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H.B. 233

This document includes House Committee Amendments incorporated into the bill on Wed, Feb 3, 2010 at 3:46 PM by lerror. -->              1     

RETIREMENT OFFICE AMENDMENTS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Don L. Ipson

             5     
Senate Sponsor: Daniel R. Liljenquist

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
             10      provisions related to appointment of board members, purchase of service credit,
             11      disability benefits, and termination of employment on the retirement date.
             12      Highlighted Provisions:
             13          This bill:
             14          .    provides that only two of the four appointed Utah State Retirement Board members,
             15      with experience in investments or banking, can be appointed every two years;
             16          .    provides that any H. [ retirement benefit ] defined contribution balance based on
             16a      employer contributions .H not just service credit must be forfeited when
             17      service credit is purchased;
             18          .    provides that purchase of service credit made on or after July 1, 2010, shall be made
             19      in accordance with rules in effect at the time the purchase is completed, and the cost
             20      of the purchase will not be recalculated at the time of retirement;
             21          .    provides that payments made for a salary protection program for a disabled
             22      employee shall be paid over the period of the disability and shall not include
             23      settlement or lump sum payments;
             24          .    clarifies that a member may not be employed on the retirement date by any other
             25      participating employer in the same system from which the member is retiring;
             26          .    allows an attorney or a person appointed as a conservator or guardian of the eligible
             27      employee who is unable to apply for long-term disability benefits to make an


             28      application and prohibits an application for a deceased employee;
             29          .    provides that after the date of disability, cost-of-living increases to any offsetting
             30      benefits may not be considered in calculating monthly disability benefits;
             31          .    provides that monthly disability benefits shall cease when the eligible employee
             32      dies; and
             33          .    makes technical changes.
             34      Monies Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37          None
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          49-11-202, as last amended by Laws of Utah 2003, Chapter 240
             41          49-11-403, as last amended by Laws of Utah 2006, Chapter 260
             42          49-11-404, as last amended by Laws of Utah 2008, Chapter 252
             43          49-12-401, as renumbered and amended by Laws of Utah 2002, Chapter 250
             44          49-13-401, as renumbered and amended by Laws of Utah 2002, Chapter 250
             45          49-14-401, as last amended by Laws of Utah 2003, Chapter 240
             46          49-15-401, 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          49-17-401, as last amended by Laws of Utah 2003, Chapter 240
             49          49-18-401, as last amended by Laws of Utah 2003, Chapter 240
             50          49-21-401, as last amended by Laws of Utah 2008, Chapter 252
             51          49-21-402, as last amended by Laws of Utah 2007, Chapter 93
             52          49-21-403, as last amended by Laws of Utah 2008, Chapter 252
             53     
             54      Be it enacted by the Legislature of the state of Utah:
             55          Section 1. Section 49-11-202 is amended to read:
             56           49-11-202. Establishment of Utah State Retirement Board -- Quorum -- Terms --
             57      Officers -- Expenses and per diem -- Membership Council established.
             58          (1) There is established the Utah State Retirement Board composed of seven board


             59      members determined as follows:
             60          (a) Four board members, with experience in investments or banking, shall be appointed
             61      by the governor from the general public.
             62          (b) One board member shall be a school employee appointed by the governor from at
             63      least three nominations submitted by the governing board of the school employees' association
             64      that is representative of a majority of the school employees who are members of a system
             65      administered by the board.
             66          (c) One board member shall be a public employee appointed by the governor from at
             67      least three nominations submitted by the governing board of the public employee association
             68      that is representative of a majority of the public employees who are members of a system
             69      administered by the board.
             70          (d) One board member shall be the state treasurer.
             71          (2) Four board members constitute a quorum for the transaction of business.
             72          (3) (a) All appointments to the board shall be made on a nonpartisan basis, with the
             73      consent of the Senate.
             74          (b) Board members shall serve until their successors are appointed and take the
             75      constitutional oath of office.
             76          (c) When a vacancy occurs on the board for any reason, the replacement shall be
             77      appointed for the unexpired term.
             78          (4) (a) Except as required by Subsection (4)(b), all appointed board members shall
             79      serve for four-year terms.
             80          (b) Notwithstanding the requirements of Subsection (4)(a), the governor shall, at the
             81      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             82      board members are staggered so that:
             83          (i) approximately half of the board is appointed every two years[.]; and
             84          (ii) no more than two of the board members appointed under Subsection (1)(a) are
             85      appointed every two years.
             86          (c) A board member who is appointed as a school employee or as a public employee
             87      who retires or who is no longer employed with a participating employer shall immediately
             88      resign from the board.
             89          (5) (a) Each year the board shall elect a president and vice president from its


