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H.B. 225

             1     

POST RETIREMENT EMPLOYMENT

             2     
2006 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Glenn A. Donnelson

             5     
Senate Sponsor: Beverly Ann Evans

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
             10      reemployment restrictions for certain retirees.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines "different agency" and "same agency" to clarify the applicability of certain
             14      reemployment restrictions for certain retirees;
             15          .    extends the period that a retiree may not be reemployed from six months to 12
             16      months in order to avoid reemployment restrictions for retirees; and
             17          .    makes technical changes.
             18      Monies Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          49-11-504, as last amended by Chapter 116, Laws of Utah 2005
             25     
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 49-11-504 is amended to read:


             28           49-11-504. Reemployment of a retiree -- Restrictions.
             29          (1) As used in this section:
             30          (a) "Different agency" means an agency of an employer that is not within the same
             31      department, division, agency, office, authority, commission, board, institution, hospital, county,
             32      municipality, school district, special district, state college, or university of the employer.
             33          (b) "Full-time" employment means employment requiring 20 hours of work per week
             34      or more or at least a half-time teaching contract.
             35          (c) "Same agency" means an agency of an employer that is within the same department,
             36      division, agency, office, authority, commission, board, institution, hospital, county,
             37      municipality, school district, special district, state college, or university of the employer.
             38          [(1)] (2) A person who retires from a nonparticipating employer is not subject to any
             39      postretirement restrictions under this title.
             40          [(2)] (3) A retiree of an agency who returns to work at a different agency:
             41          (a) is not subject to any postretirement restrictions under this section; and
             42          (b) may not earn additional service credit.
             43          [(3) For the purposes of Subsections (4) and (5), "full-time" employment means
             44      employment requiring 20 hours of work per week or more or at least a half-time teaching
             45      contract.]
             46          (4) A retiree of an agency who is reemployed on a full-time basis by the same agency
             47      within [six] 12 months of the date of retirement is subject to the following:
             48          (a) the agency shall immediately notify the office;
             49          (b) the office shall cancel the retiree's allowance and reinstate the retiree to active
             50      member status;
             51          (c) the allowance cancellation and reinstatement to active member status is effective on
             52      the first day of the month following the date of reemployment;
             53          (d) the reinstated retiree may not retire again with a recalculated benefit for a two-year
             54      period from the date of cancellation of the original allowance, and if the retiree retires again
             55      within the two-year period, the original allowance shall be resumed; and
             56          (e) a reinstated retiree retiring after the two-year period shall be credited with the
             57      service credit in the retiree's account at the time of the first retirement and from that time shall
             58      be treated as a member of a system, including the accrual of additional service credit, but


             59      subject to recalculation of the allowance under Subsection (9).
             60          (5) A retiree of an agency who is reemployed by the same agency within [six] 12
             61      months of retirement on a less than full-time basis by the same agency is subject to the
             62      following:
             63          (a) the retiree may earn, without penalty, compensation from that position which is not
             64      in excess of the exempt earnings permitted by Social Security;
             65          (b) if a retiree receives compensation in a calendar year in excess of the Social Security
             66      limitation, 25% of the allowance shall be suspended for the remainder of the [six-month]
             67      12-month period;
             68          (c) the effective date of a suspension and reinstatement of an allowance shall be set by
             69      the office; and
             70          (d) any suspension of a retiree's allowance under this Subsection (5) shall be applied
             71      on a calendar year basis.
             72          (6) For [six] 12 months immediately following retirement, the retiree and participating
             73      employer shall:
             74          (a) maintain an accurate record of gross earnings in employment;
             75          (b) report the gross earnings at least monthly to the office;
             76          (c) immediately notify the office in writing of any postretirement earnings under
             77      Subsection (4); and
             78          (d) immediately notify the office in writing whether postretirement earnings equal or
             79      exceed the exempt earnings under Subsection (5).
             80          (7) A retiree of an agency who is reemployed by the same agency after [six] 12 months
             81      from the retirement date:
             82          (a) is not subject to any postretirement restrictions under this title; and
             83          (b) may not earn additional service credit.
             84          (8) If a participating employer hires a nonexempt retiree who may not earn additional
             85      service credit under this section, the participating employer shall contribute the same
             86      percentage of a retiree's salary that the participating employer would have been required to
             87      contribute if the retiree were an active member, up to the amount allowed by federal law, to a
             88      retiree designated:
             89          (a) defined contribution plan administered by the board, if the participating employer


             90      participates in the defined contribution plan administered by the board; or
             91          (b) defined contribution plan offered by the participating employer if the participating
             92      employer does not participate in a defined contribution plan administered by the board.
             93          (9) Notwithstanding any other provision of this section, a retiree who has returned to
             94      work, accrued additional service credit, and again retires shall have the retiree's allowance
             95      recalculated using:
             96          (a) the formula in effect at the date of the retiree's original retirement for all service
             97      credit accrued prior to that date; and
             98          (b) the formula in effect at the date of the subsequent retirement for all service credit
             99      accrued between the first and subsequent retirement dates.
             100          (10) This section does not apply to elected positions.
             101          (11) The board may make rules to implement this section.




Legislative Review Note
    as of 12-5-05 10:08 AM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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