S.B. 28 Enrolled

             1     

UTAH RETIREMENT AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Todd Weiler

             5     
House Sponsor: Kraig Powell

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Utah State Retirement and Insurance Benefit Act and the Utah
             10      State Personnel Management Act by amending retirement provisions.
             11      Highlighted Provisions:
             12          This bill:
             13          .    clarifies definitions;
             14          .    replaces mention of the Teachers Insurance and Annuity Association of America
             15      with a retirement plan offered by a public or private system, organization, or
             16      company designated by the State Board of Regents;
             17          .    clarifies that a governor, legislator, other full-time elected official, or employee with
             18      Tier I service credit in a system or plan administered by the Utah State Retirement
             19      Board may only participate in another Tier I system or plan if the individual enters
             20      office or employment with a participating employer on or after July 1, 2011;
             21          .    expands the annual CPI increases for postretirement earnings limitations to include
             22      reemployed earnings that are based on one-half of final average salary;
             23          .    clarifies reporting provisions for participating employers regarding the employees'
             24      accrual of service credit;
             25          .    eliminates the requirement that certain retirement application forms must be
             26      notarized when submitted to the Utah State Retirement Office;
             27          .    provides that a beneficiary who qualifies for a monthly benefit must apply in writing
             28      to the Utah State Retirement Office and that the allowance shall begin on the first
             29      day of the month following the month in which the participant died if the


             30      application is received within 90 days of the death, or the following month if the application is
             31      received by the office more than 90 days after the date of death;
             32          .    provides that for certain employer service credit purchases, an employee is not
             33      required to have at least four years of service credit or to forfeit service credit or any
             34      defined contribution balance;
             35          .    provides that a minor child beneficiary may receive a refund of a deceased
             36      member's public safety member contributions;
             37          .    clarifies that a judge with 25 or more years of service credit does not get penalized
             38      for retiring before age 65;
             39          .    provides that an eligible employee in the Tier II public employees system includes
             40      an employee who is covered by a retirement program offered by another public or
             41      private system, organization, or company designated by the State Board of Regents;
             42          .    provides that a person who is receiving long-term disability benefits may only
             43      accrue service credit until the earlier of date of death, the date the person retires, or
             44      the date the person has accumulated or would have accumulated service credit in a
             45      defined benefit system or plan under this title, sufficient to be eligible to retire with
             46      an unreduced benefit;
             47          .    clarifies that a qualifying employee must be receiving paid leave benefits to be
             48      eligible to receive the state employee matching supplemental defined contribution
             49      benefit; and
             50          .    makes technical changes.
             51      Money Appropriated in this Bill:
             52          None
             53      Other Special Clauses:
             54          This bill takes effect immediately.
             55      Utah Code Sections Affected:
             56      AMENDS:
             57           49-11-102 , as last amended by Laws of Utah 2013, Chapters 215 and 316


             58           49-11-201 , as last amended by Laws of Utah 2004, Chapter 118
             59           49-11-403 , as last amended by Laws of Utah 2011, Chapters 366 and 439
             60           49-11-505 , as last amended by Laws of Utah 2013, Chapter 48
             61           49-11-603 , as last amended by Laws of Utah 2008, Chapter 252
             62           49-11-610 , as renumbered and amended by Laws of Utah 2002, Chapter 250
             63           49-12-201 , as last amended by Laws of Utah 2010, Chapter 266
             64           49-12-202 , as last amended by Laws of Utah 2009, Chapters 51 and 165
             65           49-12-203 , as last amended by Laws of Utah 2013, Chapters 310 and 316
             66           49-12-204 , as last amended by Laws of Utah 2013, Chapter 316
             67           49-12-401 , as last amended by Laws of Utah 2013, Chapter 215
             68           49-12-402 , as last amended by Laws of Utah 2011, Chapter 439
             69           49-13-102 , as last amended by Laws of Utah 2013, Chapters 109 and 127
             70           49-13-201 , as last amended by Laws of Utah 2010, Chapter 266
             71           49-13-202 , as last amended by Laws of Utah 2012, Chapter 298
             72           49-13-203 , as last amended by Laws of Utah 2013, Chapters 310 and 316
             73           49-13-204 , as last amended by Laws of Utah 2013, Chapter 316
             74           49-13-401 , as last amended by Laws of Utah 2013, Chapter 215
             75           49-13-402 , as last amended by Laws of Utah 2011, Chapter 439
             76           49-14-201 , as last amended by Laws of Utah 2010, Chapter 266
             77           49-14-401 , as last amended by Laws of Utah 2013, Chapter 215
             78           49-14-501 , as last amended by Laws of Utah 2011, Chapter 439
             79           49-14-504 , as last amended by Laws of Utah 2011, Chapter 366
             80           49-15-201 , as last amended by Laws of Utah 2010, Chapter 266
             81           49-15-202 , as last amended by Laws of Utah 2010, Chapter 266
             82           49-15-401 , as last amended by Laws of Utah 2013, Chapter 215
             83           49-15-501 , as last amended by Laws of Utah 2011, Chapter 439
             84           49-15-504 , as last amended by Laws of Utah 2011, Chapter 366
             85           49-16-201 , as last amended by Laws of Utah 2011, Chapter 366


