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H.B. 8 Enrolled

             1     

RETIREMENT OFFICE AMENDMENTS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: David Clark

             5     
Senate Sponsor: Carlene M. Walker

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
             10      definitions, and making certain technical and administrative amendments.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends the definition of allowance by adding "or retirement allowance";
             14          .    amends the definition of "political subdivision" by providing that a project entity
             15      created under the Interlocal Cooperation Act is not a political subdivision if it was
             16      formed prior to 1987;
             17          .    requires that retirement contributions made by a participating employee for a retiree
             18      that is subject to postemployment retirement restrictions shall be made to a
             19      "qualified" defined contribution plan;
             20          .    adds "covered individual" to those whose benefits are not subject to alienation,
             21      assignment, or attachment for legal purposes;
             22          .    allows the executive director to delegate certain dispute rulings to the deputy
             23      director;
             24          .    provides that Option One retirement allowance is only payable to the member
             25      during the member's lifetime for the Public Employees' Contributory and
             26      Noncontributory systems;
             27          .    adds "mentally" able to resume firefighter service to the examiners report for a
             28      determination regarding disability benefits;
             29          .    allows reserves in an insurance risk pool to be refunded directly to covered


             30      individuals;
             31          .    repeals a requirement that employees not be allowed to change from the high
             32      deductible health plan more frequently than every three years and replaces it with a
             33      provision that the program must be administered so that the impact on the overall
             34      health plan is actuarially neutral;
             35          .    requires the office to consult with covered employers in addition to certain state
             36      agencies prior to determining the amount of annual contributions to a health savings
             37      account;
             38          .    changes references to eligibility to receive a "retirement benefit" to eligibility to
             39      receive a "retirement allowance" to clarify provisions of the Unused Sick Leave
             40      Retirement Option Program I and II; and
             41          .    makes technical changes.
             42      Monies Appropriated in this Bill:
             43          None
             44      Other Special Clauses:
             45          None
             46      Utah Code Sections Affected:
             47      AMENDS:
             48          49-11-102, as last amended by Chapter 116, Laws of Utah 2005
             49          49-11-504, as last amended by Chapter 116, Laws of Utah 2005
             50          49-11-612, as last amended by Chapter 260, Laws of Utah 2006
             51          49-11-613, as last amended by Chapter 116, Laws of Utah 2005
             52          49-12-402, as last amended by Chapter 116, Laws of Utah 2005
             53          49-13-402, as last amended by Chapter 116, Laws of Utah 2005
             54          49-16-602, as last amended by Chapter 240, Laws of Utah 2003
             55          49-17-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
             56          49-18-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
             57          49-20-201, as last amended by Chapter 118, Laws of Utah 2004


             58          49-20-402, as renumbered and amended by Chapter 250, Laws of Utah 2002
             59          49-20-409, as last amended by Chapter 260, Laws of Utah 2006
             60          49-20-410, as enacted by Chapter 276, Laws of Utah 2006
             61          49-21-102, as last amended by Chapter 116, Laws of Utah 2005
             62          49-21-401, as last amended by Chapter 240, Laws of Utah 2003
             63          67-19-14.2, as last amended by Chapter 15, Laws of Utah 2005
             64          67-19-14.4, as enacted by Chapter 15, Laws of Utah 2005
             65     
             66      Be it enacted by the Legislature of the state of Utah:
             67          Section 1. Section 49-11-102 is amended to read:
             68           49-11-102. Definitions.
             69          As used in this title:
             70          (1) (a) "Active member" means a member who is employed or who has been employed
             71      by a participating employer within the previous 120 days.
             72          (b) "Active member" does not include retirees.
             73          (2) "Actuarial equivalent" means a benefit of equal value when computed upon the
             74      basis of mortality tables as recommended by the actuary and adopted by the executive director,
             75      including regular interest.
             76          (3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
             77      adopted by the board upon which the funding of system costs and benefits are computed.
             78          (4) "Agency" means:
             79          (a) a department, division, agency, office, authority, commission, board, institution, or
             80      hospital of the state;
             81          (b) a county, municipality, school district, or special district;
             82          (c) a state college or university; or
             83          (d) any other participating employer.
             84          (5) "Allowance" or "retirement allowance" means the pension plus the annuity,
             85      including any cost of living or other authorized adjustments to the pension and annuity.


             86          (6) "Alternate payee" means a member's former spouse or family member eligible to
             87      receive payments under a Domestic Relations Order in compliance with Section 49-11-612 .
             88          (7) "Annuity" means monthly payments derived from member contributions.
             89          (8) "Appointive officer" means an employee appointed to a position for a definite and
             90      fixed term of office by official and duly recorded action of a participating employer whose
             91      appointed position is designated in the participating employer's charter, creation document, or
             92      similar document, and who earns during the first full month of the term of office $500 or more,
             93      indexed as of January 1, 1990, as provided in Section 49-12-407 .
             94          (9) "Beneficiary" means any person entitled to receive a payment under this title
             95      through a relationship with or designated by a member, participant, covered individual, or
             96      alternate payee of a defined contribution plan.
             97          (10) "Board" means the Utah State Retirement Board established under Section
             98      49-11-202 .
             99          (11) "Board member" means a person serving on the Utah State Retirement Board as
             100      established under Section 49-11-202 .
             101          (12) "Contributions" means the total amount paid by the participating employer and the
             102      member into a system or to the Utah Governors' and Legislators' Retirement Plan under
             103      Chapter 19, Utah Governor's and Legislators' Retirement Act.
             104          (13) "Council member" means a person serving on the Membership Council
             105      established under Section 49-11-202 .
             106          (14) "Covered individual" means any individual covered under Chapter 20, Public
             107      Employees' Benefit and Insurance Program Act.
             108          (15) "Current service" means covered service as defined in Chapters 12, 13, 14, 15, 16,
             109      17, 18, and 19.
             110          (16) "Defined contribution" or "defined contribution plan" means any defined
             111      contribution plan authorized under the Internal Revenue Code and administered by the board.
             112          (17) "Educational institution" means a political subdivision or instrumentality of the
             113      state or a combination thereof primarily engaged in educational activities or the administration