             90      membership.
             91          (b) Each board member shall receive a per diem plus expenses for attending regularly
             92      constituted meetings and conferences as provided by board action.
             93          (6) (a) There is established a Membership Council to perform the duties under
             94      Subsection (10).
             95          (b) The board may pay the travel expenses of council members who attend council
             96      meetings.
             97          (7) The Membership Council shall be composed of 13 council members selected as
             98      follows:
             99          (a) Three council members shall be school employees selected by the governing board
             100      of an association representative of a majority of school employees who are members of a
             101      system administered by the board.
             102          (b) One council member shall be a classified school employee selected by the
             103      governing board of the association representative of a majority of classified school employees
             104      who are members of a system administered by the board.
             105          (c) Two council members shall be public employees selected by the governing board of
             106      the association representative of a majority of the public employees who are members of a
             107      system administered by the board.
             108          (d) One council member shall be a municipal officer or employee selected by the
             109      governing board of the association representative of a majority of the municipalities who
             110      participate in a system administered by the board.
             111          (e) One council member shall be a county officer or employee selected by the
             112      governing board of the association representative of a majority of counties who participate in a
             113      system administered by the board.
             114          (f) One council member shall be a representative of members of the Judges'
             115      Noncontributory Retirement System selected by the Judicial Council.
             116          (g) One council member shall be a representative of members of the Public Safety
             117      Retirement Systems selected by the governing board of the association representative of the
             118      majority of peace officers who are members of the Public Safety Retirement Systems.
             119          (h) One council member shall be a representative of members of the Firefighters'
             120      Retirement System selected by the governing board of the association representative of the


             121      majority of paid professional firefighters who are members of the Firefighters' Retirement
             122      System.
             123          (i) One council member shall be a retiree selected by the governing board of the
             124      association representing the largest number of retirees, who are not public education retirees,
             125      from the Public Employees' Contributory and Public Employees' Noncontributory Retirement
             126      Systems.
             127          (j) One council member shall be a retiree selected by the governing board of the
             128      association representing the largest number of public education retirees.
             129          (8) (a) Each entity granted authority to select council members under Subsection (7)
             130      may also revoke the selection at any time.
             131          (b) Each term on the council shall be for a period of four years, subject to Subsection
             132      (8)(a).
             133          (c) Each term begins on July 1 and expires on June 30.
             134          (d) When a vacancy occurs on the council for any reason, the replacement shall be
             135      selected for the remainder of the unexpired term.
             136          (9) The council shall annually designate one council member as chair.
             137          (10) The council shall:
             138          (a) recommend to the board and to the Legislature benefits and policies for members of
             139      any system or plan administered by the board;
             140          (b) recommend procedures and practices to improve the administration of the systems
             141      and plans and the public employee relations responsibilities of the board and office;
             142          (c) examine the record of all decisions affecting retirement benefits made by a hearing
             143      officer under Section 49-11-613 ;
             144          (d) submit nominations to the board for the position of executive director if that
             145      position is vacant;
             146          (e) advise and counsel with the board and the director on policies affecting members of
             147      the various systems administered by the office; and
             148          (f) perform other duties assigned to it by the board.
             149          Section 2. Section 49-11-403 is amended to read:
             150           49-11-403. Purchase of public service credit not otherwise qualifying for benefit.
             151          (1) A member, a participating employer, or a member and a participating employer


