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H.B. 173 Enrolled
AN ACT RELATING TO PENSIONS; AMENDING THE POWERS OF THE RETIREMENT
BOARD; AMENDING DEFINITIONS; AMENDING RETIREMENT ELIGIBILITY
REQUIREMENTS; MAKING TECHNICAL CORRECTIONS; AND PROVIDING AN
EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
49-1-203, as last amended by Chapter 197, Laws of Utah 1995
49-1-401, as last amended by Chapter 197, Laws of Utah 1995
49-1-406, as last amended by Chapter 197, Laws of Utah 1995
49-1-607, as enacted by Chapter 1, Laws of Utah 1987
49-2-103, as last amended by Chapter 231, Laws of Utah 1996
49-2-205, as last amended by Chapter 246, Laws of Utah 1993
49-3-103, as last amended by Chapter 231, Laws of Utah 1996
49-3-206, as last amended by Chapter 246, Laws of Utah 1993
49-4-103, as last amended by Chapter 231, Laws of Utah 1996
49-4-601, as enacted by Chapter 1, Laws of Utah 1987
49-4-704, as last amended by Chapters 239 and 304, Laws of Utah 1994
49-4a-103, as last amended by Chapter 231, Laws of Utah 1996
49-4a-704, as last amended by Chapters 239 and 304, Laws of Utah 1994
49-5-103, as last amended by Chapter 231, Laws of Utah 1996
49-5-601, as last amended by Chapter 319, Laws of Utah 1994
49-5-704, as last amended by Chapter 239, Laws of Utah 1994
49-6-103, as last amended by Chapter 197, Laws of Utah 1995
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 49-1-203 is amended to read:
49-1-203. Powers and duties of board.
(1) The board shall:
(a) appoint an executive director to administer the retirement office;
(b) receive and act upon reports covering the operations of the systems, plans, programs,
and funds administered by the retirement office;
(c) ensure that the systems, plans, programs, and funds are administered according to law;
(d) sit as a board of appeal on any appeal filed by a member of a system, plan, or program
or by a covered employer;
(e) examine and approve an annual operating budget for the retirement office;
(f) serve as investment trustees of the retirement fund;
(g) maintain, in conjunction with participating employers and members, the systems, plans,
and programs on an actuarially sound or approved basis, subject to the responsibility of the
Legislature to adjust benefits and contribution rates when recommended by the board;
(h) receive and act upon recommendations of the executive director;
(i) recommend to the governor and Legislature any necessary or desirable changes in the
statutes governing the systems, plans, and programs administered by the retirement office;
(j) develop broad policy for the long-term operation of the various retirement systems,
plans, and programs and is granted broad discretion and power to perform its policymaking
functions, including the specific authority to interpret and define any provision or term under this
title when the board provides written documentation which demonstrates that the interpretation or
definition promotes uniformity in the administration of the systems or maintains the actuarial
soundness of the systems;
(k) establish the compensation of the director and adopt compensation plans and policies
based on market surveys for fiduciary and administrative positions in the office;
(l) regulate the duties of employing units and other public authorities which are imposed
upon them by this title and specify the time, place, and manner in which contributions shall be
withheld and paid, and obtain any reports necessary for the administration of this title;
(m) adopt rules consistent with this title for the management of the systems, plans, and
programs in order to carry out the purposes of this title, and perform all other acts necessary for the
administration of the retirement systems, plans, and programs;
(n) comply with the procedures and requirements of Title 63, Chapter 46b, Administrative
Procedures Act, in its adjudicative proceedings;
(o) otherwise exercise the powers and perform the duties conferred on it by this title; and
(p) provide for audits of the retirement system.
(2) The board may:
(a) subpoena witnesses and compel their attendance to testify before it, for which purpose
each member and the secretary of the board may administer oaths and affirmations to witnesses and
others transacting business of the retirement system;
(b) establish membership councils to advise the board and the director on policies affecting
members of any system administered by the board and may pay the travel expenses of members who
attend council meetings; and
(c) sue and be sued in its own name.
Section 2. Section 49-1-401 is amended to read:
49-1-401. Service credit -- Transfer of credit or employment -- Provisions applicable
for service credit -- Direct transfer or rollover.
(1) The board shall make the transfer of service credits, together with related member and
employer contributions, from one retirement system to another upon terms and conditions
established by the board. The terms and conditions may not result in a loss of accrued benefits.
Transfer of employment from a position covered by one public retirement system to a position
covered by another system does not either:
(a) cause the employee to lose active membership status in the system; or
(b) constitute a termination of employment prerequisite to qualifying for a refund of
contributions.
(2) In the establishment of service credits, the following provisions apply:
(a) Any member of a retirement system who performs covered services shall receive service
credit for the service.
(b) Any member who is not in an active service status because of sickness, injury, leave of
absence, including service in the armed forces of the United States, or because the member is in the
process of transfer from one employing unit to another shall, upon returning to active status, have
the same rights and be subject to the same requirements as other employees under this title.
