H.B. 272 Enrolled

RETIREMENT OFFICE AMENDMENTS
2000 GENERAL SESSION
STATE OF UTAH
Sponsor: Raymond W. Short
AN ACT RELATING TO RETIREMENT; AUTHORIZING FUND TRANSFERS UNDER
CERTAIN CIRCUMSTANCES; AMENDING REEMPLOYMENT PROVISIONS;
CLARIFYING BENEFICIARY DESIGNATION RULES, ENROLLMENT PROCEDURES,
AND APPLICABILITY OF DISABILITY BENEFITS; REQUIRING THE SUBMISSION OF
INSURANCE PROGRAM AUDITS TO THE INSURANCE DEPARTMENT; AMENDING THE
DEFINITION OF TOTAL DISABILITY; AND PROVIDING AN EFFECTIVE DATE.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
49-1-301, as last amended by Chapter 267, Laws of Utah 1998
49-1-505, as last amended by Chapters 197 and 288, Laws of Utah 1995
49-1-606, as last amended by Chapter 267, Laws of Utah 1998
49-1-609, as last amended by Chapter 197, Laws of Utah 1995
49-5-203, as enacted by Chapter 1, Laws of Utah 1987
49-5-501, as last amended by Chapter 51, Laws of Utah 1990
49-8-404, as enacted by Chapter 1, Laws of Utah 1987
49-9-103, as last amended by Chapter 292, Laws of Utah 1999
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 fair market value of the various 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(d) Funds may be withdrawn or transferred out of the Utah State Retirement Investment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, except for the purpose of
actuarially recommended transfers in order to adjust employer contribution rates for an employer that
participates in both contributory and noncontributory systems.
(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.
(4) (a) Interest and other earnings shall be credited to each participating fund on a pro 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 49-1-505 is amended to read:
49-1-505. Reemployment of a retired member of a system administered by the board.
The following laws govern the reemployment of a member of any system administered by the
board who has retired from any agency and who returns to work at that agency after retirement. A
member of any system administered by the board who has retired from any agency and who returns

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to work for a private employer or at a different agency from which the member retired is not subject
to any reemployment restrictions under this section, except as provided in Subsection (4).
(1) (a) (i) If a member of any system administered by the board retires from any agency and
is reemployed within a six month period by the agency from which the member retired, including
exempt positions, but excluding part-time or full-time elected officials, the employer shall immediately
notify the administrator.
(ii) If the member has full-time employment and is not subject to Subsection (1)(b), the
administrator shall cancel the member's retirement allowance and reinstate the member to active
member status.
(iii) This cancellation of retirement and reinstatement to active status is effective on the first
day of the month following the date of reemployment.
(iv) If a member's retirement allowance is cancelled and the member is reinstated to active
member status pursuant to this subsection, the member may not retire again with a recalculated
benefit for a two-year period from the date of cancellation of the original retirement. If the member
retires again within the two-year period, the original retirement benefit shall be resumed.
(v) A reinstated member shall be credited with the service credits standing to the member's
account at the time of the first retirement and from that time shall be treated as a member of the
system in all respects, including the accrual of additional service credits but subject to recalculation
of the retirement allowance under Subsection (4).
(b) (i) If the member is reemployed on a part-time basis or is not an elected official and is
otherwise subject to Section 49-4-205 , 49-4a-206 , or 49-5-204 , that member or employee may earn,
without penalty, compensation from that position or employment which is not in excess of the exempt
earnings permitted by Social Security.
(ii) If a member or an employee receives compensation in a calendar year in excess of the
limitation, 25% of the retirement allowance shall be suspended.
(iii) The effective date of a suspension and reinstatement of an allowance shall be set by the
administrator.
(iv) Any suspension of a member's retirement allowance pursuant to Subsection (1)(b)(ii)

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shall be calculated on a calendar year basis.
(2) The member and employer shall maintain an accurate record of gross earnings in
employment after retirement, shall report the gross earnings on a monthly basis to the retirement
office, and shall immediately notify the administrator in writing of any postretirement earnings under
Subsection (1)(a) and whether postretirement earnings equal or exceed the exempt earnings under
Subsection (1)(b).
(3) If a member is reinstated to active service and subsequently retires after the two-year
period as provided in Subsection (1)(a)(iv), the member's retirement allowance shall be calculated
using:
(a) the formula in effect at the date of the member's original retirement for all service prior
to that date; and
(b) the formula in effect at the date of the subsequent retirement for all service rendered
between the first and the subsequent retirement dates.
(4) (a) A member who has retired from any agency and who returns to work at that agency
or a different agency from which the member retired may not accrue any additional service credit,
except that a member who cancels the retirement allowance under Subsection (1) may earn additional
service credit.
(b) If a member may not accrue additional service credit under Subsection (4)(a), then the
member's employer shall contribute the same percentage of the member's salary to a defined
contribution plan administered by the board that would have been contributed if the member were a
member of the retirement system.
(5) For the purposes of this section "part-time" employment means employment contemplated
as less than full-time by the employer at the time of hire.
(6) The board may make rules to implement this section.
Section 3. 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.

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(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] Intestate Succession and Wills.
(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.