             152      jointly may purchase service credit equal to the period of the member's employment in the
             153      following:
             154          (a) United States federal employment;
             155          (b) employment in a private school based in the United States, if the member received
             156      an employer paid retirement benefit for the employment;
             157          (c) public employment in another state or territory of the United States which qualifies
             158      the member for membership in the public plan or system covering the employment, but only if
             159      the member does not qualify for any retirement benefits based on the employment;
             160          (d) forfeited service credit in this state if the member does not qualify for an allowance
             161      based on the service credit;
             162          (e) full-time public service while on an approved leave of absence;
             163          (f) the period of time for which disability benefits were paid if:
             164          (i) the member was receiving:
             165          (A) long-term disability benefits;
             166          (B) short-term disability benefits; or
             167          (C) worker's compensation disability benefits; and
             168          (ii) the member's employer had not entered into a benefit protection contract under
             169      Section 49-11-404 during the period the member was disabled due to sickness or accident; or
             170          (g) employment covered by a Teachers Insurance and Annuity Association of America
             171      retirement plan if the member forfeits any retirement benefit from that retirement plan for the
             172      period of employment to be purchased under this Subsection (1)(g).
             173          (2) A member shall [have]:
             174          (a) have at least four years of service credit before a purchase can be made under this
             175      section; and
             176          (b) [forfeited] forfeit service credit and H. [ other retirement benefits ] any defined
             176a      contribution balance based on employer contributions .H under any other
             177      retirement system or plan based on the period of employment for which service credit is being
             178      purchased.
             179          (3) (a) To purchase credit under this section, the member, a participating employer, or a
             180      member and a participating employer jointly shall make payment to the system under which the
             181      member is currently covered.
             182          (b) The amount of the payment shall be determined by the office based on a formula


             183      that is:
             184          (i) recommended by the actuary; and
             185          (ii) adopted by the board.
             186          (4) The purchase may be made through payroll deductions or through a lump sum
             187      deposit based upon the present value of future payments.
             188          (5) Total payment must be completed prior to the member's effective date of retirement
             189      or service credit will be prorated in accordance with the amount paid.
             190          (6) (a) [If] For a purchase made before July 1, 2010, if any of the factors used to
             191      determine the cost of a service credit purchase change at or before the member's retirement
             192      date, the cost of the purchase shall be recalculated at the time of retirement.
             193          (b) [If] For a purchase made before July 1, 2010, if the recalculated cost exceeds the
             194      amount paid for the purchase, the member, a participating employer, or a member and a
             195      participating employer jointly may:
             196          (i) pay the increased cost, plus interest, to receive the full amount of service credit; or
             197          (ii) not pay the increased cost and have the purchased service credit prorated.
             198          (c) For a purchase made on or after July 1, 2010:
             199          (i) the purchase shall be made in accordance with rules:
             200          (A) adopted by the board based on recommendations by the board's actuary; and
             201          (B) in effect at the time the purchase is completed; and
             202          (ii) the cost of the service credit purchase shall not be recalculated at the time of
             203      retirement.
             204          (7) If the recalculated cost under Subsection (6)(a) is less than the amount paid for the
             205      purchase, the office shall refund the excess payment to the member or participating employer
             206      who paid for the purchase.
             207          (8) (a) The board may adopt rules under which a member may make the necessary
             208      payments to the office for purchases under this title as permitted by federal law.
             209          (b) The office may reject any payments if the office determines the tax status of the
             210      system, plans, or programs would be jeopardized by allowing the payment.
             211          Section 3. Section 49-11-404 is amended to read:
             212           49-11-404. Benefit protection contract authorized -- Annual report required.
             213          (1) (a) A participating employer may establish a salary protection program under which


