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H.B. 250 Enrolled

                 

RETIREMENT LAW RECODIFICATION

                 
2002 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Ron Bigelow

                  This act recodifies the Retirement Code. This act has an effective date. This act provides
                  a coordination clause
                  This act affects sections of Utah Code Annotated 1953 as follows:
                  AMENDS:
                      31A-22-703, as last amended by Chapter 116, Laws of Utah 2001
                      35A-4-502, as last amended by Chapter 116, Laws of Utah 1998
                      51-7-4, as last amended by Chapter 222, Laws of Utah 2000
                      53-6-107, as last amended by Chapter 79, Laws of Utah 1996
                      53-7-105, as last amended by Chapter 282, Laws of Utah 1998
                      53-13-108, as renumbered and amended by Chapter 282, Laws of Utah 1998
                      53A-17a-125, as last amended by Chapter 335, Laws of Utah 2001
                      63-95-102, as last amended by Chapters 210 and 222, Laws of Utah 2000
                      63-95-202, as enacted by Chapter 210, Laws of Utah 2000
                      63E-1-102 (Effective 07/01/02), as enacted by Chapter 201, Laws of Utah 2001
                      63E-1-202 (Effective 07/01/02), as enacted by Chapter 201, Laws of Utah 2001
                      67-8-3, as last amended by Chapter 299, Laws of Utah 1995
                      67-20-7, as last amended by Chapter 240, Laws of Utah 1996
                      67-22-1, as last amended by Chapters 116 and 264, Laws of Utah 2001
                      67-22-2, as last amended by Chapters 116 and 264, Laws of Utah 2001
                      78-7-35, as renumbered and amended by Chapter 46, Laws of Utah 2001
                  ENACTS:
                      49-11-603, Utah Code Annotated 1953
                      49-11-604, Utah Code Annotated 1953
                      49-11-605, Utah Code Annotated 1953
                      49-11-606, Utah Code Annotated 1953


                      49-11-620, Utah Code Annotated 1953
                      49-11-802, Utah Code Annotated 1953
                      49-12-302, Utah Code Annotated 1953
                      49-13-302, Utah Code Annotated 1953
                      49-14-505, Utah Code Annotated 1953
                      49-15-505, Utah Code Annotated 1953
                      49-16-203, Utah Code Annotated 1953
                      49-16-505, Utah Code Annotated 1953
                      49-16-506, Utah Code Annotated 1953
                      49-17-403, Utah Code Annotated 1953
                      49-19-102, Utah Code Annotated 1953
                      49-19-402, Utah Code Annotated 1953
                      49-19-403, Utah Code Annotated 1953
                      49-19-404, Utah Code Annotated 1953
                      49-20-403, Utah Code Annotated 1953
                  RENUMBERS AND AMENDS:
                      49-11-101, (Renumbered from 49-1-101, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-11-102, (Renumbered from 49-1-103, as last amended by Chapter 73, Laws of Utah
                  2001)
                      49-11-103, (Renumbered from 49-1-102, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-11-201, (Renumbered from 49-1-201, as last amended by Chapter 210, Laws of Utah
                  2000)
                      49-11-202, (Renumbered from 49-1-202, as last amended by Chapter 243, Laws of Utah
                  1996)
                      49-11-203, (Renumbered from 49-1-203, as last amended by Chapter 31, Laws of Utah
                  1997)

- 2 -


                      49-11-204, (Renumbered from 49-1-204, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-11-301, (Renumbered from 49-1-301, as last amended by Chapter 283, Laws of Utah
                  2000)
                      49-11-302, (Renumbered from 49-1-302, as last amended by Chapter 79, Laws of Utah
                  1996)
                      49-11-303, (Renumbered from 49-1-303, as enacted by Chapter 1, Laws of Utah 1987)
                      49-11-304, (Renumbered from 49-1-304, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-11-305, (Renumbered from 49-1-305, as enacted by Chapter 1, Laws of Utah 1987)
                      49-11-401, (Renumbered from 49-1-401, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-11-402, (Renumbered from 49-1-402, as last amended by Chapter 197, Laws of Utah
                  1995)
                      49-11-403, (Renumbered from 49-1-407, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-404, (Renumbered from 49-1-404, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-11-405, (Renumbered from 49-1-406, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-11-501, (Renumbered from 49-1-502, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-502, (Renumbered from 49-1-503, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-11-503, (Renumbered from 49-1-504, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-11-504, (Renumbered from 49-1-505, as last amended by Chapter 141, Laws of Utah
                  2001)

- 3 -


                      49-11-601, (Renumbered from 49-1-601, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-602, (Renumbered from 49-1-602, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-11-607, (Renumbered from 49-1-603, as last amended by Chapter 81, Laws of Utah
                  1989)
                      49-11-608, (Renumbered from 49-1-604, as last amended by Chapter 81, Laws of Utah
                  1989)
                      49-11-609, (Renumbered from 49-1-606, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-610, (Renumbered from 49-1-607, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-11-611, (Renumbered from 49-1-608, as last amended by Chapters 2 and 7, Laws of Utah
                  1989, Second Special Session)
                      49-11-612, (Renumbered from 49-1-609, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-613, (Renumbered from 49-1-610, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-11-614, (Renumbered from 49-1-613, as enacted by Chapter 273, Laws of Utah 1990)
                      49-11-615, (Renumbered from 49-1-614, as enacted by Chapter 273, Laws of Utah 1990)
                      49-11-616, (Renumbered from 49-1-615, as enacted by Chapter 229, Laws of Utah 1991)
                      49-11-617, (Renumbered from 49-1-616, as enacted by Chapter 226, Laws of Utah 1993)
                      49-11-618, (Renumbered from 49-1-403, as enacted by Chapter 1, Laws of Utah 1987)
                      49-11-619, (Renumbered from 49-1-405, as enacted by Chapter 285, Laws of Utah 1990)
                      49-11-701, (Renumbered from 49-1-701, as last amended by Chapter 90, Laws of Utah
                  1994)
                      49-11-801, (Renumbered from 49-1-611, as last amended by Chapter 267, Laws of Utah
                  1998)

- 4 -


                      49-12-101, (Renumbered from 49-2-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-102, (Renumbered from 49-2-103, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-12-103, (Renumbered from 49-2-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-104, (Renumbered from 49-2-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-201, (Renumbered from 49-2-203, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-202, (Renumbered from 49-2-204, as last amended by Chapter 220, Laws of Utah
                  2000)
                      49-12-203, (Renumbered from 49-2-205, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-12-204, (Renumbered from 49-2-206, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-301, (Renumbered from 49-2-301, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-12-401, (Renumbered from 49-2-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-12-402, (Renumbered from 49-2-402, as last amended by Chapter 10, Laws of Utah
                  1997)
                      49-12-403, (Renumbered from 49-2-404, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-404, (Renumbered from 49-2-405, as last amended by Chapter 197, Laws of Utah
                  1995)
                      49-12-405, (Renumbered from 49-2-406, as last amended by Chapter 267, Laws of Utah
                  1998)
                      49-12-406, (Renumbered from 49-2-409, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-407, (Renumbered from 49-2-601, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-12-408, (Renumbered from 49-2-602, as last amended by Chapter 353, Laws of Utah
                  2000)
                      49-12-501, (Renumbered from 49-2-701, as last amended by Chapter 90, Laws of Utah

- 5 -


                  1994)
                      49-12-601, (Renumbered from 49-2-503, as enacted by Chapter 1, Laws of Utah 1987)
                      49-12-701, (Renumbered from 49-2-802, as last amended by Chapter 226, Laws of Utah
                  1993)
                      49-13-101, (Renumbered from 49-3-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-102, (Renumbered from 49-3-103, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-13-103, (Renumbered from 49-3-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-104, (Renumbered from 49-3-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-201, (Renumbered from 49-3-203, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-202, (Renumbered from 49-3-204, as last amended by Chapter 220, Laws of Utah
                  2000)
                      49-13-203, (Renumbered from 49-3-206, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-13-204, (Renumbered from 49-3-207, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-205, (Renumbered from 49-3-205, as last amended by Chapter 46, Laws of Utah
                  1995)
                      49-13-301, (Renumbered from 49-3-301, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-13-303, (Renumbered from 49-3-302, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-13-401, (Renumbered from 49-3-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-13-402, (Renumbered from 49-3-402, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-13-403, (Renumbered from 49-3-404, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-404, (Renumbered from 49-3-405, as last amended by Chapter 197, Laws of Utah
                  1995)

- 6 -


                      49-13-405, (Renumbered from 49-3-406, as last amended by Chapter 267, Laws of Utah
                  1998)
                      49-13-406, (Renumbered from 49-3-409, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-407, (Renumbered from 49-3-601, as enacted by Chapter 1, Laws of Utah 1987)
                      49-13-408, (Renumbered from 49-3-410, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-13-501, (Renumbered from 49-3-701, as last amended by Chapters 12 and 90, Laws of
                  Utah 1994)
                      49-13-701, (Renumbered from 49-3-802, as last amended by Chapter 226, Laws of Utah
                  1993)
                      49-14-101, (Renumbered from 49-4-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-102, (Renumbered from 49-4-103, as last amended by Chapter 92, Laws of Utah
                  1999)
                      49-14-103, (Renumbered from 49-4-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-104, (Renumbered from 49-4-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-201, (Renumbered from 49-4-203, as last amended by Chapter 92, Laws of Utah
                  1999)
                      49-14-202, (Renumbered from 49-4-204, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-203, (Renumbered from 49-4-205, as last amended by Chapter 110, Laws of Utah
                  2001)
                      49-14-301, (Renumbered from 49-4-301, as last amended by Chapter 169, Laws of Utah
                  1996)
                      49-14-401, (Renumbered from 49-4-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-14-402, (Renumbered from 49-4-402, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-403, (Renumbered from 49-4-601, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-14-501, (Renumbered from 49-4-701, as last amended by Chapter 285, Laws of Utah

- 7 -


                  1990)
                      49-14-502, (Renumbered from 49-4-702, as enacted by Chapter 1, Laws of Utah 1987)
                      49-14-503, (Renumbered from 49-4-703, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-14-504, (Renumbered from 49-4-704, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-15-101, (Renumbered from 49-4a-101, as enacted by Chapter 260, Laws of Utah 1989)
                      49-15-102, (Renumbered from 49-4a-103, as last amended by Chapter 92, Laws of Utah
                  1999)
                      49-15-103, (Renumbered from 49-4a-201, as enacted by Chapter 260, Laws of Utah 1989)
                      49-15-104, (Renumbered from 49-4a-202, as enacted by Chapter 260, Laws of Utah 1989)
                      49-15-201, (Renumbered from 49-4a-203, as last amended by Chapter 92, Laws of Utah
                  1999)
                      49-15-202, (Renumbered from 49-4a-204, as enacted by Chapter 260, Laws of Utah 1989)
                      49-15-203, (Renumbered from 49-4a-206, as last amended by Chapter 305, Laws of Utah
                  1999)
                      49-15-204, (Renumbered from 49-4a-205, as last amended by Chapter 268, Laws of Utah
                  1998)
                      49-15-301, (Renumbered from 49-4a-301, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-15-401, (Renumbered from 49-4a-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-15-402, (Renumbered from 49-4a-402, as last amended by Chapter 273, Laws of Utah
                  1990)
                      49-15-403, (Renumbered from 49-4a-601, as enacted by Chapter 260, Laws of Utah 1989)
                      49-15-501, (Renumbered from 49-4a-701, as last amended by Chapter 366, Laws of Utah
                  1998)
                      49-15-502, (Renumbered from 49-4a-702, as enacted by Chapter 260, Laws of Utah 1989)

- 8 -


                      49-15-503, (Renumbered from 49-4a-703, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-15-504, (Renumbered from 49-4a-704, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-16-101, (Renumbered from 49-5-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-16-102, (Renumbered from 49-5-103, as last amended by Chapter 73, Laws of Utah
                  2001)
                      49-16-103, (Renumbered from 49-5-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-16-104, (Renumbered from 49-5-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-16-201, (Renumbered from 49-5-203, as last amended by Chapter 283, Laws of Utah
                  2000)
                      49-16-202, (Renumbered from 49-5-204, as enacted by Chapter 1, Laws of Utah 1987)
                      49-16-301, (Renumbered from 49-5-301, as last amended by Chapters 131 and 292, Laws
                  of Utah 1999)
                      49-16-401, (Renumbered from 49-5-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-16-402, (Renumbered from 49-5-402, as last amended by Chapter 51, Laws of Utah
                  1990)
                      49-16-403, (Renumbered from 49-5-601, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-16-501, (Renumbered from 49-5-701, as last amended by Chapter 293, Laws of Utah
                  1999)
                      49-16-502, (Renumbered from 49-5-702, as last amended by Chapter 267, Laws of Utah
                  1998)
                      49-16-503, (Renumbered from 49-5-703, as last amended by Chapter 90, Laws of Utah
                  1994)
                      49-16-504, (Renumbered from 49-5-704, as last amended by Chapter 141, Laws of Utah
                  2001)

- 9 -


                      49-16-601, (Renumbered from 49-5-501, as last amended by Chapter 283, Laws of Utah
                  2000)
                      49-16-602, (Renumbered from 49-5-502, as last amended by Chapter 141, Laws of Utah
                  2001)
                      49-16-603, (Renumbered from 49-5-503, as enacted by Chapter 1, Laws of Utah 1987)
                      49-16-701, (Renumbered from 49-5-802, as enacted by Chapter 1, Laws of Utah 1987)
                      49-17-101, (Renumbered from 49-6-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-17-102, (Renumbered from 49-6-103, as last amended by Chapter 31, Laws of Utah
                  1997)
                      49-17-103, (Renumbered from 49-6-201, as last amended by Chapter 198, Laws of Utah
                  1996)
                      49-17-104, (Renumbered from 49-6-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-17-201, (Renumbered from 49-6-203, as last amended by Chapter 198, Laws of Utah
                  1996)
                      49-17-301, (Renumbered from 49-6-301, as last amended by Chapter 198, Laws of Utah
                  1996)
                      49-17-401, (Renumbered from 49-6-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-17-402, (Renumbered from 49-6-402, as last amended by Chapter 75, Laws of Utah
                  1990)
                      49-17-404, (Renumbered from 49-6-404, as last amended by Chapter 7, Laws of Utah 1991,
                  Second Special Session)
                      49-17-405, (Renumbered from 49-6-601, as enacted by Chapter 1, Laws of Utah 1987)
                      49-17-501, (Renumbered from 49-6-701, as last amended by Chapter 285, Laws of Utah
                  1990)
                      49-17-502, (Renumbered from 49-6-702, as enacted by Chapters 1 and 168, Laws of Utah
                  1987)
                      49-17-701, (Renumbered from 49-6-801, as enacted by Chapter 84, Laws of Utah 1996)

- 10 -


                      49-18-101, (Renumbered from 49-6a-101, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-102, (Renumbered from 49-6a-103, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-103, (Renumbered from 49-6a-201, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-104, (Renumbered from 49-6a-202, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-201, (Renumbered from 49-6a-203, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-301, (Renumbered from 49-6a-301, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-401, (Renumbered from 49-6a-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-18-402, (Renumbered from 49-6a-402, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-403, (Renumbered from 49-6a-501, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-501, (Renumbered from 49-6a-601, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-502, (Renumbered from 49-6a-602, as enacted by Chapter 356, Laws of Utah 1997)
                      49-18-701, (Renumbered from 49-6a-701, as enacted by Chapter 267, Laws of Utah 1998)
                      49-19-101, (Renumbered from 49-7-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-19-103, (Renumbered from 49-7-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-19-104, (Renumbered from 49-7-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-19-201, (Renumbered from 49-7-203, as last amended by Chapter 197, Laws of Utah
                  1995)
                      49-19-301, (Renumbered from 49-7-301, as enacted by Chapter 1, Laws of Utah 1987)
                      49-19-401, (Renumbered from 49-7-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-19-501, (Renumbered from 49-7-403, as last amended by Chapter 197, Laws of Utah
                  1995)
                      49-20-101, (Renumbered from 49-8-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-20-102, (Renumbered from 49-8-103, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-20-103, (Renumbered from 49-8-201, as enacted by Chapter 1, Laws of Utah 1987)
                      49-20-104, (Renumbered from 49-8-202, as enacted by Chapter 1, Laws of Utah 1987)

- 11 -


                      49-20-105, (Renumbered from 49-8-102, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-20-201, (Renumbered from 49-8-203, as last amended by Chapter 360, Laws of Utah
                  1998)
                      49-20-202, (Renumbered from 49-8-204, as last amended by Chapter 360, Laws of Utah
                  1998)
                      49-20-301, (Renumbered from 49-8-301, as enacted by Chapter 1, Laws of Utah 1987)
                      49-20-401, (Renumbered from 49-8-401, as last amended by Chapter 360, Laws of Utah
                  1998)
                      49-20-402, (Renumbered from 49-8-402, as enacted by Chapter 1, Laws of Utah 1987)
                      49-20-404, (Renumbered from 49-8-403, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-20-405, (Renumbered from 49-8-404, as last amended by Chapter 283, Laws of Utah
                  2000)
                      49-20-406, (Renumbered from 49-8-405, as last amended by Chapter 154, Laws of Utah
                  2000)
                      49-21-101, (Renumbered from 49-9-101, as enacted by Chapter 1, Laws of Utah 1987)
                      49-21-102, (Renumbered from 49-9-103, as last amended by Chapter 283, Laws of Utah
                  2000)
                      49-21-103, (Renumbered from 49-9-201, as last amended by Chapter 169, Laws of Utah
                  1988)
                      49-21-104, (Renumbered from 49-9-202, as enacted by Chapter 1, Laws of Utah 1987)
                      49-21-105, (Renumbered from 49-9-102, as last amended by Chapter 111, Laws of Utah
                  1987)
                      49-21-201, (Renumbered from 49-9-203, as last amended by Chapter 157, Laws of Utah
                  1992)
                      49-21-301, (Renumbered from 49-9-301, as last amended by Chapter 90, Laws of Utah
                  1994)

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                      49-21-401, (Renumbered from 49-9-401, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-21-402, (Renumbered from 49-9-402, as last amended by Chapter 231, Laws of Utah
                  1996)
                      49-21-403, (Renumbered from 49-9-403, as last amended by Chapter 292, Laws of Utah
                  1999)
                      49-21-404, (Renumbered from 49-9-404, as enacted by Chapter 1, Laws of Utah 1987)
                      49-21-405, (Renumbered from 49-9-405, as last amended by Chapter 81, Laws of Utah
                  1989)
                      49-21-406, (Renumbered from 49-9-407, as enacted by Chapter 1, Laws of Utah 1987)
                      49-21-407, (Renumbered from 49-9-409, as last amended by Chapter 231, Laws of Utah
                  1996)
                  REPEALS:
                      49-1-501, as enacted by Chapter 1, Laws of Utah 1987
                      49-1-605, as enacted by Chapter 1, Laws of Utah 1987
                      49-1-612, as enacted by Chapter 273, Laws of Utah 1990
                      49-1-617, as last amended by Chapter 332, Laws of Utah 2001
                      49-2-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-2-403, as last amended by Chapter 90, Laws of Utah 1994
                      49-2-501, as enacted by Chapter 1, Laws of Utah 1987
                      49-2-702, as enacted by Chapter 1, Laws of Utah 1987
                      49-3-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-3-403, as last amended by Chapter 90, Laws of Utah 1994
                      49-3-501, as enacted by Chapter 1, Laws of Utah 1987
                      49-3-702, as enacted by Chapter 1, Laws of Utah 1987
                      49-4-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-4-403, as enacted by Chapter 1, Laws of Utah 1987
                      49-4a-102, as enacted by Chapter 260, Laws of Utah 1989

- 13 -


                      49-4a-403, as enacted by Chapter 260, Laws of Utah 1989
                      49-5-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-5-403, as enacted by Chapter 1, Laws of Utah 1987
                      49-5-602, as last amended by Chapter 285, Laws of Utah 1990
                      49-6-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-6-602, as last amended by Chapter 75, Laws of Utah 1990
                      49-6a-102, as enacted by Chapter 356, Laws of Utah 1997
                      49-7-102, as enacted by Chapter 1, Laws of Utah 1987
                      49-7-402, as enacted by Chapter 1, Laws of Utah 1987
                      49-7-404, as last amended by Chapter 88, Laws of Utah 2000
                      49-9-302, as enacted by Chapter 132, Laws of Utah 1987
                      49-9-406, as last amended by Chapter 267, Laws of Utah 1998
                      49-9-408, as last amended by Chapter 111, Laws of Utah 1987
                      49-10-303, as enacted by Chapter 151, Laws of Utah 1995
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 31A-22-703 is amended to read:
                       31A-22-703. Conversion rights on termination of group accident and health insurance
                  coverage.
                      (1) Except as provided in Subsections (2) through (5), all policies of accident and health
                  insurance offered on a group basis under this title or Title 49, Chapter [8] 20, [Group] Public
                  Employees' Insurance Program Act, shall provide that a person whose insurance under the group
                  policy has been terminated for any reason, and who has been continuously insured under the group
                  policy or its predecessor for at least six months immediately prior to termination, is entitled to
                  choose a converted individual policy of accident and health insurance from the insurer which
                  conforms to Section 31A-22-708 or an extension of benefits under the group policy as provided in
                  Section 31A-22-714 .
                      (2) Subsection (1) does not apply if the policy:
                      (a) provides catastrophic, aggregate stop loss, or specific stop loss benefits;

