770 spouse.
1771 (1) As used in this section, "member's full allowance" means an Option Three
1772 allowance calculated under Section 49-22-305 without an actuarial reduction.
1773 (2) Upon the request of a deceased member's lawful spouse at the time of the member's
1774 death, the deceased member is considered to have retired under Option Three on the first day of
1775 the month following the month in which the member died if the following requirements are
1776 met:
1777 (a) the member has:
1778 (i) 15 or more years of service credit;
1779 (ii) attained age 62 with 10 or more years of service credit; or
1780 (iii) attained age 65 with four or more years of service credit; and
1781 (b) the member dies leaving a spouse to whom the member has been married at least
1782 six months immediately prior to the death date.
1783 (3) The spouse who requests a benefit under this section shall apply in writing to the
1784 office. The allowance shall begin on the first day of the month:
1785 (a) following the month in which the member died, if the application is received by the
1786 office within 90 days of the member's death; or
1787 (b) in which the application is received by the office.
1788 (4) The allowance payable to a surviving spouse under Subsection (2) is as follows:
1789 (a) if the member has 25 or more years of service credit at the time of death, the
1790 surviving spouse shall receive the member's full allowance;
1791 (b) if the member has between 20-24 years of service credit and is not age 60 or older
1792 at the time of death, the surviving spouse shall receive 2/3 of the member's full allowance;
1793 (c) if the member has between 15-19 years of service credit and is not age 62 or older
1794 at the time of death, the surviving spouse shall receive 1/3 of the member's full allowance; or
1795 (d) if the member is age 60 or older with 20 or more years of service credit, age 62 or
1796 older with 10 or more years of service credit, or age 65 or older with four or more years of
1797 service credit at the time of death, the surviving spouse shall receive an Option Three benefit
1798 with actuarial reductions.
1799 (5) Except for a return of member contributions, benefits payable under this section are
1800 retirement benefits and shall be paid in addition to any other payments made under Section
1801 49-22-501 and shall constitute a full and final settlement of the claim of the spouse or any other
1802 beneficiary filing a claim for benefits under Section 49-22-501 .
1803 Section 42. Section 49-22-601 is enacted to read:
1804
1805 49-22-601. Long-term disability coverage.
1806 In accordance with Section 49-21-201 , the state shall cover all of its eligible employees
1807 under Chapter 21, Public Employees' Long-Term Disability Act.
1808 Section 43. Section 49-23-101 is enacted to read:
1809
1810
1811
1812 49-23-101. Title.
1813 This chapter is known as the "New Public Safety and Firefighter Tier II Contributory
1814 Retirement Act."
1815 Section 44. Section 49-23-102 is enacted to read:
1816 49-23-102. Definitions.
1817 As used in this chapter:
1818 (1) (a) "Compensation" means the total amount of payments that are includable in
1819 gross income received by a public safety service employee or a firefighter service employee as
1820 base income for the regularly scheduled work period. The participating employer shall
1821 establish the regularly scheduled work period. Base income shall be determined prior to the
1822 deduction of any amounts the public safety service employee or firefighter service employee
1823 authorizes to be deducted for salary deferral or other benefits authorized by federal law.
1824 (b) "Compensation" includes performance-based bonuses and cost-of-living
1825 adjustments.
1826 (c) "Compensation" does not include:
1827 (i) overtime;
1828 (ii) sick pay incentives;
1829 (iii) retirement pay incentives;
1830 (iv) the monetary value of remuneration paid in kind, as in a residence, use of
1831 equipment or uniform, travel, or similar payments;
1832 (v) a lump-sum payment or special payment covering accumulated leave; and
1833 (vi) all contributions made by a participating employer under this system or under any
1834 other employee benefit system or plan maintained by a participating employer for the benefit of
1835 a member or participant.
1836 (d) "Compensation" for purposes of this chapter may not exceed the amount allowed
1837 under Internal Revenue Code Section 401(a)(17).
1838 (2) "Corresponding Tier I system" means the system or plan that would have covered
1839 the member if the member had initially entered employment before July 1, 2011.
1840 (3) "Final average salary" means the amount computed by averaging the highest five
1841 years of annual compensation preceding retirement subject to Subsections (3)(a), (b), (c), and
1842 (d).
1843 (a) Except as provided in Subsection (3)(b), the percentage increase in annual
1844 compensation in any one of the years used may not exceed the previous year's compensation by
1845 more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power
1846 of the dollar during the previous year, as measured by a United States Bureau of Labor
1847 Statistics Consumer Price Index average as determined by the board.
1848 (b) In cases where the participating employer provides acceptable documentation to the
1849 office, the limitation in Subsection (3)(a) may be exceeded if:
1850 (i) the member has transferred from another agency; or
1851 (ii) the member has been promoted to a new position.
1852 (c) If the member retires more than six months from the date of termination of
1853 employment, the member is considered to have been in service at the member's last rate of pay
1854 from the date of the termination of employment to the effective date of retirement for purposes
1855 of computing the member's final average salary only.
1856 (d) If the member has less than five years of service credit in this system, final average
1857 salary means the average annual compensation paid to the member during the full period of
1858 service credit.