             114      or servicing of educational activities, including:
             115          (a) the State Board of Education and its instrumentalities;
             116          (b) any institution of higher education and its branches;
             117          (c) any school district and its instrumentalities;
             118          (d) any vocational and technical school; and
             119          (e) any entity arising out of a consolidation agreement between entities described under
             120      this Subsection (17).
             121          (18) (a) "Employer" means any department, educational institution, or political
             122      subdivision of the state eligible to participate in a government-sponsored retirement system
             123      under federal law.
             124          (b) "Employer” may also include an agency financed in whole or in part by public
             125      funds.
             126          (19) "Exempt employee" means an employee working for a participating employer:
             127          (a) who is not eligible for service credit under Section 49-12-203 , 49-13-203 ,
             128      49-14-203 , 49-15-203 , or 49-16-203 ; and
             129          (b) for whom a participating employer is not required to pay contributions or
             130      nonelective contributions.
             131          (20) "Final average monthly salary" means the amount computed by dividing the
             132      compensation received during the final average salary period under each system by the number
             133      of months in the final average salary period.
             134          (21) "Fund” means any fund created under this title for the purpose of paying benefits
             135      or costs of administering a system, plan, or program.
             136          (22) (a) "Inactive member" means a member who has not been employed by a
             137      participating employer for a period of at least 120 days.
             138          (b) "Inactive member" does not include retirees.
             139          (23) (a) "Member" means a person, except a retiree, with contributions on deposit with
             140      a system, the Utah Governors' and Legislators' Retirement Plan under Chapter 19, or with a
             141      terminated system.


             142          (b) "Member" also includes leased employees within the meaning of Section 414(n)(2)
             143      of the Internal Revenue Code, if the employees have contributions on deposit with the office.
             144      If leased employees constitute less than 20% of the participating employer's work force that is
             145      not highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
             146      "member" does not include leased employees covered by a plan described in Section 414(n)(5)
             147      of the federal Internal Revenue Code.
             148          (24) "Member contributions" means the sum of the contributions paid to a system or
             149      the Utah Governors' and Legislators' Retirement Plan, including refund interest if allowed by a
             150      system, and which are made by:
             151          (a) the member; and
             152          (b) the participating employer on the member's behalf under Section 414(h) of the
             153      Internal Revenue Code.
             154          (25) "Nonelective contribution" means an amount contributed by a participating
             155      employer into a participant's defined contribution account.
             156          (26) "Office" means the Utah State Retirement Office.
             157          (27) "Participant" means an individual with voluntary deferrals or nonelective
             158      contributions on deposit with the defined contribution plans administered under this title.
             159          (28) "Participating employer" means a participating employer, as defined by Chapters
             160      12, 13, 14, 15, 16, 17, and 18, or an agency financed in whole or in part by public funds which
             161      is participating in a system or plan as of January 1, 2002.
             162          (29) "Pension" means monthly payments derived from participating employer
             163      contributions.
             164          (30) "Plan" means the Utah Governors' and Legislators' Retirement Plan created by
             165      Chapter 19 or the defined contribution plans created under Section 49-11-801 .
             166          (31) (a) "Political subdivision" means any local government entity, including cities,
             167      towns, counties, and school districts, but only if the subdivision is a juristic entity that is legally
             168      separate and distinct from the state and only if its employees are not by virtue of their
             169      relationship to the entity employees or the state.


             170          (b) "Political subdivision" includes special districts or authorities created by the
             171      Legislature or by local governments, including the office.
             172          (c) "Political subdivision" does not include a project entity created under Title 11,
             173      Chapter 13, Interlocal Cooperation Act, that was formed prior to July 1, 1987.
             174          (32) "Program" means the Public Employees' Insurance Program created under Chapter
             175      20, Public Employees' Benefit and Insurance Program Act, or the Public Employees'
             176      Long-Term Disability program created under Chapter 21, Public Employees' Long-Term
             177      Disability Act.
             178          (33) "Public funds" means those funds derived, either directly or indirectly, from public
             179      taxes or public revenue, dues or contributions paid or donated by the membership of the
             180      organization, used to finance an activity whose objective is to improve, on a nonprofit basis,
             181      the governmental, educational, and social programs and systems of the state or its political
             182      subdivisions.
             183          (34) "Qualified defined contribution plan" means a defined contribution plan that
             184      meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
             185          [(34)] (35) "Refund interest" means the amount accrued on member contributions at a
             186      rate adopted by the board.
             187          [(35)] (36) "Retiree" means an individual who has qualified for an allowance under this
             188      title.
             189          [(36)] (37) "Retirement" means the status of an individual who has become eligible,
             190      applies for, and is entitled to receive an allowance under this title.
             191          [(37)] (38) "Retirement date" means the date selected by the member on which the
             192      member's retirement becomes effective with the office.
             193          [(38)] (39) "Service credit" means:
             194          (a) the period during which an employee is employed and compensated by a
             195      participating employer and meets the eligibility requirements for membership in a system or the
             196      Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are
             197      paid to the office; and


             198          (b) periods of time otherwise purchasable under this title.
             199          [(39)] (40) "System" means the individual retirement systems created by [Chapters 12,
             200      13, 14, 15, 16, 17, and 18] Chapter 12, Public Employees' Contributory Retirement Act,
             201      Chapter 13, Public Employees' Noncontributory Retirement Act, Chapter 14, Public Safety
             202      Contributory Retirement Act, Chapter 15, Public Safety Noncontributory Retirement Act,
             203      Chapter 16, Firefighters' Retirement Act, Chapter 17, Judges' Contributory Retirement Act,
             204      Chapter 18, Judges' Noncontributory Retirement Act, and Utah Governors' and Legislators'
             205      Retirement Act.
             206          [(40)] (41) "Voluntary deferrals" means an amount contributed by a participant into
             207      that participant's defined contribution account.
             208          Section 2. Section 49-11-504 is amended to read:
             209           49-11-504. Reemployment of a retiree -- Restrictions.
             210          (1) A person who retires from a nonparticipating employer is not subject to any
             211      postretirement restrictions under this title.
             212          (2) A retiree of an agency who returns to work at a different agency is not subject to
             213      any postretirement restrictions under this section and may not earn additional service credit.
             214          (3) For the purposes of Subsections (4) and (5), "full-time" employment means
             215      employment requiring 20 hours of work per week or more or at least a half-time teaching
             216      contract.
             217          (4) A retiree of an agency who is reemployed on a full-time basis by the same agency
             218      within six months of the date of retirement is subject to the following:
             219          (a) the agency shall immediately notify the office;
             220          (b) the office shall cancel the retiree's allowance and reinstate the retiree to active
             221      member status;
             222          (c) the allowance cancellation and reinstatement to active member status is effective on
             223      the first day of the month following the date of reemployment;
             224          (d) the reinstated retiree may not retire again with a recalculated benefit for a two-year
             225      period from the date of cancellation of the original allowance, and if the retiree retires again


