H.B. 328

1

RETIREMENT BENEFITS FOR LAW
2 ENFORCEMENT, FIREFIGHTERS, AND
3 PUBLIC SERVICE EMPLOYEES
4 2008 GENERAL SESSION
5 STATE OF UTAH
6 Chief Sponsor: Neil A. Hansen
7 Senate Sponsor: ____________
8
9 LONG TITLE
10 General Description:
11 This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
12 the years of service required to retire and the retirement multiplier for members who are
13 public employees, public safety employees, and firefighters.
14 Highlighted Provisions:
15 This bill:
16 . provides that a member in the Public Employees' Contributory Retirement System
17 and the Public Employees' Noncontributory Retirement System:
18 . may retire with 25 years of service credit instead of 30 years; and
19 . receives 2.5% per year of service instead of 2% per year of service, or instead of
20 1.25% for certain years of service in the contributory system;
21 . provides that a member in the Public Safety Contributory Retirement System, the
22 Public Safety Noncontributory Retirement System, and the Firefighters' Retirement
23 System:
24 . who enters employment on or after July 1, 2008 may retire with 25 years of
25 service credit instead of 20 years;
26 . receives 2.5% of salary per year of service instead of 2.5% per year of service
27 for the first 20 years and then 2% for any additional years; and

28 . receives an increase in the maximum allowance to 75% of a retiree's final
29 average salary instead of 70%;
30 . amends provisions for the cut off of monthly disability benefits to conform with the
31 new retirement eligibility provisions; and
32 . makes technical changes.
33 Monies Appropriated in this Bill:
34 None
35 Other Special Clauses:
36 This bill takes effect on July 1, 2008.
37 Utah Code Sections Affected:
38 AMENDS:
39 49-12-401, as renumbered and amended by Laws of Utah 2002, Chapter 250
40 49-12-402, as last amended by Laws of Utah 2007, Chapters 130 and 306
41 49-13-401, as renumbered and amended by Laws of Utah 2002, Chapter 250
42 49-13-402, as last amended by Laws of Utah 2007, Chapter 130
43 49-14-401, as last amended by Laws of Utah 2003, Chapter 240
44 49-14-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
45 49-15-401, as renumbered and amended by Laws of Utah 2002, Chapter 250
46 49-15-402, as renumbered and amended by Laws of Utah 2002, Chapter 250
47 49-16-401, as last amended by Laws of Utah 2003, Chapter 240
48 49-16-402, as last amended by Laws of Utah 2003, Chapter 240
49 49-21-403, as last amended by Laws of Utah 2005, Chapter 116
50
51 Be it enacted by the Legislature of the state of Utah:
52 Section 1. Section 49-12-401 is amended to read:
53 49-12-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
54 (1) A member is qualified to receive an allowance from this system when:
55 (a) the member ceases actual work for a participating employer in this system before
56 the member's retirement date and provides evidence of the termination;
57 (b) the member has submitted to the office a notarized retirement application form that
58 states the member's proposed retirement date; and

59 (c) one of the following conditions is met as of the member's retirement date:
60 (i) the member has accrued at least four years of service credit and has attained an age
61 of 65 years;
62 (ii) the member has accrued at least ten years of service credit and has attained an age
63 of 62 years;
64 (iii) the member has accrued at least 20 years of service credit and has attained an age
65 of 60 years; or
66 (iv) the member has accrued at least [30] 25 years of service credit.
67 (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as
68 selected by the member, but the retirement date must be on or after the date of termination.
69 (b) The retirement date may not be more than 90 days before or after the date the
70 application is received by the office.
71 Section 2. Section 49-12-402 is amended to read:
72 49-12-402. Service retirement plans -- Calculation of retirement allowance --
73 Social Security limitations.
74 (1) (a) Except as provided under Section 49-12-701 , retirees of this system may choose
75 from the six retirement options described in this section.
76 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
77 calculation.
78 (2) The Option One benefit is an annual allowance calculated as follows:
79 (a) If the retiree is at least 65 years of age or has accrued at least [30] 25 years of
80 service credit, the allowance is[: (i) an amount equal to 1.25% of the retiree's final average
81 monthly salary multiplied by the number of years of service credit accrued prior to July 1,
82 1975; plus (ii)] an amount equal to [2%] 2.5% of the retiree's final average monthly salary
83 multiplied by the number of years of service credit accrued on and after July 1, 1975.
84 (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
85 each year of retirement from age 60 to age 65, unless the member has [30] 25 or more years of
86 accrued credit in which event no reduction is made to the allowance.
87 (c) (i) Years of service includes any fractions of years of service to which the retiree
88 may be entitled.
89 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,