             86           49-16-401 , as last amended by Laws of Utah 2013, Chapter 215
             87           49-16-504 , as last amended by Laws of Utah 2011, Chapter 366
             88           49-17-401 , as last amended by Laws of Utah 2011, Chapter 439
             89           49-17-402 , as last amended by Laws of Utah 2010, Chapter 264
             90           49-17-502 , as last amended by Laws of Utah 2009, Chapter 224
             91           49-18-401 , as last amended by Laws of Utah 2011, Chapter 439
             92           49-18-402 , as last amended by Laws of Utah 2010, Chapter 264
             93           49-18-502 , as last amended by Laws of Utah 2009, Chapter 224
             94           49-19-201 , as last amended by Laws of Utah 2010, Chapter 266
             95           49-19-401 , as last amended by Laws of Utah 2004, Chapter 118
             96           49-21-102 , as last amended by Laws of Utah 2013, Chapter 316
             97           49-22-201 , as last amended by Laws of Utah 2011, Chapter 439
             98           49-22-203 , as last amended by Laws of Utah 2013, Chapter 316
             99           49-22-204 , as enacted by Laws of Utah 2010, Chapter 266
             100           49-22-304 , as last amended by Laws of Utah 2013, Chapter 215
             101           49-23-201 , as last amended by Laws of Utah 2011, Chapter 439
             102           49-23-303 , as last amended by Laws of Utah 2013, Chapter 215
             103           49-23-503 , as last amended by Laws of Utah 2013, Chapter 40
             104           67-19-43 , as enacted by Laws of Utah 2013, Chapter 277
             105      ENACTS:
             106           49-21-408 , Utah Code Annotated 1953
             107     
             108      Be it enacted by the Legislature of the state of Utah:
             109          Section 1. Section 49-11-102 is amended to read:
             110           49-11-102. Definitions.
             111          As used in this title:
             112          (1) (a) "Active member" means a member who:
             113          (i) is employed by a participating employer and accruing service credit; or [who]


             114          (ii) within the previous 120 days:
             115          (A) has been employed by a participating employer [within the previous 120 days.];
             116      and
             117          (B) accrued service credit.
             118          (b) "Active member" does not include [retirees] a retiree.
             119          (2) "Actuarial equivalent" means a benefit of equal value when computed upon the
             120      basis of mortality tables as recommended by the actuary and adopted by the executive director,
             121      including regular interest.
             122          (3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
             123      adopted by the board upon which the funding of system costs and benefits are computed.
             124          (4) (a) "Agency" means:
             125          (i) a department, division, agency, office, authority, commission, board, institution, or
             126      hospital of the state;
             127          (ii) a county, municipality, school district, local district, or special service district;
             128          (iii) a state college or university; or
             129          (iv) any other participating employer.
             130          (b) "Agency" does not include an entity listed under Subsection (4)(a)(i) that is a
             131      subdivision of another entity listed under Subsection (4)(a).
             132          (5) "Allowance" or "retirement allowance" means the pension plus the annuity,
             133      including any cost of living or other authorized adjustments to the pension and annuity.
             134          (6) "Alternate payee" means a member's former spouse or family member eligible to
             135      receive payments under a Domestic Relations Order in compliance with Section 49-11-612 .
             136          (7) "Amortization rate" means the board certified percent of salary required to amortize
             137      the unfunded actuarial accrued liability in accordance with policies established by the board
             138      upon the advice of the actuary.
             139          (8) "Annuity" means monthly payments derived from member contributions.
             140          (9) "Appointive officer" means an employee appointed to a position for a definite and
             141      fixed term of office by official and duly recorded action of a participating employer whose