             226      within the two-year period, the original allowance shall be resumed; and
             227          (e) a reinstated retiree retiring after the two-year period shall be credited with the
             228      service credit in the retiree's account at the time of the first retirement and from that time shall
             229      be treated as a member of a system, including the accrual of additional service credit, but
             230      subject to recalculation of the allowance under Subsection (9).
             231          (5) A retiree of an agency who is reemployed by the same agency within six months of
             232      retirement on a less than full-time basis by the same agency is subject to the following:
             233          (a) the retiree may earn, without penalty, compensation from that position which is not
             234      in excess of the exempt earnings permitted by Social Security;
             235          (b) if a retiree receives compensation in a calendar year in excess of the Social Security
             236      limitation, 25% of the allowance shall be suspended for the remainder of the six-month period;
             237          (c) the effective date of a suspension and reinstatement of an allowance shall be set by
             238      the office; and
             239          (d) any suspension of a retiree's allowance under this Subsection (5) shall be applied
             240      on a calendar year basis.
             241          (6) For six months immediately following retirement, the retiree and participating
             242      employer shall:
             243          (a) maintain an accurate record of gross earnings in employment;
             244          (b) report the gross earnings at least monthly to the office;
             245          (c) immediately notify the office in writing of any postretirement earnings under
             246      Subsection (4); and
             247          (d) immediately notify the office in writing whether postretirement earnings equal or
             248      exceed the exempt earnings under Subsection (5).
             249          (7) A retiree of an agency who is reemployed by the same agency after six months from
             250      the retirement date is not subject to any postretirement restrictions under this title and may not
             251      earn additional service credit.
             252          (8) If a participating employer hires a nonexempt retiree who may not earn additional
             253      service credit under this section, the participating employer shall contribute the same


             254      percentage of a retiree's salary that the participating employer would have been required to
             255      contribute if the retiree were an active member, up to the amount allowed by federal law, to a
             256      retiree designated:
             257          (a) qualified defined contribution plan administered by the board, if the participating
             258      employer participates in [the] a qualified defined contribution plan administered by the board;
             259      or
             260          (b) qualified defined contribution plan offered by the participating employer if the
             261      participating employer does not participate in a qualified defined contribution plan
             262      administered by the board.
             263          (9) Notwithstanding any other provision of this section, a retiree who has returned to
             264      work, accrued additional service credit, and again retires shall have the retiree's allowance
             265      recalculated using:
             266          (a) the formula in effect at the date of the retiree's original retirement for all service
             267      credit accrued prior to that date; and
             268          (b) the formula in effect at the date of the subsequent retirement for all service credit
             269      accrued between the first and subsequent retirement dates.
             270          (10) This section does not apply to elected positions.
             271          (11) The board may make rules to implement this section.
             272          Section 3. Section 49-11-612 is amended to read:
             273           49-11-612. Nonassignability of benefits or payments -- Exemption from legal
             274      process.
             275          (1) Except as provided in Subsections (2), (3), and (4), the right of any member, retiree,
             276      participant, covered individual, or beneficiary to any retirement benefit, retirement payment, or
             277      any other retirement right accrued or accruing under this title and the assets of the funds created
             278      by this title are not subject to alienation or assignment by the member, retiree, participant, or
             279      their beneficiaries and are not subject to attachment, execution, garnishment, or any other legal
             280      or equitable process.
             281          (2) The office may, upon the request of the retiree, deduct from the retiree's allowance


             282      insurance premiums or other dues payable on behalf of the retiree, but only to those entities
             283      that have received the deductions prior to February 1, 2002.
             284          (3) (a) The office shall provide for the division of an allowance, defined contribution
             285      account, continuing monthly death benefit, or refund of member contributions upon
             286      termination to former spouses and family members under an order of a court of competent
             287      jurisdiction with respect to domestic relations matters on file with the office.
             288          (b) The court order shall specify the manner in which the allowance, defined
             289      contribution account, continuing monthly death benefit, or refund of member contributions
             290      shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
             291          (c) Allowances, continuing monthly death benefits, and refunds of member
             292      contributions split under a domestic relations order are subject to the following:
             293          (i) the amount to be paid or the period for which payments shall be made under the
             294      original domestic relations order may not be altered if the alteration affects the actuarial
             295      calculation of the allowance;
             296          (ii) payments to an alternate payee shall begin at the time the member or beneficiary
             297      begins receiving payments; and
             298          (iii) the alternate payee shall receive payments in the same form as allowances received
             299      by the member or beneficiary.
             300          (d) A court order under this section may not be issued more than 12 months after the
             301      death of the member.
             302          (4) In accordance with federal law, the board may deduct the required amount from any
             303      benefit, payment, or other right accrued or accruing to any member of a system, plan, or
             304      program under this title to offset any amount that member owes to a system, plan, or program
             305      administered by the board.
             306          (5) The board shall make rules to implement this section.
             307          Section 4. Section 49-11-613 is amended to read:
             308           49-11-613. Appeals procedure -- Right of appeal to hearing officer -- Board
             309      reconsideration -- Judicial review.


