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Third Substitute S.B. 63
Representative Brad L. Dee proposes the following substitute bill:
1
NEW PUBLIC EMPLOYEES' TIER II
2
CONTRIBUTORY RETIREMENT ACT
3
2010 GENERAL SESSION
4
STATE OF UTAH
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Chief Sponsor: Daniel R. Liljenquist
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House Sponsor:
Brad L. Dee
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8
LONG TITLE
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General Description:
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This bill modifies the Utah State Retirement and Insurance Benefit Act to provide for
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modified retirement benefits for new public employees and new public safety and
12
firefighter employees.
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Highlighted Provisions:
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This bill:
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. defines terms;
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. requires that the Retirement Office report when the funded status of the trust fund
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reaches 100% funded and requires the Retirement and Independent Entities
18
Committee to study employee compensation and benefits;
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. 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
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1, 2011;
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. 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
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July 1, 2011, and which includes a:
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. New Public Employees' Tier II Hybrid Retirement System;
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. New Public Employees' Tier II Defined Contribution Plan;
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. New Public Safety and Firefighter Tier II Hybrid Retirement System; and
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. New Public Safety and Firefighter Tier II Defined Contribution Plan;
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. provides that all new public employees including public safety, firefighters,
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governors, and legislators may only participate in a Tier II retirement system or
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plan;
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. provides that new employees may choose between the Tier II hybrid system or the
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Tier II Defined Contribution (DC) plan except governors and legislators are only
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eligible for the Tier II DC plan;
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. provides that the retirement benefits for public employees Tier II hybrid system
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employees include:
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. full retirement benefits after 35 years of service credit;
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. 2.5% cost-of-living adjustments on the retirement allowance;
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. a 1.5% multiplier for each year of service;
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. a 401(k) employer contribution;
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. a death benefit; and
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. a disability benefit;
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. provides that the participating employer shall contribute for public employees Tier
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II employees the percentage of the employee's compensation equal to the
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corresponding Tier I system amortization rate plus 10%;
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. provides that the total public employees' Tier II contribution credited specifically on
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behalf of a Tier II employee is 10% of the employee's salary;
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. provides that the retirement benefits for the public safety and firefighter Tier II
49
hybrid system employees include:
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. full retirement benefits after 25 years of service credit;
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. 2.5% cost-of-living adjustments on the retirement allowance;
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. a 1.5% multiplier for each year of service;
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. a 401(k) employer contribution;
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. a death benefit;
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. a line of duty death benefit; and
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. a disability benefit;
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. provides that the participating employer shall contribute for public safety and
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firefighter Tier II employees the percentage of the employee's compensation equal
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to the corresponding Tier I system amortization rate plus 12%;
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. provides that the total Tier II contribution credited specifically on behalf of a public
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safety and firefighter Tier II employee is 12% of the employee's salary;
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. closes for employees who initially enter employment beginning on or after July 1,
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2011, the:
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. Public Employees' Contributory Retirement System;
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. Public Employees' Noncontributory Retirement System;
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. Public Safety Contributory Retirement System;
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. Public Safety Noncontributory Retirement System;
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. Firefighters' Retirement System; and
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. Utah Governors' and Legislators' Retirement System;
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. provides for certain exclusions from membership in the Tier II DC plan; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill takes effect on July 1, 2010.