90 service credit is within 1/10 of one year of the total years of service credit required for
91 retirement, the retiree shall be considered to have the total years of service credit required for
92 retirement.
93 (d) An Option One allowance is only payable to the member during the member's
94 lifetime.
95 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
96 by reducing an Option One benefit based on actuarial computations to provide the following:
97 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
98 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
99 member contributions, the remaining balance of the retiree's member contributions shall be
100 paid in accordance with Sections 49-11-609 and 49-11-610 .
101 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
102 retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
103 the lifetime of the retiree's lawful spouse at the time of retirement.
104 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
105 retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
106 to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
107 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
108 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
109 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
110 retiree's life, beginning on the last day of the month following the month in which the lawful
111 spouse dies.
112 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
113 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
114 of initial retirement under Option One shall be paid to the retiree for the remainder of the
115 retiree's life, beginning on the last day of the month following the month in which the lawful
116 spouse dies.
117 (4) (a) (i) The final average salary is limited in the computation of that part of an
118 allowance based on service rendered prior to July 1, 1967, during a period when the retiree
119 received employer contributions on a portion of compensation from an educational institution
120 toward the payment of the premium required on a retirement annuity contract with the

121 Teachers' Insurance and Annuity Association of America or with any other public or private
122 system, organization, or company to $4,800.
123 (ii) This limitation is not applicable to retirees who elected to continue in this system
124 by July 1, 1967.
125 (b) Periods of employment which are exempt from this system under Subsection
126 49-12-203 (1)(b), may be purchased by the member for the purpose of retirement only if all
127 benefits from the Teachers' Insurance and Annuity Association of America or any other public
128 or private system or organization based on this period of employment are forfeited.
129 (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
130 date, the retirement is canceled and the death shall be considered as that of a member before
131 retirement.
132 (b) Any payments made to the retiree shall be deducted from the amounts due to the
133 beneficiary.
134 (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
135 retiree may elect to convert the benefit to a Option One benefit at the time of divorce, if there is
136 no court order filed in the matter.
137 Section 3. Section 49-13-401 is amended to read:
138 49-13-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
139 (1) A member is qualified to receive an allowance from this system when:
140 (a) the member ceases actual work for a participating employer in this system before
141 the member's retirement date and provides evidence of the termination;
142 (b) the member has submitted to the office a notarized retirement application form that
143 states the member's proposed retirement date; and
144 (c) one of the following conditions is met as of the member's retirement date:
145 (i) the member has accrued at least four years of service credit and has attained an age
146 of 65 years;
147 (ii) the member has accrued at least ten years of service credit and has attained an age
148 of 62 years;
149 (iii) the member has accrued at least 20 years of service credit and has attained an age
150 of 60 years; or
151 (iv) the member has accrued at least [30] 25 years of service credit[; or].