1859 (4) "Firefighter service" means employment normally requiring an average of 2,080
1860 hours of regularly scheduled employment per year rendered by a member who is a firefighter
1861 service employee trained in firefighter techniques and assigned to a position of hazardous duty
1862 with a regularly constituted fire department, but does not include secretarial staff or other
1863 similar employees.
1864 (5) "Firefighter service employee" means an employee of a participating employer who
1865 provides firefighter service under this chapter. An employee of a regularly constituted fire
1866 department who does not perform firefighter service is not a firefighter service employee.
1867 (6) "Participating employer" means an employer which meets the participation
1868 requirements of:
1869 (a) Sections 49-14-201 and 49-14-202 ;
1870 (b) Sections 49-15-201 and 49-15-202 ;
1871 (c) Sections 49-16-201 and 49-16-202 ; or
1872 (d) Sections 49-23-201 and 49-23-202 .
1873 (7) (a) "Public safety service" means employment normally requiring an average of
1874 2,080 hours of regularly scheduled employment per year rendered by a member who is a:
1875 (i) law enforcement officer in accordance with Section 53-13-103 ;
1876 (ii) correctional officer in accordance with Section 53-13-104 ; and
1877 (iii) special function officer approved in accordance with Sections 49-15-201 and
1878 53-13-105 .
1879 (b) "Public safety service" also requires that in the course of employment the
1880 employee's life or personal safety is at risk.
1881 (8) "Public safety service employee" means an employee of a participating employer
1882 who performs public safety service under this chapter.
1883 (9) "System" means the New Public Safety and Firefighter Tier II Contributory
1884 Retirement System created under this chapter.
1885 (10) (a) "Volunteer firefighter" means any individual that is not regularly employed as
1886 a firefighter service employee, but who:
1887 (i) has been trained in firefighter techniques and skills;
1888 (ii) continues to receive regular firefighter training; and
1889 (iii) is on the rolls of a legally organized volunteer fire department which provides
1890 ongoing training and serves a political subdivision of the state.
1891 (b) An individual that volunteers assistance but does not meet the requirements of
1892 Subsection (10)(a) is not a volunteer firefighter for purposes of this chapter.
1893 (11) "Years of service credit" means:
1894 (a) a period, consisting of 12 full months as determined by the board; or
1895 (b) a period determined by the board, whether consecutive or not, during which a
1896 regular full-time employee performed services for a participating employer, including any time
1897 the regular full-time employee was absent on a paid leave of absence granted by a participating
1898 employer or was absent in the service of the United States government on military duty as
1899 provided by this chapter.
1900 Section 45. Section 49-23-103 is enacted to read:
1901 49-23-103. Creation of system.
1902 (1) There is created for members employed by a participating employer the "New
1903 Public Safety and Firefighter Tier II Contributory Retirement System."
1904 (2) The New Public Safety and Firefighter Tier II Contributory Retirement System
1905 includes:
1906 (a) the Tier II hybrid retirement system created in Part 3, Tier II Hybrid Retirement
1907 System; and
1908 (b) the Tier II defined contribution plan created in Part 4, Tier II Defined Contribution
1909 Plan.
1910 Section 46. Section 49-23-104 is enacted to read:
1911 49-23-104. Creation of trust fund.
1912 (1) There is created the "New Public Safety and Firefighter Tier II Contributory
1913 Retirement Trust Fund" for the purpose of paying the benefits and costs of administering the
1914 defined benefit portion of this system.
1915 (2) The fund shall consist of all money paid into it, including interest, in accordance
1916 with this chapter, whether in the form of cash, securities, or other assets, and of all money
1917 received from any other source.
1918 (3) Custody, management, and investment of the fund shall be governed by Chapter 11,
1919 Utah State Retirement Systems Administration.
1920 Section 47. Section 49-23-201 is enacted to read:
1921
1922 49-23-201. System membership -- Eligibility.
1923 (1) Beginning July 1, 2011, a participating employer that employs public safety service
1924 employees or firefighter service employees shall participate in this system.
1925 (2) (a) A public safety service employee or a firefighter service employee entering
1926 employment with a participating employer on or after July 1, 2011, is eligible:
1927 (i) as a member for service credit and defined contributions under the Tier II hybrid
1928 retirement system established by Part 3, Tier II Hybrid Retirement System; or
1929 (ii) as a participant for defined contributions under the Tier II defined contributions
1930 plan established by Part 4, Tier II Defined Contribution Plan.
1931 (b) A public safety service employee or a firefighter service employee entering
1932 employment with a participating employer on or after July 1, 2011, shall:
1933 (i) make an election to participate in the system created under this chapter within 30
1934 days from the date of employment:
1935 (A) as a member for service credit and defined contributions under the Tier II Hybrid
1936 Retirement System established by Part 3, Tier II Hybrid Retirement System; or
1937 (B) as a participant for defined contributions under the Tier II defined contribution plan
1938 established by Part 4, Tier II Defined Contribution Plan; and
1939 (ii) submit to the office notification of the member's election under Subsection (2)(b)(i)
1940 in a manner approved by the office.
1941 (c) An election made by a public safety service employee or firefighter service
1942 employee entering employment with a participating employer under this Subsection (2) is
1943 irrevocable.
1944 (d) If no election is made under Subsection (2)(b)(i), the public safety service employee
1945 or firefighter service employee shall become a member eligible for service credit and defined
1946 contributions under the Tier II Hybrid Retirement System established by Part 3, Tier II Hybrid
1947 Retirement System.
1948 Section 48. Section 49-23-202 is enacted to read:
1949 49-23-202. Participation of employers -- Admission requirements.