             214      its employees are paid during periods of disability.
             215          (b) If a salary protection program is established, a participating employer may enter
             216      into benefit protection contracts with the office.
             217          (c) A salary protection program shall:
             218          (i) pay benefits based on the disabled member's rate of compensation at the time of
             219      disability;
             220          (ii) pay benefits over the period of the disability;
             221          (iii) not include settlement or lump sum payments of any type;
             222          [(ii)] (iv) be substantially equivalent to the long-term disability programs offered under
             223      Chapter 21, Public Employees' Long-Term Disability Act; and
             224          [(iii)] (v) comply with requirements adopted by the board.
             225          (2) A benefit protection contract shall allow:
             226          (a) the disabled member to be considered an active member in a system and continue to
             227      accrue service credit and salary credit based on the member's rate of pay in effect at the time
             228      disability commences;
             229          (b) the office to require participating employer contributions to be paid before granting
             230      service credit and salary credit to the member;
             231          (c) the disabled member to remain eligible during the contract period for any benefits
             232      provided by the system that covers the member; and
             233          (d) the benefit for the disabled member to be improved by the annual cost-of-living
             234      increase factor applied to retired members of the system that covered the member on the date
             235      the member is eligible to receive benefits under a benefit protection contract.
             236          (3) (a) The office shall establish the manner and times when employer contributions
             237      are paid.
             238          (b) A failure to make the required payments is cause for the office to cancel a contract.
             239          (c) Service credit and salary credit granted and accrued up to the time of cancellation
             240      may not be forfeited.
             241          (4) A participating employer that has entered into a benefit protection contract under
             242      this section shall submit an annual report to the office which identifies:
             243          (a) the employees receiving long-term disability benefits under policies initiated by the
             244      participating employer and approved under the benefit protection contract;


             245          (b) the employees that have applied for long-term disability benefits and who are
             246      waiting approval; and
             247          (c) the insurance carriers that are actively providing long-term disability benefits.
             248          (5) If an employer fails to provide the annual report required under Subsection (4), the
             249      benefits that would have accrued under the benefit protection contract shall be forfeited.
             250          (6) The board may adopt rules to implement and administer this section.
             251          Section 4. Section 49-12-401 is amended to read:
             252           49-12-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             253          (1) A member is qualified to receive an allowance from this system when:
             254          (a) the member ceases actual work for a participating employer in this system before
             255      the member's retirement date and provides evidence of the termination;
             256          (b) the member has submitted to the office a notarized retirement application form that
             257      states the member's proposed retirement date; and
             258          (c) one of the following conditions is met as of the member's retirement date:
             259          (i) the member has accrued at least four years of service credit and has attained an age
             260      of 65 years;
             261          (ii) the member has accrued at least 10 years of service credit and has attained an age
             262      of 62 years;
             263          (iii) the member has accrued at least 20 years of service credit and has attained an age
             264      of 60 years; or
             265          (iv) the member has accrued at least 30 years of service credit.
             266          (2) (a) The member's retirement date [shall]:
             267          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             268      retirement date must];
             269          (ii) shall be on or after the date of termination[. (b) The retirement date may not]; and
             270          (iii) may not be more than 90 days before or after the date the application is received by
             271      the office.
             272          (b) A member may not be employed by a participating employer in the system
             273      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             274          Section 5. Section 49-13-401 is amended to read:
             275           49-13-401. Eligibility for an allowance -- Date of retirement -- Qualifications.


             276          (1) A member is qualified to receive an allowance from this system when:
             277          (a) the member ceases actual work for a participating employer in this system before
             278      the member's retirement date and provides evidence of the termination;
             279          (b) the member has submitted to the office a notarized retirement application form that
             280      states the member's proposed retirement date; and
             281          (c) one of the following conditions is met as of the member's retirement date:
             282          (i) the member has accrued at least four years of service credit and has attained an age
             283      of 65 years;
             284          (ii) the member has accrued at least 10 years of service credit and has attained an age
             285      of 62 years;
             286          (iii) the member has accrued at least 20 years of service credit and has attained an age
             287      of 60 years;
             288          (iv) the member has accrued at least 30 years of service credit; or
             289          (v) the member has accrued at least 25 years of service credit, in which case the
             290      member shall be subject to the reduction under Subsection 49-13-402 (2)(b).
             291          (2) (a) The member's retirement date [shall]:
             292          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             293      retirement date must];
             294          (ii) shall be on or after the date of termination[. (b) The retirement date may not]; and
             295          (iii) may not be more than 90 days before or after the date the application is received by
             296      the office.
             297          (b) A member may not be employed by a participating employer in the system
             298      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             299          Section 6. Section 49-14-401 is amended to read:
             300           49-14-401. Eligibility for service retirement -- Date of retirement --
             301      Qualifications.
             302          (1) A member is qualified to receive an allowance from this system when:
             303          (a) the member ceases actual work for a participating employer in this system before
             304      the member's retirement date and provides evidence of the termination;
             305          (b) the member has submitted to the office a notarized retirement application form that
             306      states the member's proposed retirement date; and