152 [(v) the member has accrued at least 25 years of service credit, in which case the
153 member shall be subject to the reduction under Subsection 49-13-402 (2)(b).]
154 (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as
155 selected by the member, but the retirement date must be on or after the date of termination.
156 (b) The retirement date may not be more than 90 days before or after the date the
157 application is received by the office.
158 Section 4. Section 49-13-402 is amended to read:
159 49-13-402. Service retirement plans -- Calculation of retirement allowance --
160 Social Security limitations.
161 (1) (a) Except as provided under Section 49-13-701 , retirees of this system may choose
162 from the six retirement options described in this section.
163 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
164 calculation.
165 (2) The Option One benefit is an allowance calculated as follows:
166 (a) If the retiree is at least 65 years of age or has accrued at least [30] 25 years of
167 service credit, the allowance is an amount equal to [2%] 2.5% of the retiree's final average
168 monthly salary multiplied by the number of years of service credit accrued.
169 (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
170 each year of retirement from age 60 to age 65, plus a full actuarial reduction for each year of
171 retirement prior to age 60, unless the member has [30] 25 or more years of accrued credit, in
172 which event no reduction is made to the allowance.
173 (c) (i) Years of service include any fractions of years of service to which the retiree
174 may be entitled.
175 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
176 service credit is within 1/10 of one year of the total years of service credit required for
177 retirement, the retiree shall be considered to have the total years of service credit required for
178 retirement.
179 (d) An Option One allowance is only payable to the member during the member's
180 lifetime.
181 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
182 by reducing an Option One benefit based on actuarial computations to provide the following:

183 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
184 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
185 member contributions, the remaining balance of the retiree's member contributions shall be
186 paid in accordance with Sections 49-11-609 and 49-11-610 .
187 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
188 retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
189 the lifetime of the retiree's lawful spouse at the time of retirement.
190 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
191 retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
192 to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
193 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
194 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
195 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
196 retiree's life, beginning on the last day of the month following the month in which the lawful
197 spouse dies.
198 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
199 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
200 of initial retirement under Option One shall be paid to the retiree for the remainder of the
201 retiree's life, beginning on the last day of the month following the month in which the lawful
202 spouse dies.
203 (4) (a) (i) The final average salary is limited in the computation of that part of an
204 allowance based on service rendered prior to July 1, 1967, during a period when the retiree
205 received employer contributions on a portion of compensation from an educational institution
206 toward the payment of the premium required on a retirement annuity contract with the
207 Teachers' Insurance and Annuity Association of America or with any other public or private
208 system, organization, or company to $4,800.
209 (ii) This limitation is not applicable to retirees who elected to continue in the Public
210 Employees' Contributory Retirement System by July 1, 1967.
211 (b) Periods of employment which are exempt from this system as permitted under
212 Subsection 49-13-203 (1)(b) may be purchased by the member for the purpose of retirement
213 only if all benefits from the Teachers' Insurance and Annuity Association of America or any

214 other public or private system or organization based on this period of employment are forfeited.
215 (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
216 date, the retirement is canceled and the death shall be considered as that of a member before
217 retirement.
218 (b) Any payments made to the retiree shall be deducted from the amounts due to the
219 beneficiary.
220 (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
221 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
222 is no court order filed in the matter.
223 Section 5. Section 49-14-401 is amended to read:
224 49-14-401. Eligibility for service retirement -- Date of retirement --
225 Qualifications.
226 (1) A member is qualified to receive an allowance from this system when:
227 (a) the member ceases actual work for a participating employer in this system before
228 the member's retirement date and provides evidence of the termination;
229 (b) the member has submitted to the office a notarized retirement application form that
230 states the member's proposed retirement date; and
231 (c) one of the following conditions is met as of the member's retirement date:
232 (i) the member has accrued at least 20 years of service credit[;], if the member entered
233 employment under this system prior to July 1, 2008;
234 (ii) the member has accrued at least 25 years of service credit, if the member entered
235 employment under this system on or after July 1, 2008;
236 [(ii)] (iii) the member has accrued at least ten years of service credit and has attained an
237 age of 60 years; or
238 [(iii)] (iv) the member has accrued at least four years of service credit and has attained
239 an age of 65 years.
240 (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as
241 selected by the member, but the retirement date must be on or after the date of termination.
242 (b) The retirement date may not be more than 90 days before or after the date the
243 application is received by the office.
244 Section 6. Section 49-14-402 is amended to read:

245 49-14-402. Calculation of retirement allowance.
246 (1) (a) A retiree under this system who retires prior to July 1, 2008, shall receive an
247 allowance equal to:
248 [(a)] (i) 2.5% of final average monthly salary multiplied by the number of years of
249 service credit, limited to 20 years; plus
250 [(b)] (ii) 2% of final average monthly salary, multiplied by the number of years of
251 service credit in excess of 20 years.
252 (b) A retiree under this system who retires on or after July 1, 2008, shall receive an
253 allowance equal to 2.5% of final average monthly salary multiplied by the number of years of
254 service credit.
255 (2) Except as modified by cost-of-living adjustments, an allowance under this system
256 may not exceed [70%] 75% of a retiree's final average monthly salary.
257 Section 7. Section 49-15-401 is amended to read:
258 49-15-401. Eligibility for service retirement -- Date of retirement --
259 Qualifications.
260 (1) A member is qualified to receive an allowance from this system when:
261 (a) the member ceases actual work for a participating employer in this system before
262 the member's retirement date and provides evidence of the termination;
263 (b) the member has submitted to the office a notarized retirement application form that
264 states the member's proposed retirement date; and
265 (c) one of the following conditions is met as of the member's retirement date:
266 (i) the member has accrued at least 20 years of service credit[;], if the member entered
267 employment under this system prior to July 1, 2008;
268 (ii) the member has accrued at least 25 years of service credit, if the member entered
269 employment under this system on or after July 1, 2008;
270 [(ii)] (iii) the member has accrued at least ten years of service credit and has attained an
271 age of 60 years; or
272 [(iii)] (iv) the member has accrued at least four years of service and has attained an age
273 of 65 years.
274 (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as
275 selected by the member, but the retirement date must be on or after the date of termination.

276 (b) The retirement date may not be more than 90 days before or after the date the
277 application is received by the office.
278 Section 8. Section 49-15-402 is amended to read:
279 49-15-402. Calculation of retirement benefit.
280 (1) (a) A retiree under this system who retires before July 1, 2008, shall receive an
281 allowance equal to:
282 [(a)] (i) 2.5% of final average monthly salary multiplied by the number of years of
283 service credit, limited to 20 years; plus
284 [(b)] (ii) 2% of final average monthly salary, multiplied by the number of years of
285 service credit in excess of 20 years.
286 (b) A retiree under this system who retires on or after July 1, 2008, shall receive an
287 allowance equal to 2.5% of final average monthly salary multiplied by the number of years of
288 service credit.
289 (2) Except as modified by cost-of-living adjustments, an allowance under this system
290 may not exceed [70%] 75% of a retiree's final average monthly salary.
291 Section 9. Section 49-16-401 is amended to read:
292 49-16-401. Eligibility for service retirement -- Date of retirement --
293 Qualifications.
294 (1) A member is qualified to receive an allowance from this system when:
295 (a) the member ceases actual work for a participating employer in this system before
296 the member's retirement date and provides evidence of the termination;
297 (b) the member has submitted to the office a notarized retirement application form that
298 states the member's proposed retirement date; and
299 (c) one of the following conditions is met as of the member's retirement date:
300 (i) the member has accrued at least 20 years of service credit[;], if the member entered
301 employment under this system prior to July 1, 2008;
302 (ii) the member has accrued at least 25 years of service credit, if the member entered
303 employment under this system on or after July 1, 2008;
304 [(ii)] (iii) the member has accrued at least ten years of service credit and has attained an
305 age of 60 years; or
306 [(iii)] (iv) the member has accrued at least four years of service credit and has attained