- 14 -


                      (b) provides benefits for specific diseases or for accidental injuries only, or for dental
                  service; or
                      (c) is an income replacement policy.
                      (3) An employee or group member does not have conversion rights under Subsection (1) if:
                      (a) termination of the group coverage occurred because of failure of the group member to
                  pay any required individual contribution;
                      (b) the individual group member acquires other group coverage covering all preexisting
                  conditions including maternity, if the coverage existed under the replaced group coverage; or
                      (c) the person has:
                      (i) performed an act or practice that constitutes fraud; or
                      (ii) made an intentional misrepresentation of material fact under the terms of the coverage.
                      (4) Notwithstanding Subsections (1), (2), and (3), an employee or group member does not
                  have conversion rights under Subsection (1) if the individual or group member qualifies to continue
                  coverage under his existing group policy in accordance with the terms of his policy.
                      (5) (a) Notwithstanding Subsection 31A-22-613 (1), an insurer may reduce benefits under
                  a converted policy covering any person to the extent the benefits provided or available to that person
                  under one or more of the sources listed under Subsection (5)(b), together with the benefits provided
                  by the converted policy, would result in coverage that would result in payment of more than 100%
                  of the amount of the claim.
                      (b) The benefits sources referred to under Subsection (5)(a) include:
                      (i) benefits under another insurance policy; and
                      (ii) benefits under any arrangement of coverage for individuals in a group, whether on an
                  insured or an uninsured basis.
                      (6) (a) The conversion policy shall provide maternity benefits equal to the lesser of the
                  maternity benefits of the group policy or the conversion policy until termination of pregnancy that
                  exists on the date of conversion if:
                      (i) one of the following is pregnant on the date of the conversion:
                      (A) the insured;

- 15 -


                      (B) a spouse of the insured; or
                      (C) a dependent of the insured; and
                      (ii) the accident and health policy had maternity benefits.
                      (b) The requirements of this Subsection (6) do not apply to a pregnancy that occurs after the
                  date of conversion.
                      Section 2. Section 35A-4-502 is amended to read:
                       35A-4-502. Administration of Employment Security Act.
                      (1) (a) The department shall administer this chapter through the division.
                      (b) The department may make, amend, or rescind any rules and special orders necessary for
                  the administration of this chapter.
                      (c) The division may:
                      (i) employ persons;
                      (ii) make expenditures;
                      (iii) require reports;
                      (iv) make investigations;
                      (v) make audits of any or all funds provided for under this chapter when necessary; and
                      (vi) take any other action it considers necessary or suitable to that end.
                      (d) No later than the first day of October of each year, the department shall submit to the
                  governor a report covering the administration and operation of this chapter during the preceding
                  calendar year and shall make any recommendations for amendments to this chapter as the department
                  considers proper.
                      (e) (i) The report required under Subsection (1)(d) shall include a balance sheet of the
                  moneys in the fund in which there shall be provided, if possible, a reserve against liability in future
                  years to pay benefits in excess of the then current contributions, which reserve shall be set up by the
                  division in accordance with accepted actuarial principles on the basis of statistics of employment,
                  business activity, and other relevant factors for the longest possible period.
                      (ii) Whenever the department believes that a change in contribution or benefit rates will
                  become necessary to protect the solvency of the fund, it shall promptly inform the governor and the

- 16 -


                  Legislature and make appropriate recommendations.
                      (2) (a) The department may make, amend, or rescind rules in accordance with Title 63,
                  Chapter 46a, Utah Administrative Rulemaking Act.
                      (b) The director of the division or the director's designee may adopt, amend, or rescind
                  special orders after appropriate notice and opportunity to be heard. Special orders become effective
                  ten days after notification or mailing to the last-known address of the individuals or concerns
                  affected thereby.
                      (3) The director of the division or the director's designee shall cause to be printed for
                  distribution to the public:
                      (a) the text of this chapter;
                      (b) the department's rules pertaining to this chapter;
                      (c) the department's annual reports to the governor required by Subsection (1)(e); and
                      (d) any other material the director of the division or the director's designee considers relevant
                  and suitable and shall furnish them to any person upon application.
                      (4) (a) The division may delegate to any person so appointed the power and authority it
                  considers reasonable and proper for the effective administration of this chapter and may bond any
                  person handling moneys or signing checks under this authority.
                      (b) The department may, when permissible under federal and state law, make arrangements
                  to voluntarily elect coverage under the United States Civil Service Retirement System or a
                  comparable private retirement plan with respect to past as well as future services of individuals
                  employed under this chapter who:
                      (i) were hired prior to October 1, 1980; and
                      (ii) have been retained by the department without significant interruption in the employees'
                  services for the department.
                      (c) An employee of the department who no longer may participate in a federal or other
                  retirement system as a result of a change in status or appropriation under this chapter may purchase
                  credit in a retirement system created under Title 49, Chapter [3] 13, Public Employees'
                  Noncontributory Retirement Act, with the employee's assets from the federal or other retirement

- 17 -


                  system in which the employee may no longer participate.
                      (5) There is created an Employment Advisory Council composed of the members listed in
                  Subsections (5)(a) and (b).
                      (a) The executive director shall appoint:
                      (i) not less than five employer representatives chosen from individuals recommended by
                  employers, employer associations, or employer groups;
                      (ii) not less than five employee representatives chosen from individuals recommended by
                  employees, employee associations, or employee groups; and
                      (iii) five public representatives chosen at large.
                      (b) The executive director or the executive director's designee shall serve as a nonvoting
                  member of the council.
                      (c) The employee representatives shall include both union and nonunion employees who
                  fairly represent the percentage in the labor force of the state.
                      (d) Employers and employees shall consider nominating members of groups who historically
                  may have been excluded from the council, such as women, minorities, and individuals with
                  disabilities.
                      (e) (i) Except as required by Subsection (5)(e)(ii), as terms of current council members
                  expire, the executive director shall appoint each new member or reappointed member to a four-year
                  term.
                      (ii) Notwithstanding the requirements of Subsection (5)(e)(i), the executive director shall,
                  at the time of appointment or reappointment, adjust the length of terms to ensure that the terms of
                  council members are staggered so that approximately half of the council is appointed every two
                  years.
                      (f) When a vacancy occurs in the membership for any reason, the replacement shall be
                  appointed for the unexpired term.
                      (g) The executive director shall terminate the term of any council member who ceases to be
                  representative as designated by the council member's original appointment.
                      (h) The council shall advise the department and the Legislature in formulating policies and

- 18 -


                  discussing problems related to the administration of this chapter including:
                      (i) reducing and preventing unemployment;
                      (ii) encouraging the adoption of practical methods of vocational training, retraining, and
                  vocational guidance;
                      (iii) monitoring the implementation of the Wagner-Peyser Act;
                      (iv) promoting the creation and development of job opportunities and the reemployment of
                  unemployed workers throughout the state in every possible way; and
                      (v) appraising the industrial potential of the state.
                      (i) The council shall assure impartiality and freedom from political influence in the solution
                  of the problems listed in Subsection (5)(h).
                      (j) The executive director or the executive director's designee shall serve as chair of the
                  council and call the necessary meetings.
                      (k) (i) A member shall receive no compensation or benefits for the member's services, but
                  may receive per diem and expenses incurred in the performance of the member's official duties at
                  the rates established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
                      (ii) A member may decline to receive per diem and expenses for the member's service.
                      (l) The department shall provide staff support to the council.
                      (6) In the discharge of the duties imposed by this chapter, the division director or the
                  director's designee as designated by department rule, may in connection with a disputed matter or
                  the administration of this chapter:
                      (a) administer oaths and affirmations;
                      (b) take depositions;
                      (c) certify to official acts; and
                      (d) issue subpoenas to compel the attendance of witnesses and the production of books,
                  papers, correspondence, memoranda, and other records necessary as evidence.
                      (7) (a) In case of contumacy by or refusal to obey a subpoena issued to any person, any court
                  of this state within the jurisdiction of which the inquiry is carried on or within the jurisdiction of
                  which the person guilty of contumacy or refusal to obey is found or resides or transacts business,

- 19 -


                  upon application by the director of the division or the director's designee shall have jurisdiction to
                  issue to that person an order requiring the person to appear before the director or the director's
                  designee to produce evidence, if so ordered, or give testimony regarding the matter under
                  investigation or in question. Any failure to obey that order of the court may be punished by the court
                  as contempt.
                      (b) Any person who, without just cause, fails or refuses to attend and testify or to answer any
                  lawful inquiry or to produce books, papers, correspondence, memoranda, and other records, if it is
                  in that person's power to do so, in obedience to a subpoena of the director or the director's designee
                  shall be punished as provided in Subsection 35A-1-301 (1)(b). Each day the violation continues is
                  a separate offense.
                      (c) In the event a witness asserts a privilege against self-incrimination, testimony and
                  evidence from the witness may be compelled pursuant to Title 77, Chapter 22b, Grants of Immunity.
                      (8) (a) In the administration of this chapter, the division shall cooperate with the United
                  States Department of Labor to the fullest extent consistent with the provisions of this chapter and
                  shall take action, through the adoption of appropriate rules by the department and administrative
                  methods and standards, as necessary to secure to this state and its citizens all advantages available
                  under the provisions of:
                      (i) the Social Security Act that relate to unemployment compensation;
                      (ii) the Federal Unemployment Tax Act; and
                      (iii) the Federal-State Extended Unemployment Compensation Act of 1970.
                      (b) In the administration of Section 35A-4-402 , which is enacted to conform with the
                  requirements of the Federal-State Extended Unemployment Compensation Act of 1970, 26 U.S.C.
                  3304, the division shall take any action necessary to ensure that the section is interpreted and applied
                  to meet the requirements of the federal act, as interpreted by the United States Department of Labor
                  and to secure to this state the full reimbursement of the federal share of extended and regular benefits
                  paid under this chapter that are reimbursable under the federal act.
                      Section 3. Section 49-11-101 , which is renumbered from Section 49-1-101 is renumbered
                  and amended to read:

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TITLE 49. UTAH STATE RETIREMENT AND INSURANCE BENEFIT ACT

                 
CHAPTER 11. UTAH STATE RETIREMENT SYSTEMS ADMINISTRATION

                 
Part 1. General Provisions

                       [49-1-101].     49-11-101. Title.
                      (1) This title is known as the "Utah State Retirement and Insurance Benefit Act."
                      (2) This chapter is known as the "Utah State Retirement Systems Administration."
                      Section 4. Section 49-11-102 , which is renumbered from Section 49-1-103 is renumbered
                  and amended to read:
                       [49-1-103].     49-11-102. Definitions.
                      As used in this title:
                      [(1) "Accumulated contributions" means the sum of the contributions made by or on behalf
                  of a member and standing to the credit of the member's individual account, including regular interest
                  where allowed by law.]
                      (1) (a) "Active member" means a member who is employed or who has been employed by
                  a participating employer within the previous 120 days.
                      (b) "Active member" does not include retirees.
                      (2) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of
                  mortality tables [adopted by the board] as recommended by the actuary and adopted by the executive
                  director, including regular interest.
                      (3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
                  adopted by the board [upon the recommendation of the actuary and] upon which the funding of
                  [retirement] system costs and benefits are computed.
                      [(4) "Administrator" means the executive director of the board.]
                      [(5)] (4) "Agency" means:
                      (a) a department, division, agency, office, authority, commission, board, institution, or
                  hospital of the state;
                      (b) a county, municipality, school district, or special district;
                      (c) a state college or university; or

- 21 -


                      (d) any other [individual employing unit that participates in a system administered by the
                  board] participating employer.
                      [(6)] (5) "Allowance" means the pension plus the annuity, including any cost of living or
                  other authorized adjustments to the pension and annuity.
                      (6) "Alternate payee" means a member's former spouse or family member eligible to receive
                  payments under a Domestic Relations Order in compliance with Section 49-11-612 .
                      (7) "Annuity" means [annual] monthly payments [for life] derived from member
                  contributions [made by the employee].
                      (8) "Appointive officer" means an employee appointed to a position for a definite and fixed
                  term of office by official and duly recorded action of a participating employer, and who earns during
                  the first full month of the term of office $500 or more, indexed as of January 1, 1989, as provided
                  in Section 49-12-407 .
                      [(8)] (9) "Beneficiary" means any person entitled to receive a [retirement allowance or other
                  benefit provided by] payment under this title through a relationship with or designated by a member,
                  participant, covered individual, or alternate payee of a defined contribution plan.
                      [(9)] (10) "Board" [or "retirement board"] means the Utah State Retirement Board
                  established under [this title] Section 49-11-202 .
                      (11) "Board member" means a person serving on the Utah State Retirement Board as
                  established under Section 49-11-202 .
                      [(10)] (12) "Contributions" means the [contributions] total amount paid by the participating
                  employer and the member[, if any,] into a [retirement fund] system or to the Utah Governors' and
                  Legislators' Retirement Plan under Chapter 19, Utah Governor's and Legislators' Retirement Act.
                      (13) "Council member" means a person serving on the Membership Council established
                  under Section 49-11-202 .
                      (14) "Covered Individual" means any individual covered under Chapter 20, Public
                  Employees Benefit and Insurance Program Act.
                      [(11)] (15) "Current service" means covered service [rendered after the effective date of each
                  system] as defined in Chapters 12, 13, 14, 15, 16, 17, 18, and 19.

- 22 -


                      [(12) "Department" means any department, office, board, commission, instrumentality, or
                  other agency of the state.]
                      [(13) "Dependent beneficiary" means a spouse, child, or children under 21 years of age, a
                  child or children with a physical or mental disability, regardless of age, or a parent, or person,
                  regardless of age or relationship, who is or are financially dependent upon the member. The
                  dependency of a person other than a spouse or child shall be proved by written verified documents
                  acceptable to the board or by a copy of the member's state income tax return for the last reportable
                  year listing the person as a dependent. All documents are subject to review and approval of the
                  administrator.]
                      (16) "Defined contribution" or "defined contribution plan" means any defined contribution
                  plan authorized under the Internal Revenue Code and administered by the board.
                      (17) "Educational institution" means a political subdivision or instrumentality of the state
                  or a combination thereof primarily engaged in educational activities or the administration or
                  servicing of educational activities, including:
                      (a) the State Board of Education and its instrumentalities;
                      (b) any institution of higher education and its branches;
                      (c) any school district and its instrumentalities;
                      (d) any vocational and technical school; and
                      (e) any entity arising out of a consolidation agreement between entities described under this
                  Subsection (16).
                      [(14)] (18) (a) "Employer" [or "employing unit"] means any department, educational
                  institution, or political subdivision[, organization, or agency financed in whole or in part by public
                  funds for which any employee or member performs services subject to this title] of the state eligible
                  to participate in a government-sponsored retirement system under federal law.
                      (b) "Employer” may also include an agency financed in whole or in part by public funds as
                  allowed under Chapter 12 or 13.
                      (19) "Final average monthly salary" means the amount computed by dividing the
                  compensation received during the final average salary period under each system by the number of

- 23 -


                  months in the final average salary period.
                      (20) "Fund” means any fund created under this title for the purpose of paying benefits or
                  costs of administering a system, plan, or program.
                      [(15)] (21) (a) "Inactive member" means a member who has [received no compensation for
                  a period longer than four months] not been employed by a participating employer for a period of at
                  least 120 days.
                      (b) "Inactive member" does not include retirees.
                      [(16) (a) "Member" means any person included in the membership of any retirement system
                  administered by the board. (b) A]
                      (22) (a) "Member" means a person [is considered to be a member if he has], except a retiree,
                  with contributions on deposit with [the retirement] a system, the Utah Governors' and Legislators'
                  Retirement Plan under Chapter 19, or with [the] a terminated system.
                      (b) "Member" also includes leased employees within the meaning of Section 414(n)(2) of
                  the [federal] Internal Revenue Code, if the employees have contributions on deposit with the office.
                  If leased employees constitute less than 20% of the participating employer's work force that is not
                  highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
                  "member" does not include leased employees covered by a plan described in Section 414(n)(5) of
                  the federal Internal Revenue Code.
                      (23) "Member contributions" means the sum of the contributions paid to a system or the
                  Utah Governors' and Legislators' Retirement Plan, including refund interest if allowed by a system,
                  and which are made by:
                      (a) the member; and
                      (b) the participating employer on the member's behalf under Section 414(h) of the Internal
                  Revenue Code.
                      (24) "Nonelective contribution" means an amount contributed by a participating employer
                  into a participant's defined contribution account.
                      [(17)] (25) "Office" [or "retirement office"] means the Utah State Retirement Office.
                      (26) "Participant" means an individual with voluntary deferrals or nonelective contributions

- 24 -


                  on deposit with the defined contribution plans administered under this title.
                      [(18)] (27) "Participating employer" [or "participating employing unit" means any employer
                  or employing unit participating in the system whose employees are members of the system] means
                  a participating employer, as defined by Chapters 12, 13, 14, 15, 16, 17, and 18, or an agency financed
                  in whole or in part by public funds which is participating in a system or plan as of January 1, 2002.
                      [(19) "Payroll" means a register, warrant, or any other document upon which all persons
                  receiving salary payments are listed.]
                      [(20)] (28) "Pension" means [annual] monthly payments [for life] derived from participating
                  employer contributions [made by employers].
                      (29) "Plan" means the Utah Governors' and Legislators' Retirement Plan created by Chapter
                  19 or the defined contribution plans created under Section 49-11-801 .
                      [(21)] (30) (a) "Political subdivision" means any [political subdivision of the state] local
                  government entity, including cities, towns, counties, and school districts, but only if the subdivision
                  is a juristic entity that is legally separate and distinct from the state and only if its employees are not
                  by virtue of their relationship to the entity[,] or employees of the state [or one of its departments].
                  [(a) The term]
                      (b) "Political subdivision" includes special districts or authorities created by the Legislature
                  or by local governments, including [mosquito abatement districts, sewer or water districts, water
                  associations and companies, libraries, and any entity arising out of a consolidation agreement
                  between political subdivisions. (b) The term includes] the [retirement] office.
                      (c) [The term] "Political subdivision" does not include a project entity created under Title
                  11, Chapter 13, Interlocal Cooperation Act.
                      [(22) "Prior service" means service rendered prior to the effective date of each system.]
                      [(23) "Refund" means a return of contributions to a terminating member.]
                      (31) "Program" means the Public Employees' Insurance Program created under Chapter 20,
                  Public Employees' Insurance Program Act, or the Public Employees' Long-Term Disability program
                  created under Chapter 21, Public Employees' Long-Term Disability Act.
                      (32) "Public funds" means those funds derived, either directly or indirectly, from public

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                  taxes or public revenue, dues or contributions paid or donated by the membership of the
                  organization, used to finance an activity whose objective is to improve, on a nonprofit basis, the
                  governmental, educational, and social programs and systems of the state or its political subdivisions.
                      [(24) "Regular] (33) "Refund interest" means [interest compounded annually at a rate] the
                  amount accrued on member contributions at a rate adopted by the board [in accordance with this
                  title].
                      [(25)] (34) "[Retirant] Retiree" means [a retired member] an individual who [is receiving
                  retirement benefits] has qualified for an allowance under this title.
                      [(26)] (35) "Retirement" means [withdrawal from active service with a retirement allowance
                  granted under this title] the status of an individual who has become eligible, applies for, and is
                  entitled to receive an allowance under this title.
                      (36) "Retirement date" means the date selected by the member on which the member's
                  retirement becomes effective with the office.
                      [(27)] (37) "Service credit" [or "covered service"] means [service used in the computation
                  of benefits.]:
                      (a) the period during which an employee is employed and compensated by a participating
                  employer and meets the eligibility requirements for membership in a system or the Utah Governors'
                  and Legislators' Retirement Plan, provided that any required contributions are paid to the office; and
                      (b) periods of time otherwise purchasable under this title.
                      (38) "System" means the individual retirement systems created by Chapters 12, 13, 14, 15,
                  16, 17, and 18.
                      (39) "Voluntary deferrals" means an amount contributed by a participant into that
                  participant's defined contribution account.
                      Section 5. Section 49-11-103 , which is renumbered from Section 49-1-102 is renumbered
                  and amended to read:
                       [49-1-102].     49-11-103. Purpose -- Liberal construction.
                      (1) The purpose of this [chapter] title is to establish [a central administrative office and a
                  board to administer the various]:

- 26 -


                      (a) retirement systems [established by the Legislature.] and the Utah Governors' and
                  Legislators' Retirement Plan for members which provide:
                      (i) a uniform system of membership;
                      (ii) retirement requirements;
                      (iii) benefits for members;
                      (iv) funding on an actuarially sound basis;
                      (v) contributions; and
                      (vi) economy and efficiency in public service; and
                      (b) a central administrative office and a board to administer the various systems, plans, and
                  programs established by the Legislature or the board.
                      (2) This title shall be liberally construed to provide maximum benefits and protections
                  consistent with sound fiduciary and actuarial principals.
                      Section 6. Section 49-11-201 , which is renumbered from Section 49-1-201 is renumbered
                  and amended to read:
                 
Part 2. Retirement Office and Board

                       [49-1-201].     49-11-201. Establishment of retirement office -- An independent state
                  agency -- Office exemption.
                      (1) (a) There is established the Utah State Retirement Office.
                      (b) The office shall administer the [state retirement] systems, plans, and programs and
                  perform all other functions assigned to it [by law] under this title.
                      (2) (a) The office is an independent state agency.
                      (b) It is subject to legislative and executive department budgetary [examination] review and
                  comment.
                      (3) The office [shall be housed in Salt Lake City, but branches of the office may be
                  established in other areas of the state] may establish branch offices upon approval of the board.
                      (4) [(a)] The board [is] and office are exempt from those acts which are applicable to state
                  and other governmental entities under this code.
                      [(b) Notwithstanding Subsection (4)(a), the board shall:]

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                      [(i) adopt, where not in conflict with its trust and fiduciary responsibilities or other law, rules
                  governing the operation of the retirement office that are substantially similar to those governing other
                  public agencies; and]
                      [(ii) report the rules and any amendments to the rules adopted under Subsection (4)(b)(i) to
                  the Legislative Quasi-Governmental Entities Committee on an annual basis or as otherwise requested
                  by the Legislative Quasi-Governmental Entities Committee.]
                      Section 7. Section 49-11-202 , which is renumbered from Section 49-1-202 is renumbered
                  and amended to read:
                       [49-1-202].     49-11-202. Establishment of Utah State Retirement Board -- Quorum --
                  Terms -- Officers -- Expenses and per diem -- Membership council established.
                      (1) There is established the Utah State Retirement Board composed of seven board members
                  determined as follows:
                      (a) Four board members, with experience in investments or banking, shall be appointed by
                  the governor from the general public.
                      (b) One board member shall be a school employee appointed by the governor from at least
                  three nominations submitted by the governing board of [a] the school employees' association that
                  is representative of a majority of the school employees who are members of [the school employees'
                  retirement] a system administered by the board.
                      (c) One board member shall be a public employee appointed by the governor from at least
                  three nominations submitted by the governing board of [a] the public employee association that is
                  representative of a majority of the public employees who are members of [the public employees'
                  retirement] a system administered by the board.
                      (d) One board member shall be the state treasurer[, who shall serve as an ex officio member
                  with full voting privileges].
                      (2) Four board members constitute a quorum for the [purpose of doing all] transaction of
                  business.
                      (3) (a) All appointments to the board shall be made on a nonpartisan basis, with the advice
                  and consent of the Senate.