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Section 4. Section 49-1-609 is amended to read:
49-1-609. Nonassignability of benefits or payments -- Exemption from legal process
-- Deduction of amounts owned.
(1) Except as provided in Subsection (4), the right of any member or beneficiary to any
benefit, payment, or any other right accrued or accruing to any person under this title and the assets
of the fund created by this title are not subject to alienation or assignment by the member or
beneficiary and are not subject to attachment, execution, garnishment, or any other legal or equitable
process.
(2) This section may not be construed to prohibit the administrator from deducting medical
or other insurance premiums from a retirant's allowance as requested by the retirant providing that
any request is within limitations and rules prescribed by the board.
(3) (a) Notwithstanding Subsection (1), the retirement board shall provide for the division
of a member's service retirement allowance, continuing monthly death benefit, or refund of
contributions upon termination to former spouses and family members pursuant to an order of a court
of competent jurisdiction with respect to domestic relations matters on file with the retirement office.
(b) The court order shall specify the manner in which the retirement allowance or refund of
contributions shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
(c) The board may also provide for the division of a member's defined contribution account.
(d) The board shall make rules to implement this section.
(4) In accordance with federal law, the board may deduct the required amount from any
benefit, payment, or other right accrued or accruing to any member of a system, plan, or program
under this title to offset any amount that member owes to a system, plan, or program administered
by the board.
Section 5. Section 49-5-203 is amended to read:
49-5-203. Eligibility for membership in the system.
(1) Any employee who performs covered services for any political subdivision after the
effective date of this system shall become a member of this retirement system.
(2) (a) Any new employee engaged to perform covered services for an agency or political

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subdivision after the effective date of this chapter shall undergo a physical examination to determine
the employee's fitness for employment, and file a membership form with the retirement office. The
employer shall notify the administrator of the employee's employment within 30 days of employment.
(b) In political subdivisions with public safety and firefighter personnel where cross-training
and duty is required, the employing unit may[, with the prior written approval of the board, through
its executive director,] enroll the dual purpose personnel in the retirement system in which the
greatest amount of duty time is contemplated and actually worked. The personnel shall be full-time
public safety or firefighter employees of the employing unit.
Section 6. Section 49-5-501 is amended to read:
49-5-501. Disability program -- Line-of-duty disability -- Benefits -- Monthly
allowance.
Any active member who becomes disabled may apply to the retirement office for disability
retirement subject to the following provisions:
(1) (a) If the disability is classified as a line-of-duty disability, the member shall retire on
disability and be granted a disability allowance subject to Section 49-5-502 .
(b) If the member is a participant in Division A or B, the monthly disability allowance is an
amount equal to 50% of the member's final average monthly salary.
(2) (a) If the disability is classified as ordinary disability and not incurred in the line-of-duty
and if the member has five or more years of service, the member shall retire on disability and be
granted a disability allowance subject to Section 49-5-502 .
(b) If the member is a participant in Division A or B, the monthly disability allowance is an
amount equal to 50% of the member's final average monthly salary.
Section 7. Section 49-8-404 is amended to read:
49-8-404. Audit submitted to Insurance Department.
The Insurance Department shall biennially audit all funds and programs authorized under this
chapter and report its findings to the governor and the Legislature, but the commissioner may accept
the annual audited statement of programs under this chapter in lieu of the biennial audit requirement.
Section 8. Section 49-9-103 is amended to read:

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49-9-103. Definitions.
(1) "Date of disability" means the date on which a period of continuous disability commences,
and may not commence on or before the last day of actual work.
(2) "Educational institution" means a political subdivision or an instrumentality of a political
subdivision, an instrumentality of the state, or any combination of these entities, which is primarily
engaged in educational activities or the administration or servicing of educational activities. The term
includes[, but is not limited to,] the State Board of Education and any instrumentality of the State
Board of Education, institutions of higher education and their branches, school districts, and
vocational and technical schools.
(3) "Elimination period" means the three months at the beginning of each continuous period
of total disability for which no benefit will be paid and commences with the date of disability.
(4) "Employee" means any regular full-time employee of an employer who participates in any
system administered by the board, except those employees exempt from coverage under Section
49-9-102 .
(5) "Maximum benefit period" means the maximum period of time the monthly disability
income benefit will be paid for any continuous period of total disability.
(6) "Medically determinable impairment" means an impairment that results from anatomical,
physiological, or psychological abnormalities which can be shown by medically acceptable clinical and
laboratory diagnostic techniques. A physical or mental impairment must be established by medical
evidence consisting of signs, symptoms, and laboratory findings, not only by the individual's statement
of symptoms.
(7) "Physician" means a legally qualified physician.
(8) "Rehabilitative employment" means any board-approved occupation or employment for
wage or profit, for which the employee is reasonably qualified by education, training, or experience,
in which the employee engages while unable to perform his occupation as a result of injury or illness.
(9) "Total disability" means the complete inability, due to medically determinable physical or
mental impairment [which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months], to engage in the employee's regular

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occupation during the elimination period and the first 24 months of disability benefits. Thereafter,
"total disability" means the complete inability, based solely on medically determinable physical
impairment, to engage in any gainful occupation which is reasonable, considering the employee's
education, training, and experience. "Total disability" exists only if during any period of "total
disability" the employee is under the regular care of a physician other than the employee.
Section 9. Effective date.
If approved by two-thirds of all the members elected to each house, this act takes effect upon
approval by the governor, or the day following the constitutional time limit of Utah Constitution
Article VII, Section 8, without the governor's signature, or in the case of a veto, the date of veto
override.

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