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H.B. 196 Enrolled
AN ACT RELATING TO PENSIONS; CLARIFYING DUTIES AND RESPONSIBILITIES OF
THE RETIREMENT BOARD AND OFFICE; CLARIFYING BENEFICIARY
DESIGNATIONS; SPECIFYING BENEFIT APPLICATION PROCEDURES;
AUTHORIZING EXCESS BENEFIT PLANS; PERMITTING INDEPENDENT REVIEW OF
DISABILITY RETIREMENT CLAIMS; PROVIDING A CERTAIN HEALTH INSURANCE
BENEFIT; CLARIFYING PSYCHOPATHY BENEFITS; AND MAKING TECHNICAL
CORRECTIONS.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
49-1-301, as last amended by Chapter 273, Laws of Utah 1990
49-1-606, as last amended by Chapter 81, Laws of Utah 1989
49-1-611, as last amended by Chapter 197, Laws of Utah 1995
49-2-406, as last amended by Chapter 90, Laws of Utah 1994
49-3-406, as last amended by Chapter 253, Laws of Utah 1997
49-5-502, as last amended by Chapter 231, Laws of Utah 1996
49-5-702, as last amended by Chapter 157, Laws of Utah 1992
49-8-403, as enacted by Chapter 1, Laws of Utah 1987
49-9-401, as last amended by Chapter 197, Laws of Utah 1995
49-9-406, as last amended by Chapter 90, Laws of Utah 1994
ENACTS:
49-6a-801, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 49-1-301 is amended to read:
49-1-301. Creation -- Board to act as trustees of the fund -- Commingling and
pooling of funds -- Interest earnings.
(1) There is created for the purpose of enlarging the investment base and simplifying
investment procedures and functions a common trust fund known as the "Utah State Retirement
Investment Fund."
(2) (a) The board shall act as trustees of the fund, and through its executive officer, may
commingle and pool the funds and investments of any retirement system, plan, or program into the
Utah State Retirement Investment Fund, as long as the principal amounts of the participating funds
do not lose their individual identity and are maintained as separate trust funds on the books of the
retirement office.
(b) In combining the investments of any fund, each of the participating funds shall be
credited initially with its share of the total assets transferred to the Utah State Retirement Investment
Fund, the calculation being made on the basis of the [
investments at the time the investments are credited to the Utah State Retirement Investment Fund.
(c) Subsequent transfers of additional capital from participating funds shall be credited
similarly to its respective trust account.
(d) Funds may be withdrawn or transferred out of the Utah State Retirement Investment
Fund and credited back to a participating fund, but at no time may the income or principal or equity
credit belonging to one participating fund be transferred to another.
(3) The assets of the participating funds are for the exclusive benefit of the members and
may not be diverted or appropriated for any purpose other than that permitted by this chapter or the
chapters covering the individual participating funds.
[
rata basis monthly, or otherwise as directed by the board.
(b) A portion of the interest and other earnings of the common trust fund may be credited
to a reserve account within the Utah State Retirement Investment Fund to meet adverse experiences
arising from investments or other contingencies. Each participating fund shall retain its
proportionate equity in the reserve account.
Section 2. Section 49-1-606 is amended to read:
49-1-606. Beneficiary designations -- Revocation of beneficiary designation --
Procedure -- Beneficiary not designated -- Payment to survivors in order established under the
Uniform Probate Code -- Restrictions on payment -- Payment of deceased's expenses.
[
(1) The beneficiary designation in a member's file at the retirement office at the time of the
member's death is binding in the payment of any benefits due under this title.
(2) A member may revoke a designation of beneficiary at any time and may file a different
beneficiary designation by executing and filing with the retirement office a written beneficiary
designation on forms provided by the retirement office, except where an optional continuing plan
is chosen, or the law makes a specific benefit designation to a dependent spouse, in which case the
beneficiary designation may not be revoked.
(3) If no beneficiary is designated or if the estate is the named beneficiary and if a deceased
member does not leave an estate requiring probate in the absence of the amounts due from the
retirement system, unless otherwise provided in this title, all benefits payable from the retirement
system, including retirement benefits accrued but not received prior to death, may be paid or applied
to the benefit of the surviving next of kin of the deceased in the order of precedence established
under Title 75, Chapter 2, the Utah Uniform Probate Code.
(4) No payment may be made to persons included in any of these groups if at the date of
payment there are living persons in any of the groups preceding it. Payment to the persons in any
group based upon receipt from those persons of an affidavit in a form satisfactory to the
administrator that:
(a) there are no living individuals in the group preceding it;
(b) that the probate of the estate of the deceased has not been commenced; and
(c) that more than three months have elapsed since the date of death of the decedent, shall
be in full satisfaction and discharge of all claims for benefits under this title and payable by reason
of the death of the decedent.
