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S.B. 139 Enrolled

             1     

EMPLOYER ELECTION RETIREMENT

             2     
AMENDMENTS

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Curtis S. Bramble

             6     
House Sponsor: John Dougall

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah State Retirement and Insurance Benefit Act by adding a
             11      conversion window for certain employees to elect to participate in the Public
             12      Employees' Noncontributory Retirement System and by extending the date by which
             13      certain participating employers may elect to provide an enhanced maximum annual
             14      cost-of-living adjustment for certain public safety retirees.
             15      Highlighted Provisions:
             16          This bill:
             17          .    adds a six-month window for employers of an entity created under the Interlocal
             18      Cooperation Act to elect to participate in the Public Employees' Noncontributory
             19      Retirement System;
             20          .    provides election and notice procedures for the retirement system conversion
             21      election;
             22          .    allows employees of the eligible entity six months to elect to participate in the
             23      Public Employees' Noncontributory Retirement System;
             24          .    extends the deadline that a participating employer may elect to provide a maximum
             25      4% COLA, instead of a maximum 2.5% COLA, to its eligible public safety retirees
             26      from December 1, 2009 to December 1, 2012; and
             27          .    makes technical changes.
             28      Monies Appropriated in this Bill:
             29          None


             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          49-13-205, as last amended by Laws of Utah 2005, Chapter 116
             35          49-14-403, as last amended by Laws of Utah 2008, Chapter 227
             36          49-15-403, as last amended by Laws of Utah 2008, Chapter 227
             37     
             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 49-13-205 is amended to read:
             40           49-13-205. Conversion to system -- Time schedule -- Conversion windows.
             41          (1) An employee governed under Section 49-13-201 shall make the election to
             42      participate in this system within six months of July 1, 1986.
             43          (2) (a) (i) An employer governed under Sections 49-13-201 and 49-13-202 shall make
             44      the election to participate in this system within six months of July 1, 1986.
             45          (ii) The employer shall indicate whether or not it elects to participate by enacting a
             46      resolution or ordinance to that effect.
             47          (iii) Prior to the enactment of the resolution or ordinance, a hearing shall be held by
             48      the employer, at which all employees of the political subdivision shall be given an opportunity
             49      to be heard on the question of participating in this system.
             50          (iv) Notice of the hearing shall be mailed to all employees within 30 days of the
             51      hearing and shall contain the time, place, and purpose of the hearing.
             52          (b) A regular full-time employee has six months from the date the employer elects to
             53      participate in this system in which to make the election to participate in this system and
             54      become eligible for service credit in this system.
             55          (3) Subsections (1) and (2) shall be used to provide a second time period of conversion
             56      to this system beginning July 1, 1990.
             57          (4) Subsections (1) and (2) shall be used to provide a third time period of conversion


             58      to this system beginning July 1, 1995.
             59          (5) Subsection (2) shall be used to provide a fourth time period of conversion to this
             60      system beginning July 1, 2009 for an entity created under the authority of Title 11, Chapter 13,
             61      Interlocal Cooperation Act, and the entity's employees.
             62          [(5)] (6) A member of the Contributory Retirement System who is employed by one
             63      agency and who either transfers to or is reemployed by another agency shall be enrolled in the
             64      Noncontributory Retirement System as of the date of employment, if the participating
             65      employer has elected to participate in the Noncontributory Retirement System.
             66          Section 2. Section 49-14-403 is amended to read:
             67           49-14-403. Annual cost-of-living adjustment -- Enhanced adjustment --
             68      Eligibility.
             69          (1) The office shall make an annual cost-of-living adjustment to:
             70          (a) an original allowance paid under Section 49-14-402 and Part 5, Death Benefit, of
             71      this chapter if the allowance has been paid for at least one year; and
             72          (b) an original payment made to an alternate payee under a domestic relations order, if
             73      the payment is to be paid as a percentage of the allowance rather than a specific dollar amount.
             74          (2) (a) Unless Subsection (2)(b) applies, the original allowance shall be increased by
             75      the annual increase in the Consumer Price Index up to a maximum of 2.5%.
             76          (b) If the participating employer has made an election under Subsection (5), and in
             77      lieu of the annual increase under Subsection (2)(a), the original allowance shall be increased
             78      by the annual increase in the Consumer Price Index up to a maximum of 4%.
             79          (c) Annual increases in the Consumer Price Index in excess of the applicable
             80      maximum annual increase under this Subsection (2), shall be accumulated and used in
             81      subsequent adjustments when the annual increase in the Consumer Price Index is less than the
             82      applicable maximum annual increase under this Subsection (2).
             83          (3) The Consumer Price Index used in calculating adjustments shall be a United States
             84      Bureau of Labor Statistics Consumer Price Index average as determined by the board.
             85          (4) The cost-of-living adjustment made under this section may not decrease the