             307          (c) one of the following conditions is met as of the member's retirement date:
             308          (i) the member has accrued at least 20 years of service credit;
             309          (ii) the member has accrued at least 10 years of service credit and has attained an age
             310      of 60 years; or
             311          (iii) the member has accrued at least four years of service credit and has attained an age
             312      of 65 years.
             313          (2) (a) The member's retirement date [shall]:
             314          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             315      retirement date must];
             316          (ii) shall be on or after the date of termination[. (b) The retirement date may not]; and
             317          (iii) may not be more than 90 days before or after the date the application is received by
             318      the office.
             319          (b) A member may not be employed by a participating employer in the system
             320      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             321          Section 7. Section 49-15-401 is amended to read:
             322           49-15-401. Eligibility for service retirement -- Date of retirement --
             323      Qualifications.
             324          (1) A member is qualified to receive an allowance from this system when:
             325          (a) the member ceases actual work for a participating employer in this system before
             326      the member's retirement date and provides evidence of the termination;
             327          (b) the member has submitted to the office a notarized retirement application form that
             328      states the member's proposed retirement date; and
             329          (c) one of the following conditions is met as of the member's retirement date:
             330          (i) the member has accrued at least 20 years of service credit;
             331          (ii) the member has accrued at least 10 years of service credit and has attained an age
             332      of 60 years; or
             333          (iii) the member has accrued at least four years of service and has attained an age of 65
             334      years.
             335          (2) (a) The member's retirement date [shall]:
             336          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             337      retirement date must];


             338          (ii) shall be on or after the date of termination[. (b) The retirement date may not]; and
             339          (iii) may not be more than 90 days before or after the date the application is received by
             340      the office.
             341          (b) A member may not be employed by a participating employer in the system
             342      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             343          Section 8. Section 49-16-401 is amended to read:
             344           49-16-401. Eligibility for service retirement -- Date of retirement --
             345      Qualifications.
             346          (1) A member is qualified to receive an allowance from this system when:
             347          (a) the member ceases actual work for a participating employer in this system before
             348      the member's retirement date and provides evidence of the termination;
             349          (b) the member has submitted to the office a notarized retirement application form that
             350      states the member's proposed retirement date; and
             351          (c) one of the following conditions is met as of the member's retirement date:
             352          (i) the member has accrued at least 20 years of service credit;
             353          (ii) the member has accrued at least 10 years of service credit and has attained an age
             354      of 60 years; or
             355          (iii) the member has accrued at least four years of service credit and has attained an age
             356      of 65 years.
             357          (2) (a) The member's retirement date [shall]:
             358          (i) shall be the 1st or the 16th day of the month, as selected by the firefighter service
             359      employee[, but the retirement date must];
             360          (ii) shall be on or after the date of termination[. (b) The retirement date may]; and
             361          (iii) may not be more than 90 days before or after the date the application is received by
             362      the office.
             363          (b) A member may not be employed by a participating employer in the system
             364      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             365          Section 9. Section 49-17-401 is amended to read:
             366           49-17-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             367          (1) A member is qualified to receive an allowance when:
             368          (a) the member ceases actual work for a participating employer in this system before