1950 (1) An employer is a participating employer and may not withdraw from participation
1951 in this system.
1952 (2) (a) An employer may, by resolution of its governing body, apply for admission to
1953 this system.
1954 (b) Upon approval of the resolution by the board, the employer is a participating
1955 employer in this system and is subject to this title.
1956 (3) If a participating employer purchases service credit on behalf of public safety
1957 service employees or firefighter service employees for service rendered prior to the
1958 participating employer's admission to this system, the service credit shall be purchased in a
1959 nondiscriminatory manner on behalf of all current and former public safety service employees
1960 or firefighter service employees who were eligible for service credit at the time service was
1961 rendered.
1962 Section 49. Section 49-23-301 is enacted to read:
1963
1964 49-23-301. Contributions.
1965 (1) Participating employers and members shall jointly pay the certified contribution
1966 rates to the office to maintain the defined benefit portion of this system on a financially and
1967 actuarially sound basis.
1968 (2) (a) A participating employer shall pay up to 12% of compensation toward the
1969 certified contribution rate to the office for the defined benefit portion of this system.
1970 (b) A member shall pay the amount, if any, of the certified contribution rate for the
1971 defined benefit portion of this system that exceeds 12% to the office.
1972 (c) In addition to the percent specified under Subsection (2)(a), the participating
1973 employer shall pay the corresponding Tier I system amortization rate of the employee's
1974 compensation to the office to be applied to the employer's corresponding Tier I system liability.
1975 (3) A participating employer may not elect to pay all or part of the required member
1976 contributions under Subsection (2)(b), in addition to the required participating employer
1977 contributions.
1978 (4) (a) A member contribution is credited by the office to the account of the individual
1979 member.
1980 (b) This amount, together with refund interest, is held in trust for the payment of
1981 benefits to the member or the member's beneficiaries.
1982 (c) A member contribution is vested and nonforfeitable.
1983 (5) (a) Each member is considered to consent to payroll deductions of member
1984 contributions.
1985 (b) The payment of compensation less these payroll deductions is considered full
1986 payment for services rendered by the member.
1987 (6) Benefits provided under the defined benefit portion of the Tier II Hybrid
1988 Retirement System created under this part may not be increased unless the actuarial funded
1989 ratios of all systems under this title reach 100%.
1990 Section 50. Section 49-23-302 is enacted to read:
1991 49-23-302. Defined contribution benefit established -- Contribution by employer
1992 and employee -- Vesting of contributions -- Plans to be separate -- Tax-qualified status of
1993 plans.
1994 (1) (a) A participating employer shall make a nonelective contribution on behalf of
1995 each public safety service employee or firefighter service employee who is a member of this
1996 system in an amount equal to 12% minus the contribution rate paid by the employer pursuant to
1997 Subsection 49-23-301 (2)(a) of the member's compensation to a defined contribution plan
1998 qualified under Section 401(k) of the Internal Revenue Code which:
1999 (i) is sponsored by the board; and
2000 (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
2001 (b) The member may make additional payments to:
2002 (i) the qualified 401(k) plan which receives the employer contribution described in this
2003 Subsection (1); or
2004 (ii) at the member's option, another defined contribution plan established by the
2005 participating employer.
2006 (2) (a) The total amount contributed by the participating employer under Subsection
2007 (1)(a) vests to the member's benefit after four years of employment from the date of
2008 employment.
2009 (b) The total amount contributed by the member under Subsection (1)(b) vests to the
2010 member's benefit immediately and is nonforfeitable.
2011 (3) (a) Contributions made by a participating employer under Subsection (1)(a) shall be
2012 invested in a default option selected by the board until the member is vested in accordance with
2013 Subsection (2)(a).
2014 (b) A member may direct the investment of contributions made by a participating
2015 employer under Subsection (1)(a) only after the contributions have vested in accordance with
2016 Subsection (2)(a).
2017 (c) A member may direct the investment of contributions made by the member under
2018 Subsection (1)(b).
2019 (4) No loans shall be available from contributions made by a participating employer
2020 under Subsection (1)(a).
2021 (5) No hardship distributions shall be available from contributions made by a
2022 participating employer under Subsection (1)(a).
2023 (6) (a) Except as provided in Subsection (6)(b), if a member terminates employment
2024 with a participating employer prior to the vesting period described in Subsection (2)(a), all
2025 contributions made by a participating employer on behalf of the member under Subsection
2026 (1)(a) are subject to forfeiture.
2027 (b) If a member who terminates employment with a participating employer prior to the
2028 vesting period described in Subsection (2)(a) subsequently enters employment with the same or
2029 another participating employer within 10 years of the termination date of the previous
2030 employment:
2031 (i) all contributions made by the previous participating employer on behalf of the
2032 member shall be reinstated upon the member's completion of the vesting period under
2033 Subsection (2)(a); and
2034 (ii) the length of time that the member worked with the previous employer shall be
2035 included in determining whether the member has completed the vesting period under
2036 Subsection (2)(a).
2037 (c) The board shall establish a forfeiture account and shall specify the uses of the
2038 forfeiture account, which may include an offset against employer contributions made under this
2039 section.