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Utah Code Sections Affected:
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AMENDS:
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35A-4-502, as last amended by Laws of Utah 2008, Chapter 382
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49-11-102, as last amended by Laws of Utah 2009, Chapter 101
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49-11-401, as last amended by Laws of Utah 2005, Chapter 116
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49-11-403, as last amended by Laws of Utah 2006, Chapter 260
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49-11-404, as last amended by Laws of Utah 2008, Chapter 252
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49-11-612, as last amended by Laws of Utah 2009, Chapter 101
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49-11-801, as last amended by Laws of Utah 2008, Chapter 335
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49-11-1001, as enacted by Laws of Utah 2006, Chapter 305
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49-12-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-13-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-14-201, as last amended by Laws of Utah 2008, Chapter 382
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49-14-202, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-15-201, as last amended by Laws of Utah 2008, Chapter 382
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49-15-202, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-16-201, as last amended by Laws of Utah 2004, Chapter 118
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49-16-202, as last amended by Laws of Utah 2009, Chapter 101
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49-19-201, as renumbered and amended by Laws of Utah 2002, Chapter 250
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49-21-201, as last amended by Laws of Utah 2008, Chapter 252
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49-21-403, as last amended by Laws of Utah 2008, Chapter 252
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53-7-105, as last amended by Laws of Utah 2002, Chapter 250
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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
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67-22-1, as last amended by Laws of Utah 2008, Chapter 86
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ENACTS:
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49-11-307, Utah Code Annotated 1953
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49-22-101, Utah Code Annotated 1953
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49-22-102, Utah Code Annotated 1953
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49-22-103, Utah Code Annotated 1953
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49-22-104, Utah Code Annotated 1953
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49-22-201, Utah Code Annotated 1953
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49-22-202, Utah Code Annotated 1953
109
49-22-203, Utah Code Annotated 1953
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49-22-204, Utah Code Annotated 1953
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49-22-301, Utah Code Annotated 1953
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49-22-302, Utah Code Annotated 1953
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49-22-303, Utah Code Annotated 1953
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49-22-304, Utah Code Annotated 1953
115
49-22-305, Utah Code Annotated 1953
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49-22-306, Utah Code Annotated 1953
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49-22-307, Utah Code Annotated 1953
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49-22-308, Utah Code Annotated 1953
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49-22-309, Utah Code Annotated 1953
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49-22-401, Utah Code Annotated 1953
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49-22-402, Utah Code Annotated 1953
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49-22-501, Utah Code Annotated 1953
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49-22-502, Utah Code Annotated 1953
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49-22-601, Utah Code Annotated 1953
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49-23-101, Utah Code Annotated 1953
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49-23-102, Utah Code Annotated 1953
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49-23-103, Utah Code Annotated 1953
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49-23-104, Utah Code Annotated 1953
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49-23-201, Utah Code Annotated 1953
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49-23-202, Utah Code Annotated 1953
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49-23-301, Utah Code Annotated 1953
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49-23-302, Utah Code Annotated 1953
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49-23-303, Utah Code Annotated 1953
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49-23-304, Utah Code Annotated 1953
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49-23-305, Utah Code Annotated 1953
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49-23-306, Utah Code Annotated 1953
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49-23-307, Utah Code Annotated 1953
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49-23-308, Utah Code Annotated 1953
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49-23-401, Utah Code Annotated 1953
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49-23-402, Utah Code Annotated 1953
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49-23-501, Utah Code Annotated 1953
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49-23-502, Utah Code Annotated 1953
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49-23-503, Utah Code Annotated 1953
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49-23-601, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
35A-4-502
is amended to read:
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35A-4-502. Administration of Employment Security Act.
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(1) (a) The department shall administer this chapter through the division.
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(b) The department may make, amend, or rescind any rules and special orders
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necessary for the administration of this chapter.
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(c) The division may:
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(i) employ persons;
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(ii) make expenditures;
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(iii) require reports;
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(iv) make investigations;
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(v) make audits of any or all funds provided for under this chapter when necessary; and
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(vi) take any other action it considers necessary or suitable to that end.
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(d) No later than the first day of October of each year, the department shall submit to
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the governor a report covering the administration and operation of this chapter during the
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preceding calendar year and shall make any recommendations for amendments to this chapter
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as the department considers proper.
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(e) (i) The report required under Subsection (1)(d) shall include a balance sheet of the
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moneys in the fund in which there shall be provided, if possible, a reserve against liability in
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future years to pay benefits in excess of the then current contributions, which reserve shall be
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set up by the division in accordance with accepted actuarial principles on the basis of statistics
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of employment, business activity, and other relevant factors for the longest possible period.