307 an age of 65 years.
308 (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as
309 selected by the firefighter service employee, but the retirement date must be on or after the date
310 of termination.
311 (b) The retirement date may not be more than 90 days before or after the date the
312 application is received by the office.
313 Section 10. Section 49-16-402 is amended to read:
314 49-16-402. Calculation of retirement allowance.
315 (1) (a) A retiree under this system who retires prior to July 1, 2008, shall receive an
316 allowance equal to:
317 [(a)] (i) 2.5% of final average monthly salary multiplied by the number of years of
318 service credit, limited to 20 years; plus
319 [(b)] (ii) 2% of final average monthly salary, multiplied by the number of years of
320 service credit in excess of 20 years.
321 (b) A retiree under this system who retires on or after July 1, 2008, shall receive an
322 allowance equal to 2.5% of final average monthly salary multiplied by the number of years of
323 service credit.
324 (2) The minimum allowance payable under this section is $500.
325 (3) Except as modified by cost-of-living adjustments, an allowance under this system
326 may not exceed [70%] 75% of a firefighter service employee's final average monthly salary.
327 Section 11. Section 49-21-403 is amended to read:
328 49-21-403. Termination of disability benefits -- Calculation of retirement benefit.
329 (1) An eligible employee covered by this chapter and eligible for service credit under a
330 system, including an eligible employee who relinquishes rights to retirement benefits under
331 Section 49-11-619 , who applies and is qualified for a monthly disability benefit shall receive a
332 monthly disability benefit until the earlier of:
333 (a) the date the eligible employee has accumulated:
334 (i) 20 years of service credit if the eligible employee is covered by Chapter 14, Public
335 Safety Contributory Retirement Act, or Chapter 15, Public Safety Noncontributory Retirement
336 Act, and the eligible employee entered employment under that system before July 1, 2008;
337 (ii) 25 years of service credit if the eligible employee is covered by Chapter 14, Public

338 Safety Contributory Retirement Act, or Chapter 15, Public Safety Noncontributory Retirement
339 Act and the eligible employee entered employment under that system on or after July 1, 2008;
340 [(ii)] (iii) 25 years of service credit if the eligible employee is covered by Chapter 17,
341 Judges' Contributory Retirement Act, or Chapter 18, Judges' Noncontributory Retirement Act;
342 or
343 [(iii) 30] (iv) 25 years of service credit if the eligible employee is covered by Chapter
344 12, Public Employees' Contributory Retirement Act, or Chapter 13, Public Employees'
345 Noncontributory Retirement Act; or
346 (b) the date the eligible employee has received a monthly disability benefit for the
347 following applicable time periods:
348 (i) if the eligible employee is under age 60, the monthly disability benefit is payable
349 until age 65;
350 (ii) if the eligible employee is 60 or 61 years of age on the date of disability, the
351 monthly disability benefit is payable for five years;
352 (iii) if the eligible employee is 62 or 63 years of age on the date of disability, the
353 monthly disability benefit is payable for four years;
354 (iv) if the eligible employee is 64 or 65 years of age on the date of disability, the
355 monthly disability benefit is payable for three years;
356 (v) if the eligible employee is 66, 67, or 68 years of age on the date of disability, the
357 monthly disability benefit is payable for two years; and
358 (vi) if the eligible employee is 69 years of age or older on the date of disability, the
359 monthly disability benefit is payable for one year.
360 (2) (a) Upon termination of a monthly disability benefit, an eligible employee eligible
361 for service credit under a system may retire under the system which covered the eligible
362 employee on the date of disability.
363 (b) The final average salary used in the calculation of the allowance shall be based on
364 the annual rate of pay on the date of disability, improved by the annual cost-of-living increase
365 factor applied to retirees of the system which covered the eligible employee on the date of
366 disability.
367 (3) An eligible employee who is eligible for service credit in a system, but has
368 relinquished rights to an allowance under Section 49-11-619 , may receive the benefits the

369 eligible employee would have received by being eligible for service credit in the system
370 covering the eligible employee on the date of disability, except for the accrual of service credit,
371 in accordance with this title.
372 (4) An eligible employee receiving a monthly disability benefit who has service credit
373 from two or more systems may not combine service credits under Section 49-11-405 in
374 qualifying for retirement, unless the eligible employee would receive a greater allowance by
375 combining the service credits.
376 (5) A monthly disability benefit payable to an eligible employee who is not eligible for
377 service credit under a system shall terminate at the earliest of:
378 (a) the date the eligible employee would be eligible for an unreduced allowance;
379 (b) the date the eligible employee has received a monthly disability benefit for the
380 applicable time period as set forth in Subsection (1)(b); or
381 (c) the date the eligible employee receives a reduced allowance.
382 Section 12. Effective date.
383 This bill tak