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H.B. 36

             1     

RETIREMENT OFFICE AMENDMENTS

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Ron Bigelow

             5      This act modifies the Utah State Retirement Act to amend definitions, contribution transfers,
             6      post retirement limitations, employer obligations, beneficiary payments, alternate payee
             7      benefits, the administrative hearing process, and firefighter disability benefit provisions.
             8      This act has an immediate effective date.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          49-1-502, as last amended by Chapter 285, Laws of Utah 1990
             12          49-1-505, as last amended by Chapter 283, Laws of Utah 2000
             13          49-1-601, as last amended by Chapter 197, Laws of Utah 1995
             14          49-1-606, as last amended by Chapter 283, Laws of Utah 2000
             15          49-1-609, as last amended by Chapter 283, Laws of Utah 2000
             16          49-1-610, as last amended by Chapter 226, Laws of Utah 1993
             17          49-2-103, as last amended by Chapter 292, Laws of Utah 1999
             18          49-3-103, as last amended by Chapter 292, Laws of Utah 1999
             19          49-3-410, as last amended by Chapters 83 and 328, Laws of Utah 1999
             20          49-4-704, as last amended by Chapter 31, Laws of Utah 1997
             21          49-4a-704, as last amended by Chapter 31, Laws of Utah 1997
             22          49-5-502, as last amended by Chapter 267, Laws of Utah 1998
             23          49-5-704, as last amended by Chapter 31, Laws of Utah 1997
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 49-1-502 is amended to read:
             26           49-1-502. Refunds of vested contributions -- Transfers of contributions.
             27          (1) If a member shall for any cause, except retirement, permanent or temporary disability,


             28      or death, cease to be employed in covered services for an employer then the member may:
             29          (a) By signing a written request, affirming therein that the member has neither applied for,
             30      nor contemplates further employment with a covered unit, and directing the request to the
             31      retirement office, receive a refund of all accumulated contributions, less a withdrawal fee the
             32      amount of which the board shall establish by rule for the purpose of reimbursing its administrative
             33      fund for the cost entailed by the withdrawal. Notwithstanding the written request, if a member
             34      who has requested a refund accepts employment with another covered unit within the 60-day
             35      period, the member shall inform the retirement office immediately. In the event of this election,
             36      a terminating employee, upon later reemployment by an employer under this title, unless the
             37      employee redeposits the refund as permitted by this section, shall be treated as a new employee and
             38      the employee's service history and benefit rights shall then be based upon current services from the
             39      date of reemployment in covered services.
             40          (b) Leave the member's account in the fund intact. In the event of this election, a
             41      terminating employee shall retain status as a member of the system, except for the lack of
             42      contributions paid into the fund by the member or on the member's behalf. In the event of
             43      reemployment by an employer for services covered by this title, the employee's service history and
             44      benefit rights shall be based upon the service credit accredited to the employee at the time of the
             45      employee's most recent termination of employment, as well as upon the current service credit that
             46      is acquired as the result of reemployment.
             47          (2) Upon the attainment of retirement age, an inactive member has the same rights to
             48      retirement benefits, if so eligible, as any active employee member.
             49          (3) Refunds of vested contributions may not be made prior to 60 days from the last day the
             50      contributions were made, and only upon the termination of the member.
             51          (4) No refund may be made to an active member of any retirement system administered
             52      by the board. Contributions made in error will be returned to the employing unit.
             53          (5) Members who are exempted from a retirement system administered by the board but
             54      who remain employed by a covered unit may request a plan-to-plan transfer of vested, untaxed
             55      employee contributions to a salary deferral plan administered by the board, as permitted by federal
             56      law.
             57          (6) An employee, who is no longer a member of a retirement system administered by the
             58      board because the employee's employing unit withdrew from the retirement systems under this


             59      title, may request a plan transfer of vested employee contributions to a plan offered by the
             60      employer that is qualified to receive the transfer under federal law.
             61          Section 2. Section 49-1-505 is amended to read:
             62           49-1-505. Reemployment of a retired member of a system administered by the board.
             63          The following laws govern the reemployment of a member of any system administered by
             64      the board who has retired from any agency and who returns to work at that agency after retirement.
             65      A member of any system administered by the board who has retired from any agency and who
             66      returns to work for a private employer or at a different agency from which the member retired is
             67      not subject to any reemployment restrictions under this section, except as provided in Subsection
             68      (4).
             69          (1) (a) (i) If a member of any system administered by the board retires from any agency
             70      and is reemployed within a six month period by the agency from which the member retired,
             71      including exempt positions, but excluding part-time or full-time elected officials, the employer
             72      shall immediately notify the administrator.
             73          (ii) If the member has full-time employment and is not subject to Subsection (1)(b), the
             74      administrator shall cancel the member's retirement allowance and reinstate the member to active
             75      member status.
             76          (iii) This cancellation of retirement and reinstatement to active status is effective on the
             77      first day of the month following the date of reemployment.
             78          (iv) If a member's retirement allowance is cancelled and the member is reinstated to active
             79      member status pursuant to this subsection, the member may not retire again with a recalculated
             80      benefit for a two-year period from the date of cancellation of the original retirement. If the
             81      member retires again within the two-year period, the original retirement benefit shall be resumed.
             82          (v) A reinstated member shall be credited with the service credits standing to the member's
             83      account at the time of the first retirement and from that time shall be treated as a member of the
             84      system in all respects, including the accrual of additional service credits but subject to recalculation
             85      of the retirement allowance under Subsection (4).
             86          (b) (i) If the member is reemployed on a part-time basis or is not an elected official and
             87      is otherwise subject to Section 49-4-205 , 49-4a-206 , or 49-5-204 , that member or employee may
             88      earn, without penalty, compensation from that position or employment which is not in excess of
             89      the exempt earnings permitted by Social Security.


             90          (ii) If a member or an employee receives compensation in a calendar year in excess of the
             91      limitation, 25% of the retirement allowance shall be suspended.
             92          (iii) The effective date of a suspension and reinstatement of an allowance shall be set by
             93      the administrator.
             94          (iv) Any suspension of a member's retirement allowance pursuant to Subsection (1)(b)(ii)
             95      shall be calculated on a calendar year basis.
             96          (2) The member and employer shall maintain an accurate record of gross earnings in
             97      employment after retirement, shall report the gross earnings on a monthly basis to the retirement
             98      office, and shall immediately notify the administrator in writing of any postretirement earnings
             99      under Subsection (1)(a) and whether postretirement earnings equal or exceed the exempt earnings
             100      under Subsection (1)(b).
             101          (3) If a member is reinstated to active service and subsequently retires after the two-year
             102      period as provided in Subsection (1)(a)(iv), the member's retirement allowance shall be calculated
             103      using:
             104          (a) the formula in effect at the date of the member's original retirement for all service prior
             105      to that date; and
             106          (b) the formula in effect at the date of the subsequent retirement for all service rendered
             107      between the first and the subsequent retirement dates.
             108          (4) (a) A member who has retired from any agency and who returns to work at that agency
             109      or a different agency from which the member retired may not accrue any additional service credit,
             110      except that a member who cancels the retirement allowance under Subsection (1) may earn
             111      additional service credit.
             112          (b) If a member may not accrue additional service credit under Subsection (4)(a), then the
             113      member's employer shall contribute the same percentage of the member's salary to a defined
             114      contribution plan administered by the board that would have been contributed if the member were
             115      a member of the retirement system.
             116          (5) For the purposes of this section:
             117          (a) "full-time" employment means employment of 20 or more hours per week; and
             118          (b) "part-time" employment means employment [contemplated as less than full-time by
             119      the employer at the time of hire] of less than 20 hours per week.
             120          (6) The board may make rules to implement this section.


             121          Section 3. Section 49-1-601 is amended to read:
             122           49-1-601. Payment of employer contributions, fees, and premium taxes -- Failure to
             123      comply -- Interest added -- Adjustments to be made.
             124          (1) The employer contributions, fees, and premium taxes shall be paid to the fund by the
             125      participating employer in accordance with rules adopted by the board.
             126          (2) Any employing unit that fails to withhold the amount of any employee contributions
             127      is required to pay the contribution, together with any employer contribution, fee, or premium tax,
             128      to the fund, if necessary, out of its own funds.
             129          (3) (a) If an employing unit does not make the payments required by this title as the
             130      payments become due, there is added as part of the amounts due, except for corrections in the
             131      amounts of contributions, fees, and premium taxes arising out of error in computation, interest
             132      established under this title.
             133          (b) The board may waive all or any part of the interest if the board finds there were
             134      extenuating circumstances surrounding any delinquencies.
             135          (4) If more or less than the correct amount of contributions, fees, and premium taxes
             136      required by this title is deducted with respect to any payment of compensation, the employer shall
             137      make the necessary adjustment with or without interest as required by the board.
             138          Section 4. Section 49-1-606 is amended to read:
             139           49-1-606. Beneficiary designations -- Revocation of beneficiary designation --
             140      Procedure -- Beneficiary not designated -- Payment to survivors in order established under
             141      the Uniform Probate Code -- Restrictions on payment -- Payment of deceased's expenses.
             142          (1) The beneficiary designation in a member's file at the retirement office at the time of
             143      the member's death is binding in the payment of any benefits due under this title.
             144          (2) A member may revoke a designation of beneficiary at any time and may file a different
             145      beneficiary designation by executing and filing with the retirement office a written beneficiary
             146      designation on forms provided by the retirement office, except where an optional continuing plan
             147      is chosen, or the law makes a specific benefit designation to a dependent spouse, in which case the
             148      beneficiary designation may not be revoked.
             149          (3) If no beneficiary is designated, all benefits payable from the retirement system[,
             150      including retirement benefits accrued but not received prior to death,] may be paid or applied to
             151      the benefit of the surviving next of kin of the deceased in the order of precedence established under


             152      Title 75, Chapter 2, Intestate Succession and Wills.
             153          (4) No payment may be made to persons included in any of these groups if at the date of
             154      payment there are living persons in any of the groups preceding it. Payment to the persons in any
             155      group based upon receipt from those persons of an affidavit in a form satisfactory to the
             156      administrator that:
             157          (a) there are no living individuals in the group preceding it;
             158          (b) that the probate of the estate of the deceased has not been commenced; and
             159          (c) that more than three months have elapsed since the date of death of the decedent, shall
             160      be in full satisfaction and discharge of all claims for benefits under this title and payable by reason
             161      of the death of the decedent.
             162          (5) If the location of the nominated beneficiary cannot be ascertained or if the nominated
             163      beneficiary is the estate of the deceased person, the administrator may pay the costs of the
             164      deceased's last illness, convalescent care, and funeral expenses directly to the undertaking
             165      establishment, hospital, doctor, or convalescent home which provided the service. The
             166      administrator shall require verified statements of the charges before making partial or full payment.
             167      The payment shall discharge the obligation of the system and of the fund up to the amount paid.
             168          Section 5. Section 49-1-609 is amended to read:
             169           49-1-609. Nonassignability of benefits or payments -- Exemption from legal process
             170      -- Deduction of amounts owned.
             171          (1) Except as provided in Subsection (4), the right of any member or beneficiary to any
             172      benefit, payment, or any other right accrued or accruing to any person under this title and the assets
             173      of the fund created by this title are not subject to alienation or assignment by the member or
             174      beneficiary and are not subject to attachment, execution, garnishment, or any other legal or
             175      equitable process.
             176          (2) This section may not be construed to prohibit the administrator from deducting medical
             177      or other insurance premiums from a retirant's allowance as requested by the retirant providing that
             178      any request is within limitations and rules prescribed by the board.
             179          (3) (a) Notwithstanding Subsection (1), the retirement board shall provide for the division
             180      of a member's service retirement allowance, continuing monthly death benefit, or refund of
             181      contributions upon termination to former spouses and family members pursuant to an order of a
             182      court of competent jurisdiction with respect to domestic relations matters on file with the


             183      retirement office.
             184          (b) The court order shall specify the manner in which the retirement allowance or refund
             185      of contributions shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
             186          (c) The board may also provide for the division of a member's defined contribution
             187      account.
             188          (d) Once benefit payments under a domestic relations order begin, the period for which
             189      the payment shall be made may not be altered.
             190          (e) Benefit payments to an alternate payee shall begin at the time the member or
             191      beneficiary begins receiving benefit payments.
             192          (f) The alternate payee shall receive benefits in the same form as benefits are received by
             193      the member.
             194          [(d)] (g) The board shall make rules to implement this section.
             195          (4) In accordance with federal law, the board may deduct the required amount from any
             196      benefit, payment, or other right accrued or accruing to any member of a system, plan, or program
             197      under this title to offset any amount that member owes to a system, plan, or program administered
             198      by the board.
             199          Section 6. Section 49-1-610 is amended to read:
             200           49-1-610. Right of appeal to hearing officer -- Council review of hearings -- Further
             201      board review -- Rules of procedure applied -- Judicial review.
             202          (1) (a) All members of a system, plan, or program under this title shall acquaint themselves
             203      with their rights and obligations as members.
             204          (b) A member shall request a ruling by the administrator on any benefit claim or legal right
             205      under this title.
             206          (c) Any person who is dissatisfied by a ruling of the administrator with respect to any
             207      benefit claim or legal right under any system, plan, or program under this title shall request a
             208      review of that claim by a hearing officer.
             209          (d) The hearing officer shall:
             210          (i) be hired by the executive director after consultation and review with the membership
             211      council; and
             212          (ii) follow the procedures and requirements of Title 63, Chapter 46b, Administrative
             213      Procedures Act.