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(ii) Whenever the department believes that a change in contribution or benefit rates
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will become necessary to protect the solvency of the fund, it shall promptly inform the
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governor and the Legislature and make appropriate recommendations.
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(2) (a) The department may make, amend, or rescind rules in accordance with Title
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63G, Chapter 3, Utah Administrative Rulemaking Act.
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(b) The director of the division or the director's designee may adopt, amend, or rescind
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special orders after appropriate notice and opportunity to be heard. Special orders become
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effective 10 days after notification or mailing to the last-known address of the individuals or
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concerns affected thereby.
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(3) The director of the division or the director's designee shall cause to be printed for
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distribution to the public:
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(a) the text of this chapter;
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(b) the department's rules pertaining to this chapter;
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(c) the department's annual reports to the governor required by Subsection (1)(e); and
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(d) any other material the director of the division or the director's designee considers
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relevant and suitable and shall furnish them to any person upon application.
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(4) (a) The division may delegate to any person so appointed the power and authority it
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considers reasonable and proper for the effective administration of this chapter and may bond
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any person handling moneys or signing checks under this authority.
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(b) The department may, when permissible under federal and state law, make
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arrangements to voluntarily elect coverage under the United States Civil Service Retirement
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System or a comparable private retirement plan with respect to past as well as future services of
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individuals employed under this chapter who:
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(i) were hired prior to October 1, 1980; and
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(ii) have been retained by the department without significant interruption in the
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employees' services for the department.
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(c) An employee of the department who no longer may participate in a federal or other
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retirement system as a result of a change in status or appropriation under this chapter may
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purchase credit with the employee's assets from the federal or other retirement system in which
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the employee may no longer participate in a retirement system created under:
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(i) Title 49, Chapter 13, Public Employees' Noncontributory Retirement Act[, with the
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employee's assets from the federal or other retirement system in which the employee may no
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longer participate.] for a purchase made under this Subsection (4)(c) made prior to July 1,
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2011; or
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(ii) Title 49, Chapter 22, Public Employees' Tier II Contributory Retirement Act, if the
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date of purchase under this Subsection (4)(c) is on or after July 1, 2011.
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(5) There is created an Employment Advisory Council composed of the members listed
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in Subsections (5)(a) and (b).
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(a) The executive director shall appoint:
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(i) not less than five employer representatives chosen from individuals recommended
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by employers, employer associations, or employer groups;
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(ii) not less than five employee representatives chosen from individuals recommended
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by employees, employee associations, or employee groups; and
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(iii) five public representatives chosen at large.
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(b) The executive director or the executive director's designee shall serve as a
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nonvoting member of the council.
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(c) The employee representatives shall include both union and nonunion employees
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who fairly represent the percentage in the labor force of the state.
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(d) Employers and employees shall consider nominating members of groups who
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historically may have been excluded from the council, such as women, minorities, and
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individuals with disabilities.
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(e) (i) Except as required by Subsection (5)(e)(ii), as terms of current council members
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expire, the executive director shall appoint each new member or reappointed member to a
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four-year term.
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(ii) Notwithstanding the requirements of Subsection (5)(e)(i), the executive director
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shall, at the time of appointment or reappointment, adjust the length of terms to ensure that the
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terms of council members are staggered so that approximately half of the council is appointed
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every two years.
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(f) When a vacancy occurs in the membership for any reason, the replacement shall be
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appointed for the unexpired term.
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(g) The executive director shall terminate the term of any council member who ceases
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to be representative as designated by the council member's original appointment.
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(h) The council shall advise the department and the Legislature in formulating policies
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and discussing problems related to the administration of this chapter including:
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(i) reducing and preventing unemployment;
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(ii) encouraging the adoption of practical methods of vocational training, retraining,
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and vocational guidance;
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(iii) monitoring the implementation of the Wagner-Peyser Act;
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(iv) promoting the creation and development of job opportunities and the
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reemployment of unemployed workers throughout the state in every possible way; and
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(v) appraising the industrial potential of the state.