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                      (b) [Members] Board members shall serve until their successors are appointed and take the
                  constitutional oath of office.
                      (c) When a vacancy occurs [in the membership] on the board for any reason, the replacement
                  shall be appointed for the unexpired term.
                      [(d) Members appointed to the board between sessions of the Legislature shall serve with
                  full authority until acted upon by the Senate in session.]
                      (4) (a) Except as required by Subsection (4)(b), all appointed board members shall serve for
                  four-year terms.
                      (b) Notwithstanding the requirements of Subsection (4)(a), the governor shall, at the time
                  of appointment or reappointment, adjust the length of terms to ensure that the terms of board
                  members are staggered so that approximately half of the board is appointed every two years.
                      (c) [Public employees or educators] A board member who is appointed as a school employee
                  or as a public employee who [retire] retires or [otherwise terminate their employment] who is no
                  longer employed with a [covered unit] participating employer shall immediately resign from the
                  board.
                      (5) (a) Each year the board shall elect a president and [vice-president] vice president from
                  its membership. [Each member shall be reimbursed for expenses incurred in service to the board.]
                      (b) Each board member shall receive a per diem plus [travel] expenses for attending
                  regularly constituted meetings and conferences as provided by [law for attending board meetings]
                  board action.
                      (6) (a) [The board shall establish] There is established a Membership Council to [advise and
                  counsel with the board and the director on policies affecting members of the various systems
                  administered by the retirement office] perform the duties under Subsection (10).
                      (b) The board may pay the travel expenses of council members who attend council meetings.
                      (7) [Beginning July 1, 1991, the] The Membership Council shall be composed of 13 council
                  members selected as follows:
                      (a) Three council members shall be school employees selected by the governing board of an
                  association representative of a majority of school employees who are members of [the Public

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                  Employees' Retirement System or the Public Employees' Noncontributory Retirement System] a
                  system administered by the board.
                      (b) One council member shall be a classified school employee selected by the governing
                  board of [an] the association representative of a majority of classified school employees who are
                  members of [the Public Employees' Retirement System or the Public Employees' Noncontributory
                  Retirement System] a system administered by the board.
                      (c) Two council members shall be public employees selected by the governing board of [an]
                  the association representative of a majority of the public employees who are members of [the Public
                  Employees' Retirement System or the Public Employees' Noncontributory Retirement System] a
                  system administered by the board.
                      (d) One council member shall be a [city or town] municipal officer or employee selected by
                  the governing board of [an] the association representative of a majority of the [cities and towns]
                  municipalities who [are members of the Public Employees' Retirement System or the Public
                  Employees' Noncontributory Retirement System] participate in a system administered by the board.
                      (e) One council member shall be a county officer or employee selected by the governing
                  board of [an] the association representative of a majority of counties who [are members of the Public
                  Employees' Retirement System or the Public Employees' Noncontributory Retirement System]
                  participate in a system administered by the board.
                      (f) One council member shall be a representative of members of the Judges' Noncontributory
                  Retirement System selected by the Judicial Council.
                      (g) One council member shall be a representative of members of the Public Safety
                  Retirement [System] Systems selected by the governing board of [an] the association representative
                  of the majority of peace officers who are members of the Public Safety Retirement [System]
                  Systems.
                      (h) One council member shall be a representative of members of the Firefighters' Retirement
                  System selected by the governing board of [an] the association representative of the majority of paid
                  professional firefighters who are members of the Firefighters' Retirement System.
                      (i) One council member shall be a [retired member] retiree selected by the Utah Association

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                  of Retired Public Employees.
                      (j) One council member shall be a [retired member] retiree selected by the Utah Retired
                  School Employees' Association.
                      (8) (a) [Members shall be appointed as provided for in Subsection (7)] Each entity granted
                  authority to select council members under Subsection (7) may also revoke the selection at any time.
                      (b) [Except as required by Subsection (c), as terms of current council members expire, the
                  board shall appoint each new member or reappointed member to a four-year term] Each term on the
                  council shall be for a period of four years, subject to Subsection (8)(a).
                      [(c) Notwithstanding the requirements of Subsection (b), the board shall, at the time of
                  appointment or reappointment, adjust the length of terms to ensure that the terms of council members
                  are staggered so that approximately half of the council is appointed every two years.]
                      [(d)] (c) Each term begins on July 1 and expires on June 30 [in the year of expiration].
                      [(e)] (d) When a vacancy occurs [in] on the [membership] council for any reason, the
                  replacement shall be [appointed] selected for the remainder of the unexpired term.
                      (9) The council shall annually designate one council member as chair [annually].
                      (10) The council shall:
                      (a) recommend to the board and to the Legislature benefits and policies for members of any
                  system or plan administered by the board [to the board and to the Legislature];
                      (b) recommend procedures and practices to improve the administration of the [system]
                  systems and plans and the public employee relations responsibilities of the board and office;
                      (c) examine the record of all decisions affecting retirement benefits made by a hearing
                  officer under Section 49-11-613 ;
                      (d) submit nominations to the board for the position of executive director if that position is
                  vacant; [and]
                      (e) advise and counsel with the board and the director on policies affecting members of the
                  various systems administered by the office; and
                      [(e) act upon all] (f) perform other duties assigned to it by the board.
                      Section 8. Section 49-11-203 , which is renumbered from Section 49-1-203 is renumbered

- 31 -


                  and amended to read:
                       [49-1-203].     49-11-203. Powers and duties of board.
                      (1) The board shall:
                      (a) appoint an executive director to administer the [retirement] office;
                      (b) receive and act upon reports covering the operations of the systems, plans, programs, and
                  funds administered by the [retirement] office;
                      (c) ensure that the systems, plans, programs, and funds are administered according to law;
                      (d) [sit as a board of appeal on any appeal filed by a member of a system, plan, or program
                  or by a covered employer] review any final order of a hearing officer and approve or modify the
                  order at the board's discretion in accordance with Section 49-11-613 ;
                      (e) examine and approve an annual operating budget for the [retirement] office;
                      (f) serve as investment trustees of the [retirement fund] Utah State Retirement Investment
                  Fund as provided under this title;
                      (g) maintain, in conjunction with participating employers and members, the systems, plans,
                  and programs on an actuarially sound [or approved] basis[, subject to the responsibility of the
                  Legislature to adjust benefits and contribution rates when recommended by the board];
                      (h) report annually to the governor, the Legislature, and each participating employer the
                  contribution rates, premium rates, and any adjustments necessary to maintain the systems, plans, and
                  programs on a financially and actuarially sound basis;
                      [(h)] (i) receive and act upon recommendations of the executive director;
                      [(i)] (j) recommend to the governor and Legislature, through the executive director, any
                  necessary or desirable changes [in the statutes governing the systems, plans, and programs
                  administered by the retirement office] to this title;
                      [(j)] (k) develop broad policy for the long-term operation of the various [retirement] systems,
                  plans, and programs [and is granted] under broad discretion and power to perform [its] the board's
                  policymaking functions, including the specific authority to interpret and define any provision or term
                  under this title when the board or office provides written documentation which demonstrates that the
                  interpretation or definition promotes uniformity in the administration of the systems or maintains

- 32 -


                  the actuarial soundness of the systems, plans, or programs;
                      (l) adopt interest rates, premium rates, and annual contribution rates after reviewing actuarial
                  recommendations;
                      [(k)] (m) establish the compensation of the executive director and adopt compensation plans
                  and policies based on market surveys for [fiduciary and administrative] positions in the office;
                      [(l) regulate the duties of employing units and other public authorities which are imposed
                  upon them by this title and specify the time, place, and manner in which contributions shall be
                  withheld and paid, and obtain any reports necessary for the administration of this title;]
                      [(m) adopt rules consistent with this title for the management of the systems, plans, and
                  programs in order to carry out the purposes of this title, and perform all other acts necessary for the
                  administration of the retirement systems, plans, and programs;]
                      [(n) comply with the procedures and requirements of Title 63, Chapter 46b, Administrative
                  Procedures Act, in its adjudicative proceedings;]
                      [(o) otherwise exercise the powers and perform the duties conferred on it by this title; and]
                      (n) take action consistent with this title for the administration of the systems, plans, and
                  programs in order to carry out the purposes of this title;
                      [(p)] (o) provide for audits of the [retirement system] systems, plans, programs, and funds;.
                      (p) take actions not in conflict with the board's trust and fiduciary responsibilities or other
                  law, with respect to the governance of the office which are substantially similar to those governing
                  other public agencies; and
                      (q) otherwise exercise the powers and perform the duties conferred on the board by this title.
                      (2) The board may:
                      (a) subpoena witnesses and compel their attendance to testify before it, for which purpose
                  each board member [and the secretary of the board] may administer oaths and affirmations to
                  witnesses and others transacting business of the [retirement system] office;
                      (b) establish [membership] councils to [advise] recommend to the board and the executive
                  director [on] policies affecting members of any [system] systems, plans, and programs administered
                  by the board [and may];

- 33 -


                      (c) pay the travel expenses of council members who attend council meetings; and
                      [(c)] (d) sue and be sued in its own name.
                      Section 9. Section 49-11-204 , which is renumbered from Section 49-1-204 is renumbered
                  and amended to read:
                       [49-1-204].     49-11-204. Powers and duties of executive director.
                      The executive director shall:
                      (1) act as the executive officer of the board and the [retirement] office;
                      (2) administer the various [acts,] systems, plans, programs, and functions assigned to the
                  board or office;
                      (3) subject to board review, develop and [promulgate, with the approval of the board,
                  administrative rules which are within the authority granted by this title, in the administration of the
                  various retirement systems, plans, and programs] implement internal policies and procedures which
                  administer and govern the day-to-day operations of the systems, plans, and programs;
                      (4) transmit orders of a hearing officer made under Section 49-11-613 to the board [any
                  appeals received from members of any retirement system, plan, or program under this title, or any
                  covered employer, arising out of a ruling of the director, and to arrange a hearing before the board
                  for any affected party];
                      (5) [keep the board, the governor, the Legislature, and its agencies, and other affected
                  officers, associations, and groups informed on the operations of the retirement office] provide
                  information concerning the operation of the office to the board, the governor, the Legislature,
                  participating employers, and employer and employee associations, unless otherwise restricted under
                  Section 49-11-618 ;
                      (6) [recommend to the board] inform the Legislature of any recommendations from the board
                  regarding any necessary or desirable changes [in the retirement statutes] to this title;
                      (7) [serve as a consultant] consult with the Legislature on all [retirement] legislation under
                  this title;
                      (8) (a) recommend to the board an annual administrative budget covering the operations of
                  the [retirement] office and, upon approval, submit the budget along with the actuarial status of the

- 34 -


                  [fund] funds to the governor and the Legislature for [examination] review and comment; [after which
                  the director shall] and
                      (b) direct and control the subsequent expenditures of the budget;
                      (9) employ, within the limitations of the budget, [staff] personnel [and consultants] to
                  administer the [retirement] systems, plans, programs, and funds assigned to the [retirement] office,
                  including consultants, actuaries, attorneys, medical examiners, investment counselors, and
                  accountants[, and clerical and other assistants] to accomplish the [purpose] purposes of [the
                  retirement office] this title;
                      [(10) develop, with approval of the board, common administrative procedures and rules for
                  each of the retirement systems, plans, and programs administered by the retirement office;]
                      [(11)] (10) establish[, with approval of the board,] independent financial records for each
                  of the [retirement] systems, plans, and programs or combine all financial records using acceptable
                  principles of [fund] accounting to identify the assets and vested interests of each [retirement] system,
                  plan, or program;
                      [(12) credit contributions of employers and other accounts with interest at the rate adopted
                  in accordance with Subsection (13);]
                      [(13) from time to time, upon the recommendation of the consulting actuary, adopt interest
                  rates, mortality tables, and other tables necessary for the administration of the systems, plans, and
                  programs;]
                      [(14) keep in convenient form all records and accounts necessary for the administration of
                  the systems, plans, and programs and data for investigation of its experience and its actuarial
                  valuation;]
                      (11) maintain individual records necessary to provide benefits under this title;
                      (12) keep in convenient form all records, accounts, and data necessary for the administration
                  and actuarial valuation of the systems, plans, and programs;
                      (13) adopt fees, charges, and upon the recommendation of the actuary, interest rates and
                  tables for the administration of the systems, plans, and programs;
                      [(15)] (14) consolidate into one [warrant] payment all monthly [payments of annuities,

- 35 -


                  pensions, and subsistence payments made to each retired member as long as] allowances and any
                  defined contribution distributions if the integrity of the various funds is maintained through
                  appropriate accounting records [which shall be established];
                      [(16) comply with the procedures and requirements of Title 63, Chapter 46b, Administrative
                  Procedures Act, in any adjudicative proceedings conducted by the director; and (17) from time to
                  time, but]
                      (15) at least biennially[, and in cooperation with the Office of Legislative Research and
                  General Counsel,]:
                      (a) make an actuarial investigation into the mortality, service, and other experience of the
                  members [and], participants, beneficiaries, and covered individuals of the systems, plans, and
                  programs[,];
                      (b) actuarially value the assets and liabilities of the administered funds and accounts[,]; and
                      (c) determine the rate of interest being earned by the funds[, and, based upon all these
                  determinations and factors, including items requested by the Office of Legislative Research and
                  General Counsel, shall confer with that office and];
                      (16) report to the board findings [of the investigation] under Subsection (15), with
                  recommendations, [to the Legislature along with any] including proposed changes in the rates of
                  contribution or benefits that are necessary to [the security] maintain the actuarial soundness of the
                  [system, plan, or program. Costs of the investigation, as well as all actuarial consulting and other
                  services, shall be paid from the interest earnings of the fund.] systems, plans, or programs;
                      (17) regulate participating employers by:
                      (a) educating them on their duties imposed by this title;
                      (b) specifying the time, place, and manner in which contributions shall be withheld and paid;
                  and
                      (c) requiring any reports necessary for the administration of this title; and
                      (18) otherwise exercise the powers and perform the duties conferred on the executive
                  director by this title.
                      Section 10. Section 49-11-301 , which is renumbered from Section 49-1-301 is renumbered

- 36 -


                  and amended to read:
                 
Part 3. Investment Fund

                       [49-1-301].     49-11-301. 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[.]" for the purpose of enlarging the investment base and simplifying investment
                  procedures and functions.
                      (2) (a) The board shall act as trustees of the [fund,] Utah State Retirement Investment Fund
                  and, through [its] the executive [officer] director, 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] if 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) (i) 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].
                      (ii) The value of the transferred assets shall be calculated in accordance with generally
                  accepted accounting principles.
                      (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] The income or principal or
                  equity credit belonging to one participating fund may not be transferred to another, except for the
                  purpose of:
                      (i) actuarially recommended transfers in order to adjust employer contribution rates for an
                  employer that participates in both contributory and noncontributory systems[.]; or
                      (ii) transfers which reflect the value of service credit accrued in different systems during a

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                  member's career.
                      (3) The assets of the [participating] funds are for the exclusive benefit of the members,
                  participants, and covered individuals 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] title.
                      (4) (a) Interest and other earnings shall be credited to each participating fund on a pro rata
                  equity position basis [monthly, or otherwise as directed by the board].
                      (b) (i) 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.
                      (ii) Each participating fund shall retain its proportionate equity in the reserve account.
                      Section 11. Section 49-11-302 , which is renumbered from Section 49-1-302 is renumbered
                  and amended to read:
                       [49-1-302].     49-11-302. Board duties with respect to fund.
                      (1) The board [shall]:
                      (a) shall review and establish the asset allocation of [all funds assigned to the board or
                  retirement office] the Utah State Retirement Investment Fund for investment, and [through its] with
                  the executive [officer] director, shall determine the method of investing the funds [to ensure the
                  greatest return commensurate with sound financing adequately safeguarded. The board,];
                      (b) through [its] the executive [officer, may] director:
                      (i) shall invest [and reinvest] the money in the [retirement fund or funds and] Utah State
                  Retirement Investment Fund; and
                      (ii) may provide for the holding, purchasing, selling, assigning, transferring, and disposing
                  of any of the securities and investments in which any of the money of the [fund] Utah
                  State Retirement Investment Fund is invested. [The board shall appoint a custodian for the funds
                  and securities under its control.]
                      (2) Fees for all services shall be paid from the interest earnings of the [investment fund]                   Utah
                  State Retirement Investment Fund.
                      [(2)] (3) [The board may hold title] Title to real estate or any other fund investment may be:

- 38 -


                      (a) held in the name of the Utah State Retirement Investment Fund; or [may by rule
                  determine under what name or names it holds title to real estate or any other fund investment.]
                      (b) held in another name or names as determined by the board.
                      Section 12. Section 49-11-303 , which is renumbered from Section 49-1-303 is renumbered
                  and amended to read:
                       [49-1-303].     49-11-303. Fund investment standard -- Prudent investor rule.
                      The [fund] Utah State Retirement Investment Fund shall be invested in accordance with the
                  prudent [man] investor rule [established] under Section 75-7-302 .
                      Section 13. Section 49-11-304 , which is renumbered from Section 49-1-304 is renumbered
                  and amended to read:
                       [49-1-304].     49-11-304. Administrative costs -- Payable from fund.
                      General administrative costs of operating the [retirement] office shall be assessed to the
                  [retirement] systems, plans, programs, and funds [administered upon the basis of cost and service
                  performed. Special costs, such as actuarial studies and service, investment counsel, legal fees, and
                  medical examiner charges, which are or can be directly attributable to a system, plan, program, or
                  fund shall be paid directly from the respective fund involved. Since the administrative funds are
                  derived from the systems, plans, and programs administered by the retirement office, rather than an
                  administrative appropriation from the General Fund, any balance in the administrative fund at the
                  end of a fiscal or biennial period shall remain in the fund, but shall be taken into consideration in
                  preparing a subsequent budget] on a pro rata basis and shall be paid from earnings of the Utah State
                  Retirement Investment Fund.
                      Section 14. Section 49-11-305 , which is renumbered from Section 49-1-305 is renumbered
                  and amended to read:
                       [49-1-305].     49-11-305. Self-insurance option -- Purchase of liability insurance.
                      (1) The [retirement] office may self insure and may purchase commercial insurance[, self
                  insure, or purchase excess commercial insurance in excess of] in any amount.
                      (2) The office may also purchase excess commercial insurance above the limits provided by
                  the Governmental Immunity Act against any:

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                      (a) risk created or recognized by the Governmental Immunity Act; or [any]
                      (b) other action for which the board, office, or any of its employees, may be held liable.
                      Section 15. Section 49-11-401 , which is renumbered from Section 49-1-401 is renumbered
                  and amended to read:
                 
Part 4. Service Credits

                       [49-1-401].     49-11-401. Transfer of service credit -- Eligibility for service credit --
                  Computation of service credit.
                      (1) (a) The [board] office shall make the transfer of service [credits] credit, together with
                  related member and participating employer contributions, from one [retirement] system to another
                  upon terms and conditions established by the board.
                      (b) The terms and conditions may not result in a loss of accrued benefits.
                      (2) Transfer of employment from a position covered by one [public retirement] system to
                  a position covered by another system does not [either: (a)] cause the employee to lose active
                  [membership] member status [in the system; or].
                      [(b) constitute a termination of employment prerequisite to qualifying for a refund of
                  contributions.]
                      [(2)] (3) In the [establishment] accrual of service [credits] credit, the following provisions
                  apply:
                      [(a) Any member of a retirement system who performs covered services shall receive service
                  credit for the service.]
                      [(b) Any member who is not in an active service status because of sickness, injury, leave of
                  absence, including service in the armed forces of the United States, or because the member is in the
                  process of transfer from one employing unit to another shall, upon returning to active status, have
                  the same rights and be subject to the same requirements as other employees under this title.]
                      [(c) (i) For the purpose of computing the amount of a member's retirement allowance, no
                  service credit may be given to any member for the period during which the member is on leave of
                  absence without compensation, except as otherwise provided in this title or Subsection (2)(c)(ii).]
                      [(ii) A member with full-time public service while on an approved leave of absence may

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                  purchase, or the employer may purchase on their behalf, credit equal to the public service by making
                  contributions fixed by the administrator.]
                      [(d) No service credit may be given to a member for the period during which the member
                  was in any inactive status unless the service is purchased according to the provisions of this title.]
                      [(e) Credit for service shall be granted in proportion to the work performed under rules
                  adopted by the board. (f) In no case may a retirement]
                      (a) A person employed and compensated by a participating employer who meets the
                  eligibility requirements for membership in a system or the Utah Governors' and Legislators'
                  Retirement Plan shall receive service credit for the term of the employment provided that all required
                  contributions are paid to the office.
                      (b) An allowance or other benefit [be granted] may not accrue under this title which is based
                  upon the same [service] period of employment as has been the basis for any retirement benefits under
                  some other [state] public retirement system.
                      [(g) Members shall be credited with any fractions of years of service to which they are
                  entitled.]
                      [(h)] (c) The board shall fix the minimum time per day, per month, and per year upon the
                  basis of which one year of service and proportionate parts of a year shall be credited toward
                  qualification for retirement. Service may be computed on a fiscal or calendar year basis and portions
                  of years served shall be accumulated and counted as service. In any event, all of the service rendered
                  in any one fiscal or calendar year may not count for more than one year.
                      [(i) Any employee who is transferred to the Division of Information of Technology Service
                  from the Department of Public Safety, and who was a member in the Public Safety Retirement
                  System or Public Safety Noncontributory Retirement System, shall be entitled to remain a member
                  in the system he participated in prior to being transferred regardless of whether the employee's
                  current position is covered by the respective public safety system. This exception does not apply to
                  any person hired on or after January 1, 1992.]
                      (d) Service credit shall be accrued on a fiscal or calendar year basis as determined by the
                  participating employer.