2040 (7) The board may request from any other qualified 401(k) plan under Subsection (1)
2041 or (2) any relevant information pertaining to the maintenance of its tax qualification under the
2042 Internal Revenue Code.
2043 (8) The board may take any action which in its judgment is necessary to maintain the
2044 tax-qualified status of its 401(k) defined contribution plan under federal law.
2045 Section 51. Section 49-23-303 is enacted to read:
2046 49-23-303. Defined benefit eligibility for an allowance -- Date of retirement --
2047 Qualifications.
2048 (1) A member is qualified to receive an allowance from this system when:
2049 (a) before the member's retirement date, the member ceases actual work for a
2050 participating employer in this system and provides evidence of the termination;
2051 (b) the member has submitted to the office a notarized retirement application form that
2052 states the member's proposed retirement date; and
2053 (c) one of the following conditions is met as of the member's retirement date:
2054 (i) the member has accrued at least four years of service credit and has attained an age
2055 of 65 years;
2056 (ii) the member has accrued at least 10 years of service credit and has attained an age
2057 of 62 years;
2058 (iii) the member has accrued at least 20 years of service credit and has attained an age
2059 of 60 years; or
2060 (iv) the member has accrued at least 25 years of service credit.
2061 (2) (a) The member's retirement date:
2062 (i) shall be the 1st or the 16th day of the month, as selected by the member;
2063 (ii) shall be on or after the date of termination; and
2064 (iii) may not be more than 90 days before or after the date the application is received by
2065 the office.
2066 (b) A member may not be employed by a participating employer in the system
2067 established by this chapter on the retirement date selected under Subsection (2)(a)(i).
2068 Section 52. Section 49-23-304 is enacted to read:
2069 49-23-304. Defined benefit service retirement plans -- Calculation of retirement
2070 allowance -- Social Security limitations.
2071 (1) (a) The retirees of this system may choose from the six retirement options described
2072 in this section.
2073 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
2074 calculation.
2075 (2) The Option One benefit is an annual allowance calculated as follows:
2076 (a) If the retiree is at least 65 years of age or has accrued at least 25 years of service
2077 credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
2078 by the number of years of service credit accrued on and after July 1, 2011.
2079 (b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
2080 actuarial amount for each year of retirement from age 60 to age 65, unless the member has 25
2081 or more years of accrued credit in which event no reduction is made to the allowance.
2082 (c) (i) Years of service includes any fractions of years of service to which the retiree
2083 may be entitled.
2084 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
2085 service credit is within 1/10 of one year of the total years of service credit required for
2086 retirement, the retiree shall be considered to have the total years of service credit required for
2087 retirement.
2088 (d) An Option One allowance is only payable to the member during the member's
2089 lifetime.
2090 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
2091 by reducing an Option One benefit based on actuarial computations to provide the following:
2092 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
2093 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
2094 member contributions, the remaining balance of the retiree's member contributions shall be
2095 paid in accordance with Sections 49-11-609 and 49-11-610 .
2096 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
2097 retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
2098 the lifetime of the retiree's lawful spouse at the time of retirement.
2099 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
2100 retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance is
2101 paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
2102 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
2103 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
2104 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
2105 retiree's life, beginning on the last day of the month following the month in which the lawful
2106 spouse dies.
2107 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
2108 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
2109 of initial retirement under Option One shall be paid to the retiree for the remainder of the
2110 retiree's life, beginning on the last day of the month following the month in which the lawful
2111 spouse dies.
2112 (4) Periods of employment which are exempt from this system may be purchased by
2113 the member for the purpose of retirement only if all benefits from any other public or private
2114 system or organization based on this period of employment are forfeited.
2115 (5) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
2116 date, the retirement is canceled and the death shall be considered as that of a member before
2117 retirement.
2118 (b) Any payments made to the retiree shall be deducted from the amounts due to the
2119 beneficiary.
2120 (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
2121 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
2122 is no court order filed in the matter.
2123 Section 53. Section 49-23-305 is enacted to read:
2124 49-23-305. Allowance payable by lump-sum payment.
2125 (1) If a retiree's allowance, as computed under this chapter, amounts to $25 or less, the
2126 allowance may be settled by the office by making a lump-sum payment of an amount
2127 actuarially equivalent to the allowance.
2128 (2) A payment made under this section constitutes a full and complete settlement of the
2129 retiree's claim against this system.
2130 Section 54. Section 49-23-306 is enacted to read:
2131 49-23-306. Lump-sum death benefit for retiree and spouse.
2132 (1) (a) Upon retirement, a retiree may elect to have the office deduct an actuarially
2133 determined amount from the retiree's allowance to provide a lump-sum benefit payable to a
2134 beneficiary upon the death of the retiree.
2135 (b) Upon retirement, a retiree may also elect to have an actuarially determined amount
2136 deducted from the retiree's allowance to provide a lump-sum death benefit payable to a
2137 beneficiary upon the death of the retiree's lawful spouse at the time of retirement.
2138 (c) The board may make rules for the administration of this lump-sum death benefit.
2139 (2) (a) For a retiree who pays for a lump-sum death benefit under this section through a
2140 reduction of an allowance, benefits shall be paid in accordance with Sections 49-11-609 and
2141 49-11-610 .