             214          (2) (a) (i) The hearing officer shall hear and determine all facts pertaining to applications
             215      for benefits under any retirement system, plan, or program under this title and all matters
             216      pertaining to the administration of the system.
             217          (ii) The membership council may examine the record of the hearing, provide a
             218      recommendation to the board, and recommend any necessary changes in retirement policy or
             219      procedure to the Legislature.
             220          (b) (i) If the executive officer of the board cannot determine from the records or other
             221      information available the length of service, compensation, or age of any member, the executive
             222      officer may estimate, for the purpose of any determination required to be made, any of these
             223      factors.
             224          (ii) The board shall review all decisions of the hearing officer.
             225          (3) The moving party in any proceeding brought under this section shall bear the burden
             226      of proof.
             227          [(3)] (4) Any applicant may file an application for reconsideration according to the
             228      procedures and requirements of Title 63, Chapter 46b, Administrative Procedures Act, upon any
             229      of the following grounds:
             230          (a) that the board acted in excess of its powers;
             231          (b) that the order or award was procured by fraud;
             232          (c) that the evidence does not justify the determination of the board; or
             233          (d) that the applicant has discovered new material evidence that could not, with reasonable
             234      diligence, have been discovered or procured at the hearing.
             235          [(4)] (5) A member aggrieved by the board's decision may obtain judicial review by
             236      complying with the procedures and requirements of Title 63, Chapter 46b, Administrative
             237      Procedures Act.
             238          Section 7. Section 49-2-103 is amended to read:
             239           49-2-103. Definitions.
             240          As used in this chapter:
             241          (1) "Appointive officer" means an employee appointed to a position for a definite and
             242      fixed term of office by official and duly recorded action of the governing body of an employing
             243      unit who earns $500 or more per month over a 12-month period adjusted annually by the Bureau
             244      of Labor Statistics Consumer Price Index.


             245          (2) (a) "Compensation," "salary," or "wages" means the total amount of payments made
             246      by an employer to an employee for services rendered to the employer, including:
             247          (i) bonuses;
             248          (ii) cost-of-living adjustments;
             249          (iii) other payments currently includable in gross income and that are subject to Social
             250      Security deductions, including any payments in excess of the maximum amount subject to
             251      deduction under Social Security law; and
             252          (iv) amounts that the employee authorizes to be deducted or reduced for salary deferral or
             253      other benefit programs authorized by federal law.
             254          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
             255      Internal Revenue Code Section 401(a)(17).
             256          (c) "Compensation," "salary," or "wages" does not include:
             257          (i) the monetary value of remuneration paid in kind, such as a residence or use of
             258      equipment;
             259          (ii) all contributions made by an employer under any plan for the benefit of a participant;
             260          (iii) salary paid to an employee working under the minimum number of hours required for
             261      membership;
             262          (iv) salary paid to a temporary or exempt employee;
             263          (v) any payments upon termination, including accumulated vacation, sick leave payments,
             264      or any other special payments; or
             265          (vi) uniform, travel, or similar allowances.
             266          (3) "Educational institution" means a political subdivision or instrumentality of the state
             267      or a combination thereof primarily engaged in educational activities or the administration or
             268      servicing of educational activities, including:
             269          (a) the State Board of Education and its instrumentalities;
             270          (b) any institution of higher learning and its branches;
             271          (c) any school district and its instrumentalities;
             272          (d) any vocational and technical school; and
             273          (e) any entity arising out of a consolidation agreement between entities under this
             274      definition.
             275          (4) (a) "Employee" or "regular employee" means any regular full-time employee whose