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                      (e) A member may not accrue more than one year of service credit per fiscal or calendar year
                  as determined by the office.
                      (f) Fractions of years of service credit shall be accumulated and counted in proportion to the
                  work performed.
                      (4) The office may estimate the amount of service credit, compensation, or age of any
                  member, participant, or alternate payee, if information is not contained in the records.
                      [(3) (a) The board may adopt rules under which a member may make the necessary
                  contributions to the system for purchases or redeposits under this title through a
                  direct transfer, direct rollover or rollover from a qualified plan under Section 401, Internal Revenue
                  Code, or an eligible individual retirement account.]
                      [(b) The board may reject any contributions if the board determines the tax status of the
                  system would be jeopardized by allowing the contribution.]
                      [(c) For purposes of this section, a direct rollover shall be determined under the provisions
                  of Section 401(a)(31), Internal Revenue Code.]
                      Section 16. Section 49-11-402 , which is renumbered from Section 49-1-402 is renumbered
                  and amended to read:
                       [49-1-402].     49-11-402. Purchase of military service credit.
                      [(1) (a) Members with full-time military service not qualifying for service credit under this
                  title may purchase credit for that military service or the employer may make the purchase on behalf
                  of the member by making contributions to the system in an amount recommended by the consulting
                  actuary.]
                      [(b) Contributions shall be based on age and salary and the purchase shall be made through
                  payroll deductions or through a lump sum deposit based upon the present value of future payments.]
                      [(c) Military service credit acquired in this manner is limited to a maximum of four years.]
                      [(d) Total payment must be completed prior to retirement or service will be prorated in
                  accordance with the amount paid. (2) Any employee of a covered unit, who has status as a ]
                      (1) A member [of a retirement system authorized by this title and] who is absent from
                  employment with a participating employer by reason of an official call to full-time United States

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                  military service [in the armed forces of the United States,] may receive service credit for that military
                  service as follows:
                      (a) the member [and], the participating employer, or the member and participating employer
                  jointly shall make the [appropriate contributions] required payments, as determined by the office,
                  to the [retirement] system in which the member participated at the time of the official call, according
                  to the law governing that particular system;
                      (b) prior to a member's retirement date, the [contributions] required payments shall be made:
                      (i) during the period of [the official call, or a contribution adjustment shall be made
                  subsequent to the official call, but at least five years prior to the member's retirement date;] full-time
                  United States military service;
                      (ii) after the military service, but within a period not to exceed three times the period of
                  military service up to a maximum of five years; or
                      (iii) as otherwise allowed by federal law;
                      (c) required payments shall be based on the member's compensation at the time of the
                  official military call;
                      (d) if a required payment is not made within the time allowed under Subsection (1)(b), the
                  member or participating employer may purchase the service credit as allowed in Subsection (2); and
                      [(c)] (e) the member [must] shall return to [covered service] employment with the
                  participating employer upon receiving an honorable discharge from military service and there may
                  not be intervening employment outside of [covered service ; and] the employment with the
                  participating employer.
                      [(d) contributions shall be based on the member's compensation at the time of the official
                  military call.]
                      (2) (a) A member, a participating employer, or a member and a participating employer
                  jointly, may purchase service credit for full-time United States military service, resulting from an
                  official call to duty, if the member has four or more years of service credit and the military service
                  does not otherwise qualify for service credit under this title.
                      (b) Payment to the office for a military service credit purchase shall be made to the system

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                  under which the member is currently covered in an amount determined by the office based on a
                  formula recommended by the actuary and adopted by the board.
                      (c) The purchase shall be made through payroll deductions or through a lump sum deposit
                  based upon the present value of future payments.
                      (d) If total payment is not completed prior to retirement, service credit shall be prorated in
                  accordance with the amount paid.
                      (3) For purposes of Subsection (2), full-time United States military service does not include
                  any regularly scheduled or annual military service that is required by a reserve unit, National Guard
                  unit, or any other United States military unit.
                      (4) (a) If any of the factors used to determine the cost of a service credit purchase change at
                  or before the member's retirement date, the cost of the purchase shall be recalculated.
                      (b) If the recalculated cost exceeds the amount paid for the purchase, the member may:
                      (i) pay the increased cost, plus interest, to receive the full amount of service credit; or
                      (ii) not pay the increased cost and have the purchased service credit prorated.
                      (5) If the recalculated cost under Subsection (4) is less than the amount paid for the                   purchase,
                  the office shall refund the excess payment to the member or participating employer who paid for the
                  purchase.
                      (6) (a) The board may adopt rules under which a member may make the necessary payments
                  to the office for purchases under this title as permitted by federal law.
                      (b) The office may reject any payments if the office determines the tax status of the system,
                  plans, or programs would be jeopardized by allowing the payment.
                      Section 17. Section 49-11-403 , which is renumbered from Section 49-1-407 is renumbered
                  and amended to read:
                       [49-1-407].     49-11-403. Purchase of public service credit not otherwise qualifying for
                  benefit.
                      (1) A member, a participating employer, or a member and a participating employer jointly
                  may purchase service credit equal to the period of the member's [service] employment in the
                  following:

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                      (a) United States federal employment;
                      (b) [private school] employment in a private school based in the United States;
                      (c) public employment in [this or] another state [that does not qualify for service credit under
                  a system administered by the board] which qualifies the member for membership in the public plan
                  or system covering the employment, but only if the member does not qualify for any retirement
                  benefits based on the employment;
                      [(d) employment in a university or a public school system if the member is on a leave of
                  absence for reasons relating to employment;]
                      [(e)] (d) forfeited [public] service credit in this state if the member does not qualify for [a
                  retirement benefit for that service; or] an allowance based on the service credit;
                      (e) full-time public service while on an approved leave of absence; or
                      (f) the period of time for which disability benefits were paid if:
                      (i) the member was receiving:
                      (A) long-term disability benefits;
                      (B) short-term disability benefits; or
                      (C) worker's compensation disability benefits; and
                      (ii) the member's employer had not entered into a benefit protection contract [pursuant to]
                  under Section [ 49-1-404 ] 49-11-404 during the period the member was disabled due to sickness or
                  accident.
                      [(2) To purchase credit, the member shall pay an amount fixed by the administrator that is
                  established on an actuarial equivalent basis.]
                      [(3) The purchase may be made through payroll deductions or through a lump-sum deposit.]
                      [(4) The employer may make the purchase on behalf of the member.]
                      [(5) Total payment must be completed prior to retirement or service will be prorated in
                  accordance with the amount paid.]
                      (2) A member shall have:
                      (a) at least four years of service credit before a purchase can be made under this section; and
                      (b) forfeited service credit under any other retirement system or plan based on the public

- 45 -


                  employment for which service credit is being purchased.
                      (3) To purchase credit under this section, the member, a participating employer, or a member
                  and a participating employer jointly shall make payment to the system in an amount determined by
                  the office based on a formula recommended by the actuary and adopted by the board.
                      (4) The purchase may be made through payroll deductions or through a lump sum deposit
                  based upon the present value of future payments.
                      (5) Total payment must be completed prior to the member's effective date of retirement or
                  service credit will be prorated in accordance with the amount paid.
                      (6) (a) If any of the factors used to determine the cost of a service credit purchase change at
                  or before the member's retirement date, the cost of the purchase shall be recalculated.
                      (b) If the recalculated cost exceeds the amount paid for the purchase, the member, a
                  participating employer, or a member and a participating employer jointly may:
                      (i) pay the increased cost, plus interest, to receive the full amount of service credit; or
                      (ii) not pay the increased cost and have the purchased service credit prorated.
                      (7) If the recalculated cost under Subsection (6) is less than the amount paid for the                   purchase,
                  the office shall refund the excess payment to the member or participating employer who paid for the
                  purchase.
                      (8) (a) The board may adopt rules under which a member may make the necessary payments
                  to the office for purchases under this title as permitted by federal law.
                      (b) The office may reject any payments if the office determines the tax status of the system,
                  plans, or programs would be jeopardized by allowing the payment.
                      Section 18. Section 49-11-404 , which is renumbered from Section 49-1-404 is renumbered
                  and amended to read:
                       [49-1-404].     49-11-404. Benefit protection contract authorized.
                      [(1) Any department or political subdivision covered by any system administered by the
                  retirement office that has established a paid salary protection program under which its officers or
                  employees, during periods of disability arising out of sickness or accident, are paid by it or by an
                  insurance underwriter at the disabled member's rate of compensation in effect at the time disability

- 46 -


                  occurred and the program is substantially equivalent to the program offered under Title 49, Chapter
                  9, may with the approval of the board, enter into a "benefit protection contract" with the retirement
                  office.]
                      (1) (a) A participating employer may establish a salary protection program under which its
                  employees are paid during periods of disability.
                      (b) If a salary protection program is established, a participating employer may enter into
                  benefit protection contracts with the office.
                      (c) A salary protection program shall:
                      (i) pay benefits based on the disabled member's rate of compensation at the time of
                  disability;
                      (ii) be substantially equivalent to the long-term disability programs offered under Chapter
                  21, Public Employees' Long-Term Disability Act; and
                      (iii) comply with requirements adopted by the board.
                      (2) [The] A benefit protection contract shall [provide a means whereby] allow:
                      (a) the disabled member [is] to be considered [to be] an active [participating] member [of
                  this retirement] in a system and [as such continues] continue to accrue [full-time] service credit and
                  salary [credits during the time employer contributions,] credit based [upon] on the member's [full]
                  rate of pay in effect at the time disability [began, are paid to the retirement office] commences;
                      (b) the office to require participating employer contributions to be paid before granting
                  service credit and salary credit to the member;
                      [(b)] (c) the disabled member [or beneficiary remains] to remain eligible during the contract
                  period for any [retirement system] benefits provided by the [retirement] system that covers the
                  member; and
                      [(c)] (d) the benefit for the disabled member [is] to 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] member on the date the member is eligible to receive benefits under a benefit protection
                  contract.
                      (3) (a) The [board] office shall establish the manner and times when employer contributions

- 47 -


                  are [to be] paid.
                      (b) A failure to make the required payments is cause for the [board] office to cancel [the
                  contracts as to any individual covered by the] a contract.
                      (c) Service credit and salary [credits] credit granted and accrued up to the time of
                  cancellation[, however,] may not be forfeited.
                      (4) The board may adopt rules to implement and administer this section.
                      Section 19. Section 49-11-405 , which is renumbered from Section 49-1-406 is renumbered
                  and amended to read:
                       [49-1-406].     49-11-405. Service credit from different systems or plans -- Eligibility
                  and calculation of service credit.
                      (1) [Any] (a) A member who has [years of] service credit from two or more systems or
                  [plans administered by the board which is not concurrent service] one or more systems and the Utah
                  Governors' and Legislators' Retirement Plan may combine [these credits] service credit for purposes
                  of determining eligibility for retirement.
                      (b) The provisions of Subsection (1)(a) do not apply to concurrent service.
                      (2) To be eligible for the calculation under Subsection (3), the member's [years of] service
                  [credits] credit earned under the [two or more] different [retirement] systems or the Utah Governors'
                  and Legislators' Retirement Plan shall at least equal the minimum [number of years] amount of
                  service credit required to retire [under the system from which the member is seeking to retire] from
                  the system which most recently covered the member.
                      (3) If [the] a member meets the requirements of Subsection (2), the [board] office shall
                  calculate the member's [retirement] allowance using all [credits] service credit earned from any
                  [retirement] system or the Utah Governors' and Legislators' Retirement Plan, with no actuarial
                  reduction applied to the allowance, except the [years of] service credit used to calculate the benefit
                  shall be increased or decreased to reflect the value of the assets transferred [to effectuate the
                  calculation of the allowance].
                      (4) The [retirement board] office shall [adopt rules to] establish the standards used for
                  calculating any increase or decrease in the [years of] service credit.

- 48 -


                      (5) This section does not apply to a retiree who is subject to Section 49-11-504 .
                      Section 20. Section 49-11-501 , which is renumbered from Section 49-1-502 is renumbered
                  and amended to read:
                 
Part 5. General Member Provisions

                       [49-1-502].     49-11-501. Refunds of member contributions -- Transfers of
                  contributions to defined contribution plan.
                      (1) If a member shall for any cause, except retirement, permanent or temporary disability,
                  or death, [cease to be employed in covered services for an employer then] terminate employment
                  with a participating employer the member may[:] leave the member contributions in the fund or may
                  receive a refund of the member contributions as provided under this section.
                      [(a) By signing a written request, affirming therein that the member has neither applied for,
                  nor contemplates further employment with a covered unit, and directing the request to the retirement
                  office, receive a refund of all accumulated contributions, less a withdrawal fee the amount of which
                  the board shall establish by rule for the purpose of reimbursing its administrative fund for the cost
                  entailed by the withdrawal. Notwithstanding the written request, if a member who has requested
                  a refund accepts employment with another covered unit within the 60-day period, the member shall
                  inform the retirement office immediately. In the event of this election, a terminating employee, upon
                  later reemployment by an employer under this title, unless the employee redeposits the refund as
                  permitted by this section, shall be treated as a new employee and the employee's service history and
                  benefit rights shall then be based upon current services from the date of reemployment in covered
                  services.]
                      [(b) Leave the member's account in the fund intact. In the event of this election, a
                  terminating employee shall retain status as a member of the system, except for the lack of
                  contributions paid into the fund by the member or on the member's behalf. In the event of
                  reemployment by an employer for services covered by this title, the employee's service history and
                  benefit rights shall be based upon the service credit accredited to the employee at the time of the
                  employee's most recent termination of employment, as well as upon the current service credit that
                  is acquired as the result of reemployment.]

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                      [(2) Upon the attainment of retirement age, an inactive member has the same rights to
                  retirement benefits, if so eligible, as any active employee member.]
                      [(3) Refunds of vested contributions may not be made prior to 60 days from the last day the
                  contributions were made, and only upon the termination of the member.]
                      [(4) No refund may be made to an active member of any retirement system administered by
                  the board. Contributions made in error will be returned to the employing unit.]
                      (2) A member who applies for a refund of member contributions shall apply in writing on
                  forms provided by the office.
                      (3) A refund of member contributions may not be made to a member within 60 days from
                  the last date of the pay period for which contributions are made by or on behalf of the member.
                      (4) If the member is reemployed by a participating employer within the time period under
                  Subsection (3), the member is not eligible for a refund.
                      (5) A member who receives a refund of member contributions forfeits the service credit
                  based on those contributions.
                      [(5) Members] (6) A member who [are] is exempted from a [retirement] system
                  [administered by the board] but who [remain] remains employed by a [covered unit] participating
                  employer may request a plan-to-plan transfer of [vested, untaxed employee contributions to a salary
                  deferral plan administered by the board, as permitted by federal law] member contributions to a
                  qualified defined contribution plan administered by the board.
                      [(6) An employee, who is no longer a member of a retirement system administered by the
                  board because the employee's employing unit withdrew from the retirement systems under this title,
                  may request a plan transfer of vested employee contributions to a plan offered by the employer that
                  is qualified to receive the transfer under federal law.]
                      (7) A member who remains employed with an employer which has withdrawn from a system
                  may request a plan-to-plan transfer of member contributions to a qualified defined contribution plan
                  administered by the board or a qualified plan offered by the member's employer.
                      (8) Refund interest shall be paid on refunds of member contributions under this section.
                      Section 21. Section 49-11-502 , which is renumbered from Section 49-1-503 is renumbered

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                  and amended to read:
                       [49-1-503].     49-11-502. Redeposits of refunds -- Time period.
                      (1) [A] (a) If a member [of any system who withdraws accumulated contributions upon a
                  previous termination of employment and who returns to covered employment in a status prerequisite
                  for membership may redeposit or the member's employer may redeposit the accumulated] receives
                  a refund of member contributions and is subsequently reemployed in a position covered by a system
                  or the Utah Governors' and Legislators' Retirement Plan, the participating employer or the member
                  may redeposit an amount equal to the member contributions [withdrawn, together with] refunded
                  and interest charged under Section 49-11-503 .
                      (b) The interest shall be compounded annually from the date of refund through the month
                  of payment[, at rates compounded annually under Section 49-1-504 ].
                      (c) If a redeposit is made, service credit shall be restored [and credited to the same retirement
                  system from which the refund was taken providing that the total redeposit is made prior to
                  retirement] to the member's account and credited to the same system or the Utah Governors' and
                  Legislator's Retirement Plan from which the refund was taken.
                      (2) (a) A member may redeposit [a previous] an amount equal to a prior refund of member
                  contributions and interest charges in one lump sum or [may redeposit the refund amount and interest
                  charges] in monthly installments by payroll deduction in a time period determined by the [executive
                  director] office.
                      (b) If the total redeposit is not made prior to the member's retirement date, the amount of
                  redeposit paid to the office shall be refunded to the member without interest and the member is not
                  entitled to service credit based on the amount of the refund.
                      (c) The interest rate charged during the installment period shall be a fixed rate calculated at
                  the time of the first installment payment in accordance with Section 49-11-503 .
                      (3) A member who redeposits a refund of member contributions under this section shall
                  receive the amount of service credit forfeited in taking the refund.
                      (4) (a) For purposes of this section, the Public Employees' Contributory Retirement System
                  created under Chapter 12, and the Public Employees' Noncontributory Retirement System created

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                  under Chapter 13, are considered one system.
                      (b) For purposes of this section, the Public Safety Contributory Retirement System created
                  under Chapter 14, and the Public Safety Noncontributory Retirement System created under Chapter
                  15, are considered one system.
                      (c) For purposes of this section, the Judges' Contributory Retirement System created under
                  Chapter 17, and the Judges' Noncontributory Retirement System created under, Chapter 18, are
                  considered one system.
                      (5) (a) The board may make rules to allow a member to make the necessary payments to the
                  office for redeposits under this title as permitted by federal law.
                      (b) The office may reject any payments if the office determines the tax status of the systems,
                  plans, or programs may be jeopardized by allowing the payment.
                      Section 22. Section 49-11-503 , which is renumbered from Section 49-1-504 is renumbered
                  and amended to read:
                       [49-1-504].     49-11-503. Rate of interest on redeposits, purchases, and delinquent
                  payments.
                      The rate of interest charged on redeposits of refunds, [withdrawals] purchases, or delinquent
                  [contributions] payments is the greater of:
                      (1) [the average rate of the effective yield for the previous five years, rounded off to the
                  nearest whole or quarter percent rate, which has been earned by the Utah State Retirement
                  Investment Fund at the end of each preceding calendar year, as determined by the executive director
                  and] the interest rate as determined under a formula approved by the board; or
                      (2) the actuarial interest rate as of the preceding June 30.
                      Section 23. Section 49-11-504 , which is renumbered from Section 49-1-505 is renumbered
                  and amended to read:
                       [49-1-505].     49-11-504. Reemployment of a retiree -- Restrictions.
                      [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

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                  returns 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 that would have
                  been contributed if the member were a member of the retirement system to a:]
                      [(i) defined contribution plan administered by the board if the employer participates in the
                  defined contribution plan administered by the board; or]
                      [(ii) defined contribution plan offered by the employer if the employer does not participate
                  in the defined contribution plan administered by the board.]
                      [(5) For the purposes of this section:]
                      [(a) "full-time" employment means employment of 20 or more hours per week; and]
                      [(b) "part-time" employment means employment of less than 20 hours per week.]
                      (1) A person who retires from a nonparticipating employer is not subject to any