(5) If the location of the nominated beneficiary cannot be ascertained or if the nominated
beneficiary is the estate of the deceased person, the administrator may pay the costs of the deceased's
last illness, convalescent care, and funeral expenses directly to the undertaking establishment,
hospital, doctor, or convalescent home which provided the service. The administrator shall require
verified statements of the charges before making partial or full payment. The payment shall
discharge the obligation of the system and of the fund up to the amount paid.
Section 3. Section 49-1-611 is amended to read:
49-1-611. Additional plans authorized -- Subject to federal and state laws -- Rules to
implement this provision -- Costs of administration -- Limitations on eligibility -- Protection
of tax status.
(1) The board may establish and administer additional benefit plans under Sections 401(k)
and 457 of the Internal Revenue Code. Employee and employer contributions shall be permitted
according to the provisions of these plans as established by the board. The amount of these
accumulated contributions, together with dividend or interest credits, are vested in the member, and
are nonforfeitable.
(2) Earnings credited to accounts established as a result of this action shall be at a rate fixed
by the board.
(3) Contributions shall be invested as provided by contract in accordance with federal and
state law.
(4) The board may establish rules to implement and administer this section. Costs of
administration may be paid from the interest earnings of the funds accrued as a result of deposits or
as an assessment against each account, to be decided by the board. All funds and deposits may be
invested as a separate account or accounts in the Utah State Retirement Investment Fund.
(5) This supplemental program shall be limited to members who contract to participate in
the program a minimum of one year.
(6) The board may take the actions necessary to protect the tax qualified status of the plans,
systems, and programs under its control, including the movement of members from defined
contribution to defined benefit plans or the creation of excess benefit plans authorized by federal law,
and shall report its actions to the Legislature at the subsequent legislative session.
Section 4. Section 49-2-406 is amended to read:
49-2-406. Death of married member -- Service retirement benefits to surviving spouse.
(1) (a) A member who has 25 or more years of credited service, age 60 with 20 or more
years of credited service, age 62 with ten or more years of credited service, or age 65 with four or
more years of credited service, respectively, and who dies leaving a spouse to whom the member has
been married at least six months prior to the death date, may, upon the request of the spouse, be
considered to have retired on the first day of the month following the month in which death occurred
under Plan Number Three.
(b) The spouse who requests a benefit pursuant to Subsection (1)(a) shall apply in writing
to the retirement office stating the proposed effective date to begin receiving a monthly retirement
allowance, which may not be more than 90 days before or after the date of application, and which
shall be effective on the 1st or 16th day of the month, as selected by the spouse.
(2) The benefit calculation, when there are 25 or more years of service credit, shall be
calculated without an actuarial reduction.
(3) Benefits payable under this section are service retirement benefits and shall be paid in
addition to any payments made under Section 49-2-701 , except for a return of accumulated
contributions, and constitute a full and final settlement of the claim of the spouse or any other
beneficiary filing claim for benefits under Section 49-2-701 .
Section 5. Section 49-3-406 is amended to read:
49-3-406. Death of married members -- Service retirement benefits to surviving spouse.
(1) As used in this section, "member's full allowance" means the benefit calculated using
the formula under Subsection 49-3-402 (2)(a) without an actuarial reduction.
(2) (a) Beginning January 1, 1997, a member who has 15 or more years of credited service,
age 60 with 20 or more years of credited service, age 62 with ten or more years of credited service,
or age 65 with four or more years of credited service, respectively, and who dies leaving a spouse
to whom the member has been married at least six months prior to the death date, may, upon the
request of the spouse, be considered to have retired on the first day of the month following the month
in which death occurred and retired under Plan Three.
(b) The spouse who requests a benefit pursuant to Subsection (2)(a) shall apply in writing
to the retirement office stating the proposed effective date to begin receiving a monthly retirement
allowance, which may not be more than 90 days before or after the date of application, and which
shall be effective on the 1st or 16th day of the month, as selected by the spouse.
(3) The retirement benefit payable to a surviving spouse under Subsection (2) is:
(a) if the member has 25 or more years of credited service at the time of death, the surviving
spouse shall receive the member's full allowance;
(b) if the member has between 20-24 years of credited service and is not age 60 or older at
the time of death, the surviving spouse shall receive two-thirds of the member's full allowance;
(c) if the member has between 15-19 years of credited service and is not age 62 or older at
the time of death, the surviving spouse shall receive one-third of the member's full allowance; or
(d) if the member is age 60 or older with 20 or more years of credited service, age 62 or
older with 10 or more years of credited service, or age 65 or older with four or more years of credited
service at the time of death, the surviving spouse shall receive the benefit calculated using the
formula and the actuarial reduction under Subsections 49-3-402 (2)(a) and (2)(b).