             369      the member's retirement date and provides evidence of the termination;
             370          (b) the member has submitted to the office a notarized retirement application form that
             371      states the member's proposed retirement date; and
             372          (c) one of the following conditions is met as of the member's retirement date:
             373          (i) the member has accrued at least six years of service credit and has attained an age of
             374      70 years;
             375          (ii) the member has accrued at least 10 years of service credit and has attained an age
             376      of 62 years;
             377          (iii) the member has accrued at least 20 years of service credit and has attained an age
             378      of 55 years; or
             379          (iv) the member has accrued at least 25 years of service credit.
             380          (2) (a) The member's retirement date [shall]:
             381          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             382      retirement date must];
             383          (ii) shall be on or after the date of termination[. (b) The retirement date may]; and
             384          (iii) may not be more than 90 days before or after the date the application is received by
             385      the office.
             386          (b) A member may not be employed by a participating employer in the system
             387      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             388          Section 10. Section 49-18-401 is amended to read:
             389           49-18-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             390          (1) A member is qualified to receive an allowance when:
             391          (a) the member ceases actual work for a participating employer in this system before
             392      the member's retirement date and provides evidence of the termination;
             393          (b) the member has submitted to the office a notarized retirement application form that
             394      states the member's proposed retirement date; and
             395          (c) one of the following conditions is met as of the member's retirement date:
             396          (i) the member has accrued at least six years of service credit and has attained an age of
             397      70 years;
             398          (ii) the member has accrued at least 10 years of service credit and has attained an age
             399      of 62 years;


             400          (iii) the member has accrued at least 20 years of service credit and has attained an age
             401      of 55 years; or
             402          (iv) the member has accrued at least 25 years of service credit.
             403          (2) (a) The member's retirement date [shall]:
             404          (i) shall be the 1st or the 16th day of the month, as selected by the member[, but the
             405      retirement date must];
             406          (ii) shall be on or after the date of termination[. (b) The retirement date may]; and
             407          (iii) may not be more than 90 days before or after the date the application is received by
             408      the office.
             409          (b) A member may not be employed by a participating employer in the system
             410      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             411          Section 11. Section 49-21-401 is amended to read:
             412           49-21-401. Disability benefits -- Application -- Eligibility.
             413          (1) An eligible employee shall apply for long-term disability benefits under this chapter
             414      by:
             415          (a) completing an application form prepared by the office;
             416          (b) signing a consent form allowing the office access to the eligible employee's medical
             417      records; and
             418          (c) providing any documentation or information reasonably requested by the office.
             419          (2) (a) If an eligible employee is unable to apply on the employee's own behalf, the
             420      application may be made by a person who is:
             421          (i) the attorney for an eligible employee; or
             422          (ii) appointed as a conservator or guardian of the eligible employee.
             423          (b) A person described in Subsection (2)(a), may not make an application for a
             424      deceased employee.
             425          [(2)] (3) Upon request by the office, the participating employer of the eligible
             426      employee shall provide to the office documentation and information concerning the eligible
             427      employee.
             428          [(3)] (4) The office shall review all relevant information and determine whether or not
             429      the eligible employee is totally disabled.
             430          [(4)] (5) If the office determines that the eligible employee is totally disabled due to


             431      accidental bodily injury or physical illness which is not the result of the performance of an
             432      employment duty, the eligible employee shall receive a monthly disability benefit equal to [2/3]
             433      two-thirds of the eligible employee's regular monthly salary, for each month the total disability
             434      continues beyond the elimination period, not to exceed the maximum benefit period.
             435          [(5)] (6) If the office determines that the eligible employee is totally disabled due to
             436      psychiatric illness, the eligible employee shall receive:
             437          (a) a maximum of two years of monthly disability benefits equal to [2/3] two-thirds of
             438      the eligible employee's regular monthly salary for each month the total disability continues
             439      beyond the elimination period;
             440          (b) a maximum of $10,000 for psychiatric expenses, including rehabilitation expenses
             441      preauthorized by the office's consultants, paid during the period of monthly disability benefits;
             442      and
             443          (c) payment of monthly disability benefits according to contractual provisions for a
             444      period not to exceed five years if the eligible employee is institutionalized due to psychiatric
             445      illness.
             446          [(6)] (7) If the office determines that the eligible employee is totally disabled due to a
             447      physical injury resulting from external force or violence as a result of the performance of an
             448      employment duty, the eligible employee shall receive a monthly disability benefit equal to
             449      100% of the eligible employee's regular monthly salary, for each month the total disability
             450      continues beyond the elimination period, not to exceed the maximum benefit period.
             451          [(7)] (8) (a) Successive periods of disability are considered as a continuous period of
             452      disability if the period of disability:
             453          (i) results from the same or related causes;
             454          (ii) is separated by less than six months of continuous full-time work at the individual's
             455      usual place of employment; and
             456          (iii) commences while the individual is an eligible employee covered by this chapter.
             457          (b) The inability to work for a period of less than 15 consecutive calendar days is not
             458      considered as a period of disability.
             459          (c) If Subsection [(7)] (8)(a) or (b) does not apply, successive periods of disability are
             460      considered as separate periods of disability.
             461          [(8)] (9) The office may, at any time, have any eligible employee claiming disability