(c) (i) For the purpose of computing the amount of a member's retirement allowance, no
service credit may be given to any member for the period during which the member is on leave of
absence without compensation, except as otherwise provided in this title or Subsection (2)(c)(ii).
(ii) A member with full-time public service while on an approved leave of absence may
purchase, or the employer may purchase on their behalf, credit equal to the public service by making
contributions fixed by the administrator.
(d) No service credit may be given to a member for the period during which the member
was in any inactive status unless the service is purchased according to the provisions of this title.
(e) Credit for service shall be granted in proportion to the work performed under rules
adopted by the board.
(f) In no case may a retirement allowance or other benefit be granted under this title which
is based upon the same service as has been the basis for retirement benefits under some other state
retirement system.
(g) Members shall be credited with any fractions of years of service to which they are
entitled.
(h) The board shall fix the minimum time per day, per month, and per year upon the basis
of which one year of service and proportionate parts of a year shall be credited toward qualification
for retirement. Service may be computed on a fiscal or calendar year basis and portions of years
served shall be accumulated and counted as service. In any event, all of the service rendered in any
one fiscal or calendar year may not count for more than one year.
(i) Any employee who is transferred to the Division of Information of Technology Service
from the Department of Public Safety, and who was a member in the Public Safety Retirement
System or Public Safety Noncontributory Retirement System, shall be entitled to remain a member
in the system he participated in prior to being transferred regardless of whether the employee's
current position is covered by the respective public safety system. This exception does not apply
to any person hired on or after January 1, 1992.
(3) (a) The board may adopt rules under which a member may make the necessary
contributions to the system for purchases or redeposits under this title through a direct transfer,
direct rollover or rollover from a qualified plan under Section 401, Internal Revenue Code, or an
eligible individual retirement account.
(b) The board may reject any contributions if the board determines the tax status of the
system would be jeopardized by allowing the contribution.
(c) For purposes of this section, a direct rollover shall be determined under the provisions
of Section 401(a)(31), Internal Revenue Code.
Section 3. Section 49-1-406 is amended to read:
49-1-406. Retirement credits from different systems or plans -- Eligibility and
calculation of benefits.
(1) Any member who has years of service credit from two or more systems or plans
administered by the board which is not concurrent service may combine these credits for purposes
of determining eligibility for retirement.
(2) To be eligible for the calculation under Subsection (3), the member's years of service
credits earned under the two or more different retirement systems shall at least equal the minimum
number of years required to retire under the system from which the member is seeking to retire.
(3) If the member meets the requirements of Subsection (2), the board shall calculate the
member's retirement allowance using all credits earned from any retirement system, with no
actuarial reduction applied to the allowance, except the years of service credit used to calculate the
benefit shall be increased or decreased to reflect the value of the assets transferred to effectuate the
calculation of the allowance.
(4) The retirement board shall adopt rules to establish the standards used for calculating any
increase or decrease in the years of service credit.
Section 4. Section 49-1-607 is amended to read:
49-1-607. Benefits payable in name of beneficiary -- Delivery.
(1) Any benefits payable to a beneficiary or dependent beneficiary shall be made in the
name of the beneficiary or beneficiaries and delivered to the lawfully appointed guardian or
conservator of the beneficiary, or delivered as otherwise ordered by a court of competent jurisdiction
pursuant to Title 75, [
involves a payment not to exceed an amount authorized by the Utah Uniform Probate Code to any
one beneficiary, the administrator may, without the appointment of a guardian or conservator or the
giving of a bond, pay the amount due to the beneficiaries themselves or to the person, persons, or
institutions assuming their support in either a lump sum or in monthly amounts, and the total of the
payments so made shall be a full discharge and release to the system from any further claims.
(2) All continuing monthly benefits payable to beneficiaries upon the death of an active
member shall be paid on the first day of the month following the date of death of the member.
Section 5. Section 49-2-103 is amended to read:
49-2-103. Definitions.
As used in this chapter:
(1) "Appointive officer" means an employee appointed to a position for a definite and fixed
term of office by official and duly recorded action of the governing body of an employing unit who
earns $500 or more per month over a 12-month period adjusted annually by the Bureau of Labor
Statistics Consumer Price Index.
(2) (a) "Compensation," "salary," or "wages" means the total amount of payments made by
an employer to an employee for services rendered to the employer, including:
(i) bonuses;
(ii) cost-of-living adjustments;
(iii) other payments currently includable in gross income and that are subject to Social
Security deductions, including any payments in excess of the maximum amount subject to deduction
under Social Security law; and
(iv) amounts that the employee authorizes to be deducted or reduced for salary deferral or
other benefit programs authorized by federal law.