             142      appointed position is designated in the participating employer's charter, creation document, or
             143      similar document, and:
             144          (a) who earns $500 or more per month, indexed as of January 1, 1990, as provided in
             145      Section 49-12-407 for a Tier I appointive officer; and
             146          (b) whose appointive position is full-time as certified by the participating employer for
             147      a Tier II appointive officer.
             148          (10) (a) "At-will employee" means a person who is employed by a participating
             149      employer and:
             150          (i) who is not entitled to merit or civil service protection and is generally considered
             151      exempt from a participating employer's merit or career service personnel systems;
             152          (ii) whose on-going employment status is entirely at the discretion of the person's
             153      employer; or
             154          (iii) who may be terminated without cause by a designated supervisor, manager, or
             155      director.
             156          (b) "At-will employee" does not include a career employee who has obtained a
             157      reasonable expectation of continued employment based on inclusion in a participating
             158      employer's merit system, civil service protection system, or career service personnel systems,
             159      policies, or plans.
             160          (11) "Beneficiary" means any person entitled to receive a payment under this title
             161      through a relationship with or designated by a member, participant, covered individual, or
             162      alternate payee of a defined contribution plan.
             163          (12) "Board" means the Utah State Retirement Board established under Section
             164      49-11-202 .
             165          (13) "Board member" means a person serving on the Utah State Retirement Board as
             166      established under Section 49-11-202 .
             167          (14) "Certified contribution rate" means the board certified percent of salary paid on
             168      behalf of an active member to the office to maintain the system on a financially and actuarially
             169      sound basis.


             170          (15) "Contributions" means the total amount paid by the participating employer and the
             171      member into a system or to the Utah Governors' and Legislators' Retirement Plan under
             172      Chapter 19, Utah Governors' and Legislators' Retirement Act.
             173          (16) "Council member" means a person serving on the Membership Council
             174      established under Section 49-11-202 .
             175          (17) "Covered individual" means any individual covered under Chapter 20, Public
             176      Employees' Benefit and Insurance Program Act.
             177          (18) "Current service" means covered service under:
             178          (a) Chapter 12, Public Employees' Contributory Retirement Act;
             179          (b) Chapter 13, Public Employees' Noncontributory Retirement Act;
             180          (c) Chapter 14, Public Safety Contributory Retirement Act;
             181          (d) Chapter 15, Public Safety Noncontributory Retirement Act;
             182          (e) Chapter 16, Firefighters' Retirement Act;
             183          (f) Chapter 17, Judges' Contributory Retirement Act;
             184          (g) Chapter 18, Judges' Noncontributory Retirement Act;
             185          (h) Chapter 19, Utah Governors' and Legislators' Retirement Act;
             186          (i) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or
             187          (j) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
             188          (19) "Defined benefit" or "defined benefit plan" or "defined benefit system" means a
             189      system or plan offered under this title to provide a specified allowance to a retiree or a retiree's
             190      spouse after retirement that is based on a set formula involving one or more of the following
             191      factors:
             192          (a) years of service;
             193          (b) final average monthly salary; or
             194          (c) a retirement multiplier.
             195          (20) "Defined contribution" or "defined contribution plan" means any defined
             196      contribution plan or deferred compensation plan authorized under the Internal Revenue Code
             197      and administered by the board.


             198          (21) "Educational institution" means a political subdivision or instrumentality of the
             199      state or a combination thereof primarily engaged in educational activities or the administration
             200      or servicing of educational activities, including:
             201          (a) the State Board of Education and its instrumentalities;
             202          (b) any institution of higher education and its branches;
             203          (c) any school district and its instrumentalities;
             204          (d) any vocational and technical school; and
             205          (e) any entity arising out of a consolidation agreement between entities described under
             206      this Subsection (21).
             207          (22) "Elected official":
             208          (a) means a person elected to a state office, county office, municipal office, school
             209      board or school district office, local district office, or special service district office;
             210          (b) includes a person who is appointed to serve an unexpired term of office described
             211      under Subsection (22)(a); and
             212          (c) does not include a judge or justice who is subject to a retention election under
             213      Section 20A-12-201 .
             214          (23) (a) "Employer" means any department, educational institution, or political
             215      subdivision of the state eligible to participate in a government-sponsored retirement system
             216      under federal law.
             217          (b) "Employer" may also include an agency financed in whole or in part by public
             218      funds.
             219          (24) "Exempt employee" means an employee working for a participating employer:
             220          (a) who is not eligible for service credit under Section 49-12-203 , 49-13-203 ,
             221      49-14-203 , 49-15-203 , or 49-16-203 ; and
             222          (b) for whom a participating employer is not required to pay contributions or
             223      nonelective contributions.
             224          (25) "Final average monthly salary" means the amount computed by dividing the
             225      compensation received during the final average salary period under each system by the number


             226      of months in the final average salary period.
             227          (26) "Fund" means any fund created under this title for the purpose of paying benefits
             228      or costs of administering a system, plan, or program.
             229          (27) (a) "Inactive member" means a member who has not been employed by a
             230      participating employer for a period of at least 120 days.
             231          (b) "Inactive member" does not include retirees.
             232          (28) (a) "Initially entering" means hired, appointed, or elected for the first time, in
             233      current service as a member with any participating employer.
             234          (b) "Initially entering" does not include a person who has any prior service credit on
             235      file with the office.
             236          (c) "Initially entering" includes an employee of a participating employer, except for an
             237      employee that is not eligible under a system or plan under this title, who:
             238          (i) does not have any prior service credit on file with the office;
             239          (ii) is covered by a retirement plan other than a retirement plan created under this title;
             240      and
             241          (iii) moves to a position with a participating employer that is covered by this title.
             242          (29) "Institution of higher education" means an institution described in Section
             243      53B-1-102 .
             244          (30) (a) "Member" means a person, except a retiree, with contributions on deposit with
             245      a system, the Utah Governors' and Legislators' Retirement Plan under Chapter 19, Utah
             246      Governors' and Legislators' Retirement Act, or with a terminated system.
             247          (b) "Member" also includes leased employees within the meaning of Section 414(n)(2)
             248      of the Internal Revenue Code, if the employees have contributions on deposit with the office.
             249      If leased employees constitute less than 20% of the participating employer's work force that is
             250      not highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
             251      "member" does not include leased employees covered by a plan described in Section 414(n)(5)
             252      of the federal Internal Revenue Code.
             253          (31) "Member contributions" means the sum of the contributions paid to a system or


             254      the Utah Governors' and Legislators' Retirement Plan, including refund interest if allowed by a
             255      system, and which are made by:
             256          (a) the member; and
             257          (b) the participating employer on the member's behalf under Section 414(h) of the
             258      Internal Revenue Code.
             259          (32) "Nonelective contribution" means an amount contributed by a participating
             260      employer into a participant's defined contribution account.
             261          (33) "Normal cost rate":
             262          (a) means the percent of salary that is necessary for a retirement system that is fully
             263      funded to maintain its fully funded status; and
             264          (b) is determined by the actuary based on the assumed rate of return established by the
             265      board.
             266          (34) "Office" means the Utah State Retirement Office.
             267          (35) "Participant" means an individual with voluntary deferrals or nonelective
             268      contributions on deposit with the defined contribution plans administered under this title.
             269          (36) "Participating employer" means a participating employer, as defined by Chapter
             270      12, Public Employees' Contributory Retirement Act, Chapter 13, Public Employees'
             271      Noncontributory Retirement Act, Chapter 14, Public Safety Contributory Retirement Act,
             272      Chapter 15, Public Safety Noncontributory Retirement Act, Chapter 16, Firefighters'
             273      Retirement Act, Chapter 17, Judges' Contributory Retirement Act, and Chapter 18, Judges'
             274      Noncontributory Retirement Act, or an agency financed in whole or in part by public funds
             275      which is participating in a system or plan as of January 1, 2002.
             276          (37) "Part-time appointed board member" means a person:
             277          (a) who is appointed to serve as a member of a board, commission, council, committee,
             278      or panel of a participating employer; and
             279          (b) whose service as a part-time appointed board member does not qualify as a regular
             280      full-time employee as defined under Section 49-12-102 , 49-13-102 , or 49-22-102 .
             281          (38) "Pension" means monthly payments derived from participating employer