             276      term of employment for an employer contemplates continued employment during a calendar or
             277      school year and who performs covered service for one or more employers.
             278          (b) "Employee" or "regular employee" means an officer, elective or appointive, who
             279      receives as compensation from an employer $500 or more per month over a 12-month period
             280      adjusted annually by the Bureau of Labor Statistics Consumer Price Index.
             281          (5) "Employer" or "employing unit" means any department, educational institution,
             282      political subdivision, or organization or agency financed in whole or in part by public funds for
             283      which any employee or member performs services subject to this chapter.
             284          (6) "Final average salary" means the amount computed by averaging the highest five years
             285      of annual compensation preceding retirement subject to Subsections (6)(a), (b), (c), and (d).
             286          (a) Except as provided in Subsection (6)(b), the percentage increase in annual
             287      compensation in any one of the years used may not exceed the previous year's salary by more than
             288      10% plus a cost-of-living adjustment equal to the decrease in the purchasing power of the dollar
             289      during the previous year, as measured by the Consumer Price Index prepared by the United States
             290      Bureau of Labor Statistics.
             291          (b) In cases where the employing unit provides acceptable documentation to the board, the
             292      limitation in Subsection (6)(a) may be exceeded if:
             293          (i) the member has transferred from another employing unit; or
             294          (ii) the member has been promoted to a new position.
             295          (c) If the member retires more than six months from the date of termination of employment
             296      and for purposes of computing the member's final average salary only, the member is considered
             297      to have been in service at the member's last salary rate from the date of the termination of
             298      employment to the date retirement becomes effective if the member so requests.
             299          (d) If participating service is less than five years, final average salary means the average
             300      annual compensation paid to the member during the full period of participating service.
             301          (7) "Normal retirement age" means the age of 65 years.
             302          (8) "Organization or agency financed in whole or in part by public funds" means an
             303      agency, association, or organization that receives public funds. The term does not include political
             304      subdivisions, departments, or educational institutions.
             305          (9) "Public funds" means those funds derived, either directly or indirectly, from public
             306      taxes or public revenue, dues or contributions paid or donated by the membership of the


             307      organization, used to finance an activity whose objective is to improve, on a nonprofit basis, the
             308      governmental, educational, and social programs and systems of the state or its political
             309      subdivisions.
             310          (10) (a) "Regular full-time employee," in qualifying for membership and accrual of service
             311      credit under this system, means an employee whose employment normally requires an average of
             312      20 hours or more per week, except as modified by the board, and who receives benefits normally
             313      provided by the employing unit.
             314          (b) "Regular full-time employee" includes:
             315          (i) a teacher who teaches half-time or more, or a classified school employee who works
             316      an average of 20 hours per week or more, regardless of benefits provided[.]; and
             317          (ii) an individual who otherwise meets the definition of this Subsection (10) who performs
             318      services for a participating employer through an employee leasing or similar arrangement.
             319          (11) "Years of service" or "service years" means:
             320          (a) the number of periods, each to consist of 12 full months as determined by the board;
             321          (b) a period determined by the board, whether consecutive or not, during which an
             322      employee performed services for an employer or employers, including any time the employee
             323      rendered service in the armed forces of the United States before membership in the system or was
             324      absent on a paid leave of absence granted by an employer or absent in the service of the United
             325      States government on military duty as provided by this chapter; or
             326          (c) for a teacher, school administrator, or other contract employee of an educational
             327      institution, not less than eight months of full-time service constitutes a service year.
             328          Section 8. Section 49-3-103 is amended to read:
             329           49-3-103. Definitions.
             330          As used in this chapter:
             331          (1) "Appointive officer" means an employee appointed to a position for a definite and
             332      fixed term of office by official and duly recorded action of the governing body of an employing
             333      unit and who earns $500 or more per month over a 12-month period adjusted by the Bureau of
             334      Labor Statistics Consumer Price Index.
             335          (2) (a) "Compensation," "salary," or "wages" means the total amount of payments made
             336      by an employer to an employee for services rendered to the employer, including:
             337          (i) bonuses;


             338          (ii) cost-of-living adjustments;
             339          (iii) other payments currently includable in gross income and that are subject to Social
             340      Security deductions, including any payments in excess of the maximum amount subject to
             341      deduction under Social Security law; and
             342          (iv) amounts that the employee authorizes to be deducted or reduced for salary deferral or
             343      other benefit programs authorized by federal law.
             344          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
             345      Internal Revenue Code Section 401(a)(17).
             346          (c) "Compensation," "salary," or "wages" does not include:
             347          (i) the monetary value of remuneration paid in kind, such as a residence or use of
             348      equipment;
             349          (ii) all contributions made by an employer under any plan for the benefit of a participant;
             350          (iii) salary paid to an employee working under the minimum number of hours required for
             351      membership;
             352          (iv) salary paid to a temporary or exempt employee;
             353          (v) any payments upon termination, including accumulated lump-sum vacation, sick leave
             354      payments, or any other special payments; or
             355          (vi) uniform, travel, or similar allowances.
             356          (3) "Educational institution" means a political subdivision or instrumentality of the state
             357      or a combination thereof primarily engaged in educational activities or the administration or
             358      servicing of educational activities, including:
             359          (a) the State Board of Education and its instrumentalities;
             360          (b) any institution of higher learning and its branches;
             361          (c) any school district and its instrumentalities;
             362          (d) any vocational and technical school; and
             363          (e) any entity arising out of a consolidation agreement between entities under this
             364      definition.
             365          (4) "Effective date" of the noncontributory system means 12:01 a.m., July 1, 1986.
             366          (5) (a) "Employee" or "regular employee" means any regular full-time employee whose
             367      term of employment for an employer contemplates continued employment during a calendar or
             368      school year and who performs covered service for one or more employers.