(b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(c) "Compensation," "salary," or "wages" does not include:
(i) the monetary value of remuneration paid in kind, such as a residence or use of
equipment;
(ii) all contributions made by an employer under any plan for the benefit of a participant;
(iii) salary paid to an employee working under the minimum number of hours required for
membership;
(iv) salary paid to a temporary or exempt employee;
(v) any payments upon termination, including accumulated vacation, sick leave payments,
or any other special payments; or
(vi) uniform, travel, or similar allowances.
(3) "Educational institution" means a political subdivision or instrumentality of the state or
a combination thereof primarily engaged in educational activities or the administration or servicing
of educational activities, including:
(a) the State Board of Education and its instrumentalities;
(b) any institution of higher learning and its branches;
(c) any school district and its instrumentalities;
(d) any vocational and technical school; and
(e) any entity arising out of a consolidation agreement between entities under this definition.
(4) (a) "Employee" or "regular employee" means any regular full-time employee whose term
of employment for an employer contemplates continued employment during a calendar or school
year and who performs covered service for one or more employers.
(b) "Employee" or "regular employee" means an officer, elective or appointive, who
receives as compensation from an employer $500 or more per month over a 12-month period
adjusted annually by the Bureau of Labor Statistics Consumer Price Index.
(5) "Employer" or "employing unit" means any department, educational institution, political
subdivision, or organization or agency financed in whole or in part by public funds for which any
employee or member performs services subject to this chapter.
(6) "Final average salary" means the amount computed by averaging the highest five years
of annual compensation preceding retirement subject to Subsections (a), (b), (c), and (d).
(a) Except as provided in Subsection (b), the percentage increase in annual compensation
in any one of the years used may not exceed the previous year's salary by more than 10% plus a
cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the
previous year, as measured by the Consumer Price Index prepared by the United States Bureau of
Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board, the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(c) If the member retires more than six months from the date of termination of employment
and for purposes of computing the member's final average salary only, the member is considered
to have been in service at the member's last salary rate from the date of the termination of
employment to the date retirement becomes effective if the member so requests.
(d) If participating service is less than five years, final average salary means the average
annual compensation paid to the member during the full period of participating service.
(7) "Normal retirement age" means the age of 65 years.
(8) "Organization or agency financed in whole or in part by public funds" means an agency,
association, or organization that receives public funds. The term does not include political
subdivisions, departments, or educational institutions.
(9) "Public funds" means those funds derived, either directly or indirectly, from public taxes
or public revenue, dues or contributions paid or donated by the membership of the organization,
used to finance an activity whose objective is to improve, on a nonprofit basis, the governmental,
educational, and social programs and systems of the state or its political subdivisions.
(10) (a) "Regular full-time employee," in qualifying for membership in the system, means
an employee whose employment normally requires an average of 20 hours or more per week, except
as modified by the board, and who receives benefits normally provided by the employing unit.
(b) "Regular full-time employee" includes a teacher who teaches half-time or more, or a
classified school employee who works an average of 20 hours per week or more, regardless of
benefits provided.
(11) "Years of service" or "service years" means:
(a) the number of periods, each to consist of 12 full months as determined by the board;
(b) a period determined by the board, whether consecutive or not, during which an employee
performed services for an employer or employers, including any time the employee rendered service
in the armed forces of the United States before membership in the system or was absent on a paid
leave of absence granted by an employer or absent in the service of the United States government
on military duty as provided by this chapter; or
(c) for a teacher, school administrator, or other contract employee of an educational
institution, not less than eight months of full-time service constitutes a service year.
Section 6. Section 49-2-205 is amended to read:
49-2-205. Exclusions from membership in system.
The following employees are excluded from membership in the retirement system:
(1) Every employee whose employment status is temporary in nature due to the nature or
the type of work to be performed. If the term of employment exceeds six months, then for that
employee a regular full-time status shall be assumed, and the employee shall be enrolled in the
system effective the beginning of the seventh month of employment. If the same employee,
previously terminated prior to enrollment as a member, is again employed within three months of
termination by the same employer, the employee shall be immediately enrolled as a member if the
work constitutes full-time as defined in this chapter.
(2) Full-time students or the spouse of a full-time student and persons employed in a trainee
relationship may be excluded from coverage by rules adopted by the board.
(3) Every current or future employee of a two-year or four-year college or university who
holds, or is entitled to hold, pursuant to Section 49-2-206, a retirement annuity contract with the
Teachers' Insurance and Annuity Association of America or with any other public or private system,
organization, or company during any period in which that employee has received contributions
toward the premiums required on compensation from the employing unit. The employee, upon
cessation of the employer contributions, shall immediately become a contributing member.
(4) Every employee serving as an exchange employee from outside the state.
(5) Elected officials who file a formal request for exemption.
(6) Executive department heads of the state, members of the State Tax Commission, the
Public Service Commission, and other members of full-time or part-time boards or commissions
who file a formal request to be excluded from coverage.