             282      contributions.
             283          (39) "Plan" means the Utah Governors' and Legislators' Retirement Plan created by
             284      Chapter 19, Utah Governors' and Legislators' Retirement Act, the New Public Employees' Tier
             285      II Defined Contribution Plan created by Chapter 22, Part 4, Tier II Defined Contribution Plan,
             286      the New Public Safety and Firefighter Tier II Defined Contribution Plan created by Chapter 23,
             287      Part 4, Tier II Defined Contribution Plan, or the defined contribution plans created under
             288      Section 49-11-801 .
             289          (40) (a) "Political subdivision" means any local government entity, including cities,
             290      towns, counties, and school districts, but only if the subdivision is a juristic entity that is legally
             291      separate and distinct from the state and only if its employees are not by virtue of their
             292      relationship to the entity employees of the state.
             293          (b) "Political subdivision" includes local districts, special service districts, or
             294      authorities created by the Legislature or by local governments, including the office.
             295          (c) "Political subdivision" does not include a project entity created under Title 11,
             296      Chapter 13, Interlocal Cooperation Act, that was formed prior to July 1, 1987.
             297          (41) "Program" means the Public Employees' Insurance Program created under Chapter
             298      20, Public Employees' Benefit and Insurance Program Act, or the Public Employees'
             299      Long-Term Disability program created under Chapter 21, Public Employees' Long-Term
             300      Disability Act.
             301          (42) "Public funds" means those funds derived, either directly or indirectly, from public
             302      taxes or public revenue, dues or contributions paid or donated by the membership of the
             303      organization, used to finance an activity whose objective is to improve, on a nonprofit basis,
             304      the governmental, educational, and social programs and systems of the state or its political
             305      subdivisions.
             306          (43) "Qualified defined contribution plan" means a defined contribution plan that
             307      meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
             308          (44) (a) "Reemployed," "reemploy," or "reemployment" means work or service
             309      performed for a participating employer after retirement, in exchange for compensation.


             310          (b) Reemployment includes work or service performed on a contract for a participating
             311      employer if the retiree is:
             312          (i) listed as the contractor; or
             313          (ii) an owner, partner, or [principle] principal of the contractor.
             314          (45) "Refund interest" means the amount accrued on member contributions at a rate
             315      adopted by the board.
             316          (46) "Retiree" means an individual who has qualified for an allowance under this title.
             317          (47) "Retirement" means the status of an individual who has become eligible, applies
             318      for, and is entitled to receive an allowance under this title.
             319          (48) "Retirement date" means the date selected by the member on which the member's
             320      retirement becomes effective with the office.
             321          (49) "Retirement related contribution":
             322          (a) means any employer payment to any type of retirement plan or program made on
             323      behalf of an employee; and
             324          (b) does not include Social Security payments or Social Security substitute payments
             325      made on behalf of an employee.
             326          (50) "Service credit" means:
             327          (a) the period during which an employee is employed and compensated by a
             328      participating employer and meets the eligibility requirements for membership in a system or the
             329      Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are
             330      paid to the office; and
             331          (b) periods of time otherwise purchasable under this title.
             332          (51) "System" means the individual retirement systems created by Chapter 12, Public
             333      Employees' Contributory Retirement Act, Chapter 13, Public Employees' Noncontributory
             334      Retirement Act, Chapter 14, Public Safety Contributory Retirement Act, Chapter 15, Public
             335      Safety Noncontributory Retirement Act, Chapter 16, Firefighters' Retirement Act, Chapter 17,
             336      Judges' Contributory Retirement Act, Chapter 18, Judges' Noncontributory Retirement Act, and
             337      Chapter 19, Utah Governors' and Legislators' Retirement Act, the defined benefit portion of the