             462      examined by a physician chosen by the office to determine if the eligible employee is totally
             463      disabled.
             464          [(9)] (10) A claim brought by an eligible employee for long-term disability benefits
             465      under the Public Employee's Long-Term Disability Program is barred if it is not commenced
             466      within one year from the eligible employee's date of disability, unless the office determines that
             467      under the surrounding facts and circumstances, the eligible employee's failure to comply with
             468      the time limitations was reasonable.
             469          [(10)] (11) Medical or psychiatric conditions which existed prior to eligibility may not
             470      be a basis for disability benefits until the eligible employee has had one year of continuous
             471      eligibility in the Public Employees Long-Term Disability Program.
             472          [(11)] (12) If there is a valid benefit protection contract, service credit shall accrue
             473      during the period of total disability, unless the disabled eligible employee is exempted from a
             474      system, or is otherwise ineligible for service credit.
             475          [(12)] (13) Regardless of any medical evidence provided by the employee to support
             476      the application for disability, an employee is not eligible for long-term disability benefits
             477      during any period in which the employee:
             478          (a) makes a claim that the employee is able to work; or
             479          (b) has a pending action in a court or before any state or local administrative body in
             480      which the employee has made a claim that the employee is able to work.
             481          [(13)] (14) Notwithstanding the provisions of Section 49-11-618 , upon written request
             482      by an employer, information obtained under this part may, upon an order of a court or an
             483      administrative law judge, be released to an employer who is a party in an action under
             484      Subsection [(12)] (13).
             485          Section 12. Section 49-21-402 is amended to read:
             486           49-21-402. Reduction or reimbursement of benefit -- Circumstances --
             487      Application for other benefits required.
             488          (1) A monthly disability benefit may not be paid for any period of total disability unless
             489      the eligible employee is under the ongoing care and treatment of a physician other than the
             490      eligible employee.
             491          (2) The monthly disability benefit shall be reduced or reimbursed by any amount
             492      received by, or payable to, the eligible employee from the following sources for the same


             493      period of time during which the eligible employee is entitled to receive a monthly disability
             494      benefit:
             495          (a) Social Security disability benefits, including all benefits received by the eligible
             496      employee, the eligible employee's spouse, and the eligible employee's children as determined
             497      by the Social Security Administration;
             498          (b) workers' compensation indemnity benefits;
             499          (c) any monies received by judgment, legal action, or settlement from a third party
             500      liable to the employee for the disability;
             501          (d) unemployment compensation benefits;
             502          (e) automobile no-fault, medical payments, or similar insurance payments; and
             503          (f) any monies received by a judgment, settlement, or other payment as a result of a
             504      claim against an employer.
             505          (3) The monthly disability benefit shall be reduced by any amount in excess of [1/3]
             506      one-third of the eligible employee's regular monthly salary received by, or payable to, the
             507      eligible employee from the following sources for the same period of time during which the
             508      eligible employee is entitled to receive a monthly disability benefit:
             509          (a) any employer-sponsored retirement programs; and
             510          (b) any disability benefit resulting from the disability for which benefits are being
             511      received under this chapter.
             512          (4) [Cost-of-living] After the date of disability, cost-of-living increases to any of the
             513      benefits listed in Subsection (2) or (3) may not be considered in calculating a reduction to the
             514      monthly disability benefit.
             515          (5) Any amounts payable to the eligible employee from one or more of the sources
             516      under Subsection (2) are considered as amounts received whether or not the amounts were
             517      actually received by the eligible employee.
             518          (6) (a) An eligible employee shall first apply for all disability benefits from
             519      governmental entities under Subsection (2) to which the eligible employee is or may be
             520      entitled, and provide to the office evidence of the applications.
             521          (b) The eligible employee shall also first apply at the earliest eligible age for all
             522      unreduced retirement benefits to which the eligible employee is or may be entitled, and provide
             523      to the office evidence of the application.