(7) (a) Employees of the Department of Employment Security who are covered under
another retirement system allowed under Title 35, Chapter 4, Employment Security Act; or
(b) employees of the Department of Workforce Services who were covered under
Subsection (a) and who are covered under another retirement system allowed under Title 35A,
Chapter 4, Employment Security Act.
[
employed by a city, town, county, or other political subdivision who are not entitled to merit or civil
service protection. Persons eligible for exclusion under this subsection shall file a formal request
for exclusion from coverage and be employed in a position designated as exempt under an employee
exemption plan developed by the city, town, county, or political subdivision. Employee exemption
plans shall be subject to the following limitations:
(a) The total number of positions a city, town, county, or political subdivision may exempt
may not exceed the lesser of 30 positions or a number equal to 10% of the employees of the city,
town, county, or political subdivision. However, every city, town, county, or political subdivision
is entitled to a minimum exemption of one eligible employee.
(b) Employee exemption plans shall be filed annually with the retirement office, and the
city, town, county, or political subdivision shall update the exemption plan in the event of any
change.
(c) The retirement office may promulgate rules to implement this subsection.
Section 7. Section 49-3-103 is amended to read:
49-3-103. Definitions.
As used in this chapter:
(1) "Appointive officer" means an employee appointed to a position for a definite and fixed
term of office by official and duly recorded action of the governing body of an employing unit and
who earns $500 or more per month over a 12-month period adjusted by the Bureau of Labor
Statistics Consumer Price Index.
(2) (a) "Compensation," "salary," or "wages" means the total amount of payments made by
an employer to an employee for services rendered to the employer, including:
(i) bonuses;
(ii) cost-of-living adjustments;
(iii) other payments currently includable in gross income and that are subject to Social
Security deductions, including any payments in excess of the maximum amount subject to deduction
under Social Security law; and
(iv) amounts that the employee authorizes to be deducted or reduced for salary deferral or
other benefit programs authorized by federal law.
(b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(c) "Compensation," "salary," or "wages" does not include:
(i) the monetary value of remuneration paid in kind, such as a residence or use of
equipment;
(ii) all contributions made by an employer under any plan for the benefit of a participant;
(iii) salary paid to an employee working under the minimum number of hours required for
membership;
(iv) salary paid to a temporary or exempt employee;
(v) any payments upon termination, including accumulated lump-sum vacation, sick leave
payments, or any other special payments; or
(vi) uniform, travel, or similar allowances.
(3) "Educational institution" means a political subdivision or instrumentality of the state or
a combination thereof primarily engaged in educational activities or the administration or servicing
of educational activities, including:
(a) the State Board of Education and its instrumentalities;
(b) any institution of higher learning and its branches;
(c) any school district and its instrumentalities;
(d) any vocational and technical school; and
(e) any entity arising out of a consolidation agreement between entities under this definition.
(4) "Effective date" of the noncontributory system means 12:01 a.m., July 1, 1986.
(5) (a) "Employee" or "regular employee" means any regular full-time employee whose term
of employment for an employer contemplates continued employment during a calendar or school
year and who performs covered service for one or more employers.
(b) "Employee" or "regular employee" means an officer, elective or appointive, who
receives as compensation from an employer $500 or more per month over a 12-month period
adjusted by the Bureau of Labor Statistics Consumer Price Index.
(6) "Employer" or "employing unit" means any department, educational institution, political
subdivision, or eligible organization, or agency financed in whole or in part by public funds for
which any employee or member performs services subject to this chapter.
(7) "Final average salary" means the amount computed by averaging the highest three years
of annual compensation preceding retirement subject to Subsections (a), (b), and (c).
(a) Except as provided in Subsection (b), the percentage increase in annual compensation
in any one of the years used may not exceed the previous year's salary by more than 10% plus a
cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the
previous year, as measured by the Consumer Price Index prepared by the United States Bureau of
Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board, the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(c) If the member retires more than six months from the date of termination of employment
and for purposes of computing the member's final average salary only, the member is considered
to have been in service at his last salary rate from the date of the termination of employment to the
date retirement becomes effective if the member so requests.
(8) "Normal retirement age" means the age of 65 years.
(9) "Organization or agency financed in whole or in part by public funds" means an agency,
association, or organization that receives public funds. The term does not include political
subdivisions, departments, or educational institutions.
(10) "Public funds" means those funds derived, either directly or indirectly, from public
taxes or public revenue, dues, or contributions paid or donated by the membership of the
organization used to finance an activity whose objective is to improve, on a nonprofit basis, the
governmental, educational, and social programs and systems of the state or its political subdivisions.
(11) (a) "Regular full-time employee," in qualifying for membership in the system, means
an employee whose employment normally requires an average of 20 hours or more per week, except
as modified by the board, and who receives benefits normally provided by the employing unit.