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                  postretirement restrictions under this title.
                      (2) A retiree of an agency who returns to work at a different agency is not subject to any
                  postretirement restrictions under this section and may not earn additional service credit.
                      (3) For the purposes of Subsections (4) and (5), "full-time" employment means employment
                  requiring compensation for 20 hours per week or more or at least a half-time teaching contract.
                      (4) A retiree of an agency who is reemployed on a full-time basis by the same agency within
                  six months of the date of retirement is subject to the following:
                      (a) the agency shall immediately notify the office;
                      (b) the office shall cancel the retiree's allowance and reinstate the retiree to active member
                  status;
                      (c) the allowance calculations and reinstatement to active member status is effective on the
                  first day of the month following the date of reemployment;
                      (d) the reinstated retiree may not retire again with a recalculated benefit for a two-year period
                  from the date of cancellation of the original allowance, and if the retiree retires again within the
                  two-year period, the original allowance shall be resumed; and
                      (e) a reinstated retiree shall be credited with the service credit in the retiree's account at the
                  time of the first retirement and from that time shall be treated as a member of a system, including
                  the accrual of additional service credit, but subject to recalculation of the allowance under
                  Subsection (9).
                      (5) A retiree of an agency who is reemployed by the same agency within six months of
                  retirement on a less than full-time basis by the same agency is subject to the following:
                      (a) the retiree may earn, without penalty, compensation from that position which is not in
                  excess of the exempt earnings permitted by Social Security;
                      (b) if a retiree receives compensation in a calendar year in excess of the Social Security
                  limitation, 25% of the allowance shall be suspended for the remainder of the six-month period;
                      (c) the effective date of a suspension and reinstatement of an allowance shall be set by the
                  office; and
                      (d) any suspension of a retiree's allowance under this Subsection (5) shall be applied on a

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                  calendar year basis.
                      (6) For six months immediately following retirement, the retiree and participating employer
                  shall:
                      (a) maintain an accurate record of gross earnings in employment;
                      (b) report the gross earnings at least monthly to the office;
                      (c) immediately notify the office in writing of any postretirement earnings under Subsection
                  (4); and
                      (d) immediately notify the office in writing whether postretirement earnings equal or exceed
                  the exempt earnings under Subsection (5).
                      (7) A retiree of an agency who is reemployed by the same agency after six months from the
                  retirement date is not subject to any postretirement penalties under this title and may not earn
                  additional service credit.
                      (8) If a participating employer hires a retiree that may not earn additional service credit under
                  this section, the participating employer shall contribute the same percentage of a retiree's salary that
                  the participating employer would have been required to contribute if the retiree were an active
                  member, up to the amount allowed by federal law, to a retiree designated:
                      (a) defined contribution plan administered by the board, if the participating employer
                  participates in the defined contribution plan administered by the board; or
                      (b) defined contribution plan offered by the participating employer if the participating
                  employer does not participate in a defined contribution plan administered by the board.
                      (9) Notwithstanding any other provision of this section, a retiree who has returned to work,
                  accrued additional service credit, and again retires shall have the retiree's allowance recalculated
                  using:
                      (a) the formula in effect at the date of the retiree's original retirement for all service credit
                  accrued prior to that date; and
                      (b) the formula in effect at the date of the subsequent retirement for all service credit accrued
                  between the first and subsequent retirement dates.
                      (10) This section does not apply to elected positions.

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                      [(6)] (11) The board may make rules to implement this section.
                      Section 24. Section 49-11-601 , which is renumbered from Section 49-1-601 is renumbered
                  and amended to read:
                 
Part 6. Procedures and Records

                       [49-1-601].     49-11-601. Payment of employer contributions -- Penalties for failure to
                  comply -- Adjustments to be made.
                      (1) The employer contributions, fees, [and] premium taxes, contribution adjustments, and
                  other required payments shall be paid to the [fund] office by the participating employer [in
                  accordance with rules adopted by the board] as determined by the executive director.
                      (2) [Any employing unit] A participating employer that fails to withhold the amount of any
                  [employee] member contributions [is required to pay the contribution, together with any employer
                  contribution, fee, or premium tax, to the fund, if necessary, out of its own funds], as soon as
                  administratively possible, shall also pay the member contributions to the office out of its own funds.
                      (3) [(a)] If [an employing unit] a participating employer does not make the [payments]
                  contributions required by this title [as the payments become due, there is added as part of the
                  amounts due, except for corrections in the amounts of contributions, fees, and premium taxes arising
                  out of error in computation, interest established under this title.] within 60 days of the end of the pay
                  period, the participating employer is liable to the office as provided in Section 49-11-604 for:
                      (a) delinquent contributions;
                      (b) refund interest on the delinquent contributions; and
                      (c) a 12% per annum penalty on delinquent contributions.
                      [(b)] (4) The [board] executive director may waive all or any part of the interest, penalties,
                  expenses, and fees if the [board] executive director finds there were extenuating circumstances
                  surrounding [any delinquencies] the participating employer's failure to comply with this section.
                      [(4) If more or less than the correct amount of contributions, fees, and premium taxes
                  required by this title is deducted with respect to any payment of compensation, the employer shall
                  make the necessary adjustment with or without interest as required by the board.]
                      (5) Contributions made in error will be refunded to the participating employer or member

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                  that made the contributions.
                      Section 25. Section 49-11-602 , which is renumbered from Section 49-1-602 is renumbered
                  and amended to read:
                       [49-1-602].     49-11-602. Participating employer to maintain records -- Time limit --
                  Penalties for failure to comply.
                      (1) [Each employing unit] A participating employer shall maintain records [and file reports
                  relating to compensation, employees, service, and other factors relating to the proper administration
                  of this title under rules adopted by the board] necessary to calculate benefits under this title and other
                  records necessary for proper administration of this title as required by the office.
                      [(2) A penalty of 1% of the covered unit's last monthly employer contribution to the system
                  may be assessed by the board for each week a required payroll report of members' earnings and
                  employer contributions is delinquent beyond a 60-day grace period beginning with the month after
                  the month in which the report is due.]
                      (2) A participating employer shall maintain the records required under Subsection (1) until
                  three years after the latest of:
                      (a) the date of retirement of the employee from a system or plan; or
                      (b) the date of death of the employee.
                      (3) A participating employer shall be liable to the office for:
                      (a) any liabilities and expenses, including administrative expenses and the cost of increased
                  benefits to members, resulting from the participating employer's failure to maintain records under
                  this section; and
                      (b) 12% per annum penalty of those liabilities and expenses.
                      (4) The executive director may waive all or any part of the interest, penalties, expenses, and
                  fees if the executive director finds there were extenuating circumstances surrounding the
                  participating employer's failure to comply with this section.
                      (5) The executive director may estimate the length of service, compensation, or age of any
                  member, if that information is not contained in the records.
                      Section 26. Section 49-11-603 is enacted to read:

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                      49-11-603. Participating employer to report and certify -- Time limit -- Penalties for
                  failure to comply.
                      (1) As soon as administratively possible, but in no event later than 60 days after the end of
                  each pay period, a participating employer shall report and certify to the office:
                      (a) the eligibility for service credit accrual of:
                      (i) all current members;
                      (ii) each new member as they begin employment; and
                      (iii) any changes to eligibility for service credit accrual of each member.
                      (b) the compensation of each current member eligible for service credit; and
                      (c) other factors relating to the proper administration of this title as required by the executive
                  director.
                      (2) Each participating employer shall submit the reports required under Subsection (1) in a
                  form approved by the office.
                      (3) A participating employer shall be liable to the office for:
                      (a) any liabilities and expenses, including administrative expenses and the cost of increased
                  benefits to members, resulting from the participating employer's failure to correctly report and certify
                  records under this section;
                      (b) 12% per annum penalty of those liabilities and expenses; and
                      (c) attorneys' fees.
                      (4) The executive director may waive all or any part of the interest, penalties, expenses, and
                  fees if the executive director finds there were extenuating circumstances surrounding the
                  participating employer's failure to comply with this section.
                      (5) The executive director may estimate the length of service, compensation, or age of any
                  member, if that information is not contained in the records.
                      Section 27. Section 49-11-604 is enacted to read:
                      49-11-604. Office audits of participating employers -- Penalties for failure to comply.
                      (1) (a) The office may perform on-site compliance audits of participating employers to
                  determine compliance with reporting, contribution, and certification requirements under this title.

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                      (b) The office may request records to be provided by the participating employer at the time
                  of the audit.
                      (c) Audits shall be conducted at the sole discretion of the office after reasonable notice to
                  the participating employer of at least five working days.
                      (d) The participating employer shall extract and provide records as requested by the office
                  in an appropriate, organized, and usable format.
                      (e) Failure of a participating employer to allow access, provide records, or comply in any
                  way with an office audit shall result in the participating employer being liable to the office for:
                      (i) any liabilities and expenses, including administrative expenses and travel expenses,
                  resulting from the participating employer's failure to comply with the audit; and
                      (ii) a 1% penalty of the participating employer's last month's contributions.
                      (2) If the audit reveals a participating employer's failure to make contributions as required
                  under Section 49-11-601 , a failure to maintain records as required under Section 49-11-602 , or a
                  failure to correctly report or certify eligibility as required under Section 49-11-603 , the participating
                  employer shall reimburse the office for the cost of the audit.
                      (3) If the audit reveals that an incorrect benefit has been paid by the office to a member,
                  participant, alternate payee, or beneficiary due to a participating employer's failure to comply with
                  the requirements of Section 49-11-601 , 49-11-602 , or 49-11-603 , in addition to the liabilities
                  contained in Subsection (2), the participating employer shall be liable to the office for the following:
                      (a) the actuarial cost of correcting the incorrect benefit; and
                      (b) administrative expenses.
                      (4) The executive director may waive all or any part of the interest, penalties, expenses, and
                  fees if the executive director finds there were extenuating circumstances surrounding the
                  participating employer's failure to comply with this section.
                      Section 28. Section 49-11-605 is enacted to read:
                      49-11-605. Notification and correction of violations.
                      If a participating employer discovers that it has violated Section 49-11-601 , 49-11-602, or
                  49-11-603 prior to the office becoming aware of the violation, notifies the office of the violation in

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                  writing, and corrects the violation within a period agreed to by the office, the penalties under those
                  sections shall be waived.
                      Section 29. Section 49-11-606 is enacted to read:
                      49-11-606. Full participation.
                      Except as provided in Sections 49-12-203 , 49-12-204 , 49-13-203 , 49-13-204 , 49-14-203 , and
                  49-15-203 , participating employers shall cover all employees eligible for service credit under this
                  title.
                      Section 30. Section 49-11-607 , which is renumbered from Section 49-1-603 is renumbered
                  and amended to read:
                       [49-1-603].     49-11-607. Determination of benefits -- Errors in records or calculations
                  -- Correction of errors by the office.
                      (1) After the [date of] retirement date, which shall be set by a member in the member's
                  application for retirement, no alteration, addition, or cancellation of a benefit may be made except
                  as provided in Subsections (2), (3), and (4) or other law.
                      (2) (a) Errors in the records or in the calculations of the [retirement] office which result in
                  an incorrect benefit to any member, retiree, participant, covered individual, alternate payee, or
                  beneficiary [receiving more or less than the member or beneficiary is entitled to receive] shall be
                  corrected by the [administrator] office.
                      (b) Future payments shall be made to any member, retiree, participant, covered individual,
                  alternate payee, or beneficiary[, insofar as practicable, on an actuarially equivalent basis so as] to:
                      [(a)] (i) pay the benefit to which the member or beneficiary was entitled; or
                      [(b)] (ii) recover any overpayment.
                      [(3) When it is documented that an incorrect calculation by an employing unit has resulted
                  in a decreased benefit to a retirant, and the incorrect calculation is due to a bona fide error in
                  employer records, the error may be corrected by the administrator, if the employing unit makes the
                  calculation adjustment required by the administrator to keep the retirement system affected
                  actuarially sound.]
                      (3) (a) Errors in the records or calculation of a participating employer which result in an

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                  incorrect benefit to a member, retiree, participant, covered individual, alternate payee, or beneficiary
                  shall be corrected by the participating employer.
                      (b) If insufficient employer contributions have been received by the office, the participating
                  employer shall pay any delinquent employer contributions, plus interest under Section 49-11-503 ,
                  required by the office to maintain the system, plan, or program affected on an actuarially sound basis.
                      (c) If excess contributions have been received by the office, the contributions shall be
                  refunded to the participating employer or member which paid the contributions.
                      (4) If a [salary] dispute exists between [an employing unit] a participating employer and [an
                  employee] a member at the time of the [employee's] member's retirement which will affect the
                  [employee's retirement] member's benefit calculation, and notice of the dispute is given to the
                  [retirement] office prior to the calculation of a member's benefit, the benefit may be paid based on
                  the member's [stated] retirement date and [on] the records available [at that time] and then
                  recalculated upon settlement of the dispute [according to Subsection (2)].
                      Section 31. Section 49-11-608 , which is renumbered from Section 49-1-604 is renumbered
                  and amended to read:
                       [49-1-604].     49-11-608. False statements or records -- Unlawfully cashing benefit
                  checks.
                      (1) [Any] A person who knowingly makes any false statement, or who falsifies or permits
                  to be falsified any record necessary for carrying out the intent of this title is in violation of Section
                  76-6-504 .
                      (2) [Any] A person cashing a benefit check to which that person is not entitled is in violation
                  of Section 76-6-501 .
                      Section 32. Section 49-11-609 , which is renumbered from Section 49-1-606 is renumbered
                  and amended to read:
                       [49-1-606].     49-11-609. 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) As used in this section, "member" includes a member, retiree, participant, covered
                  individual, a spouse of a retiree participating in the insurance benefits created by Sections 49-12-404
                  and 49-13-404 , or an alternate payee under a domestic relations order dividing a defined contribution
                  account.
                      [(1)] (2) The most recent beneficiary [designation in a member's file at the retirement office]
                  designations contained in office records, including electronic records, at the time of the member's
                  death [is] are binding in the payment of any benefits due under this title.
                      [(2) A] (3) (a) Except where an optional continuing benefit is chosen, or the law makes a
                  specific benefit designation to a dependent spouse, a member may revoke a beneficiary designation
                  [of beneficiary] at any time and may execute and 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.] with the office.
                      (b) A change of beneficiary designation shall be completed on forms provided by the office.
                      (4) (a) All benefits payable by the office 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, Intestate Succession and Wills, if:
                      [(3) If] (i) no beneficiary is designated[, all benefits payable from the retirement system 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, Intestate Succession and Wills.];
                      (ii) the location of the beneficiary cannot be ascertained by the office within 12 months of
                  the date beneficiaries are provided with the forms; or
                      (iii) the beneficiary has not completed the forms necessary to pay the benefits within six
                  months of the date beneficiaries are provided the forms.
                      [(4) No] (b) (i) A payment may not be made to [persons] a person included in any of [these]
                  the groups referred to in Subsection (3)(a) if at the date of payment there [are] is a living [persons]
                  person in any of the groups preceding it.

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                      (ii) Payment to [the persons] a person in any group based upon receipt from [those persons]
                  the person of an affidavit in a form satisfactory to the [administrator] office that:
                      [(a)] (A) there are no living individuals in the group preceding it;
                      [(b) that] (B) the probate of the estate of the deceased has not been commenced; and
                      [(c) that] (C) more than three months have elapsed since the date of death of the decedent[,].
                      (5) Benefits paid under this section shall be [in]:
                      (a) a full satisfaction and discharge of all claims for benefits under this title; and
                      (b) 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 33. Section 49-11-610 , which is renumbered from Section 49-1-607 is renumbered
                  and amended to read:
                       [49-1-607].     49-11-610. Benefits payable in name of beneficiary -- Delivery.
                      (1) (a) Any benefits payable to a beneficiary [or dependent beneficiary] shall be made in the
                  name of [the beneficiary or beneficiaries] and delivered to the beneficiary or the lawfully appointed
                  guardian or conservator of the beneficiary, or delivered as otherwise ordered by a court of competent
                  jurisdiction [pursuant to] under Title 75, Utah Uniform Probate Code. [In those cases where]
                      (b) If the benefit involves a payment not to exceed an amount authorized by the Utah
                  Uniform Probate Code to any one beneficiary, the [administrator] office may, without the
                  appointment of a guardian or conservator or the giving of a bond, pay the amount due to the
                  [beneficiaries themselves] beneficiary or to the [person,] persons[, or institutions] assuming their
                  support.
                      (c) The payment shall be in either a lump sum or in monthly amounts[, and the].
                      (d) The total of the payments [so] made under this section shall [be a full] fully discharge

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                  and release [to] the [system] office from any further claims.
                      (2) All continuing monthly benefits payable to beneficiaries upon the death of [an active]
                  a member or participant shall be [paid] effective on the first day of the month following the date of
                  death of the member or participant.
                      Section 34. Section 49-11-611 , which is renumbered from Section 49-1-608 is renumbered
                  and amended to read:
                       [49-1-608].     49-11-611. Benefits and money in the fund exempt from taxation --
                  Exceptions.
                      [The] (1) Except as provided under Subsection (2), the benefits accrued or paid to any
                  beneficiary of any system or plan administered by the [retirement office] board and the
                  [accumulated] contributions, money, [and] securities, and other assets in the [fund] funds created by
                  this title are exempt from any state, county, or municipal tax[, except that the retirement].
                      (2) An allowance, a refund of member contributions, or other benefits that are subject to
                  [the] federal income tax, which [are] is received by a member, retiree, alternate payee, participant,
                  or beneficiary of any system or plan administered by the board and which [have] has not been taxed
                  is subject to Title 59, Chapter 10, Individual Income Tax Act.
                      Section 35. Section 49-11-612 , which is renumbered from Section 49-1-609 is renumbered
                  and amended to read:
                       [49-1-609].     49-11-612. Nonassignability of benefits or payments -- Exemption from
                  legal process.
                      (1) Except as provided in [Subsection] Subsections (2), (3), and (4), the right of any member,
                  retiree, participant, 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] funds created by this title are not subject to
                  alienation or assignment by the member, retiree, participant, or [beneficiary] their beneficiaries 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.]

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                      (2) The office may, upon the request of the retiree, deduct from the retiree's allowance
                  insurance premiums or other dues payable on behalf of the retiree, but only to those entities that have
                  received the deductions prior to February 1, 2002.
                      (3) (a) [Notwithstanding Subsection (1), the retirement board] The office shall provide for
                  the division of [a member's service retirement] an allowance, defined contribution account,
                  continuing monthly death benefit, or refund of member contributions upon termination to former
                  spouses and family members [pursuant to] under 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, defined
                  contribution account, continuing monthly death benefit, or refund of member 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) Once benefit payments under a domestic relations order begin, the period for which the
                  payment shall be made may not be altered.]
                      [(e) Benefit payments to an alternate payee shall begin at the time the member or beneficiary
                  begins receiving benefit payments.]
                      [(f) The alternate payee shall receive benefits in the same form as benefits are received by
                  the member.]
                      [(g) The board shall make rules to implement this section.]
                      (c) Allowances, continuing monthly death benefits, and refunds of member contributions
                  split under a domestic relations order are subject to the following:
                      (i) the period for which payments shall be made under the original domestic relations order
                  may not be altered;
                      (ii) payments to an alternate payee shall begin at the time the member or beneficiary begins
                  receiving payments; and
                      (iii) the alternate payee shall receive payments in the same form as payments received by the
                  member or beneficiary.

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                      (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.
                      (5) The board shall make rules to implement this section.
                      Section 36. Section 49-11-613 , which is renumbered from Section 49-1-610 is renumbered
                  and amended to read:
                       [49-1-610].     49-11-613. Appeals procedure -- Right of appeal to hearing officer --
                  Board reconsideration -- Judicial review.
                      (1) (a) All members, retirees, participants, alternative payees, or covered individuals of a
                  system, plan, or program under this title shall acquaint themselves with their rights and obligations
                  [as members] under this title.
                      (b) A [member shall] person who claims a benefit, legal right, or employment right under
                  this title shall request a ruling by the [administrator on any benefit claim or legal right under this
                  title] executive director.
                      (c) [Any] A person who is dissatisfied by a ruling of the [administrator] executive director
                  with respect to any benefit claim or legal right under any system, plan, or program under this title
                  shall request a review of that claim by a hearing officer.
                      [(d)] (2) The hearing officer shall:
                      [(i)] (a) be hired by the executive director after consultation [and review] with the
                  [membership council] board; [and]
                      [(ii)] (b) follow the procedures and requirements of Title 63, Chapter 46b, Administrative
                  Procedures Act[. (2) (a) (i) The hearing officer shall], except as specifically modified under this title;
                      (c) hear and determine all facts pertaining to applications for benefits under any [retirement]
                  system, plan, or program under this title and all matters pertaining to the administration of the
                  [system.] office; and
                      [(ii) The membership council may examine the record of the hearing, provide a
                  recommendation to the board, and recommend any necessary changes in retirement policy or

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                  procedure to the Legislature.]
                      [(b) (i) If the executive officer of the board cannot determine from the records or other
                  information available the length of service, compensation, or age of any member, the executive
                  officer may estimate, for the purpose of any determination required to be made, any of these factors.]
                      (d) make conclusions of law in determining the person's rights under any system, plan, or
                  program under this title and matters pertaining to the administration of the office.
                      [(ii)] (3) The board shall review and approve or deny all decisions of the hearing officer in
                  accordance with rules adopted by the board.
                      [(3)] (4) The moving party in any proceeding brought under this section shall bear the burden
                  of proof.
                      [(4) Any applicant] (5) A party may file an application for reconsideration [according to the
                  procedures and requirements of Title 63, Chapter 46b, Administrative Procedures Act,] by the board
                  upon any of the following grounds:
                      (a) that the board acted in excess of its powers;
                      (b) that the order or award was procured by fraud;
                      (c) that the evidence does not justify the determination of the [board] hearing officer; or
                      (d) that the [applicant] party has discovered new material evidence that could not, with
                  reasonable diligence, have been discovered or procured [at] prior to the hearing.
                      (6) The board shall affirm, reverse, or modify the decision of the hearing officer, or remand
                  the application to the hearing officer for further consideration.
                      [(5)] (7) A [member] party aggrieved by the board's decision may obtain judicial review by
                  complying with the procedures and requirements of Title 63, Chapter 46b, Administrative
                  Procedures Act.
                      (8) The board may make rules to implement this section.
                      Section 37. Section 49-11-614 , which is renumbered from Section 49-1-613 is renumbered
                  and amended to read:
                       [49-1-613].     49-11-614. Vesting on termination of system or plan.
                      If any [retirement plan established under this title] system or the Utah Governors' and

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                  Legislators' Retirement Plan is terminated, the accrued benefits of each member in the terminated
                  system or plan shall immediately become [100%] vested and nonforfeitable.
                      Section 38. Section 49-11-615 , which is renumbered from Section 49-1-614 is renumbered
                  and amended to read:
                       [49-1-614].     49-11-615. Election to grandfather -- Applicability of provisions.
                      (1) Notwithstanding any other provision of this title, the [retirement plan or program]
                  allowance payable to any person who becomes a member of any system, administered by the board
                  on or after January 1, 1990, may not exceed the limitation imposed by Section 415 of the Internal
                  Revenue Code of 1986, as amended, which is incorporated by reference.
                      (2) This constitutes an election of the grandfather provision under Section 415(b)(10)(C) of
                  the Internal Revenue Code.
                      Section 39. Section 49-11-616 , which is renumbered from Section 49-1-615 is renumbered
                  and amended to read:
                       [49-1-615].     49-11-616. Benefits information.
                      (1) The [retirement board] office shall provide [the following] written general information[,
                  by means of a form to be adopted by the board,] to each [employing unit] participating [in a plan,
                  program, or system administered by the board:] employer concerning benefits available under this
                  title.
                      [(a) all retirement benefits available to participants in a retirement system administered by
                  the board, including the right to participate in deferred compensation programs and rights upon
                  termination;]
                      [(b) all group health and dental insurance benefits available to participants, including
                  conversion and coverage rights upon termination;]
                      [(c) all group life insurance benefits and other death benefits, including conversion and
                  coverage rights upon termination;]
                      [(d) all long-term disability programs available to participants;]
                      [(e) any other benefits that the board may make available to eligible employers and their
                  employees; and]

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                      [(f) the address and telephone number of the division of the retirement office responsible for
                  each of these plans, programs, and systems.]
                      (2) (a) [The] A participating [employing unit] employer shall provide the information under
                  Subsection (1) to each eligible employee immediately upon:
                      (i) termination of service[,];
                      (ii) leave of absence[, or];
                      (iii) commencement of long-term disability benefits; or
                      (iv) retirement.
                      (b) (i) Each participating employer shall maintain the records necessary to demonstrate that
                  each employee has received the information outlined in Subsection (1).
                      (ii) The records shall be made available to the office upon request.
                      [(3) Each eligible employee shall sign the form provided under Subsection (1), a]
                      (3) (a) The office shall provide each participating employer with a form to be signed by each
                  employee which verifies that the employee has been given the information required by this section.
                      (b) A copy of [which] the signed form shall be immediately forwarded to the [retirement]
                  office [immediately] by the participating employer or the employee.
                      (4) The dissemination of information to the employer by the [board pursuant to] office under
                  this section constitutes presentment by the policyholder [pursuant to] under Title 31A, Chapter 22,
                  Contracts in Specific Lines, and other law.
                      Section 40. Section 49-11-617 , which is renumbered from Section 49-1-616 is renumbered
                  and amended to read:
                       [49-1-616].     49-11-617. Original documents.
                      [(1) The retirement office may treat any document received by facsimile as an original if it
                  pertains to member accounts and is forwarded by a member or employer.]
                      [(2) All records at the retirement office, filmed from facsimile or other sources, or produced
                  from optical imaging or other technology, have the same legal effect as the original record.]
                      At the reasonable discretion of the office, any document relating to this title may be treated
                  as an original, whether created by photocopy, facsimile, e-mail, electronic transmission, imaging,

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                  or other technology.
                      Section 41. Section 49-11-618 , which is renumbered from Section 49-1-403 is renumbered
                  and amended to read:
                       [49-1-403].     49-11-618. Members and beneficiaries subject to chapter -- Furnishing
                  of information -- Confidentiality of information.
                      (1) (a) Every member, retiree, participant, covered individual, alternate payee, and
                  beneficiary is subject to this chapter [and to all], rules [adopted] made by the board [under this
                  chapter] or office, board actions, resolutions, policies, and procedures adopted under this title.
                      (b) Each member, retiree, participant, covered individual, alternate payee, and beneficiary
                  shall furnish to the [retirement] office any information required [by the executive director affecting
                  the member's status as a member or beneficiary] to carry out the purposes of this title.
                      (2) (a) All data [filed with the retirement] in the possession of the office is confidential, and
                  [no information contained in any record pertaining to individual data] may not be divulged by [any
                  official or employee of] the office except as permitted by board action. [The information]
                      (b) All data in the possession of the office or divulged pursuant to board action shall be used
                  for the sole purpose of carrying into effect the provisions of this [chapter. The record may not be
                  open to inspection to any person except the board, the employees of the retirement office, and the
                  employing unit] title.
                      Section 42. Section 49-11-619 , which is renumbered from Section 49-1-405 is renumbered
                  and amended to read:
                       [49-1-405].     49-11-619. Permanent relinquishment of benefit -- Procedure.
                      [Any retired member or beneficiary receiving a continuing benefit who for any reason desires
                  to permanently relinquish that retirement benefit may do so at any time after the effective date of
                  retirement. The relinquishment of the benefit is irrevocable 30 days after the witnessed signing of
                  the waiver agreement by the member and the beneficiary.]
                      (1) (a) Except for defined contribution plans authorized by this title, a retiree or beneficiary
                  may permanently relinquish a benefit under this title by signing an irrevocable written
                  relinquishment.

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                      (b) If the retiree has designated a beneficiary which is still living, the written relinquishment
                  must be signed by both the retiree and the beneficiary.
                      (2) The value of the benefit permanently relinquished under Subsection (1) shall remain in
                  the fund from which the benefit was relinquished and shall be used in the calculation of future
                  contribution rates.
                      (3) A designated beneficiary may disclaim beneficiary status and the benefit shall then be
                  payable first to any alternate designated beneficiary, then dispersed under Title 75, Chapter 2,
                  Intestate Succession and Wills, as applicable.
                      (4) The office is not required to recognize or accept any written relinquishment that
                  jeopardizes the tax qualified status of the systems, plans, or programs or otherwise violates federal
                  law.
                      Section 43. Section 49-11-620 is enacted to read:
                      49-11-620. Closing the retirement account -- Status of retirants and beneficiaries.
                      (1) The monthly benefit payable for the month a retiree, beneficiary, or alternate payee dies
                  shall be a full monthly benefit and shall be payable to the estate of the deceased.
                      (2) If more than one year has elapsed since the death of a retiree whose designated
                  beneficiary is deceased and whose account payable to the beneficiary amounts to $100 or less, the
                  account shall be closed and further payment may not be made.
                      Section 44. Section 49-11-701 , which is renumbered from Section 49-1-701 is renumbered
                  and amended to read:
                 
Part 7. Allowance Increase

                       [49-1-701].     49-11-701. Allowance increase to offset tax liability -- Administration.
                      (1) This section applies to members of any system administered by the board under this title,
                  whose retirement allowance remained exempt from the tax imposed under Title 59, Chapter 10,
                  Individual Income Tax Act, pursuant to Section 2, Chapter 195, Laws of Utah 1988, but whose
                  allowance has subsequently become subject to that tax.
                      (2) Any member who meets the conditions established under Subsection (1) shall receive
                  the following:

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                      (a) the administrator shall calculate the member's retirement allowance pursuant to the
                  formula governing the system from which the member retired;
                      (b) the administrator shall then increase the allowance calculated under Subsection (2)(a)
                  by 3%; and
                      (c) the adjusted retirement allowance under Subsection (2) (b) is the new basis upon which
                  any future adjustments to benefits are made.
                      (3) (a) For all members who retire or are receiving retirement allowances in calendar year
                  1989, the administrator shall apply the 3% adjustment under Subsection (2) to all retirement
                  allowances received in 1989, so that the period for which the allowance becomes subject to the tax
                  under Title 59, Chapter 10, Individual Income Tax Act, and the period for which the 3% adjustment
                  is given are the same.
                      (b) For all members who retire after December 31, 1989, and who meet the requirements of
                  Subsection (1), the administrator shall apply the 3% adjustment under Subsection (2) beginning on
                  the effective date of retirement.
                      (4) Any penalty or interest for underpayment of taxes under Title 59, Chapter 1, General
                  Taxation Policies, or 10, Individual Income Tax Act, shall be waived for members whose
                  noncompliance is attributable to Section [ 49-1-608 ] 49-11-611 and this section. This only applies
                  to tax year 1989.
                      (5) The administrator shall comply with Title 59, Chapter 10, Part 4, Withholding of Tax,
                  with respect to withholding of taxes.
                      (6) (a) The retirement board shall annually certify the contribution rate necessary for each
                  system to comply with this section and may adopt rules to administer this section.
                      (b) This contribution rate shall be reported separately from the total contribution rate
                  necessary to fund the systems on an actuarially sound basis and may not be used in comparative
                  studies of public employee benefits.
                      Section 45. Section 49-11-801 , which is renumbered from Section 49-1-611 is renumbered
                  and amended to read:
                 
Part 8. Defined Contribution Plans


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                       [49-1-611].     49-11-801. Defined contribution plans authorized -- Subject to federal
                  and state laws -- Rules to implement this provision -- Costs of administration -- Limitations on
                  eligibility -- Protection of tax status.
                      (1) (a) The board may establish and administer [additional benefit] defined contribution
                  plans established under [Sections 401(k) and 457 of] the Internal Revenue Code. [Employee and
                  employer]
                      (b) Voluntary deferrals and nonelective 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.]
                      (c) The defined contribution account balance is vested in the participant.
                      [(2) Earnings credited to accounts established as a result of this action shall be at a rate fixed
                  by the board. (3) Contributions]
                      (2) (a) Voluntary deferrals and nonelective contributions shall be [invested as provided by
                  contract in accordance with federal and state law] posted to the participant's account.
                      (b) Participants may direct the investment of their account in the investment options
                  established by the board and in accordance with federal and state law.
                      [(4) The] (3) (a) The board may [establish] make rules and create plan documents to
                  implement and administer this section.
                      (b) The board may adopt rules under which a participant may put money into a defined
                  contribution plan as permitted by federal law.
                      (c) The office may reject any payments if the office determines the tax status of the systems,
                  plans, or programs would be jeopardized by allowing the payment.
                      (d) Costs of administration [may] shall 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] as established
                  by the board. [All funds and deposits]
                      (4) Voluntary deferrals and nonelective contributions may be invested [as a separate account
                  or accounts in] separately or in conjunction with the Utah State Retirement Investment Fund.

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                      [(5) This supplemental program shall be limited to members who contract to participate in
                  the program a minimum of one year.]
                      [(6)] (5) The board or office may take [the] actions necessary to protect the tax qualified
                  status of the [plans,] systems, plans, and programs under its control, including the movement of
                  [members] individuals from defined contribution plans to defined benefit [plans] systems or the
                  creation of excess benefit plans authorized by federal law[, and shall report its actions to the
                  Legislature at the subsequent legislative session].
                      (6) The office may, at its sole discretion, correct errors made in the administration of its
                  defined contribution plans.
                      Section 46. Section 49-11-802 is enacted to read:
                      49-11-802. Permanent relinquishment of defined contribution benefit -- Procedure.
                      A participant or designated beneficiary under a defined contribution plan may permanently
                  relinquish the benefit by signing an irrevocable written relinquishment.
                      Section 47. Section 49-12-101 , which is renumbered from Section 49-2-101 is renumbered
                  and amended to read:
                 
CHAPTER 12. PUBLIC EMPLOYEES' CONTRIBUTORY RETIREMENT ACT

                 
Part 1. General Provisions

                       [49-2-101].     49-12-101. Title.
                      This chapter is known as the "Public Employees' Contributory Retirement Act."
                      Section 48. Section 49-12-102 , which is renumbered from Section 49-2-103 is renumbered
                  and amended to read:
                       [49-2-103].     49-12-102. Definitions.
                      As used in this chapter:
                      [(1) "Appointive officer" means an employee appointed to a position for a definite and fixed
                  term of office by official and duly recorded action of the governing body of an employing unit who
                  earns $500 or more per month over a 12-month period adjusted annually by the Bureau of Labor
                  Statistics Consumer Price Index.]
                      [(2) (a) "Compensation," "salary," or "wages" means the total amount of payments made by

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                  an employer to an employee for services rendered to the employer, including:]
                      [(i) bonuses;]
                      [(ii) cost-of-living adjustments;]
                      [(iii) other payments currently includable in gross income and that are subject to Social
                  Security deductions, including any payments in excess of the maximum amount subject to deduction
                  under Social Security law; and]
                      [(iv) amounts that the employee authorizes to be deducted or reduced for salary deferral or
                  other benefit programs authorized by federal law.]
                      [(b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
                  Internal Revenue Code Section 401(a)(17).]
                      [(c) "Compensation," "salary," or "wages" does not include:]
                      [(i) the monetary value of remuneration paid in kind, such as a residence or use of
                  equipment;]
                      [(ii) all contributions made by an employer under any plan for the benefit of a participant;]
                      [(iii) salary paid to an employee working under the minimum number of hours required for
                  membership;]
                      [(iv) salary paid to a temporary or exempt employee;]
                      [(v) any payments upon termination, including accumulated vacation, sick leave payments,
                  or any other special payments; or]
                      [(vi) uniform, travel, or similar allowances.]
                      [(3) "Educational institution" means a political subdivision or instrumentality of the state
                  or a combination thereof primarily engaged in educational activities or the administration or
                  servicing of educational activities, including:]
                      [(a) the State Board of Education and its instrumentalities;]
                      [(b) any institution of higher learning and its branches;]
                      [(c) any school district and its instrumentalities;]
                      [(d) any vocational and technical school; and]
                      [(e) any entity arising out of a consolidation agreement between entities under this

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                  definition.]
                      [(4) (a) "Employee" or "regular employee" means any regular full-time employee whose term
                  of employment for an employer contemplates continued employment during a calendar or school
                  year and who performs covered service for one or more employers.]
                      [(b) "Employee" or "regular employee" means an officer, elective or appointive, who
                  receives as compensation from an employer $500 or more per month over a 12-month period
                  adjusted annually by the Bureau of Labor Statistics Consumer Price Index.]
                      [(5) "Employer" or "employing unit" means any department, educational institution, political
                  subdivision, or organization or agency financed in whole or in part by public funds for which any
                  employee or member performs services subject to this chapter.]
                      (1) (a) Except as provided in Subsection (1)(c),"compensation" means the total amount of
                  payments made by a participating employer to a member of this system for services rendered to the
                  participating employer, including:
                      (i) bonuses;
                      (ii) cost-of-living adjustments;
                      (iii) other payments currently includable in gross income and that are subject to Social
                  Security deductions, including any payments in excess of the maximum amount subject to deduction
                  under Social Security law;
                      (iv) amounts that the member authorizes to be deducted or reduced for salary deferral or
                  other benefits authorized by federal law; and
                      (v) member contributions.
                      (b) "Compensation" for purposes of this chapter may not exceed the amount allowed under
                  Internal Revenue Code, Section 401(a)(17).
                      (c) "Compensation" does not include:
                      (i) the monetary value of remuneration paid in kind, including a residence or use of
                  equipment;
                      (ii) the cost of any employment benefits paid for by the participating employer;
                      (iii) compensation paid to a temporary employee, an exempt employee, or an employee

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                  otherwise ineligible for service credit;
                      (iv) any payments upon termination, including accumulated vacation, sick leave payments,
                  severance payments, compensatory time payments, or any other special payments; or
                      (v) any costs incurred by the member and reimbursed by the participating employer,
                  including automobile costs, uniform costs, travel costs, tuition costs, housing costs, insurance costs,
                  and dependent care costs.
                      (d) The executive director may determine if a payment not listed under this Subsection (1)
                  falls within the definition of compensation.
                      [(6)] (2) "Final average salary" means the amount computed by averaging the highest five
                  years of annual compensation preceding retirement subject to Subsections [(6)] (2)(a), (b), (c), and
                  (d).
                      (a) Except as provided in Subsection [(6)] (2)(b), the percentage increase in annual
                  compensation in any one of the years used may not exceed the previous year's [salary] compensation
                  by more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power of
                  the dollar during the previous year, as measured by [the Consumer Price Index prepared by the] a
                  United States Bureau of Labor Statistics Consumer Price Index average as determined by the board.
                      (b) In cases where the [employing unit] participating employer provides acceptable
                  documentation to the [board] office, the limitation in Subsection [(6)] (2)(a) may be exceeded if:
                      (i) the member has transferred from another [employing unit] agency; or
                      (ii) the member has been promoted to a new position.
                      (c) If the member retires more than six months from the date of termination of employment
                  [and for purposes of computing the member's final average salary only], the member is considered
                  to have been in service at the member's last [salary] rate of pay from the date of the termination of
                  employment to the effective date of retirement [becomes effective if the member so requests] for
                  purposes of computing the member's final average salary only.
                      (d) If [participating service is] the member has less than five years of service credit in this
                  system, final average salary means the average annual compensation paid to the member during the
                  full period of [participating] service credit.

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                      [(7) "Normal retirement age" means the age of 65 years.]
                      [(8) "Organization or agency financed in whole or in part by public funds" means an agency,
                  association, or organization that receives public funds. The term does not include political
                  subdivisions, departments, or educational institutions.]
                      [(9) "Public funds" means those funds derived, either directly or indirectly, from public taxes
                  or public revenue, dues or contributions paid or donated by the membership of the organization, used
                  to finance an activity whose objective is to improve, on a nonprofit basis, the governmental,
                  educational, and social programs and systems of the state or its political subdivisions.]
                      [(10) (a) "Regular full-time employee," in qualifying for membership and accrual of service
                  credit under this system, means an employee whose employment normally requires an average of 20
                  hours or more per week, except as modified by the board, and who receives benefits normally
                  provided by the employing unit.]
                      [(b) "Regular full-time employee" includes:]
                      [(i) a teacher who teaches half-time or more, or a classified school employee who works an
                  average of 20 hours per week or more, regardless of benefits provided; and]
                      [(ii) an individual who otherwise meets the definition of this Subsection (10) who performs
                  services for a participating employer through an employee leasing or similar arrangement.]
                      [(11) "Years of service" or "service years" means:]
                      [(a) the number of periods, each to consist of 12 full months as determined by the board;]
                      [(b) a period determined by the board, whether consecutive or not, during which an
                  employee performed services for an employer or employers, including any time the employee
                  rendered service in the armed forces of the United States before membership in the system or was
                  absent on a paid leave of absence granted by an employer or absent in the service of the United
                  States government on military duty as provided by this chapter; or]
                      [(c) for a teacher, school administrator, or other contract employee of an educational
                  institution, not less than eight months of full-time service constitutes a service year.]
                      (3) "Participating employer" means an employer which meets the participation requirements
                  of Section 49-12-201 .

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                      (4) (a) "Regular full-time employee" means an employee whose term of employment for a
                  participating employer contemplates continued employment during a fiscal or calendar year and
                  whose employment normally requires an average of 20 hours or more per week, except as modified
                  by the board, and who receives benefits normally provided by the participating employer.
                      (b) "Regular full-time employee" includes:
                      (i) a teacher whose term of employment for a participating employer contemplates continued
                  employment during a school year and who teaches half-time or more or a classified school employee
                  who works an average of 20 hours per week or more for a participating employer, regardless of
                  benefits provided;
                      (ii) an officer, elective or appointive, who earns during the first full month of the term of
                  office $500 or more, indexed as of January 1, 1989, as provided in Section 49-12-407 ;
                      (iii) a faculty member or employee of an institution of higher education who is considered
                  full-time by that institution of higher education; and
                      (iv) an individual who otherwise meets the definition of this Subsection (4) who performs
                  services for a participating employer through an employee leasing or similar arrangement.
                      (5) "System" means the Public Employees' Contributory Retirement System created under
                  this chapter.
                      (6) "Years of service credit" means:
                      (a) a period, consisting of 12 full months as determined by the board;
                      (b) a period determined by the board, whether consecutive or not, during which a regular
                  full-time employee performed services for a participating employer, including any time the regular
                  full-time employee was absent on a paid leave of absence granted by a participating employer or was
                  absent in the service of the United States government on military duty as provided by this chapter;
                  or
                      (c) the regular school year consisting of not less than eight months of full-time service for
                  a regular full-time employee of an educational institution.
                      Section 49. Section 49-12-103 , which is renumbered from Section 49-2-201 is renumbered
                  and amended to read:

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                       [49-2-201].     49-12-103. Creation of system.
                      There is created for [the employees of the state, its educational institutions, and political
                  subdivisions] members employed by a participating employer the "Public Employees' Contributory
                  Retirement System."
                      Section 50. Section 49-12-104 , which is renumbered from Section 49-2-202 is renumbered
                  and amended to read:
                       [49-2-202].     49-12-104. Creation of trust fund.
                      (1) There is created the "Public Employees' Contributory Retirement Trust Fund" for the
                  purpose of paying the benefits and costs of administering this system.
                      (2) The fund shall consist of all money paid into it, including interest, in accordance with
                  this chapter, whether in the form of cash, securities, or other assets, and of all money received from
                  any other source.
                      (3) Custody, management, and investment of the fund shall be governed by [Title 49,]
                  Chapter [1] 11, Utah State Retirement Systems Administration.
                      Section 51. Section 49-12-201 , which is renumbered from Section 49-2-203 is renumbered
                  and amended to read:
                 
Part 2. Membership Eligibility

                       [49-2-203].     49-12-201. System membership -- Eligibility.
                      [All employees, as defined under Section 49-2-103 , who perform covered services for any
                  employing unit, except as excluded by Section 49-2-205 , are members of the retirement system as
                  follows:]
                      [(1) Every employee who is employed to perform covered services for a department or
                  educational institution prior to July 1, 1986, shall become a member of the system effective on the
                  date of employment.]
                      [(2) Each employee engaged in performing covered services for a political subdivision on
                  the date the political subdivision becomes a participant in the system under Section 49-2-204 shall
                  become a member of the system as of the date of coverage. Each new employee of the covered unit
                  shall thereafter become a member of the system effective on the date of employment.]

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                      (1) A regular full-time employee of a participating employer is eligible for service credit in
                  this system upon the later of:
                      (a) the date on which the participating employer began participating in this system; or
                      (b) the effective date of employment of the regular full-time employee with the participating
                  employer.
                      (2) Beginning July 1, 1986, a person entering employment with the state and its educational
                  institutions may not participate in this system.
                      Section 52. Section 49-12-202 , which is renumbered from Section 49-2-204 is renumbered
                  and amended to read:
                       [49-2-204].     49-12-202. Participation of employers -- Limitations -- Exclusions --
                  Admission requirements -- Exceptions -- Nondiscrimination requirements.
                      (1) (a) [All political subdivisions of the state, unless] Unless excluded under Subsection (2),
                  [are] an employer is a participating [employers in the system] employer and may not withdraw from
                  participation in [the] this system. [All departments and educational institutions are also participating
                  employers in the system and may not withdraw from participation in the system. As participating
                  employers, political subdivisions, departments, and educational institutions shall meet all
                  requirements for full participation in the system.]
                      (b) In addition to their participation in this system, participating employers may provide or
                  participate in public or private retirement, supplemental or defined contribution plan, either directly
                  or indirectly, for their employees.
                      (2) [(a) Any political subdivision] An employer not initially admitted or included as a
                  participating employer in [the] this system prior to January 1, 1982, may be excluded from
                  participation in [the] this system if:
                      [(i)] (a) the [political subdivision] employer elects not to provide or participate in any type
                  of private or public retirement, supplemental or [deferred income program] defined contribution
                  plan, either directly or indirectly, for its employees, except for social security; or
                      [(ii)] (b) the [political subdivision participated in] employer offers another collectively
                  bargained retirement [program] benefit and has continued to do so on an uninterrupted basis since

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                  that date.
                      [(b) Any excluded political subdivision may by resolution of its governing body apply for
                  and receive admission to the system. Once admitted, the political subdivision may not withdraw
                  from participation and shall meet all requirements for full participation in the system. If an excluded
                  political subdivision elects at any time to provide or participate in any type of public or private
                  retirement, supplemental or deferred income program, either directly or indirectly, except for social
                  security, the political subdivision shall be required to be a participating employer in the system. As
                  a participating employer, the political subdivision may not withdraw from participation and shall
                  meet all requirements for full participation in the system.]
                      [(3) (a) Any organization or agency supported in whole or in part by state public funds,
                  which prior to application is not covered by this chapter, may by resolution of its governing body
                  apply for admission to the system. The board may refuse admission to any organization or agency
                  applying for admission upon a finding that it is not in the best interest of the participating employers
                  and employees.]
                      [(b) Upon approval of the board, the organization or agency shall become a participant in
                  the system if the board and the organization or agency agree upon:]
                      [(i) the terms by which its employees shall become members of the system, such as the
                  effective date of coverage;]
                      [(ii) the amount of prior service credit with which they may be credited, if any;]
                      [(iii) the amount of any contributions in addition to regular contributions that will be
                  required to provide any prior service credits or retroactive current service credits from either the
                  employing unit or its employees; and ]
                      [(iv) the manner in which retroactive current or prior service credits may be established, if
                  any.]
                      [(c) Once admitted to the system, an organization or agency may not withdraw from
                  participation, except as provided in Subsection (4), and shall meet all requirements for full
                  participation in the system.]
                      [(d) An organization or agency supported in whole or in part by public funds may not apply

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                  for or receive admission to the system after the effective date of this Subsection (3)(d).]
                      [(4) (a) An organization or agency admitted to the system pursuant to Subsection (3) which
                  no longer receives public funds may withdraw from the system if:]
                      [(i) the organization or agency's governing body, by resolution, petitions the board for
                  withdrawal from the system; and]
                      [(ii) the board approves the withdrawal.]
                      [(b) Once approval to withdraw is granted, the organization or agency and its employees
                  shall be governed by Sections 49-1-502 and 49-1-503 .]
                      [(5) Except as provided in Sections 49-2-205 and 49-2-206 , no participating employer may
                  maintain full participation in the system by covering only part of its employees. The full
                  participation requirement is satisfied if a participating employer covers those of its employees
                  eligible for coverage under:]
                      [(a) Title 49, Chapter 4, Public Safety Retirement Act; or]
                      [(b) Title 49, Chapter 5, Firefighters' Retirement Act and its remaining employees under
                  either Title 49, Chapter 2, Public Employees' Retirement Act or Title 49, Chapter 3, Public
                  Employees' Noncontributory Retirement Act, whichever is applicable.]
                      [(6) In addition to their participation in the system, participating employers may provide or
                  participate in any additional public or private retirement, supplemental or deferred income program,
                  either directly or indirectly, for their employees.]
                      [(7) (a) Credit unions or private hospitals which are participating units in any system
                  administered by the board may withdraw from participation upon applying to the board. This
                  application shall be made between July 1, 2000, and December 31, 2000. The withdrawal is
                  effective the day after the last day the withdrawing unit pays retirement contributions on its
                  employees' salaries.]
                      [(b) Once the withdrawal of the credit union or private hospital is complete, the employees
                  of the withdrawing unit may apply to withdraw their vested contributions. Refunds shall then be paid
                  in accordance with Subsection 49-1-502 (3).]
                      [(c) Under no circumstance may a withdrawing unit receive the employer contributions

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                  which have been made to the system.]
                      (3) An employer who did not become a participating employer in this system prior to July
                  1, 1986, may not participate in this system.
                      (4) If a participating employer purchases service credit on behalf of regular full-time
                  employees for service rendered prior to the participating employer's admission to this system, the
                  service credit shall be purchased in a nondiscriminatory manner on behalf of all current and former
                  regular full-time employees who were eligible for service credit at the time service was rendered.
                      Section 53. Section 49-12-203 , which is renumbered from Section 49-2-205 is renumbered
                  and amended to read:
                       [49-2-205].     49-12-203. Exclusions from membership in system.
                      (1) The following employees are [excluded from membership in the retirement] not eligible
                  for service credit in this system:
                      [(1)] (a) [Every] An employee whose employment status is temporary in nature due to the
                  nature or the type of work to be performed[.], provided that:
                      (i) if the term of employment exceeds six months[, then for that employee a regular                   full-time
                  status shall be assumed, and the employee shall be enrolled in the system] and the employee
                  otherwise qualifies for service credit in this system, the participating employer shall report and
                  certify to the office that the employee is a regular full-time employee effective the beginning of the
                  seventh month of employment[.]; or
                      (ii) if [the same] an employee, previously terminated prior to [enrollment as a member, is
                  again employed] being eligible for service credit in this system is reemployed within three months
                  of termination by the same participating employer, [the employee shall be immediately enrolled as
                  a member if the work constitutes full-time as defined in this chapter] the participating employer shall
                  report and certify that the member is a regular full-time employee when the total of the periods of
                  employment equals six months and the employee otherwise qualifies for service credit in this system.
                      [(2)] (b) [Full-time students or] A full-time student, the spouse of a full-time student [and
                  persons], or a person employed in a trainee relationship [may be excluded from coverage by rules
                  adopted by the board] who files a formal request for exemption.

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                      [(3)] (c) (i) [Every] A current or future employee of a two-year or four-year college or
                  university who holds, or is entitled to hold, [pursuant to] under Section [ 49-2-206 ] 49-12-204 , a
                  retirement annuity contract with the Teachers' Insurance and Annuity Association of America or with
                  any other public or private system, organization, or company during any period in which [that
                  employee has received] required contributions [toward the premiums required] based on
                  compensation [from the employing unit] have been paid on behalf of the employee by the employer.
                      (ii) The employee, upon cessation of the participating employer contributions, shall
                  immediately become [a contributing member] eligible for service credit in this system.
                      [(4)] (d) [Every] An employee serving as an exchange employee from outside the state.
                      [(5)] (e) [Elected officials] An elected official who [file] files a formal request for
                  exemption.
                      [(6) Executive] (f) An executive department [heads] head of the state, [members] a member
                  of the State Tax Commission, the Public Service Commission, and [other members] a member of
                  a full-time or part-time [boards] board or [commissions] commission who [file] files a formal
                  request [to be excluded from coverage] for exemption.
                      [(7) (a) Employees of the Department of Employment Security who are covered under
                  another retirement system allowed under Title 35A, Chapter 4, Employment Security Act; or (b)
                  employees]
                      (g) An employee of the Department of Workforce Services [who were covered under
                  Subsection (a) and] who [are] is covered under another retirement system allowed under Title 35A,
                  Chapter 4, Employment Security Act.
                      [(8)] (h) (i) [Persons] A person appointed as a city [managers] manager or chief city
                  [administrators or other persons] administrator or another person employed by a [city, town]
                  municipality, county, or other political subdivision who [are] is not entitled to merit or civil service
                  protection. [Persons]
                      (ii) A person eligible for exclusion under [this] Subsection (1)(h)(i) shall file a formal
                  request for [exclusion from coverage] exemption and be employed in a position designated as
                  exempt under an employee exemption plan developed by the [city, town] municipality, county, or

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                  political subdivision. [Employee exemption plans shall be subject to the following limitations:(a)
                  The total number of positions a city, town]
                      (2) (a) A municipality, county, or political subdivision may not exempt [may not exceed the
                  lesser of] more than 30 positions or a number equal to 10% of the employees of the [city, town]
                  municipality, county, or political subdivision[. However, every city, town] whichever is lesser.
                      (b) A municipality, county, or political subdivision [is entitled to a minimum exemption of
                  one eligible] may exempt at least one regular full-time employee.
                      [(b) Employee exemption plans shall be filed]
                      (3) Each participating employer shall:
                      (a) file employee exemptions annually with the [retirement] office[,]; and [the city, town,
                  county, or political subdivision shall]
                      (b) update the [exemption plan] employee exemptions in the event of any change.
                      [(c) The retirement]
                      (4) The office may [promulgate] make rules to implement this [subsection] section.
                      Section 54. Section 49-12-204 , which is renumbered from Section 49-2-206 is renumbered
                  and amended to read:
                       [49-2-206].     49-12-204. Higher education employees' eligibility requirements --
                  Election between different retirement plans -- Classification requirements -- Transfer between
                  systems -- Supplemental plans authorized.
                      (1) (a) [The faculty members and] Regular full-time employees of institutions of higher
                  education who are eligible to participate in either this system or in a retirement annuity contract with
                  the [Teacher's] Teachers' Insurance and Annuity Association of America or with any other public
                  or private system, organization, or company, designated by the Board of Regents, shall, not later than
                  January 1, 1979, elect to participate exclusively in this system or in an annuity contract allowed
                  under this Subsection (1).
                      (b) The election is final, and no right exists to make any further election.
                      (2) (a) A [faculty member or] regular full-time employee hired by an institution of higher
                  education after January 1, 1979, may participate only in the retirement plan which attaches to the

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                  person's employment classification[, and each].
                      (b) Each institution of higher education [is directed to] shall prepare or amend existing
                  employment classifications, under the direction of the Board of Regents, so that each classification
                  is assigned with either:
                      (i) this system [or with];
                      (ii) the [Teacher's] Teachers' Insurance and Annuity Association of America; or [with any
                  other]
                      (iii) another public or private system, organization, or company designated by the Board of
                  Regents.
                      (3) A [faculty member or] regular full-time employee hired by an institution of higher
                  education after January 1, 1979, whose employment classification requires participation in [the state
                  retirement] this system may[,] elect to continue participation in this system upon change to an
                  employment classification which requires participation in:
                      (a) an annuity plan with the [Teacher's] Teachers' Insurance and Annuity Association of
                  America; or [with some other]
                      (b) another public or private system, organization, or company designated by the Board of
                  Regents[, finally elect to continue participation in the state retirement system].
                      (4) A [faculty member or] regular full-time employee hired by an institution of higher
                  education after January 1, 1979, whose employment classification requires participation in [such an
                  annuity plan, upon change to an employment classification which requires participation in this
                  system,] this system shall participate in this system.
                      [(5) Nothing contained in this section prohibits a faculty member or employee of an
                  institution of higher education from participating in a supplemental annuity plan, and the Board of
                  Regents shall promulgate rules governing permissible participation, but in no event may the
                  contribution by an institution for the purchase of an old age annuity or other approved investment
                  exceed 14.2% of the employee's or member's salary.]
                      [(6) The State Board of Education may assist its faculties and employees to purchase any old
                  age annuity plan or other approved investment by promulgating rules governing permissible

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                  participation in a supplemental old age annuity plan or other approved investment, but such
                  assistance is limited to contracting with the employee to receive a reduced salary, and investing the
                  employee contribution towards the purchase of the annuity or other approved investment.]
                      Section 55. Section 49-12-301 , which is renumbered from Section 49-2-301 is renumbered
                  and amended to read:
                 
Part 3. Contributions

                       [49-2-301].     49-12-301. Contributions -- Two levels -- Election by a participating
                  employer to pay employee contributions -- Accounting for and vesting of member
                  contributions -- Deductions.
                      (1) [The system shall be maintained on a financially and actuarially sound basis by means
                  of contributions made jointly by the participating employer and by the active members of the
                  system.] Participating employers and members shall jointly pay the certified contribution rates to the
                  office to maintain this system on a financially and actuarially sound basis.
                      (2) For purposes of determining contribution rates, [the] this system is divided into two
                  levels according to participating employers[. The levels are] as follows:
                      (a) Level A includes the state [of Utah, the Utah State Retirement Office], its independent
                  agencies, independent entities, public corporations, and other instrumentalities, all participating
                  educational institutions, and all other participating employers whose activities are associated with
                  participating educational institutions.
                      (b) Level B includes all other participating employers in [the] this system.
                      [(2) Any] (3) (a) A participating employer may elect to pay all or part of [its members'] the
                  required member contributions, in addition to the required participating employer contributions.
                      (b) Any amount contributed by [an] a participating employer under this [subsection] section
                  shall vest to the member's benefit as though the member had made the contribution.
                      (c) The [member's] required [contribution] member contributions shall be reduced by the
                  amount that is paid by the participating employer.
                      [(3)] (4) (a) All member contributions are credited by the [retirement] office to the account
                  of the individual member.

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                      (b) This amount, together with [regular] refund interest, is held in trust for the payment of
                  benefits to the member or the member's beneficiaries.
                      (c) All member contributions are [100%] vested and nonforfeitable.
                      [(4)] (5) (a) Each member is [deemed] considered to consent to [monthly] payroll deductions
                  of member contributions.
                      (b) The payment of compensation less [retirement] these payroll deductions is considered
                  full payment [of the employee's salary] for services rendered by the member.
                      [(5) The board shall report at least biennially to the governor, the Legislature, and each
                  employing unit under Division A or B the contribution rates and any adjustments necessary to
                  maintain the system on a financially and actuarially sound basis, and the employer and employee
                  shall pay the certified contribution rates. ]
                      Section 56. Section 49-12-302 is enacted to read:
                      49-12-302. Purchase of service credit.
                      Any member who works 20 or more hours per week for a participating employer                   participating
                  in this system, but does not meet other eligibility requirements for service credit, may purchase the
                  service credit in accordance with Section 49-11-403 .
                      Section 57. Section 49-12-401 , which is renumbered from Section 49-2-401 is renumbered
                  and amended to read:
                 
Part 4. Defined Benefit

                       [49-2-401].     49-12-401. Eligibility for an allowance -- Date of retirement --
                  Qualifications.
                      [(1) (a) Any member who qualifies for service retirement may retire by submitting to the
                  retirement office an application form notarized by a notary public. The application shall state the
                  proposed effective date of retirement, which may not be more than 90 days before or after the date
                  of application.]
                      [(b) The effective date shall be the 1st or 16th day of the month, as selected by the member,
                  but must be after the last day of actual work.]
                      [(c) The member shall actually terminate employment and provide evidence of termination.]

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                      [(2) The member is qualified to retire upon termination of services on or before the effective
                  date of retirement if one of the following requirements on that date is met:]
                      (1) A member is qualified to receive an allowance from this system when:
                      (a) the member ceases actual work for a participating employer in this system before the
                  member's retirement date and provides evidence of the termination;
                      (b) the member has submitted to the office a notarized retirement application form that states
                  the member's proposed retirement date; and
                      (c) one of the following conditions is met as of the member's retirement date:
                      [(a)] (i) the member has [been credited with] accrued at least four years of service credit and
                  has attained an age of 65 years [or more];
                      [(b)] (ii) the member has [been credited with] accrued at least ten years of service credit and
                  has attained an age of 62 years [or more];
                      [(c)] (iii) the member has [been credited with] accrued at least 20 years of service credit and
                  has attained an age of 60 years [or more]; or
                      [(d)] (iv) the member has [been credited with] accrued at least 30 years of service credit.
                      (2) (a) The member's retirement date shall be the 1st or the 16th day of the month, as                   selected
                  by the member, but the retirement date must be on or after the date of termination.
                      (b) The retirement date may not be more than 90 days before or after the date the application
                  is received by the office.
                      Section 58. Section 49-12-402 , which is renumbered from Section 49-2-402 is renumbered
                  and amended to read:
                       [49-2-402].     49-12-402. Service retirement plans -- Calculation of retirement
                  allowance -- Social Security limitations.
                      (1) (a) [There are six service retirement plans available to members of the system. Plan One
                  is as follows, with Plans Two, Three, Four, Five, and Six established under Section 49-2-403 .]
                  Except as provided under Section 49-12-701 , retirees of this system may choose from the six
                  retirement options described in this section.
                      (b) Options Two, Three, Four, Five, and Six are modifications of the Option One calculation.

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                      (2) [Except for members of this system who meet the requirements of Section 49-2-802 ,
                  upon the service retirement of a member under Section 49-2-401 , the member shall receive a
                  retirement allowance consisting of an annuity, a pension based on prior service and a pension based
                  on current service, the total of which is determined] The Option One benefit is an annual allowance
                  calculated as follows:
                      (a) If the [member has attained the age of] retiree is at least 65 years of age or has accrued
                  at least 30 years of service credit, the [retirement] allowance is:
                      [(i) (A) an amount equal to 1.10% of the member's final average monthly salary, multiplied
                  by the number of years of service credited for service rendered prior to July 1, 1967; plus]
                      [(B)] (i) an amount equal to 1.25% of the [member's] retiree's final average monthly salary
                  multiplied by the number of years of service [credited for service rendered on and after July 1, 1967,
                  through June 30, 1975] credit accrued prior to July 1, 1975; plus
                      [(C)] (ii) an amount equal to 2% of the [member's] retiree's final average monthly salary
                  multiplied by the number of years of service [credited for service rendered] credit accrued on and
                  after July 1, 1975.
                      [(ii) In no case may that part of a retiring member's allowance, based upon prior service, as
                  provided in Subsection (2)(a)(i)(A) be less than 1.15% of that member's final average monthly salary
                  if the final average monthly salary is $500 or less, multiplied by the number of prior service years
                  standing to the member's credit at retirement.]
                      (b) If the [member] retiree is less than 65 years [old] of age, the [retirement] allowance shall
                  be reduced 3% for each year of retirement from age 60 to age 65, unless the member has 30 or more
                  years of accrued credit in which event no reduction is made to the allowance.
                      [(3)] (c) (i) Years of service includes any fractions of years of service to which the [member]
                  retiree may be entitled. [Service amounting to 9/10 of one year constitutes a year of service credit
                  in the computation of a retirement benefit.]
                      (ii) At the time of retirement, if a retiree's combined years of actual, not purchased, service
                  credit is within 1/10 of one year of the total years of service credit required for retirement, the retiree
                  shall be considered to have the total years of service credit required for retirement.

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                      (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated by
                  reducing an Option One benefit based on actuarial computations to provide the following:
                      (a) Option Two is a reduced allowance paid to and throughout the lifetime of the retiree, and,
                  if the retiree receives less in annuity payments than the amount of the retiree's member contributions,
                  the remaining balance of the retiree's member contributions shall be paid in accordance with Sections
                  49-11-609 and 49-11-610 .
                      (b) Option Three is a reduced allowance paid to and throughout the lifetime of the retiree,
                  and, upon the death of the retiree, the same reduced allowance paid to and throughout the lifetime
                  of the retiree's lawful spouse at the time of retirement.
                      (c) Option Four is a reduced allowance paid to and throughout the lifetime of the retiree, and
                  upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid to and throughout
                  the lifetime of the retiree's lawful spouse at the time of retirement.
                      (d) Option Five is a modification of Option Three so that if the lawful spouse at the time of
                  retirement predeceases the retiree, an allowance equivalent to the amount payable at the time of
                  initial retirement under Option One shall be paid to the retiree for the remainder of the retiree's life,
                  beginning on the last day of the month following the month in which the lawful spouse dies.
                      (e) Option Six is a modification of Option Four so that if the lawful spouse at the time of
                  retirement predeceases the retiree, an allowance equivalent to the amount payable at the time of
                  initial retirement under Option One shall be paid to the retiree for the remainder of the retiree's life,
                  beginning on the last day of the month following the month in which the lawful spouse dies.
                      (4) (a) (i) The final average salary is limited in the computation of that part of [a member's
                  prior service retirement] an allowance based on service rendered prior to July 1, 1967, during a
                  period when the [member] retiree received employer contributions on a portion of compensation
                  from an educational institution toward the payment of the premium required on a retirement annuity
                  contract with the Teachers' Insurance and Annuity Association of America or with any other public
                  or private system, organization, or company to $4,800.
                      (ii) This limitation is not applicable to [members] retirees who elected to continue in the
                  [state retirement] this system by July 1, 1967.

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                      (b) Periods of [service] employment which are exempt from this system under Subsection
                  [ 49-2-205 (3), not to exceed four years] 49-12-203 (1)(c), may be purchased by the member for the
                  purpose of retirement[.] only if all benefits from the Teachers' Insurance and Annuity Association
                  of America or any other public or private system or organization based on this period of employment
                  are forfeited.
                      (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement date,
                  the retirement is canceled and the death shall be considered as that of a member before retirement.
                      (b) Any payments made to the retiree shall be deducted from the amounts due to the
                  beneficiary.
                      (6) If a retiree retires under either Option Five or Six and subsequently divorces, the retiree
                  may elect to convert the benefit to a Option One benefit at the time of divorce, if there is no court
                  order filed in the matter.
                      Section 59. Section 49-12-403 , which is renumbered from Section 49-2-404 is renumbered
                  and amended to read:
                       [49-2-404].     49-12-403. Allowance payable by lump sum payment.
                      (1) If a [retiring member's monthly] retiree's allowance, as computed under [Section
                  49-2-402 ] this chapter, amounts to $25 or less, the [benefit claim] allowance may be settled by the
                  [administrator] office by making a lump-sum payment of an amount actuarially equivalent to the
                  [monthly] allowance. [Payment thus]
                      (2) A payment made under this section constitutes a full and complete settlement of the
                  [retiring member's] retiree's claim against [the] this system.
                      Section 60. Section 49-12-404 , which is renumbered from Section 49-2-405 is renumbered
                  and amended to read:
                       [49-2-405].     49-12-404. Lump-sum death benefit for retiree and spouse.
                      (1) (a) [A member, upon service] Upon retirement, a retiree may elect to have the
                  [administrator set aside in reserve from the member's retirement allowance a sufficient sum of
                  money, based upon age, sex, interest rate in effect, and the mortality rates for the member's group,]
                  office deduct an actuarially determined amount from the retiree's allowance to provide a lump-sum

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                  benefit payable to a beneficiary upon the death of the [member after retirement, under an agreement
                  that will provide a reduced retirement allowance payable to the retirant throughout the retirant's
                  lifetime, plus the lump-sum amount at death] retiree.
                      (b) A retiree may also elect to have an actuarially determined amount deducted from the
                  retiree's allowance to provide a lump-sum death benefit payable to a beneficiary upon the death of
                  the retiree's lawful spouse at the time of retirement.
                      [(b) This] (c) The board may make rules for the administration of this lump-sum death
                  [benefit may be purchased in accordance with rules adopted by the board] benefit.
                      [(c) The spouse of a retiring member may also be covered with a death benefit upon the
                  request of the member.]
                      [(2) The lump-sum death benefit provided by this section may be chosen as a modification
                  of or deduction from the retirement allowance provided under Sections 49-2-402 and 49-2-403 , and
                  is payable to the designated beneficiary chosen at the time of the member's retirement, to a
                  beneficiary subsequently designated, or to the retirant's estate under applicable conditions established
                  under Section 49-1-606 or 49-1-607 .]
                      [(3) If a retirant cancels retirement as permitted by this title, the lump-sum death benefit
                  under this section shall also be canceled, with the appropriate reserve, as determined by the
                  administrator, credited back to the member's contribution account.]
                      [(4) Payment of the lump-sum death benefit consists only of a refund of the retirant's reserve
                  or the amount determined by the board and set aside as provided in this section if death occurs within
                  three years from the date of retirement and is due to a health condition existing and being treated at
                  the time of retirement.]
                      [(5) The board may establish rules and adopt suitable mortality rates to protect the fund
                  against adverse selection of benefits by a retiring member under this section.]
                      (2) (a) For retirees who pay for a lump-sum death benefit under this section through a
                  reduction of an allowance, benefits shall be paid in accordance with Sections 49-11-609 and
                  49-11-610 .
                      (b) If the retiree chooses Option Three, Four, Five, or Six, and a lump-sum death benefit is

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                  payable after the death of the retiree or the lawful spouse, the allowance shall be restored to its
                  original amount.
                      Section 61. Section 49-12-405 , which is renumbered from Section 49-2-406 is renumbered
                  and amended to read:
                       [49-2-406].     49-12-405. Death of married member -- Service retirement benefits to
                  surviving spouse.
                      (1) [(a) A member who has] Upon the request of the member's lawful spouse at the time of
                  death, a member is considered to be eligible to retire under Option Three on the first day of the
                  month following the month in which the member died if the following requirements are met:
                      (a) the member has:
                      (i) 25 or more years of [credited] service[,] credit;
                      (ii) attained age 60 with 20 or more years of [credited] service[,] credit;
                      (iii) attained age 62 with ten or more years of [credited] service[,] credit; or
                      (iv) attained age 65 with four or more years of [credited] service[, respectively, and who]
                  credit; and
                      (b) the member 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)] (2) The spouse who requests a benefit [pursuant to Subsection (1)(a)] under this section
                  shall apply in writing to the [retirement] office stating the proposed effective date to begin receiving
                  [a monthly retirement] an 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)] (3) The [benefit] Option Three benefit calculation, when there are 25 or more years of
                  service credit, shall be calculated without [an actuarial] a reduction in allowance under Section
                  49-12-402 .
                      [(3) Benefits] (4) Except for a return of member contributions, benefits payable under this

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                  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,] 49-12-501 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 ] 49-12-501 .
                      Section 62. Section 49-12-406 , which is renumbered from Section 49-2-409 is renumbered
                  and amended to read:
                       [49-2-409].     49-12-406. Part-time elective or appointive service -- Computation of
                  allowance.
                      [Elective] Notwithstanding any other provision of this title, elective or appointive service
                  rendered on a basis not considered full time by the [board,] office, unless otherwise provided by this
                  chapter, shall have a [retirement] separate allowance computed on the basis of compensation actually
                  received by the [official] member during the period of elective or appointive service.
                      Section 63. Section 49-12-407 , which is renumbered from Section 49-2-601 is renumbered
                  and amended to read:
                       [49-2-601].     49-12-407. Annual cost-of-living adjustment.
                      (1) [There shall be computed and paid by the retirement] The office[, upon the approval of
                  the board,] shall make an annual cost-of-living [allowance] adjustment to: [all retired members of
                  this system after the members have been retired one year. The adjustment shall be equal to the
                  decrease in the purchasing power of the dollar during the preceding year, as measured by the
                  Consumer Price Index, prepared by the United States Bureau of Labor Statistics, limited to a
                  maximum of 4% of the retirant's or beneficiary's original retirement allowance. Decreases in the
                  purchasing power of the dollar in excess of 4% annually shall be accumulated and used in
                  subsequent allowances when the cost-of-living adjustment is less than 4% annually.]
                      [(2) If the cost-of-living shows a decline of 4% or more during any period of time extending
                  longer than one year a reduction not to exceed the rate of 2% per year shall be made based upon the
                  original retirement allowance. Payments made under this section shall be a part of the retired
                  member's allowance. These payments and subsequent adjustments as prescribed for the retirant shall
                  also apply to the beneficiary who is paid an allowance under optional retirement plans.

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                  Cost-of-living benefits granted prior to July 1, 1975, are not subject to adjustment.]
                      (a) an original allowance paid under Section 49-12-402 or 49-12-404 , if the allowance has
                  been paid for at least one year; and
                      (b) an original payment made to an alternate payee under a domestic relations order, if the
                  payment is to be paid as a percentage of the allowance rather than a specific dollar amount.
                      (2) (a) The original allowance shall be increased by the annual increase in the Consumer
                  Price Index up to a maximum of 4%.
                      (b) Annual increases in the Consumer Price Index in excess of 4% shall be accumulated and
                  used in subsequent adjustments when the annual increase in the Consumer Price Index is less than
                  4%.
                      (3) The Consumer Price Index used in calculating adjustments shall be a United States
                  Bureau of Labor Statistics Consumer Price Index average as determined by the board.
                      (4) The cost-of-living adjustment made under this section may not decrease the allowance.
                      Section 64. Section 49-12-408 , which is renumbered from Section 49-2-602 is renumbered
                  and amended to read:
                       [49-2-602].     49-12-408. Minimum monthly allowance.
                      (1) [No member who retired] A retiree under this system may not receive less than $9 per
                  month for each year of service credit at the time of retirement.
                      (2) The increased allowance provided by this section may not exceed the allowance payable
                  under [Plan I] Option One under Section 49-12-402 , by more than 75%.
                      (3) The cost of providing this benefit shall be assumed within the contribution rate
                  established under Section [ 49-2-301 ] 49-12-301 .
                      Section 65. Section 49-12-501 , which is renumbered from Section 49-2-701 is renumbered
                  and amended to read:
                 
Part 5. Death Benefit

                       [49-2-701].     49-12-501. Death benefit by means of group insurance policy -- Eligibility
                  for death benefit -- Benefit calculation -- Payment of claim -- Exclusion.
                      (1) The [board] office shall provide a death benefit through the purchase of a group

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                  insurance policy for members of this system.
                      (2) The board shall make rules to [implement and] administer the death benefit provided by
                  this section and may, in accordance with federal law, establish:
                      (a) benefit levels [or];
                      (b) classes of [employees] members; and
                      [(b)] (c) a living benefit option.
                      [(2) Upon receipt of acceptable proof of death of a member of the system, either prior to the
                  effective date of the member's retirement, except as provided in Section 49-2-406 , or after the date
                  of retirement but under circumstances that Section 49-2-403 requires to be treated as the death of
                  member before retirement, the following death benefits, except those benefits already provided to
                  the member under a living benefit option, shall be paid to the beneficiary:]
                      [(a) the return of any accumulated contributions under this chapter; plus]
                      [(b) a percentage of the final average salary of the deceased member to be determined by the
                  board. This percentage shall be the highest percentage of final average salary obtainable by the
                  board through the purchase of a group insurance policy using the money contributed by the employer
                  under Subsection (3).]
                      (3) This death benefit is payable when:
                      (a) the member dies prior to the member's retirement date or dies under circumstances which
                  Section 49-12-402 requires to be treated as the death of a member before retirement;
                      (b) the office receives acceptable proof of death; and
                      (c) benefits are not payable under Section 49-12-404 .
                      (4) The death benefit payable to the beneficiary under this section is a lump-sum payment
                  consisting of:
                      (a) the return of any member contributions under this chapter; plus
                      (b) a percentage of the final average salary of the member to be determined by the board.
                      (5) Any amount of a living benefit option paid to the member prior to death shall be
                  deducted from the benefit payable to the beneficiary.
                      [(3)] (6) The cost of the death benefit shall be paid by the participating employer as a portion

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                  of the contribution rate established under Section 49-12-301 .
                      [(4)] (7) The portion of the death benefit provided under Subsection [(2)] (4)(b)[, based upon
                  the member's past compensation,] may not be paid to the beneficiary of an inactive member unless:
                      (a) that member has [credit for] ten or more years of accrued service credit prior to July 1,
                  1987; or
                      (b) the death of the member occurs either:
                      (i) within a period of 120 days after the last day of [service] work for which the person
                  received compensation; or
                      (ii) while the [person] member is still physically or mentally incapacitated from performance
                  of duties, if the incapacity has been continuous since the last day of [service] work for which
                  compensation [is] was received[; or].
                      [(iii) while that person is on military leave and has elected to remain in active contributing
                  membership status as provided in Section 49-1-402 .]
                      (8) The death benefit [may not be paid to any person except a beneficiary] provided under
                  Subsection (4)(b) shall be paid in accordance with Sections 49-11-609 and 49-11-610 .
                      [(5)] (9) The death benefit [for] paid to the beneficiary of an inactive member, except as
                  otherwise provided under Subsection [(4)] (7), is a lump-sum return of the [deceased] member's
                  [accumulated] member contributions.
                      [(6)] (10) Payment of the death benefit by the [retirement] office constitutes a full settlement
                  of any beneficiary's claim against the [system] office, and the [system] office is not liable for any
                  further or additional claims or assessments on behalf of the [deceased] member.
                      [(7)] (11) Unless otherwise specified in a written document filed [in] with the [retirement]
                  office, death benefits payable to beneficiaries shall be in accordance with the order of precedence
                  established under Title 75, Chapter 2, [Uniform Probate Code] Intestate Succession and Wills.
                      [(8) In the implementation of this section and for administrative purposes only, the State Tax
                  Commission shall provide pertinent information to the retirement administrator, upon request,
                  concerning dependents claimed by a deceased member on the income tax return covering the year
                  prior to the member's death.]

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                      [(9)] (12) A death benefit under this section may not be paid to a [member who has retired]
                  beneficiary of a retiree under this system.
                      Section 66. Section 49-12-601 , which is renumbered from Section 49-2-503 is renumbered
                  and amended to read:
                 
Part 6. Disability

                       [49-2-503].     49-12-601. Disability retirement -- Medical examinations --
                  Reemployment of disabled retirant -- Cancellation of benefit -- Service credit -- Disabled
                  retirant engaging in gainful employment -- Reduction of allowance -- Refusal to submit to
                  medical examination.
                      (1) Only members of this system who became eligible for a disability retirement allowance
                  before January 1, 1983, are covered under this section.
                      [(1)] (2) (a) The board may, upon the recommendation of the administrator, require any
                  retirant who has been retired for disability and who has not attained the age of 60 years, to undergo
                  a medical examination by a physician or surgeon, appointed by the board, at the place of residence
                  of the retirant or other place mutually agreed upon.
                      (b) Upon the basis of the examination, the board shall determine whether the disabled
                  retirant is still incapacitated, physically or mentally, for service under this chapter.
                      (c) If the board determines that the retirant is not incapacitated, the retirement allowance
                  shall be cancelled and the retirant shall be reinstated immediately to a position of the same class as
                  that held by the retirant when retired for disability.
                      (d) If any employing unit is unable to reinstate the retirant, the board shall continue the
                  disability retirement allowance of the retirant until [such time as] employment is available.
                      [(2)] (3) (a) If a disabled retirant under this system reenters covered service and is eligible
                  for membership in the retirement system, the retirement allowance shall be cancelled and the retirant
                  shall immediately become a member of the retirement system.
                      (b) (i) The member's individual account shall be credited with an amount which is the
                  actuarial equivalent, at the time of reentry, based on a disabled life, of that portion of the member's
                  retirement allowance which was derived from the member's accumulated contributions[, but that].

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                      (ii) The amount credited may not exceed the amount of accumulated contributions standing
                  at the time of retirement.
                      (c) Each member shall receive credit for the service [standing to] in the member's account
                  at the time of retirement.
                      [(3)] (4) If the retirement allowance of any disabled retirant is cancelled for any cause other
                  than reentry into service, the retirant shall be paid the accumulated contributions less the amounts
                  prescribed by Subsection [(5)] (6).
                      [(4)] (5) (a) If any member retired for disability engages in a gainful occupation prior to
                  attaining age 60, the administrator shall reduce the amount of the retirement [benefit] allowance to
                  an amount which, when added to the compensation earned monthly by the retirant in that occupation,
                  may not exceed the amount of the final average monthly salary on the basis of which the current
                  service retirement [benefit] allowance was determined.
                      (b) If the earning capacity of the retirant is further altered, the administrator may further alter
                  the retirement [benefit] allowance as provided in this Subsection (5).
                      (c) In no event, however, may the retirement benefit be reduced below that portion of the
                  retirant's allowance derived from the retirant's own accumulated contributions.
                      (d) When the retirant reaches age 60, the retirement allowance shall be made equal to the
                  amount upon which the retirant was originally retired and may not again be modified for any cause.
                      [(5)] (6) (a) If any member who retired for disability under age 60, refuses to submit to a
                  medical examination, the retirement allowance may be discontinued until the retirant withdraws that
                  refusal[, and if].
                      (b) If the refusal continues for one year the disability status may be cancelled and
                  membership terminated.
                      (c) (i) The retirant's accumulated contribution account shall be the actuarial equivalent on
                  the date of the retirant's change of status, based on a disabled life, of that portion of the disability
                  retirement allowance which was derived from the retirant's accumulated contributions[, but that].
                      (ii) The amount credited may not exceed the amount of the retirant's accumulated
                  contributions at the time of disability retirement.

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                      Section 67. Section 49-12-701 , which is renumbered from Section 49-2-802 is renumbered
                  and amended to read:
                 
Part 7. Early Retirement Incentive

                       [49-2-802].     49-12-701. Early retirement incentive -- Eligibility -- Calculation of
                  benefit -- Payment of costs -- Savings to be appropriated by Legislature -- Restrictions on
                  reemployment.
                      (1) Any member of this system may retire and receive the [benefit] allowance allowed under
                  Subsection (2) if the member meets the following requirements as of the [effective date of] member's
                  retirement date:
                      (a) the member is eligible for retirement under Section [ 49-2-401 ] 49-12-401 , or [otherwise]
                  has 25 years of service credit;
                      (b) the member elects to forfeit any stipend for retirement offered by the [employing unit]
                  participating employer; and
                      (c) the member elects to retire from this system by applying for retirement by the date
                  established under Subsection (3)(a) or (3)(b).
                      (2) (a) A member who retires [pursuant to] under Subsection (1) shall receive 2% of that
                  member's final average salary for all years of service credit.
                      (b) An actuarial reduction may not be applied to the [benefit] allowance granted under this
                  section.
                      (3) In order to receive the [benefit] allowance allowed by this section, a member shall submit
                  an application to the [retirement] office as follows:
                      (a) (i) For state and school employees under Level A, the application shall be filed by May
                  31, 1987. The [effective date of] member's retirement date shall then be set by the [employee]
                  member on the [first] 1st or [sixteenth] 16th day of July, August, or September, 1987.
                      (ii) If a Level A [employee] member elects to retire, the [administrator] executive director
                  or participating employer may request the [employee] member to delay the [effective date of]
                  retirement date until a later date, but no later than June 30, 1988.
                      (iii) If the [employee] member agrees to delay the [effective] retirement date, the [effective]

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                  retirement date shall be delayed, but [no] service credit may not be accrued after the member's
                  original [effective date of] retirement date elected by the [employee] member, and [no] [salary]
                  compensation earned after [that effective] the member's original retirement date may not be used in
                  the calculation of the final average salary for determining the retirement [benefit] allowance.
                      (b) (i) For political [subdivisions] subdivision employees under Level B, the application
                  shall be filed by September 30, 1987.
                      (ii) The [effective date of] retirement date shall then be set by the [employee] member on
                  the [first] 1st or [sixteenth] 16th day of July, August, September, October, November, or December,
                  1987.
                      (4) (a) The cost of providing the [benefit] allowance under this section shall be funded in
                  fiscal year 1987-88 by a supplemental appropriation in the 1988 General Session based on the
                  retirement contribution rate increase established by the consulting actuary and approved by the
                  board.
                      (b) The cost of providing the [benefit] allowance under this section shall be funded
                  beginning July 1, 1988, by means of an increase in the retirement contribution rate established by
                  the consulting actuary and approved by the board.
                      (c) The rate increase under Subsections (4)(a) and (b) shall be funded:
                      (i) for state employees, by an appropriation from the account established by the Division of
                  Finance under Subsection (4)(d), which is funded by savings derived from this early retirement
                  incentive and a work force reduction;
                      (ii) for school employees, by direct contributions from the employing unit, which may not
                  be funded through an increase in the retirement contribution amount established in Title 53A,
                  Chapter 17a, Minimum School Program Act; and
                      (iii) for political subdivisions under Level B, by direct contributions by the [employing unit]
                  participating employer.
                      (d) (i) Each year, any excess savings derived from this early retirement incentive which are
                  above the costs of funding the increase and the costs of paying insurance, sick leave, compensatory
                  leave, and vacation leave under Subsections (4)(c)(i) and (c)(ii) shall be reported to the Legislature

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                  and shall be appropriated as provided by law.
                      (ii) In the case of Subsection (4)(c)(i), the Division of Finance shall establish an account into