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MINUTES OF THE

SENATE RETIREMENT AND INDEPENDENT ENTITIES STANDING COMMITTEE

WEDNESDAY, FEBRUARY 10, 2010, 12:00 P.M.

ROOM 210, SENATE BUILDING, UTAH STATE CAPITOL COMPLEX



Members Present:    Sen. Daniel Liljenquist, Chair
    Sen. Curtis Bramble
    Sen. D. Chris Buttars
    Sen. Brent Goodfellow
    Sen. Karen Mayne

Member Excused:    Sen. John Greiner    
    
Staff Present:    Benjamin N. Christensen, Policy Analyst
    Cathy Dupont, Associate General Counsel
    Shannon Halverson, Associate General Counsel
    J. Daniel Schoenfeld, Fiscal Analyst
    Saundra Maeser, Committee Secretary

Public Speakers Present:    Lincoln Shurtz, Utah League of Cities and Towns
    Kathleen Soffe, wife of police officer
    Chad Soffe, State President, Fraternal Order of Police
    Sheri Waters, Utah Public Employees Association
    G. W. Leonard, Utah School Employees Association

A list of visitors is filed with the committee minutes.


Committee Chair Liljenquist called the meeting to order at 12:17 p.m.

Sen. Bramble assumed the chair.

Acting Chair Bramble announced that S.B. 42, Retirement Eligibility Modifications (D. Liljenquist) would not be considered at this meeting.

Sen. Liljenquist gave an overview of all three bills under consideration.

1. S.B. 43 Post-retirement Employment Amendments (D. Liljenquist)

    Sen. Liljenquist introduced the bill.

     MOTION: Sen. Liljenquist moved to adopt 1st Sub. S.B. 43, Post-Retirement Employment Amendments.

    The motion passed unanimously.


    Sen. Liljenquist moved to adopt Amendment 1, as follows:

    1. Page 1, Lines 20 through 24

                       20          .    
provides that a participating employer who hires a retiree before July 1, 2010
{   :

                      21              .  
}     may not contribute an amount that exceeds the normal cost rate to a qualified
                      22      defined contribution plan;
{   and

                      23              .    shall contribute the amortization rate for the reemployed retiree to the retirement
                      24      system that would have covered the retiree in the new position;  
}

    2. Page 11, Line 333 through Page 12, Line 353

            
333          (8) (a) If a participating employer hires a [nonexempt] retiree, on a full-time basis, who
             334      may not earn additional service credit under [this section] Subsection (4), the participating
             335      employer
{   :

             336          (i)  
} may not contribute an amount that exceeds the normal cost rate as defined under
             337      Section 49-11-102 to a plan for the retiree under Subsection (8)(b)
{   ; and

             338          (ii) shall contribute the  
} [same percentage of a retiree's salary that the participating
             339      employer would have been required to contribute if the retiree were an active member, up to
             340      the amount allowed by federal law.]
{   amortization rate, as defined under Section 49-11-102 , for

             341      the retiree to the office to be credited to the system that would have covered the retiree in the
             342      new position  
} .
             343          (b) The contributions under Subsection (8)(a)
{   (I)   } are not required, but if paid, shall be

             344      paid to a retiree-designated:                                    
             345          (i) qualified defined contribution plan administered by the board, if the participating
             346      employer participates in a qualified defined contribution plan administered by the board; or
             347          (ii) qualified defined contribution plan offered by the participating employer if the
             348      participating employer does not participate in a qualified defined contribution plan
            
349      administered by the board.
             350          (c) Notwithstanding the provisions of Subsection (8)(b), if an employer is not
             351      participating in a qualified defined contribution plan administered by the board, the employer
             352      may elect to pay the contributions under Subsection (8)(a)
{   (i)   } to a nonqualified deferred

             353      compensation plan administered by the board.

    The motion passed unanimously .

2. S.B. 63 New Public Employees' Tier II Contributory Retirement Act (D. Liljenquist)

    Sen. Liljenquist introduced the bill.