             338      Tier II Hybrid Retirement System under Chapter 22, Part 3, Tier II Hybrid Retirement System,
             339      and the defined benefit portion of the Tier II Hybrid Retirement System under Chapter 23, Part
             340      3, Tier II Hybrid Retirement System.
             341          (52) "Tier I" means a system or plan under this title for which:
             342          (a) an employee is eligible to participate if the employee initially enters regular
             343      full-time employment before July 1, 2011[.]; or
             344          (b) a governor or legislator who initially enters office before July 1, 2011.
             345          (53) (a) "Tier II" means a system or plan under this title provided in lieu of a Tier I
             346      system or plan for [which an employee is eligible to participate,] an employee, governor,
             347      legislator, or full-time elected official who does not have Tier I service credit in a system or
             348      plan under this title:
             349          (i) if the employee initially enters regular full-time employment on or after July 1,
             350      2011[.]; or
             351          (ii) if the governor, legislator, or full-time elected official initially enters office on or
             352      after July 1, 2011.
             353          (b) "Tier II" includes:
             354          (i) the Tier II hybrid system established under:
             355          (A) Chapter 22, Part 3, Tier II Hybrid Retirement System; or
             356          (B) Chapter 23, Part 3, Tier II Hybrid Retirement System; and
             357          (ii) the Tier II Defined Contribution Plan (Tier II DC Plan) established under:
             358          (A) Chapter 22, Part 4, Tier II Defined Contribution Plan; or
             359          (B) Chapter 23, Part 4, Tier II Defined Contribution Plan.
             360          (54) "Unfunded actuarial accrued liability" or "UAAL":
             361          (a) is determined by the system's actuary; and
             362          (b) means the excess, if any, of the accrued liability of a retirement system over the
             363      actuarial value of its assets.
             364          (55) "Voluntary deferrals" means an amount contributed by a participant into that
             365      participant's defined contribution account.


             366          Section 2. Section 49-11-201 is amended to read:
             367           49-11-201. Establishment of retirement office -- An independent state agency --
             368      Office exemption.
             369          (1) (a) There is established the Utah State Retirement Office, which may also be
             370      known and function as the Utah State Retirement Systems or the Utah Retirement Systems.
             371          (b) The office shall administer the systems, plans, and programs and perform all other
             372      functions assigned to it under this title.
             373          (2) (a) The office is an independent state agency.
             374          (b) It is subject to legislative and executive department budgetary review and comment.
             375          (3) The office may establish branch offices upon approval of the board.
             376          (4) The board and office are exempt from those acts which are applicable to state and
             377      other governmental entities under this code.
             378          Section 3. Section 49-11-403 is amended to read:
             379           49-11-403. Purchase of public service credit not otherwise qualifying for benefit.
             380          (1) A member, a participating employer, or a member and a participating employer
             381      jointly may purchase service credit equal to the period of the member's employment in the
             382      following:
             383          (a) United States federal employment;
             384          (b) employment in a private school based in the United States, if the member received
             385      an employer paid retirement benefit for the employment;
             386          (c) public employment in another state or territory of the United States which qualifies
             387      the member for membership in the public plan or system covering the employment, but only if
             388      the member does not qualify for any retirement benefits based on the employment;
             389          (d) forfeited service credit in this state if the member does not qualify for an allowance
             390      based on the service credit;
             391          (e) full-time public service while on an approved leave of absence;
             392          (f) the period of time for which disability benefits were paid if:
             393          (i) the member was receiving:


             394          (A) long-term disability benefits;
             395          (B) short-term disability benefits; or
             396          (C) worker's compensation disability benefits; and
             397          (ii) the member's employer had not entered into a benefit protection contract under
             398      Section 49-11-404 during the period the member had a disability due to sickness or accident;
             399          (g) employment covered by a [Teachers Insurance and Annuity Association of
             400      America] retirement plan offered by a public or private system, organization, or company
             401      designated by the State Board of Regents, if the member forfeits any retirement benefit from
             402      that retirement plan for the period of employment to be purchased under this Subsection (1)(g);
             403      or
             404          (h) employment in a charter school located within the state if the member forfeits any
             405      retirement benefit under any other retirement system or plan for the period of employment to be
             406      purchased under this Subsection (1)(h).
             407          (2) A member shall:
             408          (a) have at least four years of service credit before a purchase can be made under this
             409      section; and
             410          (b) forfeit service credit and any defined contribution balance based on employer
             411      contributions under any other retirement system or plan based on the period of employment for
             412      which service credit is being purchased.
             413          (3) (a) To purchase credit under this section, the member, a participating employer, or a
             414      member and a participating employer jointly shall make payment to the system under which the
             415      member is currently covered.
             416          (b) The amount of the payment shall be determined by the office based on a formula
             417      that is:
             418          (i) recommended by the actuary; and
             419          (ii) adopted by the board.
             420          (4) The purchase may be made through payroll deductions or through a lump sum
             421      deposit based upon the present value of future payments.


             422          (5) Total payment must be completed prior to the member's effective date of retirement
             423      or service credit will be prorated in accordance with the amount paid.
             424          (6) (a) For a purchase made before July 1, 2010, if any of the factors used to determine
             425      the cost of a service credit purchase change at or before the member's retirement date, the cost
             426      of the purchase shall be recalculated at the time of retirement.
             427          (b) For a purchase made before July 1, 2010, if the recalculated cost exceeds the
             428      amount paid for the purchase, the member, a participating employer, or a member and a
             429      participating employer jointly may:
             430          (i) pay the increased cost, plus interest, to receive the full amount of service credit; or
             431          (ii) not pay the increased cost and have the purchased service credit prorated.
             432          (c) For a purchase made on or after July 1, 2010:
             433          (i) the purchase shall be made in accordance with rules:
             434          (A) adopted by the board based on recommendations by the board's actuary; and
             435          (B) in effect at the time the purchase is completed; and
             436          (ii) the cost of the service credit purchase shall not be recalculated at the time of
             437      retirement.
             438          (7) If the recalculated cost under Subsection (6)(a) is less than the amount paid for the
             439      purchase, the office shall refund the excess payment to the member or participating employer
             440      who paid for the purchase.
             441          (8) (a) The board may adopt rules under which a member may make the necessary
             442      payments to the office for purchases under this title as permitted by federal law.
             443          (b) The office may reject any payments if the office determines the tax status of the
             444      system, plans, or programs would be jeopardized by allowing the payment.
             445          (9) An employee who elects to participate exclusively in the defined contribution plan
             446      under Chapter 22, Part 4, Tier II Defined Contribution Plan, or Chapter 23, Part 4, Tier II
             447      Defined Contribution Plan, may not purchase service credit for that period of employment.
             448          Section 4. Section 49-11-505 is amended to read:
             449           49-11-505. Reemployment of a retiree -- Restrictions.