             369          (b) "Employee" or "regular employee" means an officer, elective or appointive, who
             370      receives as compensation from an employer $500 or more per month over a 12-month period
             371      adjusted by the Bureau of Labor Statistics Consumer Price Index.
             372          (6) "Employer" or "employing unit" means any department, educational institution,
             373      political subdivision, or eligible organization, or agency financed in whole or in part by public
             374      funds for which any employee or member performs services subject to this chapter.
             375          (7) "Final average salary" means the amount computed by averaging the highest three years
             376      of annual compensation preceding retirement subject to Subsections (7)(a), (b), and (c).
             377          (a) Except as provided in Subsection (7)(b), the percentage increase in annual
             378      compensation in any one of the years used may not exceed the previous year's salary by more than
             379      10% plus a cost-of-living adjustment equal to the decrease in the purchasing power of the dollar
             380      during the previous year, as measured by the Consumer Price Index prepared by the United States
             381      Bureau of Labor Statistics.
             382          (b) In cases where the employing unit provides acceptable documentation to the board, the
             383      limitation in Subsection (a) may be exceeded if:
             384          (i) the member has transferred from another employing unit; or
             385          (ii) the member has been promoted to a new position.
             386          (c) If the member retires more than six months from the date of termination of employment
             387      and for purposes of computing the member's final average salary only, the member is considered
             388      to have been in service at his last salary rate from the date of the termination of employment to the
             389      date retirement becomes effective if the member so requests.
             390          (8) "Normal retirement age" means the age of 65 years.
             391          (9) "Organization or agency financed in whole or in part by public funds" means an
             392      agency, association, or organization that receives public funds. The term does not include political
             393      subdivisions, departments, or educational institutions.
             394          (10) "Public funds" means those funds derived, either directly or indirectly, from public
             395      taxes or public revenue, dues, or contributions paid or donated by the membership of the
             396      organization used to finance an activity whose objective is to improve, on a nonprofit basis, the
             397      governmental, educational, and social programs and systems of the state or its political
             398      subdivisions.
             399          (11) (a) "Regular full-time employee," in qualifying for membership and accrual of service


             400      credit under this system, means an employee whose employment normally requires an average of
             401      20 hours or more per week, except as modified by the board, and who receives benefits normally
             402      provided by the employing unit.
             403          (b) "Regular full-time employee" includes:
             404          (i) a teacher who teaches half-time or more or a classified school employee who works an
             405      average of 20 hours per week or more, regardless of benefits provided[.]; and
             406          (ii) an individual who otherwise meets the definition of this Subsection (11) who performs
             407      services for a participating employer through an employee leasing or similar arrangement.
             408          (12) "Years of service" or "service years" means:
             409          (a) the number of periods, each to consist of 12 full months as determined by the board;
             410          (b) a period determined by the board, whether consecutive or not, during which an
             411      employee performed services for an employer or employers, including any time the employee
             412      rendered service in the armed forces of the United States before membership in the system or was
             413      absent on a paid leave of absence granted by an employer or absent in the service of the United
             414      States government on military duty as provided by this chapter; or
             415          (c) for a teacher, school administrator, or other contract employee of an educational
             416      institution, not less than eight months of full-time service constitutes a service year.
             417          Section 9. Section 49-3-410 is amended to read:
             418           49-3-410. Purchase of retirement credit -- Conditions -- Cost.
             419          (1) Any member of this system may receive retirement service credit in accordance with
             420      Subsection (2).
             421          (2) (a) A member may purchase or a member and an employing unit may jointly purchase
             422      a combined maximum total of five years of retirement service credit which is not otherwise
             423      purchasable under this chapter.
             424          (b) The number of years of retirement service credit purchased may exceed the number of
             425      years or age required by the member to retire with no actuarial reduction.
             426          (c) The purchase of retirement service credit must allow the member to meet the retirement
             427      eligibility requirements of this system with no actuarial reduction.
             428          (d) The member must retire effective immediately after the purchase of retirement service
             429      credit is made.
             430          (e) The member shall pay at least 5% of the cost of the purchase.