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(i) The council shall assure impartiality and freedom from political influence in the
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solution of the problems listed in Subsection (5)(h).
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(j) The executive director or the executive director's designee shall serve as chair of the
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council and call the necessary meetings.
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(k) (i) A member shall receive no compensation or benefits for the member's services,
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but may receive per diem and expenses incurred in the performance of the member's official
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duties at the rates established by the Division of Finance under Sections
63A-3-106
and
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63A-3-107
.
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(ii) A member may decline to receive per diem and expenses for the member's service.
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(l) The department shall provide staff support to the council.
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(6) In the discharge of the duties imposed by this chapter, the division director or the
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director's designee as designated by department rule, may in connection with a disputed matter
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or the administration of this chapter:
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(a) administer oaths and affirmations;
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(b) take depositions;
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(c) certify to official acts; and
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(d) issue subpoenas to compel the attendance of witnesses and the production of books,
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papers, correspondence, memoranda, and other records necessary as evidence.
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(7) (a) In case of contumacy by or refusal to obey a subpoena issued to any person, any
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court of this state within the jurisdiction of which the inquiry is carried on or within the
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jurisdiction of which the person guilty of contumacy or refusal to obey is found or resides or
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transacts business, upon application by the director of the division or the director's designee
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shall have jurisdiction to issue to that person an order requiring the person to appear before the
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director or the director's designee to produce evidence, if so ordered, or give testimony
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regarding the matter under investigation or in question. Any failure to obey that order of the
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court may be punished by the court as contempt.
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(b) Any person who, without just cause, fails or refuses to attend and testify or to
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answer any lawful inquiry or to produce books, papers, correspondence, memoranda, and other
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records, if it is in that person's power to do so, in obedience to a subpoena of the director or the
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director's designee shall be punished as provided in Subsection
35A-1-301
(1)(b). Each day the
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violation continues is a separate offense.
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(c) In the event a witness asserts a privilege against self-incrimination, testimony and
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evidence from the witness may be compelled pursuant to Title 77, Chapter 22b, Grants of
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Immunity.
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(8) (a) In the administration of this chapter, the division shall cooperate with the United
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States Department of Labor to the fullest extent consistent with the provisions of this chapter
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and shall take action, through the adoption of appropriate rules by the department and
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administrative methods and standards, as necessary to secure to this state and its citizens all
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advantages available under the provisions of:
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(i) the Social Security Act that relate to unemployment compensation;
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(ii) the Federal Unemployment Tax Act; and
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(iii) the Federal-State Extended Unemployment Compensation Act of 1970.
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(b) In the administration of Section
35A-4-402
, which is enacted to conform with the
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requirements of the Federal-State Extended Unemployment Compensation Act of 1970, 26
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U.S.C. 3304, the division shall take any action necessary to ensure that the section is
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interpreted and applied to meet the requirements of the federal act, as interpreted by the United
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States Department of Labor and to secure to this state the full reimbursement of the federal
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share of extended and regular benefits paid under this chapter that are reimbursable under the
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federal act.
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Section 2.
Section
49-11-102
is amended to read:
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49-11-102. Definitions.
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As used in this title:
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(1) (a) "Active member" means a member who is employed or who has been employed
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by a participating employer within the previous 120 days.
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(b) "Active member" does not include retirees.
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(2) "Actuarial equivalent" means a benefit of equal value when computed upon the
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basis of mortality tables as recommended by the actuary and adopted by the executive director,
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including regular interest.
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(3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
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adopted by the board upon which the funding of system costs and benefits are computed.