2142 (b) If the retiree chooses Option Three, Four, Five, or Six, and a lump-sum death
2143 benefit is payable after the death of the retiree, the allowance shall be restored to its original
2144 amount.
2145 (3) (a) A retiree may elect to cancel the lump-sum death benefit under this section.
2146 (b) The cancellation under this Subsection (3) is irrevocable.
2147 (c) Upon cancellation, the allowance shall be restored to its original amount and
2148 benefits under this section may not be paid.
2149 Section 55. Section 49-23-307 is enacted to read:
2150 49-23-307. Defined benefit annual cost-of-living adjustment.
2151 (1) The office shall make an annual cost-of-living adjustment to:
2152 (a) an original allowance paid under Section 49-23-305 , if the allowance has been paid
2153 for at least one year; and
2154 (b) an original payment made to an alternate payee under a domestic relations order, if
2155 the payment is to be paid as a percentage of the allowance rather than a specific dollar amount.
2156 (2) (a) The original allowance shall be increased by the annual increase in the
2157 Consumer Price Index up to a maximum of 2.5%.
2158 (b) Annual increases in the Consumer Price Index in excess of 2.5% shall be
2159 accumulated and used in subsequent adjustments when the annual increase in the Consumer
2160 Price Index is less than 2.5%.
2161 (3) The Consumer Price Index used in calculating adjustments shall be a United States
2162 Bureau of Labor Statistics Consumer Price Index average as determined by the board.
2163 (4) The cost-of-living adjustment made under this section may not decrease the
2164 allowance.
2165 Section 56. Section 49-23-308 is enacted to read:
2166 49-23-308. Purchase of service credit -- Conditions -- Cost -- Nondiscrimination
2167 policy.
2168 (1) (a) A member may purchase or a member and a participating employer may jointly
2169 purchase a maximum of five years of service credit which cannot otherwise be purchased under
2170 this title.
2171 (b) At a minimum, the years of service credit purchased shall be sufficient to allow the
2172 member to meet the retirement eligibility requirements of this system with no actuarial
2173 reduction.
2174 (c) The member's retirement date shall be immediately after the purchase of years of
2175 service credit.
2176 (d) The member shall pay at least 5% of the cost of the purchase.
2177 (e) To qualify for a purchase of service credit under this section, the member shall:
2178 (i) have at least five years of service credit; and
2179 (ii) otherwise meet federal eligibility requirements.
2180 (2) The purchase price for the years of service credit shall be calculated and paid for as
2181 provided in Section 49-11-403 .
2182 (3) Prior to making any purchase of years of service credit under this section, a
2183 participating employer shall adopt a purchase policy that includes nondiscriminatory
2184 participation standards for all regular full-time employees.
2185 (4) Only members retiring from this system may purchase service credit under this
2186 section.
2187 Section 57. Section 49-23-401 is enacted to read:
2188
2189 49-23-401. Contributions -- Rates.
2190 (1) Up to the amount allowed by federal law, the participating employer shall
2191 contribute 12% of the participant's compensation to a defined contribution plan.
2192 (2) (a) The participating employer shall contribute the 12% nonelective contribution
2193 described in Subsection (1) to a defined contribution plan qualified under Section 401(k) of the
2194 Internal Revenue Code which:
2195 (i) is sponsored by the board; and
2196 (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
2197 (b) The member may make additional payments to:
2198 (i) the qualified 401(k) plan which receives the employer contribution described in this
2199 Subsection (2); or
2200 (ii) at the member's option, another defined contribution plan established by the
2201 participating employer.
2202 (c) In addition to the percent specified under Subsection (2)(a), the participating
2203 employer shall pay the corresponding Tier I system amortization rate of the employee's
2204 compensation to the office to be applied to the employer's corresponding Tier I system liability.
2205 (3) (a) The total amount contributed by the participating employer under Subsection
2206 (2)(a) vests to the member's benefit after four years of employment from the date of
2207 employment.
2208 (b) The total amount contributed by the member under Subsection (2)(b) vests to the
2209 member's benefit immediately and is nonforfeitable.
2210 (4) (a) Contributions made by a participating employer under Subsection (2)(a) shall be
2211 invested in a default option selected by the board until the member is vested in accordance with
2212 Subsection (3)(a).
2213 (b) A member may direct the investment of contributions made by a participating
2214 employer under Subsection (2)(a) only after the contributions have vested in accordance with
2215 Subsection (3)(a).
2216 (c) A member may direct the investment of contributions made by the member under
2217 Subsection (3)(b).
2218 (5) No loans shall be available from contributions made by a participating employer
2219 under Subsection (2)(a).
2220 (6) No hardship distributions shall be available from contributions made by a
2221 participating employer under Subsection (2)(a).
2222 (7) (a) Except as provided in Subsection (7)(b), if a member terminates employment
2223 with a participating employer prior to the vesting period described in Subsection (3)(a), all
2224 contributions made by a participating employer on behalf of the member under Subsection
2225 (2)(a) are subject to forfeiture.