             310          (1) (a) All members, retirees, participants, alternative payees, or covered individuals of
             311      a system, plan, or program under this title shall acquaint themselves with their rights and
             312      obligations under this title.
             313          (b) Any dispute regarding a benefit, right, obligation, or employment right under this
             314      title is subject to the procedures provided under this section.
             315          (c) A person who disputes a benefit, right, obligation, or employment right under this
             316      title shall request a ruling by the executive director who may delegate the decision to the
             317      deputy director.
             318          (d) A person who is dissatisfied by a ruling of the executive director or deputy director
             319      with respect to any benefit, right, obligation, or employment right under this title shall request a
             320      review of that claim by a hearing officer.
             321          (2) The hearing officer shall:
             322          (a) be hired by the executive director after consultation with the board;
             323          (b) follow the procedures and requirements of Title 63, Chapter 46b, Administrative
             324      Procedures Act, except as specifically modified under this title;
             325          (c) hear and determine all facts pertaining to applications for benefits under any
             326      system, plan, or program under this title and all matters pertaining to the administration of the
             327      office; and
             328          (d) make conclusions of law in determining the person's rights under any system, plan,
             329      or program under this title and matters pertaining to the administration of the office.
             330          (3) The board shall review and approve or deny all decisions of the hearing officer in
             331      accordance with rules adopted by the board.
             332          (4) The moving party in any proceeding brought under this section shall bear the
             333      burden of proof.
             334          (5) A party may file an application for reconsideration by the board upon any of the
             335      following grounds:
             336          (a) that the board acted in excess of its powers;
             337          (b) that the order or award was procured by fraud;


             338          (c) that the evidence does not justify the determination of the hearing officer; or
             339          (d) that the party has discovered new material evidence that could not, with reasonable
             340      diligence, have been discovered or procured prior to the hearing.
             341          (6) The board shall affirm, reverse, or modify the decision of the hearing officer, or
             342      remand the application to the hearing officer for further consideration.
             343          (7) A party aggrieved by the board's decision may obtain judicial review by complying
             344      with the procedures and requirements of Title 63, Chapter 46b, Administrative Procedures Act.
             345          (8) The board may make rules to implement this section.
             346          Section 5. Section 49-12-402 is amended to read:
             347           49-12-402. Service retirement plans -- Calculation of retirement allowance --
             348      Social Security limitations.
             349          (1) (a) Except as provided under Section 49-12-701 , retirees of this system may choose
             350      from the six retirement options described in this section.
             351          (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
             352      calculation.
             353          (2) The Option One benefit is an annual allowance calculated as follows:
             354          (a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
             355      credit, the allowance is:
             356          (i) an amount equal to 1.25% of the retiree's final average monthly salary multiplied by
             357      the number of years of service credit accrued prior to July 1, 1975; plus
             358          (ii) an amount equal to 2% of the retiree's final average monthly salary multiplied by
             359      the number of years of service credit accrued on and after July 1, 1975.
             360          (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
             361      each year of retirement from age 60 to age 65, unless the member has 30 or more years of
             362      accrued credit in which event no reduction is made to the allowance.
             363          (c) (i) Years of service includes any fractions of years of service to which the retiree
             364      may be entitled.
             365          (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,


             366      service credit is within 1/10 of one year of the total years of service credit required for
             367      retirement, the retiree shall be considered to have the total years of service credit required for
             368      retirement.
             369          (d) An Option One allowance is only payable to the member during the member's
             370      lifetime.
             371          (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
             372      by reducing an Option One benefit based on actuarial computations to provide the following:
             373          (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
             374      retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
             375      member contributions, the remaining balance of the retiree's member contributions shall be
             376      paid in accordance with Sections 49-11-609 and 49-11-610 .
             377          (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
             378      retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
             379      the lifetime of the retiree's lawful spouse at the time of retirement.
             380          (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
             381      retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
             382      to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
             383          (d) Option Five is a modification of Option Three so that if the lawful spouse at the
             384      time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
             385      time of initial retirement under Option One shall be paid to the retiree for the remainder of the
             386      retiree's life, beginning on the last day of the month following the month in which the lawful
             387      spouse dies.
             388          (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
             389      of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
             390      of initial retirement under Option One shall be paid to the retiree for the remainder of the
             391      retiree's life, beginning on the last day of the month following the month in which the lawful
             392      spouse dies.
             393          (4) (a) (i) The final average salary is limited in the computation of that part of an


             394      allowance based on service rendered prior to July 1, 1967, during a period when the retiree
             395      received employer contributions on a portion of compensation from an educational institution
             396      toward the payment of the premium required on a retirement annuity contract with the
             397      Teachers' Insurance and Annuity Association of America or with any other public or private
             398      system, organization, or company to $4,800.
             399          (ii) This limitation is not applicable to retirees who elected to continue in [the] this
             400      system by July 1, 1967.
             401          (b) Periods of employment which are exempt from this system under Subsection
             402      49-12-203 (1)(b), may be purchased by the member for the purpose of retirement only if all
             403      benefits from the Teachers' Insurance and Annuity Association of America or any other public
             404      or private system or organization based on this period of employment are forfeited.
             405          (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
             406      date, the retirement is canceled and the death shall be considered as that of a member before
             407      retirement.
             408          (b) Any payments made to the retiree shall be deducted from the amounts due to the
             409      beneficiary.
             410          (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
             411      retiree may elect to convert the benefit to a Option One benefit at the time of divorce, if there is
             412      no court order filed in the matter.
             413          Section 6. Section 49-13-402 is amended to read:
             414           49-13-402. Service retirement plans -- Calculation of retirement allowance --
             415      Social Security limitations.
             416          (1) (a) Except as provided under Section 49-13-701 , retirees of this system may choose
             417      from the six retirement options described in this section.
             418          (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
             419      calculation.
             420          (2) The Option One benefit is an allowance calculated as follows:
             421          (a) If the retiree is at least 65 years of age or has accrued at least 30 years of service


             422      credit, the allowance is an amount equal to 2% of the retiree's final average monthly salary
             423      multiplied by the number of years of service credit accrued.
             424          (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
             425      each year of retirement from age 60 to age 65, plus a full actuarial reduction for each year of
             426      retirement prior to age 60, unless the member has 30 or more years of accrued credit, in which
             427      event no reduction is made to the allowance.
             428          (c) (i) Years of service include any fractions of years of service to which the retiree
             429      may be entitled.
             430          (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
             431      service credit is within 1/10 of one year of the total years of service credit required for
             432      retirement, the retiree shall be considered to have the total years of service credit required for
             433      retirement.
             434          (d) An Option One allowance is only payable to the member during the member's
             435      lifetime.
             436          (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
             437      by reducing an Option One benefit based on actuarial computations to provide the following:
             438          (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
             439      retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
             440      member contributions, the remaining balance of the retiree's member contributions shall be
             441      paid in accordance with Sections 49-11-609 and 49-11-610 .
             442          (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
             443      retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
             444      the lifetime of the retiree's lawful spouse at the time of retirement.
             445          (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
             446      retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
             447      to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
             448          (d) Option Five is a modification of Option Three so that if the lawful spouse at the
             449      time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the