             524          (c) If the eligible employee fails to make application under Subsection (6)(a) or (b), the
             525      monthly disability benefit shall be suspended.
             526          Section 13. Section 49-21-403 is amended to read:
             527           49-21-403. Termination of disability benefits -- Calculation of retirement benefit.
             528          (1) An eligible employee covered by this chapter and eligible for service credit under a
             529      system, including an eligible employee who relinquishes rights to retirement benefits under
             530      Section 49-11-619 , who applies and is qualified for a monthly disability benefit shall receive a
             531      monthly disability benefit until the earlier of:
             532          (a) the date of the eligible employee's death;
             533          [(a)] (b) the date the eligible employee is no longer disabled;
             534          [(b)] (c) the date the eligible employee has accumulated:
             535          (i) 20 years of service credit if the eligible employee is covered by Chapter 14, Public
             536      Safety Contributory Retirement Act, or Chapter 15, Public Safety Noncontributory Retirement
             537      Act;
             538          (ii) 25 years of service credit if the eligible employee is covered by Chapter 17, Judges'
             539      Contributory Retirement Act, or Chapter 18, Judges' Noncontributory Retirement Act; or
             540          (iii) 30 years of service credit if the eligible employee is covered by Chapter 12, Public
             541      Employees' Contributory Retirement Act, or Chapter 13, Public Employees' Noncontributory
             542      Retirement Act; or
             543          [(c)] (d) the date the eligible employee has received a monthly disability benefit for the
             544      following applicable time periods:
             545          (i) if the eligible employee is under age 60, the monthly disability benefit is payable
             546      until age 65;
             547          (ii) if the eligible employee is 60 or 61 years of age on the date of disability, the
             548      monthly disability benefit is payable for five years;
             549          (iii) if the eligible employee is 62 or 63 years of age on the date of disability, the
             550      monthly disability benefit is payable for four years;
             551          (iv) if the eligible employee is 64 or 65 years of age on the date of disability, the
             552      monthly disability benefit is payable for three years;
             553          (v) if the eligible employee is 66, 67, or 68 years of age on the date of disability, the
             554      monthly disability benefit is payable for two years; and


             555          (vi) if the eligible employee is 69 years of age or older on the date of disability, the
             556      monthly disability benefit is payable for one year.
             557          (2) (a) Upon termination of a monthly disability benefit, an eligible employee eligible
             558      for service credit under a system may retire under the requirements of the system which
             559      covered the eligible employee on the date of disability.
             560          (b) The final average salary used in the calculation of the allowance shall be based on
             561      the annual rate of pay on the date of disability, improved by the annual cost-of-living increase
             562      factor applied to retirees of the system which covered the eligible employee on the date of
             563      disability.
             564          (3) An eligible employee who is eligible for service credit in a system, but has
             565      relinquished rights to an allowance under Section 49-11-619 , may receive the benefits the
             566      eligible employee would have received by being eligible for service credit in the system
             567      covering the eligible employee on the date of disability, except for the accrual of service credit,
             568      in accordance with this title.
             569          (4) An eligible employee receiving a monthly disability benefit who has service credit
             570      from two or more systems may not combine service credits under Section 49-11-405 in
             571      qualifying for retirement, unless the eligible employee would receive a greater allowance by
             572      combining the service credits.
             573          (5) A monthly disability benefit payable to an eligible employee who is not eligible for
             574      service credit under a system shall terminate at the earliest of:
             575          (a) the date the eligible employee would be eligible for an unreduced allowance;
             576          (b) the date the eligible employee has received a monthly disability benefit for the
             577      applicable time period as set forth in Subsection (1)[(b)](c); or
             578          (c) the date the eligible employee receives a reduced allowance.




Legislative Review Note
    as of 1-13-10 11:59 AM


Office of Legislative Research and General Counsel


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