2226 (b) If a member who terminates employment with a participating employer prior to the
2227 vesting period described in Subsection (3)(a) subsequently enters employment with the same or
2228 another participating employer within 10 years of the termination date of the previous
2229 employment:
2230 (i) all contributions made by the previous participating employer on behalf of the
2231 member shall be reinstated upon the member's completion of the vesting period under
2232 Subsection (3)(a); and
2233 (ii) the length of time that the member worked with the previous employer shall be
2234 included in determining whether the member has completed the vesting period under
2235 Subsection (3)(a).
2236 (c) The board shall establish a forfeiture account and shall specify the uses of the
2237 forfeiture account, which may include an offset against employer contributions made under this
2238 section.
2239 (8) The board may request from any other qualified 401(k) plan under Subsection (2)
2240 any relevant information pertaining to the maintenance of its tax qualification under the
2241 Internal Revenue Code.
2242 (9) The board may take any action which in its judgment is necessary to maintain the
2243 tax-qualified status of its 401(k) defined contribution plan under federal law.
2244 Section 58. Section 49-23-402 is enacted to read:
2245 49-23-402. Defined contribution distributions for disabled members.
2246 For a person who is disabled and receives contributions under Subsection
2247 49-11-404 (4)(b), the disabled member may begin receiving distributions from the defined
2248 contributions made by the participating employer on behalf of the disabled member when the
2249 person would have been eligible to retire if the person was covered by the defined benefit
2250 portion of the Tier II Hybrid Retirement System under Part 3, Tier II Hybrid Retirement
2251 System.
2252 Section 59. Section 49-23-501 is enacted to read:
2253
2254 49-23-501. Death benefit by means of group insurance policy -- Eligibility for
2255 death benefit -- Benefit calculation -- Payment of claim.
2256 (1) The office shall provide a death benefit through the purchase of a group insurance
2257 policy for members of this system.
2258 (2) The board shall make rules to administer the death benefit provided by this section
2259 and may, in accordance with federal law, establish:
2260 (a) benefit levels;
2261 (b) classes of members; and
2262 (c) a living benefit option.
2263 (3) This death benefit is payable when:
2264 (a) the member dies prior to the member's retirement date or dies under circumstances
2265 which Subsection 49-23-304 (5) requires to be treated as the death of a member before
2266 retirement;
2267 (b) the office receives acceptable proof of death; and
2268 (c) benefits are not payable under Section 49-23-306 .
2269 (4) The death benefit payable to the beneficiary under this section is a lump-sum
2270 payment consisting of:
2271 (a) the return of any member contributions under this chapter; plus
2272 (b) a percentage of the final average salary of the member to be determined by the
2273 board.
2274 (5) Any amount of a living benefit option paid to the member prior to death shall be
2275 deducted from the benefit payable to the beneficiary.
2276 (6) The cost of the death benefit shall be paid by the participating employer in addition
2277 to the contribution rate established under Section 49-23-301 or 49-23-401 .
2278 (7) The portion of the death benefit provided under Subsection (4)(b) may not be paid
2279 to the beneficiary of an inactive member unless the death of the member occurs either:
2280 (a) within a period of 120 days after the last day of work for which the person received
2281 compensation; or
2282 (b) while the member is still physically or mentally incapacitated from performance of
2283 duties, if the incapacity has been continuous since the last day of work for which compensation
2284 was received.
2285 (8) The death benefit provided under Subsection (4)(b) shall be paid in accordance
2286 with Sections 49-11-609 and 49-11-610 .
2287 (9) The death benefit paid to the beneficiary of an inactive member, except as
2288 otherwise provided under Subsection (7), is a lump-sum return of the member's member
2289 contributions.
2290 (10) Payment of the death benefit by the office constitutes a full settlement of any
2291 beneficiary's claim against the office and the office is not liable for any further or additional
2292 claims or assessments on behalf of the member.
2293 (11) Unless otherwise specified in a written document filed with the office, death
2294 benefits payable to beneficiaries shall be in accordance with the order of precedence
2295 established under Title 75, Chapter 2, Intestate Succession and Wills.
2296 (12) A death benefit under this section may not be paid on behalf of a retiree under this
2297 system.
2298 Section 60. Section 49-23-502 is enacted to read:
2299 49-23-502. Death of married members -- Service retirement benefits to surviving
2300 spouse.
2301 (1) As used in this section, "member's full allowance" means an Option Three
2302 allowance calculated under Section 49-23-304 without an actuarial reduction.
2303 (2) Upon the request of a deceased member's lawful spouse at the time of the member's
2304 death, the deceased member is considered to have retired under Option Three on the first day of
2305 the month following the month in which the member died if the following requirements are
2306 met:
2307 (a) the member has:
2308 (i) 15 or more years of service credit;
2309 (ii) attained age 62 with 10 or more years of service credit; or
2310 (iii) attained age 65 with four or more years of service credit; and
2311 (b) the member dies leaving a spouse to whom the member has been married at least
2312 six months immediately prior to the death date.
2313 (3) The spouse who requests a benefit under this section shall apply in writing to the
2314 office. The allowance shall begin on the first day of the month:
2315 (a) following the month in which the member died, if the application is received by the
2316 office within 90 days of the member's death; or
2317 (b) in which the application is received by the office.