             450      time of initial retirement under Option One shall be paid to the retiree for the remainder of the
             451      retiree's life, beginning on the last day of the month following the month in which the lawful
             452      spouse dies.
             453          (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
             454      of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
             455      of initial retirement under Option One shall be paid to the retiree for the remainder of the
             456      retiree's life, beginning on the last day of the month following the month in which the lawful
             457      spouse dies.
             458          (4) (a) (i) The final average salary is limited in the computation of that part of an
             459      allowance based on service rendered prior to July 1, 1967, during a period when the retiree
             460      received employer contributions on a portion of compensation from an educational institution
             461      toward the payment of the premium required on a retirement annuity contract with the
             462      Teachers' Insurance and Annuity Association of America or with any other public or private
             463      system, organization, or company to $4,800.
             464          (ii) This limitation is not applicable to retirees who elected to continue in the Public
             465      Employees' Contributory Retirement System by July 1, 1967.
             466          (b) Periods of employment which are exempt from this system as permitted under
             467      Subsection 49-13-203 (1)(b) may be purchased by the member for the purpose of retirement
             468      only if all benefits from the Teachers' Insurance and Annuity Association of America or any
             469      other public or private system or organization based on this period of employment are forfeited.
             470          (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
             471      date, the retirement is canceled and the death shall be considered as that of a member before
             472      retirement.
             473          (b) Any payments made to the retiree shall be deducted from the amounts due to the
             474      beneficiary.
             475          (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
             476      retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
             477      is no court order filed in the matter.


             478          Section 7. Section 49-16-602 is amended to read:
             479           49-16-602. Disability retirement -- Disability allowance eligibility -- Conversion to
             480      service retirement -- Examinations -- Reemployment.
             481          (1) A member of this system who applies and is qualified for disability retirement shall
             482      receive a disability retirement benefit until the earlier of:
             483          (a) the date the member of this system is no longer disabled;
             484          (b) the date the member of this system has accumulated 20 years of firefighter service
             485      credit, including years earned while disabled; or
             486          (c) the date the member of this system has received disability retirement benefits for
             487      the following time periods:
             488          (i) if the member is under age 60 on the date of disability, the disability retirement
             489      benefit is payable until age 65;
             490          (ii) if the member is 60 or 61 years of age on the date of disability, the disability
             491      retirement benefit is payable for five years;
             492          (iii) if the member is 62 or 63 years of age on the date of disability, the disability
             493      retirement benefit is payable for four years;
             494          (iv) if the member is 64 or 65 years of age on the date of disability, the disability
             495      retirement benefit is payable for three years;
             496          (v) if the member is 66, 67, or 68 years of age on the date of disability, the disability
             497      retirement benefit is payable for two years; and
             498          (vi) if the member is 69 years of age or older on the date of disability, the disability
             499      retirement benefit is payable for one year.
             500          (2) (a) (i) The disability retiree shall receive service credit in this system during the
             501      period of disability.
             502          (ii) If the disability retiree is employed by a participating employer during the period of
             503      disability, the disability retiree may not receive service credit for that employment.
             504          (b) The disability retirement shall be converted to a service retirement at the time the
             505      disability retirement benefits terminate.


             506          (3) The office shall approve or disapprove applications for disability retirement
             507      benefits based upon:
             508          (a) the evaluation and recommendations of one or more treating physicians along with
             509      medical records relating to the condition;
             510          (b) the evaluation and recommendations of one or more independent physicians
             511      selected by the office; and
             512          (c) receipt of documentation by the office from the participating employer that the
             513      member is mentally or physically unable to perform firefighter service.
             514          (4) (a) A disability retiree who receives benefits under this section shall, upon request
             515      of the executive director, submit to a medical examination by one or more physicians as
             516      directed by the office.
             517          (b) If, after an examination, the examiners report that the disability retiree is physically
             518      and mentally able and capable of resuming firefighter service employment, the disability retiree
             519      shall be reinstated by the participating employer for which the disability retiree last worked at
             520      the disability retiree's former classification and rank, and the disability retirement benefit shall
             521      terminate.
             522          (c) A disability retiree may not be required to submit to an examination under this
             523      Subsection (4) more than once every year.
             524          (d) A disability retiree who returns to firefighter service employment with a
             525      participating employer in this system shall immediately begin accruing service credit that shall
             526      be added to that service credit that has been previously accrued, including service credit while
             527      disabled.
             528          (5) A disability retiree is not subject to medical examinations after reaching age 55.
             529          (6) Refusal or neglect of a member to submit to an examination as requested by the
             530      office either before or after a decision regarding disability benefits has been made is sufficient
             531      cause for denial, suspension, or discontinuance of benefits and if the refusal or neglect
             532      continues for one year, the member's or disability retiree's rights to disability retirement
             533      benefits may be revoked by the office.


             534          (7) (a) A disability retiree who receives benefits under this part shall file a sworn
             535      statement with the office on or before March 15 of each year for the first five years a disability
             536      retiree receives benefits.
             537          (b) The sworn statement shall indicate whether or not the disability retiree engaged in
             538      any employment during the preceding year and, if so, the amount of earnings received during
             539      the calendar year.
             540          (c) If the total amount received in one year by a disability retiree for disability
             541      retirement benefits and gross earnings from other employment exceeds 125% of the disability
             542      retiree's final average salary, the office shall offset the disability retirement benefit paid the
             543      following year by the amount in excess of 125% of the disability retiree's final average salary.
             544          (d) (i) If a disability retiree refuses or neglects to file a sworn statement as required
             545      under this Subsection (7), the executive director may suspend payment of any and all benefits
             546      pending receipt of the statement.
             547          (ii) Upon filing the statement, the disability retiree's payments shall be resumed.
             548          (8) The disability retirement benefit shall be improved by the annual cost-of-living
             549      increase factor applied to retirees of the system that covered the firefighter service employee at
             550      the time of disability.
             551          (9) A line of duty disability allowance paid on or after January 1, 2002, under Section
             552      49-16-601 is exempt from taxation to the extent permitted under federal law.
             553          (10) (a) An active member of this system with five or more years of firefighter service
             554      credit shall be eligible for a line-of-duty death or disability benefit resulting from heart disease,
             555      lung disease, or respiratory tract disease.
             556          (b) An active member of this system who receives a line-of-duty disability benefit for
             557      more than six months due to violence or illness other than heart disease, lung disease, or
             558      respiratory tract disease, and then returns to paid firefighter service, is not eligible for a
             559      line-of-duty death or disability benefit due to those diseases for two years after the member
             560      returned to paid firefighter service unless clear and convincing evidence is presented that the
             561      heart, lung, or respiratory tract disease was directly a result of firefighter service.