(b) "Regular full-time employee" includes a teacher who teaches half-time or more or a
classified school employee who works an average of 20 hours per week or more, regardless of
benefits provided.
(12) "Years of service" or "service years" means:
(a) the number of periods, each to consist of 12 full months as determined by the board;
(b) a period determined by the board, whether consecutive or not, during which an employee
performed services for an employer or employers, including any time the employee rendered service
in the armed forces of the United States before membership in the system or was absent on a paid
leave of absence granted by an employer or absent in the service of the United States government
on military duty as provided by this chapter; or
(c) for a teacher, school administrator, or other contract employee of an educational
institution, not less than eight months of full-time service constitutes a service year.
Section 8. Section 49-3-206 is amended to read:
49-3-206. Exclusions from membership in system.
The following employees are excluded from membership in the retirement system:
(1) Every employee whose employment status is temporary in nature due to the nature or
the type of work to be performed. If the term of employment exceeds six months, then for that
employee a regular full-time status shall be assumed, and the employee shall be enrolled in the
system effective the beginning of the seventh month of employment. If the same employee,
previously terminated prior to enrollment as a member, is again employed within three months of
termination by the same employer, the employee shall be immediately enrolled as a member if the
work constitutes full-time as defined in this chapter.
(2) Full-time students or the spouse of a full-time student and persons employed in a trainee
relationship may be excluded from coverage by rules adopted by the board.
(3) Every current or future employee of a two-year or four-year college or university who
holds, or is entitled to hold, pursuant to Section 49-2-206, a retirement annuity contract with the
Teachers' Insurance and Annuity Association of America or with any other public or private system,
organization, or company during any period in which that employee has received contributions
toward the premiums required on compensation from the employing unit. The employee, upon
cessation of the employer contributions, shall immediately become a contributing member.
(4) Every employee serving as an exchange employee from outside the state.
(5) Elected officials who file a formal request for exemption.
(6) Executive department heads of the state, members of the State Tax Commission, the
Public Service Commission, and other members of full-time or part-time boards or commissions
who file a formal request to be excluded from coverage.
(7) (a) Employees of the Department of Employment Security who are covered under
another retirement system allowed under Title 35, Chapter 4, Employment Security Act; or
(b) employees of the Department of Workforce Services who were covered under
Subsection (a) and who are covered under another retirement system allowed under Title 35A,
Chapter 4, Employment Security Act.
[
employed by a city, town, county, or other political subdivision, who are not entitled to merit or
civil service protection. Persons eligible for exclusion under this subsection shall file a formal
request for exclusion from coverage and be employed in a position designated as exempt under an
employee exemption plan developed by the city, town, county, or political subdivision. Employee
exemption plans shall be subject to the following limitations:
(a) The total number of positions a city, town, county, or political subdivision may exempt
may not exceed the lesser of 30 positions or a number equal to 10% of the employees of the city,
town, county, or political subdivision. However, every city, town, county, or political subdivision
is entitled to a minimum exemption of one eligible employee.
(b) Employee exemption plans shall be filed annually with the retirement office, and the
city, town, county, or political subdivision shall update the exemption plan in the event of any
change.
(c) The retirement office may promulgate rules to implement this section.
Section 9. Section 49-4-103 is amended to read:
49-4-103. Definitions.
As used in this chapter:
(1) (a) "Compensation," "salary," or "wages" means the total amount of payments which are
currently includable in gross income made by an employer to an employee covered under the
retirement system for services rendered to the employer as base income. Base income shall be
determined prior to any salary deductions or reductions for any salary deferral or pretax benefit
programs authorized by federal law.
(b) "Compensation" includes performance-based bonuses and cost-of-living adjustments.
(c) "Compensation" does not include:
(i) overtime;
(ii) sick pay incentives;
(iii) retirement pay incentives;
(iv) the monetary value of remuneration paid in kind, such as a residence, use of equipment
or uniform or travel allowances;
(v) a lump-sum payment or special payments covering accumulated leave; and
(vi) all contributions made by an employer under this plan or under any other employee
benefit plan maintained by an employer for the benefit of a participant.
(d) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(2) "Final average salary" means the amount computed by averaging the highest three years
of annual compensation preceding retirement, subject to Subsections (a) and (b).
(a) Except as provided in Subsection (b), the percentage increase in annual compensation
in any one of the years used may not exceed the previous year's salary by more than 10% plus a
cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the
previous year, as measured by the Consumer Price Index prepared by the United States Bureau of
Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board, the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(3) "Full-time service" means 2,080 hours a year.
(4) "Line-of-duty death" means a death resulting from external force, violence, or disease
occasioned by an act of duty as a police officer or other public safety member.
(5) (a) "Participating service" means public safety service rendered during which a person
was a member of this system as well as any of the terminated systems during which the person was
paid compensation upon which member contributions were taken.
(b) Participating service also means public safety service rendered for an employer covered
by the retirement system and standing to the credit of a member as of June 30, 1969, who transferred
to coverage under the public safety retirement system on July 1, 1969.
(6) (a) "Public safety service" means full-time paid service rendered by:
(i) peace officers in accordance with Section 77-1a-1;
(ii) correctional officers in accordance with Section 77-1a-2; and
(iii) special function officers in accordance with Subsection 49-4-203(5) and Section
77-1a-4.
(b) Subsection (a) does not apply to any person who became a member of the system prior
to January 1, 1984.
(7) "Years of service" or "service years" means the number of periods, each to consist of 12
full months as determined by the board, whether consecutive or not, during which an employee
performed services for an employer or employers, including time the employee was absent in the
service of the United States government on military duty.
Section 10. Section 49-4-601 is amended to read:
49-4-601. Annual cost-of-living adjustment.
(1) The retirement office shall compute and pay, upon approval by the board, an annual
cost-of-living adjustment to all retired members after the members have been retired one year. The
adjustment shall be equal to the decrease in the purchasing power of the dollar during the preceding
year, as measured by the Consumer Price Index, U.S. City Average, prepared by the United States
Bureau of Labor Statistics, and shall be limited to a maximum of 2.5% of the retirant's or
beneficiary's retirement allowance at the time of retirement. Decreases in the purchasing power of
the dollar exceeding 2.5% annually shall be accumulated and used in subsequent allowances when
the cost-of-living adjustment is less than 2.5%.
(2) The cost-of-living adjustment shall be reduced if the index shows a decline of 4% or
more during any period of more than one year. These reductions may not exceed 2% per year based
upon the original retirement allowance. Payments made under this section shall be a part of the
retired member's allowance. Payments and adjustments for the retirant shall also apply to the
beneficiary [
Section 11. Section 49-4-704 is amended to read:
49-4-704. Death of retired member -- Benefits.
(1) Except as provided in Subsection (3), if the member retired under Division A or
Division B, the death benefit payable to the dependent spouse after the death of the retired member
of this system is a monthly amount equal to 65% of the allowance that was being paid to the retired
member at the time of death.
(2) (a) Except as provided in Subsection (3), if the member retired solely under Division
B or dies leaving dependent children, the children shall qualify for a benefit as prescribed for
children under Section 49-4-702, with the total being paid as limited by that section.
(b) The effective date of accrual of this pension is on the first day of the month following
the month in which the retirant died.
(c) Except as provided in Subsection (3), payment of the full pension for this latter month
shall be made to the dependent beneficiary in lieu of the deceased member.
(3) (a) In the event of a court order complying with Section 49-1-609, a former spouse of
a retired member is entitled to the court designated share of the retired member's monthly retirement
benefit and the [
(b) This subsection supersedes conflicting subsections of this section.
Section 12. Section 49-4a-103 is amended to read:
49-4a-103. Definitions.
As used in this chapter:
(1) (a) "Compensation," "salary," or "wages" means the total amount of payments which are
currently includable in gross income made by an employer to an employee for services rendered to
the employer as base income for the position covered under the retirement system. Base income
shall be determined prior to any salary deductions or reductions for any salary deferral or pretax
benefit programs authorized by federal law.
(b) "Compensation" includes performance-based bonuses and cost-of-living adjustments.
(c) "Compensation" does not include:
(i) overtime;
(ii) sick pay incentives;
(iii) retirement pay incentives;
(iv) the monetary value of remuneration paid in kind, as in a residence, use of equipment
or uniform or travel allowances;
(v) a lump-sum payment or special payment covering accumulated leave; and
(vi) all contributions made by an employer under this plan or under any other employee
benefit plan maintained by an employer for the benefit of a participant.
(d) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(2) "Final average salary" means the amount computed by averaging the highest three years
of annual compensation preceding retirement subject to Subsections (a) and (b).
(a) Except as provided in Subsection (b), the percentage increase in annual compensation
in any one of the years used may not exceed the previous year's salary by more than 10% plus a
cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the
previous year, as measured by the Consumer Price Index prepared by the United States Bureau of
Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board, the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(3) "Full-time service" means 2,080 hours a year.
(4) "Line-of-duty death" means a death resulting from external force, violence, or disease
occasioned by an act of duty as a policeman or other public safety member.
(5) "Public safety service" means full-time paid service rendered by:
(a) peace officers in accordance with Section 77-1a-1;
(b) correctional officers in accordance with Section 77-1a-2; and
(c) special function officers in accordance with Subsection 49-4a-203(7) and Section
77-1a-4.
(6) "Years of service" or "service years" means the number of periods, each to consist of 12
full months as determined by the board, whether consecutive or not, during which an employee
performed services for an employer or employers, including time the employee was absent in the
service of the United States government on military duty.
Section 13. Section 49-4a-704 is amended to read:
49-4a-704. Death of retired member -- Benefits.