    MOTION: Sen. Liljenquist moved to adopt Amendment 2, as follows:

    1. Page 29, Line 894 through Page 30, Line 896

             894          (iv) 35 years of service credit if the eligible employee is covered by the defined benefit


             895      portion under Chapter 22, Part 3, Tier II Hybrid Retirement System
  or is covered by the defined contribution plan under Chapter 22, Part 4, Tier II Defined Contribution Plan       ; or

             896          (c) the date the eligible employee has received a monthly disability benefit for the

    2. Page 32, Lines 959 through 960

                     
959          (iii) compensation paid to a temporary employee
{   , an exempt employee,   } or an employee

                     960      otherwise ineligible for service credit;

    3. Page 33, Lines 1017 through 1018

             1017      System created under this chapter.
    
  (7)(a) "Volunteer firefighter" means any individual that is not regularly employed as a firefighter service employee, but who:

    (I) has been trained in firefighter techniques and skills;
    (ii) continues to receive regular firefighter training;
    (iii) is assigned to a position of hazardous duty; and
    (iv) is on the rolls of a legally organized volunteer fire department which provides ongoing training and serves a political subdivision of the state.
    (b) An individual that volunteers assistance but does not meet the requirements of Subsection (7)(a) is not a volunteer firefighter for purposes of this chapter.  

             1018          
{   (7)   }        (8)       "Years of service credit" means:


    4. Page 37, Lines 1121 through 1127

             1121           An employee serving as an exchange employee from outside the state.
             1122          
{   (d) An executive department head of the state or a legislative director, senior executive

             1123      employed by the governor's office, a member of the State Tax Commission, a member of the
             1124      Public Service Commission, and a member of a full-time or part-time board or commission
             1125      who files a formal request for exemption.
             1126          (e)  
}
  (d)       An employee of the Department of Workforce Services who is covered under

             1127      another retirement system allowed under Title 35A, Chapter 4, Employment Security Act.     

    5. Page 49, Lines 1490 through 1491

             1490          (c) a living benefit option.
    
  (3)(a) A volunteer firefighter is eligible for a death benefit under this section if the death results from external force, violence, or disease directly resulting from firefighter service.

    (b) The lowest monthly compensation of firefighters of a city of the first class in this state at the time of death shall be considered to be the final average monthly salary of a volunteer firefighter for purposes of computing these benefits.
     (c) Each volunteer fire department shall maintain a current roll of all volunteer firefighters which meet the requirements of Subsection 49-22-102(7) to determine the eligibility for this benefit.  

             1491          
{   (3)   }        (4)       This death benefit is payable when:



    6. Page 49, Lines 1496 through 1506

             1496          
{   (4)   }        (5)       The death benefit payable to the beneficiary under this section is a lump-sum

             1497      payment consisting of:
             1498          (a) the return of any member contributions under this chapter; plus
             1499          (b) a percentage of the final average salary of the member to be determined by the
             1500      board.
             1501          
{   (5)   }        (6)       Any amount of a living benefit option paid to the member prior to death shall be

             1502      deducted from the benefit payable to the beneficiary.
             1503          
{   (6)   }        (7)       The cost of the death benefit shall be paid by the participating employer in addition

             1504      to the contribution rate established under Section 49-22-301 or 49-22-401 .
             1505          
{   (7)   }        (8)       The portion of the death benefit provided under Subsection      {   (4)   }        (5)       (b), may not be paid

             1506      to the beneficiary of an inactive member unless the death of the member occurs either:

    7. Page 49, Line 1512 through Page 50, Line 1523

             1512          
{   (8)   }        (9)       The death benefit provided under Subsection      {   (4)   }        (5)       (b) shall be paid in accordance

             1513      with Sections 49-11-609 and 49-11-610 .
             1514          
{   (9)   }        (10)       The death benefit paid to the beneficiary of an inactive member, except as

             1515      otherwise provided under Subsection
{   (7)   }        (8)       , is a lump-sum return of the member's member