(4) Benefits payable under this section are service retirement benefits and shall be paid in
addition to any other payments made under Section 49-3-701 , except for a return of accumulated
contributions, and shall constitute a full and final settlement of the claim of the spouse or any other
beneficiary filing a claim for benefits under Section 49-3-701 .
Section 6. Section 49-5-502 is amended to read:
49-5-502. Disability retirement -- Disability allowance eligibility -- Conversion to
service retirement -- Examinations -- Reemployment.
The following rules apply to all members applying for disability retirement under this part:
(1) Any member who applies and is qualified for disability retirement shall receive a
disability allowance until the earlier of:
(a) the date the member has accumulated 20 years of service credit, including years earned
while disabled; or
(b) the member has received disability benefits for the following time periods:
(i) if the member is under age 60, the disability allowance is payable until age 65;
(ii) if the member is 60-61, the disability allowance is payable for five years;
(iii) if the member is 62-63, the disability allowance is payable for four years;
(iv) if the member is 64-65, the disability allowance is payable for three years;
(v) if the member is 66-68, the disability allowance is payable for two years; and
(vi) if the member is age 69 or older, the disability benefit is payable for one year.
(2) (a) The member shall receive service credit during the period of disability.
(b) The disability retirement shall be converted to a service retirement at the time the
disability benefits terminate.
(3) The board shall approve or disapprove applications for disability retirement based upon
both:
(a) the evaluation and recommendations of one or more physicians along with medical
records relating to the disability which may, at the board's option, be reviewed by an independent
medical examiner selected by the board, to the effect that the member is mentally or physically
totally disabled; and
(b) receipt of proof by the board from the employer that the member has become totally
disabled.
(4) Any disability retirant who regains health and is regularly employed shall have the
disability allowance reduced or suspended as the retirant's earnings justify.
(5) (a) Members receiving benefits under this section shall, upon request of the
administrator, submit to a medical examination by one or more physicians as directed by the board.
(b) If the member resides outside the state and is requested to submit to an examination, the
member shall be examined under the same rules in the area in which the member resides.
(c) If, after an examination, the examiners report that the retirant is physically able and
capable of resuming employment, the retirant shall be reinstated at the retirant's former classification
and rank, and disability benefits terminate.
(d) Examinations may not be required more than once every year.
(e) A retirant who returns to employment of a participating employer shall immediately
commence accruing service credit that shall be added to that credit that has been accrued by virtue
of previous service, including service credited while disabled.
(6) Retired members are not subject to medical examinations after reaching age 55.
(7) Refusal or neglect to submit to an examination is sufficient cause for suspension or
discontinuance of benefits and if the refusal or neglect continues for one year, the member's rights
to all benefits may be revoked by the board.
(8) Retirants who receive benefits under this part shall file a sworn statement with the
retirement office on or before January 15 of each year for the first five years a retirant receives
benefits. The sworn statement shall indicate whether or not the retirant engaged in any gainful
employment during the preceding year and, if so, the amount of earnings received during the
calendar year.
(a) If the retirant has been gainfully employed, the retirant's benefit payments shall be
reduced in the year following employment so that the total payments, when added to the
compensation received for employment, do not exceed 125% of the retirant's final average salary.
(b) If any retirant refuses or neglects to file a sworn statement as required, the administrator
may suspend payment of any and all benefits pending receipt of the statement. Upon filing the
statement, the retirant's payments shall be resumed.
(9) The disability allowance shall be improved by the annual cost-of-living increase factor
applied to retired members of the system that covered the employee at the time of disability.
Section 7. Section 49-5-702 is amended to read:
49-5-702. Death of active member in Division B -- Payment of benefits.
If an active member of the system enrolled in Division B dies, the following benefits are
payable:
(1) If death is classified as line-of-duty, the dependent spouse receives a lump sum of $1,500
and a monthly allowance equal to 37-1/2% of the deceased member's final average monthly salary,
subject to Section 49-5-503 .
(2) If death is classified as line-of-duty, and the member has 20 or more years of service
credit, the member shall be considered to have retired and the dependent spouse shall receive the
death benefit payable to a retired member under Section 49-5-704 .
(3) If death is not classified as line-of-duty and the deceased member has five or more years
of service credit, the death is considered line-of-duty and the same benefits are payable as established
under Subsection (1) or (2).
(4) If death is not classified as line-of-duty and the deceased member has less than five years
of service credit, the benefit is a refund of the deceased member's contributions, plus 50% of the
member's most recent 12 months regular salary.
(5) If the deceased member has five or more years of service credit, the member's unmarried
children, until they reach age 21, receive a monthly allowance of $75. In the event of the death of
the member and spouse, the spouse's benefits are equally divided and paid to each unmarried child
until the child reaches age 21. The payments shall be made to the surviving parent or duly appointed
guardian or pursuant to Section 49-1-607 .