2318 (4) The allowance payable to a surviving spouse under Subsection (2) is:
2319 (a) if the member has 25 or more years of service credit at the time of death, the
2320 surviving spouse shall receive the member's full allowance;
2321 (b) if the member has between 20-24 years of service credit and is not age 60 or older
2322 at the time of death, the surviving spouse shall receive 2/3 of the member's full allowance;
2323 (c) if the member has between 15-19 years of service credit and is not age 62 or older
2324 at the time of death, the surviving spouse shall receive 1/3 of the member's full allowance; or
2325 (d) if the member is age 60 or older with 20 or more years of service credit, age 62 or
2326 older with 10 or more years of service credit, or age 65 or older with four or more years of
2327 service credit at the time of death, the surviving spouse shall receive an Option Three benefit
2328 with actuarial reductions.
2329 (5) Except for a return of member contributions, benefits payable under this section are
2330 retirement benefits and shall be paid in addition to any other payments made under Section
2331 49-23-501 and shall constitute a full and final settlement of the claim of the spouse or any other
2332 beneficiary filing a claim for benefits under Section 49-23-501 .
2333 Section 61. Section 49-23-503 is enacted to read:
2334 49-23-503. Death of active member in line-of-duty -- Payment of benefits.
2335 If an active member of this system dies, benefits are payable as follows:
2336 (1) If the death is classified by the office as a line-of-duty death, benefits are payable as
2337 follows:
2338 (a) If the member has accrued less than 20 years of public safety service or firefighter
2339 service credit, the spouse at the time of death shall receive a lump sum of $1,000 and an
2340 allowance equal to 30% of the member's final average monthly salary.
2341 (b) If the member has accrued 20 or more years of public safety service or firefighter
2342 service credit, the member shall be considered to have retired with an Option One allowance
2343 calculated without an actuarial reduction under Section 49-23-304 and the spouse at the time of
2344 death shall receive the allowance that would have been payable to the member.
2345 (2) (a) A volunteer firefighter is eligible for a line-of-duty death benefit under this
2346 section if the death results from external force, violence, or disease directly resulting from
2347 firefighter service.
2348 (b) The lowest monthly compensation of firefighters of a city of the first class in this
2349 state at the time of death shall be considered to be the final average monthly salary of a
2350 volunteer firefighter for purposes of computing these benefits.
2351 (c) Each volunteer fire department shall maintain a current roll of all volunteer
2352 firefighters which meet the requirements of Subsection 49-23-102 (10) to determine the
2353 eligibility for this benefit.
2354 (3) (a) If the death is classified as a line-of-duty death by the office, death benefits are
2355 payable under this section and the spouse at the time of death is not eligible for benefits under
2356 Section 49-23-502 .
2357 (b) If the death is not classified as a line-of-duty death by the office, benefits are
2358 payable in accordance with Section 49-23-502 .
2359 Section 62. Section 49-23-601 is enacted to read:
2360
2361 49-23-601. Long-term disability coverage.
2362 Each participating employer shall cover the following employees under Title 49,
2363 Chapter 21, Public Employees' Long-Term Disability Act, or a substantially similar long-term
2364 disability program:
2365 (1) public safety employees initially entering employment on or after July 1, 2011;
2366 (2) firefighter service employees initially entering employment on or after July 1, 2011;
2367 and
2368 (3) volunteer firefighters
2369 Section 63. Section 53-7-105 is amended to read:
2370 53-7-105. State fire marshal, deputies, and investigators -- Status of law
2371 enforcement officers -- Inclusion in Public Safety Retirement -- Training.
2372 (1) The state fire marshal, his deputies, and investigators, for the purpose of enforcing
2373 and investigating violations of fire related statutes and ordinances, have the status of law
2374 enforcement officers.
2375 (2) Inclusion under Title 49, Chapter 14, Public Safety Contributory Retirement Act,
2376 [
2377 23, New Public Safety and Firefighter Tier II Contributory Retirement Act, is not authorized by
2378 Subsection (1) except as provided in those chapters.
2379 (3) The commissioner, with the concurrence of the Peace Officer Standards and
2380 Training Advisory Board may require peace officer standards and training for the state fire
2381 marshal, his deputies, and investigators.
2382 Section 64. Section 53-13-108 is amended to read:
2383 53-13-108. Retirement.
2384 Eligibility for coverage under the Public Safety Contributory Retirement System or
2385 Public Safety Noncontributory Retirement System for persons and political subdivisions
2386 included in this chapter is governed by Title 49, Chapter 14, Public Safety Contributory
2387 Retirement Act, [
2388 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
2389 Section 65. Section 53A-1a-512 is amended to read:
2390 53A-1a-512. Employees of charter schools.
2391 (1) A charter school shall select its own employees.
2392 (2) The school's governing body shall determine the level of compensation and all
2393 terms and conditions of employment, except as otherwise provided in Subsections (7) and (8)
2394 and under this part.
2395 (3) The following statutes governing public employees and officers do not apply to
2396 charter schools:
2397 (a) Chapter 8, Utah Orderly School Termination Procedures Act;
2398 (b) Chapter 10, Educator Evaluation; and
2399 (c) Title 52, Chapter 3, Prohibiting Employment of Relatives.
2400 (4) (a) To accommodate differentiated staffing and better meet student needs, a charter
2401 school, under rules adopted by the State Board of Education, shall employ teachers who:
2402 (i) are licensed; or
2403 (ii) on the basis of demonstrated competency, would qualify to teach under alternative
2404 certification or authorization programs.
2405 (b) The school's governing body shall disclose the qualifications of its teachers to the
2406 parents of its students.