             431          (3) The purchase price for the retirement service credit shall be calculated and paid for as
             432      provided in Section 49-1-407 .
             433          (4) (a) The employing unit may elect to purchase retirement service credit for a member
             434      under Subsection (2) while the member is on an unpaid leave of absence.
             435          (b) If the member is on an unpaid leave of absence, the employing unit may make
             436      installment payments towards the purchase in amounts fixed by the administrator.
             437          (c) The member shall retire when the purchase obligations are fulfilled.
             438          (5) [(a)] A member who retires after the employer purchases retirement service credit
             439      under this section [may not be reemployed by the employing unit from which the member retired]
             440      shall be subject to the provisions of Section 49-1-505 .
             441          [(b) Subsection (5)(a) does not apply to a member if the member does not earn
             442      compensation in excess of the exempt earnings permitted by Social Security.]
             443          (6) Prior to making any purchase of service credit under this section, an employing unit
             444      shall adopt a purchase policy that includes nondiscriminatory participation standards for all
             445      employees.
             446          Section 10. Section 49-4-704 is amended to read:
             447           49-4-704. Death of retired member -- Benefits.
             448          (1) [Except as provided in Subsection (3), if] If the member retired under Division A or
             449      Division B, the death benefit payable to the dependent spouse after the death of the retired member
             450      of this system is a monthly amount equal to 65% of the allowance that was being paid to the retired
             451      member at the time of death.
             452          (2) (a) [Except as provided in Subsection (3), if] If the member retired solely under
             453      Division B or dies leaving dependent children, the children shall qualify for a benefit as prescribed
             454      for children under Section 49-4-702 , with the total being paid as limited by that section.
             455          (b) The effective date of accrual of this pension is on the first day of the month following
             456      the month in which the retirant died.
             457          (c) [Except as provided in Subsection (3), payment] Payment of the full pension for this
             458      latter month shall be made to the dependent beneficiary in lieu of the deceased member.
             459          [(3) (a) In the event of a court order complying with Section 49-1-609 , a former spouse
             460      of a retired member is entitled to the court designated share of the retired member's monthly
             461      retirement benefit and the same percentage share of the spouse's death benefit.]


             462          [(b) This subsection supersedes conflicting subsections of this section.]
             463          Section 11. Section 49-4a-704 is amended to read:
             464           49-4a-704. Death of retired member -- Benefits.
             465          (1) [Except as provided in Subsection (3), if] If the member retired under Division A or
             466      Division B, the death benefit payable to the dependent spouse after the death of the retired member
             467      of this system is a monthly amount equal to 65% of the allowance that was being paid to the retired
             468      member at the time of death.
             469          (2) (a) [Except as provided in Subsection (3), if] If the member retired solely under
             470      Division B or dies leaving dependent children, the children shall qualify for a benefit as prescribed
             471      for children under Section 49-4a-702 , with the total being paid as limited by that section.
             472          (b) The effective date of accrual of this pension is on the first day of the month following
             473      the month in which the retirant died.
             474          (c) [Except as provided in Subsection (3), payment] Payment of the full pension for this
             475      latter month shall be made to the dependent beneficiary in lieu of the deceased member.
             476          [(3) (a) In the event of a court order complying with Section 49-1-609 , a former spouse
             477      of a retired member is entitled to a court designated share of the retired member's monthly
             478      retirement benefit and the same percentage share of the spouse's death benefit.]
             479          [(b) This subsection supersedes conflicting subsections of this section.]
             480          Section 12. Section 49-5-502 is amended to read:
             481           49-5-502. Disability retirement -- Disability allowance eligibility -- Conversion to
             482      service retirement -- Examinations -- Reemployment.
             483          The following rules apply to all members applying for disability retirement under this part:
             484          (1) Any member who applies and is qualified for disability retirement shall receive a
             485      disability allowance until the earlier of:
             486          (a) the date the member is no longer disabled from performing firefighter duties;
             487          [(a)] (b) the date the member has accumulated 20 years of service credit, including years
             488      earned while disabled; or
             489          [(b)] (c) the member has received disability benefits for the following time periods:
             490          (i) if the member is under age 60, the disability allowance is payable until age 65;
             491          (ii) if the member is 60-61, the disability allowance is payable for five years;
             492          (iii) if the member is 62-63, the disability allowance is payable for four years;