(6) If the benefit is not distributed under this section, and there is a beneficiary, the vested
contribution shall be paid to the beneficiary.
(7) The total monthly payments made on behalf of any one deceased member's account may
not exceed 75% of the member's final average salary.
Section 8. Section 49-6a-801 is enacted to read:
49-6a-801. Judges' mandatory retirement age.
(1) Except as provided in Subsection (2), a justice or judge who qualifies as a member of
this system under Section 49-6a-203 shall retire upon attaining the age of 75 years.
(2) A justice or judge serving on July 1, 1996, who is 75 years of age or older on July 1,
1996, or who attains 75 years of age prior to the justice or judge's next retention election may not
be a candidate in that retention election and shall retire on or before December 31 of the year in
which the justice or judge would have been subject to a retention election.
Section 9. Section 49-8-403 is amended to read:
49-8-403. Assistance to members in purchase of life, health, and medical insurance
after retirement -- Employment of personnel to administer section -- Governor's and legislative
benefit.
(1) (a) The board may assist active and retired members and beneficiaries and inactive
members of the various retirement systems administered under its direction, to purchase life, health,
and medical insurance on a group basis which can be continued after retirement under rules adopted
by the board.
(b) The executive director may employ any personnel, including consultants, to administer
this section.
(2) (a) The board shall annually report and the state shall pay the percentage described in
Subsection (2)(c) of the cost of providing a paid-up group health insurance policy for members
covered under Title 49, Chapter 7, Governor's and Legislative Service Pension Act who:
(i) retire after January 1, 1998;
(ii) are at least 62 but less than 65 years of age;
(iii) elect to receive and apply for this benefit to the group insurance division; and
(iv) are active members at the time of retirement or have retired and continued insurance
coverage with the group insurance division until the date of eligibility for the benefit under this
Subsection (2).
(b) The board shall annually report and the state shall pay the percentage described in
Subsection (2)(c) of the cost of providing Medicare supplemental insurance for members covered
under Title 49, Chapter 7, Governor's and Legislative Service Pension Act who:
(i) retire after January 1, 1998;
(ii) are at least 65 years of age; and
(iii) elect to receive and apply for this benefit to the group insurance division.
(c) The following percentages apply to the benefit described in Subsections (2)(a) and (b):
(i) 100% if the member has 10 or more years of service;
(ii) 80% if the member has 8 or more years of service;
(iii) 60% if the member has 6 or more years of service; and
(iv) 40% if the member has 4 or more years of service.
Section 10. Section 49-9-401 is amended to read:
49-9-401. Disability benefits -- Proof required -- Eligibility.
(1) Upon receipt of proof by the board from the employer that an employee has become
totally disabled as a result of:
(a) accidental bodily injury which is the sole cause of disability and is sustained while this
chapter is in force;
(b) disease or illness causing total disability commencing while this chapter is in force; or
(c) physical injury resulting from external force or violence as a result of the performance
of duty, the fund will pay to the employee a monthly disability benefit for each month the total
disability continues beyond the elimination period, not to exceed the maximum benefit period.
(2) Successive periods of disability which: (a) result from the same or related causes, (b) are
separated by less than six months of continuous full-time work at the individual's usual place of
employment, and (c) commence while the individual is an employee covered by this chapter, shall
be considered as a single period of disability. The inability to work for a period less than 15
consecutive days may not be considered as a period of disability. Otherwise, successive periods of
disability shall be considered as separate periods of disability.
(3) The board may, at any time, have any employee claiming disability examined by a
physician chosen by the board to determine if the employee is disabled, and if so, the extent of the
disability.
(4) (a) Except as provided in Subsection (b), any claim brought by an employee for
long-term disability benefits under the Public Employee's Disability Program is barred if it is not
commenced within one year from the employee's date of disability.
(b) If an employee fails to commence a claim for long-term disability benefits within the
time limitations prescribed by Subsection (a), the board may permit an employee to commence a
claim for long-term disability benefits if the employee demonstrates that under the surrounding facts
and circumstances the employee's failure to comply with the time limitations was reasonable.
(5) Benefits for disability based primarily on psychopathy shall be determined in accordance
with Section 49-9-406 .
Section 11. Section 49-9-406 is amended to read:
49-9-406. Psychopathy benefit.
[
[
Notwithstanding any other provision in this chapter, the benefits payable for a disability
based primarily on psychopathy shall consist of the following:
[
[
of a maximum of $10,000 for psychiatric expenses, including rehabilitation expenses approved by
the board's consultants; and
[
contractual provisions for a period not to exceed five years.
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