2407 (5) State Board of Education rules governing the licensing or certification of
2408 administrative and supervisory personnel do not apply to charter schools.
2409 (6) (a) An employee of a school district may request a leave of absence in order to
2410 work in a charter school upon approval of the local school board.
2411 (b) While on leave, the employee may retain seniority accrued in the school district and
2412 may continue to be covered by the benefit program of the district if the charter school and the
2413 locally elected school board mutually agree.
2414 (7) Except as provided under Subsection (8), an employee of a charter school shall be a
2415 member of a retirement system or plan under Title 49, Utah State Retirement and Insurance
2416 Benefit Act.
2417 (8) (a) At the time of application for a charter school, whether the chartering entity is
2418 the State Charter School Board or a school district, a proposed charter school may make an
2419 election of nonparticipation as an employer for retirement programs under:
2420 (i) Title 49, Chapter 12, Public Employees' Contributory Retirement Act [
2421 (ii) Title 49, Chapter 13, Public Employees' Noncontributory Retirement Act[
2422 (iii) Title 49, Chapter 22, New Public Employees' Tier II Contributory Retirement Act.
2423 (b) A charter school that was approved prior to July 1, 2004 may make an election of
2424 nonparticipation prior to December 31, 2004.
2425 (c) An election provided under this Subsection (8):
2426 (i) shall be made at the time specified under Subsection (8)(a) or (b);
2427 (ii) shall be documented by a resolution adopted by the governing body of the charter
2428 school;
2429 (iii) is in effect unless the charter school makes an irrevocable retraction of the election
2430 of nonparticipation in accordance with Subsection (9); and
2431 (iv) applies to the charter school as the employer and to all employees of the charter
2432 school.
2433 (d) The governing body of a charter school may offer employee benefit plans for its
2434 employees:
2435 (i) under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act;
2436 or
2437 (ii) under any other program.
2438 (9) (a) A charter school that made an election of nonparticipation as an employer for
2439 the following retirement programs [
2440
2441
2442 (i) Title 49, Chapter 12, Public Employees' Contributory Retirement Act;
2443 (ii) Title 49, Chapter 13, Public Employees' Noncontributory Retirement Act; or
2444 (iii) Title 49, Chapter 22, New Public Employees' Tier II Contributory Retirement Act.
2445 (b) A retraction provided under this Subsection (9):
2446 (i) shall be documented by a resolution adopted by the governing body of the charter
2447 school;
2448 (ii) is a one-time election;
2449 (iii) is irrevocable; and
2450 (iv) applies to the charter school as the employer and to all employees of the charter
2451 school.
2452 (10) The governing body of a charter school shall ensure that, prior to the beginning of
2453 each school year, each of its employees signs a document acknowledging that the employee:
2454 (a) has received:
2455 (i) the disclosure required under Section 63A-4-204.5 if the charter school participates
2456 in the Risk Management Fund; or
2457 (ii) written disclosure similar to the disclosure required under Section 63A-4-204.5 if
2458 the charter school does not participate in the Risk Management Fund; and
2459 (b) understands the legal liability protection provided to the employee and what is not
2460 covered, as explained in the disclosure.
2461 Section 66. Section 67-22-1 is amended to read:
2462 67-22-1. Compensation -- Constitutional offices.
2463 (1) The Legislature fixes salaries for the constitutional offices as follows:
2464 (a) governor: $109,900;
2465 (b) lieutenant governor: 95% of the governor's salary;
2466 (c) attorney general: 95% of the governor's salary;
2467 (d) state auditor: 95% of the governor's salary beginning
2468 June 28, 2008; and
2469 (e) state treasurer: 95% of the governor's salary.
2470 (2) The Legislature fixes benefits for the constitutional offices as follows:
2471 (a) Governor:
2472 (i) a vehicle for official and personal use;
2473 (ii) housing;
2474 (iii) household and security staff;
2475 (iv) household expenses;
2476 (v) retirement benefits as provided in Title 49;
2477 (vi) health insurance;
2478 (vii) dental insurance;
2479 (viii) basic life insurance;
2480 (ix) workers' compensation;
2481 (x) required employer contribution to Social Security;
2482 (xi) long-term disability income insurance; and
2483 (xii) the same additional state paid life insurance available to other noncareer service
2484 employees.
2485 (b) Lieutenant governor, attorney general, state auditor, and state treasurer:
2486 (i) a vehicle for official and personal use;
2487 (ii) the option of participating in a:
2488 (A) state retirement system [
2489 (I) Chapter 12, Public Employees' Contributory Retirement Act[
2490 (II) Chapter 13, Public Employees' Noncontributory Retirement Act[
2491 (III) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or [
2492 (B) deferred compensation plan administered by the State Retirement Office, in
2493 accordance with the Internal Revenue Code and its accompanying rules and regulations;
2494 (iii) health insurance;
2495 (iv) dental insurance;
2496 (v) basic life insurance;
2497 (vi) workers' compensation;
2498 (vii) required employer contribution to Social Security;
2499 (viii) long-term disability income insurance; and
2500 (ix) the same additional state paid life insurance available to other noncareer service
2501 employees.
2502 (c) Each constitutional office shall pay the cost of the additional state-paid life
2503 insurance for its constitutional officer from its existing budget.
2504 Section 67. Effective date.
2505 This bill takes effect on July 1, 2010.
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