             493          (iv) if the member is 64-65, the disability allowance is payable for three years;
             494          (v) if the member is 66-68, the disability allowance is payable for two years; and
             495          (vi) if the member is age 69 or older, the disability benefit is payable for one year.
             496          (2) (a) The member shall receive service credit in this system during the period of
             497      disability. However, if the member is employed by a participating employer during the period of
             498      disability, the member may not receive service credit for that employment.
             499          (b) The disability retirement shall be converted to a service retirement at the time the
             500      disability benefits terminate.
             501          (3) The board shall approve or disapprove applications for disability retirement based upon
             502      both:
             503          (a) the evaluation and recommendations of one or more physicians along with medical
             504      records relating to the disability which may, at the board's option, be reviewed by an independent
             505      medical examiner selected by the board, to the effect that the member is mentally or physically
             506      totally disabled; and
             507          (b) receipt of proof by the board from the employer that the member has become totally
             508      disabled.
             509          (4) Any disability retirant who regains health and is regularly employed shall have the
             510      disability allowance reduced or suspended as the retirant's earnings justify.
             511          (5) (a) Members receiving benefits under this section shall, upon request of the
             512      administrator, submit to a medical examination by one or more physicians as directed by the board.
             513          (b) If the member resides outside the state and is requested to submit to an examination,
             514      the member shall be examined under the same rules in the area in which the member resides.
             515          (c) If, after an examination, the examiners report that the retirant is physically able and
             516      capable of resuming employment, the retirant shall be reinstated at the retirant's former
             517      classification and rank, and disability benefits terminate.
             518          (d) Examinations may not be required more than once every year.
             519          (e) A retirant who returns to employment [of] with a participating employer in this system
             520      shall immediately commence accruing service credit that shall be added to that credit that has been
             521      accrued by virtue of previous service, including service credited while disabled.
             522          (6) Retired members are not subject to medical examinations after reaching age 55.
             523          (7) Refusal or neglect to submit to an examination is sufficient cause for suspension or


             524      discontinuance of benefits and if the refusal or neglect continues for one year, the member's rights
             525      to all benefits may be revoked by the board.
             526          (8) Retirants who receive benefits under this part shall file a sworn statement with the
             527      retirement office on or before January 15 of each year for the first five years a retirant receives
             528      benefits. The sworn statement shall indicate whether or not the retirant engaged in any gainful
             529      employment during the preceding year and, if so, the amount of earnings received during the
             530      calendar year.
             531          (a) If the retirant has been gainfully employed, the retirant's benefit payments shall be
             532      reduced in the year following employment so that the total payments, when added to the
             533      compensation received for employment, do not exceed 125% of the retirant's final average salary.
             534          (b) If any retirant refuses or neglects to file a sworn statement as required, the
             535      administrator may suspend payment of any and all benefits pending receipt of the statement. Upon
             536      filing the statement, the retirant's payments shall be resumed.
             537          (9) The disability allowance shall be improved by the annual cost-of-living increase factor
             538      applied to retired members of the system that covered the employee at the time of disability.
             539          (10) A line of duty disability allowance paid on or after January 1, 2002, under Subsection
             540      49-5-501 (1) is exempt from taxation to the extent permitted under federal law.
             541          Section 13. Section 49-5-704 is amended to read:
             542           49-5-704. Death of retired member -- Benefits.
             543          (1) (a) [Except as provided in Subsection (3), the] The death benefit payable to a
             544      dependent spouse after death of the retirant is a monthly amount equal to 75% of the allowance
             545      being paid to the retirant at the time of death.
             546          (b) The effective date of accrual of this pension is the first day of the month following the
             547      month the retirant died.
             548          (c) [Except as provided in Subsection (3), payment] Payment of the full pension for this
             549      latter month shall be made to the dependent beneficiary instead of the deceased member.
             550          (2) If the member retires under Division B and dies leaving dependent children, they
             551      qualify for benefits prescribed for children under Section 49-5-701 or 49-5-702 .
             552          [(3) (a) In the event of a court order complying with Section 49-1-609 , a former spouse
             553      of a retired member is entitled to the court designated share of the retirant's monthly retirement
             554      benefit and the same percentage share of the spouse's death benefit.]


             555          [(b) This subsection supersedes conflicting subsections of this section.]
             556          Section 14. Effective date.
             557          If approved by two-thirds of all the members elected to each house, this act takes effect
             558      upon approval by the governor, or the day following the constitutional time limit of Utah
             559      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto, the
             560      date of veto override.




Legislative Review Note
    as of 11-30-00 9:32 AM


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

Office of Legislative Research and General Counsel


Committee Note

The Quasi-Governmental Entities Committee recommended this bill.


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