(1) Except as provided in Subsection (3), if the member retired under Division A or
Division B, the death benefit payable to the dependent spouse after the death of the retired member
of this system is a monthly amount equal to 65% of the allowance that was being paid to the retired
member at the time of death.
(2) (a) Except as provided in Subsection (3), if the member retired solely under Division
B or dies leaving dependent children, the children shall qualify for a benefit as prescribed for
children under Section 49-4a-702, with the total being paid as limited by that section.
(b) The effective date of accrual of this pension is on the first day of the month following
the month in which the retirant died.
(c) Except as provided in Subsection (3), payment of the full pension for this latter month
shall be made to the dependent beneficiary in lieu of the deceased member.
(3) (a) In the event of a court order complying with Section 49-1-609, a former spouse of
a retired member is entitled to a court designated share of the retired member's monthly retirement
benefit and the [
(b) This subsection supersedes conflicting subsections of this section.
Section 14. Section 49-5-103 is amended to read:
49-5-103. Definitions.
As used in this chapter:
(1) (a) "Compensation," "salary," or "wages" means the total amount of payments which are
currently includable in gross income made by an employer to an employee for services rendered to
the employer as base income. Base income shall be determined prior to any salary deductions or
reductions for any salary deferral or pretax benefit programs authorized by federal law, for the
position covered under the retirement system.
(b) "Compensation" includes performance-based bonuses and cost-of-living adjustments.
(c) "Compensation" does not include:
(i) overtime;
(ii) sick pay incentives;
(iii) retirement pay incentives;
(iv) remuneration paid in kind such as a residence, use of equipment, uniforms, or travel
allowances;
(v) a lump-sum payment or special payments covering accumulated leave; and
(vi) all contributions made by an employer under this plan or under any other employee
benefit plan maintained by an employer for the benefit of a participant.
(d) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(2) (a) "Disability" means a physical or mental condition which, in the judgment of the
board, is total and presumably permanent, prevents a member from fulfilling the responsibilities of
the member's assignment, and prevents the member from performing satisfactorily in some other
assignment of the same general class.
(b) The determination of disability is based upon medical and other evidence satisfactory
to the board.
(3) "Employer" or "employing unit" means any regularly constituted fire department of a
political subdivision for which any employee or member performs services subject to this chapter.
(4) "Final average salary" means the amount computed by averaging the highest three years
of annual compensation preceding retirement, but not including overtime or lump-sum or special
salary adjustments received instead of uniform or other allowances or expenses or other payments
made covering accumulated leave.
(a) Except as provided in Subsection (b), the percentage increase in any one of the years
used may not exceed the previous year's salary by more than 10% plus a cost-of-living adjustment
equal to the decrease in the purchasing power of the dollar during the previous year, as measured
by the Consumer Price Index prepared by the United States Bureau of Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(5) "Firefighter service" means full-time paid service rendered as an individual or as a
member of a group of firefighters regularly assigned to a regularly constituted fire department.
(6) "Full-time service" means 2,080 hours per year.
(7) "Inactive member" means a member who has received no compensation for a period of
longer than four months.
(8) "Line-of-duty death or disability" means a death or any physical or mental disability
resulting from external force, violence, or disease occasioned by an act of duty as a firefighter and
includes for a paid firefighter, after five years of credited service, any death or disability resulting
from heart disease, lung disease, or respiratory tract, but if a firefighter ceases to be a contributing
member because of personal illness or service-connected disability, neither of which is related to
heart or lung disease nor the respiratory tract for a period of six months or more and then again
becomes a contributing member, the provision relating to death or disability resulting from heart,
lung, or respiratory disease does not apply until the member again becomes a contributing member
for a period of not less than two years or unless clear and precise evidence is presented that the
heart, lung, or respiratory disease was, in fact, occasioned in the line-of-duty.
(9) (a) "Member" means any person included in the membership of the retirement system.
(b) A person is a member if the person has contributions on deposit with the retirement
system.
(c) A person hired on or after July 1, 1971, in a fire department, who is assigned directly
to a clerical position, and because of lack of training in fire fighting techniques, is not subject to
reassignment into positions of hazardous duty, is not eligible for membership in this system.
(i) The person in a clerical position shall become a contributing member of the appropriate
retirement system.
(ii) The required employer contributions shall be paid by the fire department.
(iii) This membership exclusion may not be interpreted to prohibit the assignment of a
handicapped or partially disabled firefighter to that position.
(iv) If Subsection (iii) applies, the firefighter retains status as a contributing member of this
system and continues to accrue service credits while so employed.
(10) "Regularly constituted fire department" means a fire department which employs a
full-time fire chief and promulgates rules.
(11) (a) "Service" or "covered service" means firefighter service rendered an employer for
compensation which is included in computations relating to membership status or benefit rights
under this chapter.
(b) A retirement allowance or other benefit may not be granted under this system that is
based upon the same service for retirement benefits under some other retirement system
administered by the board.