             86      allowance.
             87          (5) (a) A participating employer may make a one-time election to provide the annual
             88      cost-of-living adjustment under Subsection (2)(b), in lieu of the annual cost-of-living
             89      adjustment under Subsection (2)(a), for the participating employer's current and future retirees.
             90          (b) A participating employer shall make the election under this Subsection (5) prior to
             91      December 1, [2009] 2012.
             92          (c) The participating employer shall indicate whether or not it elects to participate in
             93      this benefit by enacting a resolution or ordinance to that effect and making an application to
             94      the office.
             95          (d) The effective date for the annual cost-of-living adjustment under Subsection (2)(b)
             96      is January 1 of the year following an election under Subsection (5)(a).
             97          (e) Notwithstanding the election provided under this section, the state, as a
             98      participating employer, shall provide the annual cost-of-living adjustment under Subsection
             99      (2)(b) to its eligible employees and retirees effective on January 1, 2009.
             100          (6) (a) To be eligible for the annual cost-of-living adjustment under Subsection (2)(b),
             101      a retiring employee shall earn the final 72 months of service credit prior to initial retirement:
             102          (i) as an employee of a participating employer who:
             103          (A) has made the election under Subsection (5)(a); or
             104          (B) is included under Subsection (5)(e); and
             105          (ii) in a covered position under Title 49, Chapter 14, Public Safety Contributory
             106      Retirement System Act or under Title 49, Chapter 15, Public Safety Noncontributory
             107      Retirement System Act.
             108          (b) The eligibility requirements under Subsection (6)(a)(i) do not apply to a person
             109      who retires prior to July 1, 2008.
             110          (c) The annual cost-of-living adjustment under Subsection (2)(b) may not be paid to a
             111      retiree who is not eligible under this Subsection (6).
             112          (7) An allowance adjustment made under Subsections (2)(b) and (5) may not be paid
             113      prior to the effective date of the enhanced cost-of-living adjustment for the participating


             114      employer.
             115          (8) The board may adopt rules for:
             116          (a) the administration of the election provided under Subsection (5); and
             117          (b) the effective date of the enhanced cost-of-living adjustment for participating
             118      employers.
             119          Section 3. Section 49-15-403 is amended to read:
             120           49-15-403. Annual cost-of-living adjustment.
             121          (1) The office shall make an annual cost-of-living adjustment to:
             122          (a) an original allowance paid under Section 49-15-402 and Part 5, Death Benefit, of
             123      this chapter if the allowance has been paid for at least one year; and
             124          (b) an original payment made to an alternate payee under a domestic relations order if
             125      the payment is to be paid as a percentage of the allowance rather than a specific dollar amount.
             126          (2) (a) Unless Subsection (2)(b) applies, the original allowance shall be increased by
             127      the annual increase in the Consumer Price Index up to a maximum of 2.5%.
             128          (b) If the participating employer has made an election under Subsection (5), and in
             129      lieu of the annual increase under Subsection (2)(a), the original allowance shall be increased
             130      by the annual increase in the Consumer Price Index up to a maximum of 4%.
             131          (c) Annual increases in the Consumer Price Index in excess of the applicable
             132      maximum annual increase under this Subsection (2), shall be accumulated and used in
             133      subsequent adjustments when the annual increase in the Consumer Price Index is less than the
             134      applicable maximum annual increase under this Subsection (2).
             135          (3) The Consumer Price Index used in calculating adjustments shall be a United States
             136      Bureau of Labor Statistics Consumer Price Index average as determined by the board.
             137          (4) The cost-of-living adjustment made under this section may not decrease the
             138      allowance.
             139          (5) (a) A participating employer may make a one-time election to provide the annual
             140      cost-of-living adjustment under Subsection (2)(b), in lieu of the annual cost-of-living
             141      adjustment under Subsection (2)(a), for the participating employer's current and future retirees.


             142          (b) A participating employer shall make the election under this Subsection (5) prior to
             143      December 1, [2009] 2012.
             144          (c) The participating employer shall indicate whether or not it elects to participate in
             145      this benefit by enacting a resolution or ordinance to that effect and making an application to
             146      the office.
             147          (d) The effective date for the annual cost-of-living adjustment under Subsection (2)(b)
             148      is January 1 of the year following an election under Subsection (5)(a).
             149          (e) Notwithstanding the election provided under this section, the state, as a
             150      participating employer, shall provide the annual cost-of-living adjustment under Subsection
             151      (2)(b) to its eligible employees and retirees effective on January 1, 2009.
             152          (6) (a) To be eligible for the annual cost-of-living adjustment under Subsection (2)(b),
             153      a retiring employee shall earn the final 72 months of service credit prior to initial retirement
             154      effective on January 1, 2009:
             155          (i) as an employee of a participating employer who:
             156          (A) has made the election under Subsection (5)(a); or
             157          (B) is included under Subsection (5)(e); and
             158          (ii) in a covered position under Title 49, Chapter 14, Public Safety Contributory
             159      Retirement System Act or under Title 49, Chapter 15, Public Safety Noncontributory
             160      Retirement System Act.
             161          (b) The eligibility requirements under Subsection (6)(a)(i) do not apply to a person
             162      who retires prior to July 1, 2008.
             163          (c) The annual cost-of-living adjustment under Subsection (2)(b) may not be paid to a
             164      retiree who is not eligible under this Subsection (6).
             165          (7) An allowance adjustment made under Subsections (2)(b) and (5) may not be paid
             166      prior to the effective date of the enhanced cost-of-living adjustment for the participating
             167      employer.
             168          (8) The board may adopt rules for:
             169          (a) the administration of the election provided under Subsection (5); and


             170          (b) the effective date of the enhanced cost-of-living adjustment for participating
             171      employers.


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