             562          (11) Disability retirement benefits shall be considered an allowance for purposes of
             563      Section 49-11-701 .
             564          Section 8. Section 49-17-301 is amended to read:
             565           49-17-301. Contributions by members and participating employers -- Retirement
             566      fees -- Deductions.
             567          (1) In addition to the monies paid to this system under Subsection (3), participating
             568      employers and members shall jointly pay the certified contribution rates to the office to
             569      maintain this system on a financially and actuarially sound basis.
             570          (2) The participating employer may make contributions on behalf of members of this
             571      system in addition to the contribution required of the participating employer, except that 2% of
             572      compensation shall be paid by the member.
             573          (3) Fees collected under Subsection 78-7-35 [(1)(i)] (1)(j)(i) shall be paid monthly to
             574      the office to maintain this system and the system established under Chapter 18, Judges'
             575      Noncontributory Retirement Act.
             576          (4) (a) All member contributions are credited by the office to the account of the
             577      individual member.
             578          (b) This amount, plus refund interest, is held in trust for the payment of benefits to the
             579      member or the member's beneficiaries.
             580          (c) All member contributions are vested and nonforfeitable.
             581          (5) (a) Each member is considered to consent to payroll deductions of the member
             582      contributions.
             583          (b) The payment of compensation less these payroll deductions is considered full
             584      payment for services rendered by the member.
             585          Section 9. Section 49-18-301 is amended to read:
             586           49-18-301. Contributions by employees and employers -- Retirement fees.
             587          (1) In addition to the monies paid to this system under Subsection (2), participating
             588      employers shall pay the certified contribution rates to the office to maintain this system on a
             589      financially and actuarially sound basis.


             590          (2) Fees collected under Subsection 78-7-35 [(1)(i)] (1)(j)(i) shall be paid monthly to
             591      the office to maintain this system and the system established under Chapter 17, Judges'
             592      Contributory Retirement Act.
             593          Section 10. Section 49-20-201 is amended to read:
             594           49-20-201. Program participation -- Eligibility -- Optional for certain groups.
             595          (1) (a) The state shall participate in the program on behalf of its employees.
             596          (b) Other employers, including political subdivisions and educational institutions, are
             597      eligible, but are not required, to participate in the program on behalf of their employees.
             598          (2) (a) The Department of Health may participate in the program for the purpose of
             599      providing health and dental benefits to children enrolled in the Utah Children's Health
             600      Insurance Program created in Title 26, Chapter 40, Utah Children's Health Insurance Act, if the
             601      provisions in Subsection 26-40-110 (4) occur.
             602          (b) If the Department of Health participates in the program under the provisions of this
             603      Subsection (2), all insurance risk associated with the Children's Health Insurance Program shall
             604      be the responsibility of the Department of Health and not the program or the office.
             605          (3) A covered individual [covered under a medical employee benefit plan] shall be
             606      eligible for coverage after termination of employment under rules adopted by the board.
             607          (4) Only the following are eligible for Medicare supplement coverage under this
             608      chapter upon becoming eligible for Medicare Part A and Part B coverage:
             609          (a) retirees;
             610          (b) members;
             611          (c) participants;
             612          (d) employees who have medical employee benefit plan coverage at the time of their
             613      retirement; and
             614          (e) current spouses of those who are eligible under Subsections (4)(a) through (d).
             615          Section 11. Section 49-20-402 is amended to read:
             616           49-20-402. Reserves to be held -- Refunds.
             617          (1) The reserves in a risk pool in a given fiscal year shall be maintained at the level


             618      recommended by the program's consulting actuary and approved or ratified by the board. If the
             619      reserves drop below that level, covered employers in the risk pool are required to cure any
             620      deficiency in the reserve.
             621          (2) If substantial excess reserves are accrued above those required by this chapter, and
             622      the board determines that a refund is appropriate, a refund shall be made:
             623          (a) to covered employers which shall then make a refund to covered individuals on the
             624      basis of the contribution of each to the plan[.]; or
             625          (b) directly to covered individuals on the basis of the contribution of each to the plan.
             626          Section 12. Section 49-20-409 is amended to read:
             627           49-20-409. Long-term disability -- Cost of health coverage benefit.
             628          (1) Under the direction of the board, the program shall provide for health insurance
             629      coverage for state employees who receive a monthly disability benefit under Title 49, Chapter
             630      21, Public Employees' Long-Term Disability Act.
             631          (2) A risk pool, other than the state risk pool, may elect to provide a [waiver] benefit
             632      for its employees similar to the [waiver] benefit provided under Subsection (1).
             633          Section 13. Section 49-20-410 is amended to read:
             634           49-20-410. High deductible health plan -- Health savings account --
             635      Contributions.
             636          (1) (a) In addition to other employee benefit plans offered under this part, the
             637      [program] office shall offer a high deductible health plan with a federally qualified health
             638      savings account as an optional health plan.
             639          (b) The provisions and limitations of the plan shall be determined by the [program]
             640      office in accordance with federal requirements and limitations.
             641          (2) (a) The [program may not allow an employee to change from the high deductible
             642      health plan to another health plan offered for employees more frequently than every three
             643      years] office shall administer the high deductible health plan in coordination with the health
             644      savings account so that the impact on the covered employer's overall health plan is actuarially
             645      neutral.