(12) (a) "Volunteer firefighter" means any individual that is not regularly employed as a
firefighter, but who is on the rolls of a regularly constituted fire department.
(b) An individual that volunteers assistance but is not a regularly enrolled firefighter is not
a volunteer firefighter.
(c) Service as a volunteer firefighter is not creditable towards qualifying for a service
retirement allowance.
(13) "Years of service" or "service years" means the number of periods consisting of 12 full
months as determined by the board, whether consecutive or not, during which an employee
performed services for an employer or received full-time pay while on sick leave, including any
time the employee was absent in the service of the United States.
Section 15. Section 49-5-601 is amended to read:
49-5-601. Annual cost-of-living allowance.
(1) (a) The retirement office shall compute and pay, upon approval by the board, an annual
cost-of-living adjustment to all retired members after those members have been retired for one year.
(b) The adjustment is equal to the decrease in the purchasing power of the dollar during the
preceding year, as measured by the Consumer Price Index, United States City Average, prepared
by the United States Bureau of Labor Statistics, and is limited to a maximum of 4% of the retirant's
or beneficiary's original retirement allowance.
(c) Decreases in the purchasing power of the dollar exceeding 4% annually are accumulated
and used in subsequent allowances when the cost-of-living adjustment is less than 4% annually.
(2) (a) The cost-of-living adjustment shall be reduced if the index shows a decline of 4%
or more during any period of more than one year.
(b) These reductions may not exceed 2% per year based upon the original retirement
allowance.
(c) Payments made under this section are a part of the retired member's allowance.
(d) Payments and adjustments for the retirant also apply to the beneficiary [
(e) The net cost of increasing the cost-of-living adjustment from 2-1/2% to 4% annually
under this section, after recognizing the decrease in the contribution rates for actuarial expense, is
1.74% for Division A firefighters and 1.9% for Division B firefighters. The net cost shall be added
to the employee contribution rate in Division A and Division B.
Section 16. Section 49-5-704 is amended to read:
49-5-704. Death of retired member -- Benefits.
(1) (a) Except as provided in Subsection (3), the death benefit payable to a dependent spouse
after death of the retirant is a monthly amount equal to 75% of the allowance being paid to the
retirant at the time of death.
(b) The effective date of accrual of this pension is the first day of the month following the
month the retirant died.
(c) Except as provided in Subsection (3), payment of the full pension for this latter month
shall be made to the dependent beneficiary instead of the deceased member.
(2) If the member retires under Division B and dies leaving dependent children, they qualify
for benefits prescribed for children under Section 49-5-701 or 49-5-702.
(3) (a) In the event of a court order complying with Section 49-1-609, a former spouse of
a retired member is entitled to the court designated share of the retirant's monthly retirement benefit
and the [
(b) This subsection supersedes conflicting subsections of this section.
Section 17. Section 49-6-103 is amended to read:
49-6-103. Definitions.
As used in this chapter:
(1) (a) "Compensation," "salary," or "wages" means the total amount of payments which are
currently includable in gross income made by an employer to an employee for services rendered to
the employer.
(b) "Compensation" includes:
(i) performance-based bonuses;
(ii) cost-of-living adjustments;
(iii) payments subject to Social Security deductions;
(iv) any payments in excess of the maximum amount subject to deduction under Social
Security law; and
(v) amounts which the employee authorizes to be deducted or reduced for salary deferral
or other authorized benefit programs.
(c) "Compensation" for purposes of this chapter may not exceed the amount allowed under
Internal Revenue Code Section 401(a)(17).
(d) "Compensation," "salary," or "wages" does not include:
(i) the monetary value of remuneration paid in kind, such as a residence or use of
equipment;
(ii) all contributions made by an employer under any plan for the benefit of a participant;
(iii) salary paid to an employee working under the minimum number of hours required for
membership;
(iv) salary paid to a temporary or exempt employee;
(v) payments upon termination or any other special payments including early retirement
inducements; or
(vi) uniform, travel, or similar allowances.
(2) "Final average salary" means the amount computed by averaging the highest two years
of annual compensation preceding retirement subject to Subsections (a) and (b).
(a) Except as provided in Subsection (b), the percentage increase in annual compensation
in any one of the years used may not exceed the previous year's salary by more than 10% plus a
cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the
previous year, as measured by the Consumer Price Index prepared by the United States Bureau of
Labor Statistics.
(b) In cases where the employing unit provides acceptable documentation to the board, the
limitation in Subsection (a) may be exceeded if:
(i) the member has transferred from another employing unit; or
(ii) the member has been promoted to a new position.
(3) "Normal retirement age" means the age of 65 years.
(4) "Years of service" or "service years" means the number of periods, each to consist of 12
full months [
was employed to perform services for the employer.
Section 18. Effective date.
This act takes effect on July 1, 1997.
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