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(4) (a) "Agency" means:
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(i) a department, division, agency, office, authority, commission, board, institution, or
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hospital of the state;
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(ii) a county, municipality, school district, local district, or special service district;
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(iii) a state college or university; or
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(iv) any other participating employer.
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(b) "Agency" does not include an entity listed under Subsection (4)(a)(i) that is a
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subdivision of another entity listed under Subsection (4)(a).
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(5) "Allowance" or "retirement allowance" means the pension plus the annuity,
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including any cost of living or other authorized adjustments to the pension and annuity.
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(6) "Alternate payee" means a member's former spouse or family member eligible to
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receive payments under a Domestic Relations Order in compliance with Section
49-11-612
.
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(7) "Amortization rate" means the board certified percent of salary required to amortize
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the unfunded actuarial accrued liability in accordance with policies established by the board
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upon the advice of the actuary.
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[(7)] (8) "Annuity" means monthly payments derived from member contributions.
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[(8)] (9) "Appointive officer" means an employee appointed to a position for a definite
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and fixed term of office by official and duly recorded action of a participating employer whose
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appointed position is designated in the participating employer's charter, creation document, or
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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
.
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[(9)] (10) (a) "At-will employee" means a person who is employed by a participating
321
employer and:
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(i) who is not entitled to merit or civil service protection and is generally considered
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exempt from a participating employer's merit or career service personnel systems;
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(ii) whose on-going employment status is entirely at the discretion of the person's
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employer; or
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(iii) who may be terminated without cause by a designated supervisor, manager, or
327
director.
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(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
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employer's merit system, civil service protection system, or career service personnel systems,
331
policies, or plans.
332
[(10)] (11) "Beneficiary" means any person entitled to receive a payment under this
333
title through a relationship with or designated by a member, participant, covered individual, or
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alternate payee of a defined contribution plan.
335
[(11)] (12) "Board" means the Utah State Retirement Board established under Section
336
49-11-202
.
337
[(12)] (13) "Board member" means a person serving on the Utah State Retirement
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
[(13)] (15) "Contributions" means the total amount paid by the participating employer
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
[(14)] (16) "Council member" means a person serving on the Membership Council
346
established under Section
49-11-202
.
347
[(15)] (17) "Covered individual" means any individual covered under Chapter 20,
348
Public Employees' Benefit and Insurance Program Act.
349
[(16)] (18) "Current service" means covered service as defined in Chapters 12, 13, 14,
350
15, 16, 17, 18, and 19.
351
[(17)] (19) "Defined benefit" or "defined benefit plan" or "defined benefit system"
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
[(18)] (20) "Defined contribution" or "defined contribution plan" means any defined
359
contribution plan or deferred compensation plan authorized under the Internal Revenue Code
360
and administered by the board.
361
[(19)] (21) "Educational institution" means a political subdivision or instrumentality of
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 [(19)] (21).
370
[(20)] (22) (a) "Employer" means any department, educational institution, or political
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
[(21)] (23) "Exempt employee" means an employee working for a participating
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
[(22)] (24) "Final average monthly salary" means the amount computed by dividing the
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
[(23)] (25) "Fund” means any fund created under this title for the purpose of paying
385
benefits or costs of administering a system, plan, or program.
386
[(24)] (26) (a) "Inactive member" means a member who has not been employed by a
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
[(25)] (28) (a) "Member" means a person, except a retiree, with contributions on
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
[(26)] (29) "Member contributions" means the sum of the contributions paid to a
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
[(27)] (30) "Nonelective contribution" means an amount contributed by a participating
409
employer into a participant's defined contribution account.
410
[(28)] (31) "Office" means the Utah State Retirement Office.
411
[(29)] (32) "Participant" means an individual with voluntary deferrals or nonelective
412
contributions on deposit with the defined contribution plans administered under this title.
413
[(30)] (33) "Participating employer" means a participating employer, as defined by
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
[(31)] (34) "Pension" means monthly payments derived from participating employer
417
contributions.