             646          (b) The [program] office shall offer the federally qualified health savings account for
             647      medical expenses for each covered individual in the high deductible health plan.
             648          (3) (a) Contributions to the health savings account may be made by the employer.
             649          (b) The amount of the contributions under Subsection (3)(a) shall be determined
             650      annually by the [program] office, after consultation with the covered employer, or on behalf of
             651      the state as an employer, the Department of Human Resource Management and the Governor's
             652      Office of Planning and Budget, based on:
             653          (i) federal requirements and limitations; and
             654          (ii) the actuarial value of the risk-adjusted high deductible to the [program] office.
             655          (c) An employee may also make contributions to the health savings [plan] account.
             656          Section 14. Section 49-21-102 is amended to read:
             657           49-21-102. Definitions.
             658          As used in this chapter:
             659          (1) "Date of disability" means the date on which a period of continuous disability
             660      commences, and may not commence on or before the last day of actual work.
             661          (2) "Elimination period" means the three months at the beginning of each continuous
             662      period of total disability for which no benefit will be paid. The elimination period begins on
             663      the nearest first day of the month from the date of disability. The elimination period may
             664      include a one-time trial return to work period of less than 15 consecutive calendar days.
             665          (3) (a) "Eligible employee" means:
             666          (i) any regular full-time employee as defined under Section 49-12-102 or 49-13-102 ,
             667      public safety service employee as defined under Section 49-14-102 or 49-15-102 , or judge as
             668      defined under Section 49-17-102 or 49-18-102 , whose employer provides coverage under this
             669      chapter, or the governor of the state; and
             670          (ii) an employee who is covered by a retirement program offered by the Teachers'
             671      Insurance and Annuity Association of America, if the employee's employer provides coverage
             672      under this chapter; and
             673          (b) "Eligible employee" does not include any employee that is exempt from coverage


             674      under Section 49-21-201 .
             675          (4) "Maximum benefit period" means the maximum period of time the monthly
             676      disability income benefit will be paid under Section 49-21-403 for any continuous period of
             677      total disability.
             678          (5) "Monthly disability benefit" means the monthly payments and accrual of service
             679      credit under Section 49-21-401 .
             680          (6) "Objective medical impairment" means an impairment resulting from an injury or
             681      illness which is diagnosed by a physician and which is based on accepted objective medical
             682      tests or findings rather than subjective complaints.
             683          (7) "Physician" means a licensed physician.
             684          (8) "Regular monthly salary" means the amount certified by the participating employer
             685      as the monthly salary of the eligible employee, unless there is a discrepancy between the
             686      certified amount and the amount actually paid, in which case the office shall determine the
             687      regular monthly salary.
             688          (9) "Regular occupation" means either the primary duties performed by the eligible
             689      employee for the twelve months preceding the date of disability, or a permanent assignment of
             690      duty to the eligible employee.
             691          (10) "Rehabilitative employment" means any occupation or employment for wage or
             692      profit, for which the eligible employee is reasonably qualified to perform based on education,
             693      training, or experience [while unable to perform the employee's regular occupation].
             694          (11) (a) "Total disability" or "totally disabled" means the complete inability, due to
             695      objective medical impairment, whether physical or mental, to engage in the eligible employee's
             696      regular occupation during the elimination period and the first 24 months of disability benefits.
             697          (b) "Total disability" means, after the elimination period and the first 24 months of
             698      disability benefits, the complete inability, based solely on physical objective medical
             699      impairment, to engage in any gainful occupation which is reasonable, considering the eligible
             700      employee's education, training, and experience.
             701          Section 15. Section 49-21-401 is amended to read:


             702           49-21-401. Disability Benefits -- Application -- Eligibility.
             703          (1) An eligible employee shall apply for long-term disability benefits under this chapter
             704      by:
             705          (a) completing an application form prepared by the office;
             706          (b) signing a consent form allowing the office access to the eligible employee's medical
             707      records; and
             708          (c) providing any documentation or information reasonably requested by the office.
             709          (2) Upon request by the office, the participating employer of the eligible employee
             710      shall provide to the office documentation and information concerning the eligible employee.
             711          (3) The office shall review all relevant information and determine whether or not the
             712      eligible employee is totally disabled.
             713          (4) If the office determines that the eligible employee is totally disabled due to
             714      accidental bodily injury or physical illness which is not the result of the performance of an
             715      employment duty, the eligible employee shall receive a monthly disability benefit equal to 2/3
             716      of the eligible employee's regular monthly salary, for each month the total disability continues
             717      beyond the elimination period, not to exceed the maximum benefit period.
             718          (5) If the office determines that the eligible employee is totally disabled due to
             719      psychiatric illness, the eligible employee shall receive:
             720          (a) a maximum of two years of monthly disability benefits equal to 2/3 of the eligible
             721      employee's regular monthly salary for each month the total disability continues beyond the
             722      elimination period;
             723          (b) a maximum of $10,000 for psychiatric expenses, including rehabilitation expenses
             724      preauthorized by the office's consultants, paid during the period of monthly disability benefits;
             725      and
             726          (c) payment of monthly disability benefits according to contractual provisions for a
             727      period not to exceed five years if the eligible employee is institutionalized due to psychiatric
             728      illness.
             729          (6) If the office determines that the eligible employee is totally disabled due to a


             730      physical injury resulting from external force or violence as a result of the performance of an
             731      employment duty, the eligible employee shall receive a monthly disability benefit equal to
             732      100% of the eligible employee's regular monthly salary, for each month the total disability
             733      continues beyond the elimination period, not to exceed the maximum benefit period.
             734          (7) (a) Successive periods of disability are considered as a continuous period of
             735      disability if the period of disability:
             736          (i) results from the same or related causes;
             737          (ii) is separated by less than six months of continuous full-time work at the individual's
             738      usual place of employment; and
             739          (iii) commences while the individual is an eligible employee covered by this chapter.
             740          (b) The inability to work for a period of less than 15 consecutive calendar days is not
             741      considered as a period of disability.
             742          (c) If Subsection (7)(a) or (b) does not apply, successive periods of disability are
             743      considered as separate periods of disability.
             744          (8) The office may, at any time, have any eligible employee claiming disability
             745      examined by a physician chosen by the office to determine if the eligible employee is totally
             746      disabled.
             747          (9) A claim brought by an eligible employee for long-term disability benefits under the
             748      Public Employee's Long-Term Disability Program is barred if it is not commenced within one
             749      year from the eligible employee's date of disability, unless the office determines that under the
             750      surrounding facts and circumstances, the eligible employee's failure to comply with the time
             751      limitations was reasonable.
             752          (10) Medical or psychiatric conditions which existed prior to enrollment may not be a
             753      basis for disability benefits until the eligible employee has had one year of continuous
             754      enrollment in the Public Employees Long-Term Disability Program.
             755          (11) If there is a valid benefit protection contract, service credit shall accrue during the
             756      period of total disability, unless the disabled eligible employee is exempted from a system, or is
             757      otherwise ineligible for service credit.