             1516      contributions.
             1517          
{   (10)   }        (11)       Payment of the death benefit by the office constitutes a full settlement of any

             1518      beneficiary's claim against the office and the office is not liable for any further or additional
             1519      claims or assessments on behalf of the member.
             1520          
{   (11)   }        (12)       Unless otherwise specified in a written document filed with the office, death

             1521      benefits payable to beneficiaries shall be in accordance with the order of precedence
             1522      established under Title 75, Chapter 2, Intestate Succession and Wills.
             1523          
{   (12)   }        (13)       A death benefit under this section may not be paid on behalf of a retiree under this


    The motion passed unanimously.

    MOTION: Sen. Liljenquist moved to adopt Amendment 3, as follows:


    1. Page 35, Line 1080 through Page 36, Line 1086

             1080          (1)
{   (a)   } Unless excluded under Subsection (2), an employer is a participating employer

             1081      and may not withdraw from participation in this system.
             1082          
{   (b) In addition to their participation in this system, a participating employer may not

             1083      provide or participate in any additional public or private retirement, supplemental or defined
             1084      contribution plan, either directly or indirectly, for their employees unless the actuarial funded
             1085      ratio of all the systems under this title reach 100%.  
}
             1086          (2) An employer that is a charter school sponsored by the State Board of Education or a

    2. Page 37, Lines 1114 through 1118

             1114          (b) (I) A current or future employee of
{   a   }      {   two-year or four-year college or university   }        an institution of higher education      

             1115      who holds, or is entitled to hold, under Section 49-22-204 , a retirement annuity contract with
             1116      the Teachers' Insurance and Annuity Association of America or with any other public or private
             1117      system, organization, or company during any period in which required contributions based on
             1118      compensation have been paid on behalf of the employee by the employer.

    The motion passed unanimously .

3. S.B. 94 Supplemental Benefit Amendments for Noncontributory Public Employees (D. Liljenquist)

    Sen. Liljenquist introduced the bill.

    MOTION: Sen. Liljenquist moved to adopt Amendment 1, as follows:
    
     1. Page 2, Lines 41 through 50

             41          (A) is a member of this system;
  and      

             42          (B) before July 1, 1986, began the employee's
{   current   } regular full-time employment

             43      with:
             44          (I) the state;
             45          (II) an educational institution of the state; or
             46          (III) a participating employer whose activities are associated with participating
             47      educational institutions
{   ; and

             48          © has, since before July 1, 1986, continued the employment which began under
             49      Subsection (1)(a)(i)(B) without a break, interruption, transfer, termination, rehire, or change of
             50      the employing agency  
} .

    2. Page 3, Lines 65 through 72

             65          (A) is a member of this system; and


             66          (B) before July 1, 1986, began the employee's
{   current   } regular full-time employment

             67      with:
             68          (I) the state; or
             69          (II) an educational institution of the state
{   ; and

             70          (C) has, since before July 1, 1986, continued the employment which began under
             71      Subsection (1)(a)(i)(B) without a break, interruption, transfer, termination, rehire, or change of
             72      the employing agency  
} .

    
The motion passed unanimously.

    Lincoln Shurtz, Utah League of Cities and Towns, spoke in support of the three bills under consideration.

    Kathleen Soffe, wife of a police officer; Chad Soffe, State President, fraternal Order of Police; Sheri Waters, Utah Public Employees Association; and F. W. Leonard, Utah School Employees Association, spoke in opposition to the bills.

    Acting Chair Bramble announced that the next meeting of the Senate Retirement and Independent Entities Standing Committee will be Friday, February 12, in Room 210 Senate Building. Public testimony will be continued at that time.

         MOTION: Sen. Buttars moved to adjourn. The motion passed unanimously.

        The meeting adjourned at 1:50 p.m.
                                        
        Minutes reported by Saundra Maeser, Secretary.




Sen. Dan Liljenquist, Committee Chair