418
[(32)] (35) "Plan" means the Utah Governors' and Legislators' Retirement Plan created
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
[(33)] (36) (a) "Political subdivision" means any local government entity, including
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
[(34)] (37) "Program" means the Public Employees' Insurance Program created under
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
[(35)] (38) "Public funds" means those funds derived, either directly or indirectly, from
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
[(36)] (39) "Qualified defined contribution plan" means a defined contribution plan
442
that meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
443
[(37)] (40) "Refund interest" means the amount accrued on member contributions at a
444
rate adopted by the board.
445
[(38)] (41) "Retiree" means an individual who has qualified for an allowance under this
446
title.
447
[(39)] (42) "Retirement" means the status of an individual who has become eligible,
448
applies for, and is entitled to receive an allowance under this title.
449
[(40)] (43) "Retirement date" means the date selected by the member on which the
450
member's retirement becomes effective with the office.
451
[(41)] (44) "Service credit" means:
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
[(42)] (45) "System" means the individual retirement systems created by Chapter 12,
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[.], the defined benefit portion of the Tier II Hybrid Retirement System under Chapter 22,
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
[(43)] (49) "Voluntary deferrals" means an amount contributed by a participant into
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
[(4)] (5) A participating employer that has entered into a benefit protection contract
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
[(5)] (6) If an employer fails to provide the annual report required under Subsection
662
[(4)] (5), the benefits that would have accrued under the benefit protection contract shall be
663
forfeited.
664
[(6)] (7) The board may adopt rules to implement and administer this section.
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 [Title 49,] :
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) [Title 49,] Chapter 14, Part 5, Death Benefit;
677
(ii) [Title 49,] Chapter 15, Part 5, Death Benefit;
678
(iii) [Title 49,] Chapter 16, Part 5, Death Benefit;
679
(iv) [Title 49,] Chapter 17, Part 5, Death Benefit;
680
(v) [Title 49,] Chapter 18, Part 5, Death Benefit; or
681
(vi) [Title 49,] Chapter 19, Part 5, Death Benefit;
682
(d) a death benefit provided under a group insurance policy under:
683
(i) [Title 49,] Chapter 12, Part 5, Death Benefit; [or]
684
(ii) [Title 49,] Chapter 13, Part 5, Death Benefit; [or]
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) [The] Except as provided in Subsections
49-22-302
(2)(a),
49-22-401
(3)(a),
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) [Participants] Except as provided in Subsections
49-22-303
(3),
49-22-401
(4),
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) [At] Except as provided in Subsection (5), at the time of application for retirement,
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) [A] Until June 30, 2011, a person initially entering regular full-time employment
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; [or]
904
(d) Chapter 15, Public Safety Noncontributory Retirement Act[.]; or
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; [or]
1032
(d) Chapter 15, Public Safety Noncontributory Retirement Act[.]; or
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) [An] Until June 30, 2011, an employer that is not participating in this system
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; [or]
1099
(c) Chapter 16, Firefighters' Retirement Act[.]; or
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) [An] Until June 30, 2011, an employer that is not participating in this system
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
[and],
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
[or],
1132
49-15-601
[.], or
49-23-601
.
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
[(3)] (4) Except as provided under Subsection (5), all other employers may provide
1138
coverage for their eligible employees under this chapter.
1139
[(4)] (5) If an employer elects to cover any of its eligible employees under this chapter,
1140
all of its eligible employees shall be covered.
1141
[(5)] (6) Except as provided under Subsections (1) and (2), nothing in this chapter
1142
requires any employer to cover its eligible employees under this chapter.
1143
[(6)] (7) The following employees are not eligible for coverage under this chapter:
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; [or]
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; [or]
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
CHAPTER 22. NEW PUBLIC EMPLOYEES' TIER II CONTRIBUTORY
1209
RETIREMENT ACT
1210
Part 1. General Provisions
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
Part 2. Membership Eligibility
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
Part 3. Tier II Hybrid Retirement System
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