             758          Section 16. Section 67-19-14.2 is amended to read:
             759           67-19-14.2. Unused Sick Leave Retirement Option Program -- Creation -- Payout
             760      at retirement -- Continuing medical and life insurance benefits after retirement.
             761          (1) (a) There is created the "Unused Sick Leave Retirement Option Program I."
             762          (b) An agency may offer the Unused Sick Leave Retirement Option Program I to an
             763      employee who is eligible to receive [retirement benefits] a retirement allowance in accordance
             764      with Title 49, Utah State Retirement and Insurance Benefit Act.
             765          (2) The Unused Sick Leave Retirement Option Program I provides that upon
             766      [retirement] becoming eligible to receive a retirement allowance an employee who was
             767      employed by the state prior to January 1, 2006:
             768          (a) receives a contribution under Subsection (3) for 25% of the employee's unused
             769      accumulated sick leave accrued prior to January 1, 2006, at the employee's rate of pay at the
             770      time of retirement;
             771          (b) receives continuing medical and life insurance benefits until the earlier of:
             772          (i) the date the employee reaches the age eligible for Medicare; or
             773          (ii) up to the following number of years:
             774          (A) five years if the employee retires during calendar year 2006;
             775          (B) four years if the employee retires during calendar year 2007;
             776          (C) three years if the employee retires during calendar year 2008;
             777          (D) two years if the employee retires during calendar year 2009;
             778          (E) one year if the employee retires during calendar year 2010; or
             779          (F) zero years if the employee retires after calendar year 2010; and
             780          (c) may purchase additional continuing medical and life insurance benefits in
             781      accordance with Subsection (4).
             782          (3) (a) Subject to federal requirements and limitations, the contribution under
             783      Subsection (2)(a) shall be transferred directly to the employee's defined contribution plan
             784      qualified under Section 401(k) of the Internal Revenue Code which is sponsored by the Utah
             785      State Retirement Board.


             786          (b) If the amount calculated under Subsection (2)(a) exceeds the federal contribution
             787      limitations, the employee's unused accumulated sick leave hours representing the excess shall
             788      be used for the purchase of continuing medical and life insurance benefits under Subsection
             789      (4).
             790          (4) (a) An employee may purchase continuing medical and life insurance benefits, at
             791      the rate of one month's coverage per policy for eight hours of unused sick leave remaining
             792      after:
             793          (i) the contribution of unused sick leave under Subsection (2)(a); and
             794          (ii) an additional reduction, at the time of retirement, of unused sick leave hours as
             795      follows:
             796          (A) 480 hours if the employee retires during calendar year 2006;
             797          (B) 384 hours if the employee retires during calendar year 2007;
             798          (C) 288 hours if the employee retires during calendar year 2008;
             799          (D) 192 hours if the employee retires during calendar year 2009;
             800          (E) 96 hours if the employee retires during calendar year 2010; or
             801          (F) 0 hours if the employee retires after calendar year 2010.
             802          (b) The medical coverage level for member, two person, or family coverage that is
             803      provided to the member at the time of retirement is the maximum coverage level available to
             804      the member under this program.
             805          (c) The purchase of continuing medical and life insurance benefits at the rate provided
             806      under Subsection (4)(a) may be used by the employee to extend coverage:
             807          (i) beyond the number of years provided under Subsection (2) until the employee
             808      reaches the age of eligibility for Medicare; or
             809          (ii) if the employee has reached the age of eligibility for Medicare, continuing medical
             810      benefits for the employee's spouse may be purchased until the employee's spouse reaches the
             811      age of eligibility for Medicare.
             812          (d) An employee and the employee's spouse who are or who later become eligible for
             813      Medicare may purchase Medicare supplemental insurance at the rate of one month's coverage


             814      for eight hours of the employee's unused sick leave per person.
             815          Section 17. Section 67-19-14.4 is amended to read:
             816           67-19-14.4. Unused Sick Leave Retirement Program II -- Creation --
             817      Remuneration at retirement -- Medical expense account after retirement.
             818          (1) (a) There is created the "Unused Sick Leave Retirement Program II."
             819          (b) An agency shall offer the Unused Sick Leave Retirement Option Program II to an
             820      employee who is eligible to receive [retirement benefits] a retirement allowance in accordance
             821      with Title 49, Utah State Retirement and Insurance Benefit Act.
             822          (c) Beginning January 1, 2011, an employee who is participating in the Unused Sick
             823      Leave Retirement Program I under Section 67-19-14.2 may make a one-time and irrevocable
             824      election to transfer all unused sick leave hours which shall include all converted sick leave
             825      hours under Section 67-19-14.1 for use under the Unused Sick Leave Retirement Program II
             826      under this section.
             827          (2) (a) The Unused Sick Leave Retirement Program II provides that upon [retirement]
             828      becoming eligible to receive a retirement allowance an employee who is employed by the state
             829      on or after January 1, 2006, shall receive remuneration for the employee's unused accumulated
             830      sick leave and converted sick leave accrued beginning January 1, 2006 in accordance with this
             831      section as follows:
             832          (i) subject to federal requirements and limitations, a contribution at the employee's rate
             833      of pay at the time of retirement for 25% of the employee's unused accumulated sick leave and
             834      converted sick leave shall be transferred directly to the employee's defined contribution plan
             835      qualified under Section 401(k) of the Internal Revenue Code which is sponsored by the Utah
             836      State Retirement Board; and
             837          (ii) participation in a benefit plan that provides for reimbursement for medical
             838      expenses using monies deposited at the employee's rate of pay at the time of retirement from
             839      remaining unused accumulated sick leave and converted sick leave balances.
             840          (b) If the amount calculated under Subsection (2)(a)(i) exceeds the federal contribution
             841      limitations, the amount representing the excess shall be deposited under Subsection (2)(a)(ii).


             842          (c) An employee's rate of pay at the time of retirement for purposes of Subsection
             843      (2)(a)(ii) may not be less than the average rate of pay of state employees who retired in the
             844      same retirement system under Title 49, Utah State Retirement and Insurance Benefit Act,
             845      during the previous calendar year.
             846          (3) The Utah State Retirement Office shall develop and maintain a program to provide
             847      a benefit plan that provides for reimbursement for medical expenses under Subsection (2)(a)(ii)
             848      with:
             849          (a) monies deposited under Subsection (2)(a)(ii); and
             850          (b) accrued earnings.


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