S.B. 252

1

FIREFIGHTER RETIREMENT AMENDMENTS
2 2000 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Gene Davis
5 AN ACT RELATING TO RETIREMENT; CREATING A DEFERRED COMPENSATION
6 BENEFIT FOR MEMBERS OF THE FIREFIGHTERS' RETIREMENT SYSTEM; AND
7 PROVIDING AN EFFECTIVE DATE.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 ENACTS:
10 49-5-303, Utah Code Annotated 1953
11 Be it enacted by the Legislature of the state of Utah:
12 Section 1. Section 49-5-303 is enacted to read:
13 49-5-303. Supplemental benefit established -- Deferred compensation plan options
14 -- Contribution by employer and employee -- Immediate vesting of contributions -- Plans to
15 be separate -- Tax-qualified status of plans.
16 (1) There is established a supplemental deferred compensation benefit for members of this
17 system.
18 (a) (i) For members of level A under Section 49-5-301 , the employer shall contribute on
19 behalf of each of its employees the difference between 16.71% and the contribution rate
20 established under Section 49-5-301 to a deferred compensation plan qualified under Section 401(k)
21 of the Internal Revenue Code which is selected by the employee and which is sponsored by the
22 board, by that level A employer, or by a group of similar level A employers and which has been
23 grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
24 (ii) If the contribution rate established under Section 49-5-301 is greater than 16.71%, an
25 employer 401(k) contribution is not required under Subsection (1)(a)(i).
26 (iii) The employee may also make elective contributions to either the qualified 401(k) plan
27 which receives the contribution described in Subsection (1)(a)(i), or to any other deferred

28 compensation plan qualified under Section 401(k) of the Internal Revenue Code which is selected
29 by the employee and sponsored by the board, that level A employer, or a group of similar level A
30 employers, and which has been grandfathered under Section 1116 of the Federal Tax Reform Act
31 of 1986, but only up to an amount permitted by federal law.
32 (b) (i) For members of level B under Section 49-3-301 , the employer shall contribute
33 on behalf of each of its employees the difference between 13.31% and the contribution rate
34 established under Section 49-5-301 to a deferred compensation plan qualified under Section 401(k)
35 of the Internal Revenue Code which is selected by the employee and which is sponsored by the
36 board, by that level B employer, or by a group of similar level B employers and which has been
37 grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
38 (ii) If the contribution rate established under Section 49-5-301 is greater than 13.31%, an
39 employer 401(k) contribution is not required under Subsection (1)(a)(i).
40 (iii) The employee may also contribute to the same qualified 401(k) plan which the
41 employee selected to receive the contribution described in Subsection (1)(b)(i), but only up to an
42 amount permitted by federal law.
43 (c) The employee may not make elective contributions to any other qualified 401(k) plan
44 sponsored by a state or local government.
45 (2) The total amount contributed by the employer under Subsection (1)(a) or (b) vests to
46 the employee's benefit immediately and is nonforfeitable.
47 (3) Each qualified deferred compensation 401(k) plan is separate and distinct from any
48 other qualified deferred compensation 401(k) plan for all purposes including, but not limited to,
49 purposes of fiduciary liability and plan administration. The board may request from any other
50 qualified 401(k) plan under Subsection (1) any relevant information pertaining to the maintenance
51 of its tax qualification under the Internal Revenue Code and may request indemnification from
52 such other plan to the extent it performs testing functions for that plan.
53 (4) Prior to January 1 of each calendar year, each employee shall notify the employing unit
54 which qualified deferred compensation 401(k) plan the employee has selected to receive the
55 employer and employee contributions described in Subsections (1)(a) and (b) for that calendar
56 year. This election may be changed only in accordance with procedures established by the
57 employing unit. Notwithstanding this section, the board may take any action which in its judgment
58 is necessary to maintain the tax-qualified status of its 401(k) deferred compensation plan pursuant

59 to federal law. The board shall submit findings of fact and its conclusions prior to taking any such
60 action.
61 Section 2. Effective date.
62 This act takes effect on July 1, 2000.




Legislative Review Note
as of 2-8-00 1:06 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel