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H.B. 297 Enrolled
This act modifies the Utah State Retirement Act and the State Officers and Employees Code
by requiring an employee to have five years of service credit and meet federal eligibility
requirements to be eligible to purchase retirement service credit. This act provides for the
withdrawal of independent corporations from the state retirement systems and provides for
withdrawal procedures. This act modifies provisions governing the use of unused sick leave
at retirement. This act takes effect on July 1, 2002.
This act affects sections of Utah Code Annotated 1953 as follows:
49-3-410, as last amended by Chapter 141, Laws of Utah 2001
67-19-14, as last amended by Chapter 64, Laws of Utah 1999
49-11-621, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 49-3-410 is amended to read:
49-3-410. Purchase of retirement credit -- Conditions -- Cost.
(1) Any member of this system may receive retirement service credit in accordance with
(2) (a) A member may purchase or a member and an employing unit may jointly purchase
a combined maximum total of five years of retirement service credit which is not otherwise
purchasable under this chapter.
(b) The number of years of retirement service credit purchased may exceed the number of
years or age required by the member to retire with no actuarial reduction.
(c) The purchase of retirement service credit must allow the member to meet the retirement
eligibility requirements of this system with no actuarial reduction.
(d) The member must retire effective immediately after the purchase of retirement service
credit is made.
(e) The member shall pay at least 5% of the cost of the purchase.
(f) The member shall have five years of service credit and otherwise meet federal eligibility
requirements to qualify for a purchase of service credit under this section.
(3) The purchase price for the retirement service credit shall be calculated and paid for as
provided in Section 49-1-407 .
(4) (a) The employing unit may elect to purchase retirement service credit for a member
under Subsection (2) while the member is on an unpaid leave of absence.
(b) If the member is on an unpaid leave of absence, the employing unit may make installment
payments towards the purchase in amounts fixed by the administrator.
(c) The member shall retire when the purchase obligations are fulfilled.
(5) A member who retires after the employer purchases retirement service credit under this
section shall be subject to the provisions of Section 49-1-505 .
(6) Prior to making any purchase of service credit under this section, an employing unit shall
adopt a purchase policy that includes nondiscriminatory participation standards for all employees.
Section 2. Section 49-11-621 is enacted to read:
49-11-621. Withdrawal of independent corporations.
(1) Notwithstanding any other provision of this title, an independent corporation, as defined
in Section 63E-1-102 , which participates in a system or plan prior to July 1, 2002, may withdraw
from participation with that system or plan as follows:
(a) the independent corporation shall comply with the provisions of Title 63E, Chapter 2,
Independent Corporations Act;
(b) upon complying with the requirements of Title 63E, Chapter 2, Independent Corporations
Act, the independent corporation and the board shall agree upon a date on which the independent
entity shall make an election under Subsection (2);
(c) an employee hired after the date set under Subsection (1)(b) may not participate in a
system or plan; and
(d) the withdrawing independent corporation shall pay to the office any actuarial or
administrative cost, determined by the office, to have arisen out of the withdrawal.
(2) The independent corporation shall elect to:
(a) continue its participation for all current employees covered by a system or plan on the
date set under Subsection (1)(b); or
(b) withdraw from participation in all systems or plans for all employees as of the date set
under Subsection (1)(b).
(3) If an independent corporation elects to continue participation under Subsection (2)(a),
the independent corporation and its employees shall continue to be subject to the laws and the rules
governing the system or plan in which the employee participates, including the accrual of service
credit and payment of contributions.
(4) The independent corporation may create an alternative retirement program for its
employees not covered by a system or plan in accordance with its election under Subsection (2).
Section 3. Section 67-19-14 is amended to read:
67-19-14. Sick leave -- Unused sick days -- Retirement program.
(1) The director shall, as an incentive to reduce sick leave abuse, make rules governing
procedures whereby, after an employee has accumulated 18 unused sick leave days, any sick days
accumulated during any calendar year in excess of eight, at the option of that employee, may be
carried as "converted sick leave" which the employee may use at a later date as annual leave, regular
sick leave, or as paid-up health and medical insurance at the time of retirement on the basis of the
payment by the employing department of one month's premium for each day of accumulated sick
(2) (a) (i) The director shall make rules for the governance of a retirement program.
(ii) Employing departments may offer the retirement option to an employee.
(iii) Employee participation in any part of the retirement program shall be entirely voluntary.
(iv) An employee must be eligible for retirement benefits to qualify for the program.
(b) (i) (A) When an employee retires, the program shall provide for the employee to be paid
for 25% of the employee's unused accumulated sick leave at the employee's preretirement rate of pay.
(B) An employee shall have the option of having all monies from the cashout under
Subsection (b)(i)(A) transferred directly to the deferred compensation plan qualified under Section
401(k) of the Internal Revenue Code which is sponsored by the Utah State Retirement Board.
(ii) The employing department shall also provide the same health and life insurance benefits
the employee has at the time of retirement until the employee becomes eligible for Medicare, but this
benefit may not exceed five years' coverage from the date of retirement, except as provided under
(c) (i) An employee whose unused sick leave, after the 25% cashout has been paid, exceeds
the 60 days maximum for five-year coverage under Subsection (2)(b), may continue the health and
life insurance, which the employee had at the time of retirement, at the rate of one month's coverage
for each day of unused sick leave above the 60 days, but only to the age eligible for Medicare. If the
employee has reached the age eligible for Medicare, coverage for the employee's spouse may
continue under this Subsection (2)(c)(i) until the employee's spouse reaches the age eligible for
(ii) An employee and the employee's spouse who are or who later become eligible for
Medicare may purchase Medicare supplemental insurance at the rate of one month's coverage for
both the employee and the employee's spouse for each day of the employee's unused sick leave if the
employee and the employee's spouse have reached the age eligible for Medicare.
(iii) The coverages under this Subsection (2)(c) are in addition to the coverage provided
under Subsection (2)(b).
(d) Any costs or savings for this act shall be borne by the agency and shall not be
appropriated by the Legislature.
(3) (a) The director shall make rules to provide a continuation of health and dental insurance
to the surviving spouse and family of any state employee whose death occurs in the line of duty. The
insurance coverage shall continue for a period of five years or until the surviving spouse becomes
eligible for Medicare, whichever comes first.
(b) The rules shall also provide for the use of accumulated sick leave in the same manner
as provided under Subsection (2)(b).
(c) The costs of paying for the benefits under Subsections (3)(a) and (b) shall be included
in the agency's budget request each year following the date of death of the employee.
Section 4. Effective date.
This act takes effect on July 1, 2002.
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