             450          (1) (a) For purposes of this section, "retiree":
             451          (i) means a person who:
             452          (A) retired from a participating employer; and
             453          (B) begins reemployment on or after July 1, 2010, with a participating employer;
             454          (ii) does not include a person:
             455          (A) who was reemployed by a participating employer before July 1, 2010; and
             456          (B) whose participating employer that reemployed the person under Subsection
             457      (1)(a)(ii)(A) was dissolved, consolidated, merged, or structurally changed in accordance with
             458      Section 49-11-621 after July 1, 2010; and
             459          (iii) does not include a person who is reemployed as an active senior judge appointed
             460      to hear cases by the Utah Supreme Court in accordance with Article VIII, Section 4, Utah
             461      Constitution.
             462          (b) (i) This section does not apply to employment as an elected official if the elected
             463      official's position is not full time as certified by the participating employer.
             464          (ii) The provisions of this section apply to an elected official whose elected position is
             465      full time as certified by the participating employer.
             466          (2) A retiree may not for the same period of reemployment:
             467          (a) (i) earn additional service credit; or
             468          (ii) receive any retirement related contribution from a participating employer; and
             469          (b) receive a retirement allowance.
             470          (3) (a) Except as provided under Subsection (3)(b), the office shall cancel the
             471      retirement allowance of a retiree if the reemployment with a participating employer begins
             472      within one year of the retiree's retirement date.
             473          (b) The office may not cancel the retirement allowance of a retiree who is reemployed
             474      with a participating employer within one year of the retiree's retirement date if:
             475          (i) the retiree is not reemployed by a participating employer for a period of at least 60
             476      days from the retiree's retirement date;
             477          (ii) upon reemployment after the break in service under Subsection (3)(b)(i), the retiree


             478      does not receive any employer provided benefits, including:
             479          (A) medical benefits;
             480          (B) dental benefits;
             481          (C) other insurance benefits except for workers' compensation as provided under Title
             482      34A, Chapter 2, Workers' Compensation Act, and withholdings required by federal or state law
             483      for Social Security, Medicare, and unemployment insurance; or
             484          (D) paid time off, including sick, annual, or other type of leave; and
             485          (iii) the retiree does not earn in any calendar year of reemployment an amount in excess
             486      of the lesser of:
             487          (A) $15,000; or
             488          (B) one-half of the retiree's final average salary upon which the retiree's retirement
             489      allowance is based.
             490          (c) Beginning January 1, 2013, the board shall adjust the [amount] amounts under
             491      Subsection (3)(b)(iii)[(A)] by the annual change in the Consumer Price Index during the
             492      previous calendar year as measured by a United States Bureau of Labor Statistics Consumer
             493      Price Index average as determined by the board.
             494          (d) The office shall cancel the retirement allowance of a retiree for the remainder of the
             495      calendar year if the reemployment with a participating employer exceeds the limitations under
             496      Subsection (3)(b)(iii).
             497          (e) If a retiree is reemployed under the provisions of (3)(b), the termination date of the
             498      reemployment, as confirmed in writing by the participating employer, is considered the retiree's
             499      retirement date for the purpose of calculating the separation requirement under Subsection
             500      (3)(a).
             501          (4) If a reemployed retiree has completed the one-year separation from employment
             502      with a participating employer required under Subsection (3)(a), the retiree may elect to:
             503          (a) earn additional service credit in accordance with this title and cancel the retiree's
             504      retirement allowance; or
             505          (b) continue to receive the retiree's retirement allowance and forfeit any retirement


             506      related contribution from the participating employer who reemployed the retiree.
             507          (5) A participating employer who reemploys a retiree shall contribute to the office the
             508      amortization rate, as defined in Section 49-11-102 , to be applied to the system that would have
             509      covered the retiree, if the reemployed retiree:
             510          (a) has completed the one-year separation from employment with a participating
             511      employer required under Subsection (3)(a); and
             512          (b) makes an election under Subsection (4)(b) to continue to receive a retirement
             513      allowance while reemployed.
             514          (6) (a) A participating employer shall immediately notify the office:
             515          (i) if the participating employer reemploys a retiree;
             516          (ii) whether the reemployment is subject to Subsection (3)(b) or (4) of this section; and
             517          (iii) of any election by the retiree under Subsection (4).
             518          (b) A participating employer shall certify to the office whether the position of an
             519      elected official is or is not full time.
             520          (c) A participating employer is liable to the office for a payment or failure to make a
             521      payment in violation of this section.
             522          (d) If a participating employer fails to notify the office in accordance with this section,
             523      the participating employer is immediately subject to a compliance audit by the office.
             524          (7) (a) The office shall immediately cancel the retirement allowance of a retiree in
             525      accordance with Subsection (7)(b) if the office receives notice or learns of:
             526          (i) the reemployment of a retiree in violation of Subsection (3); or
             527          (ii) the election of a reemployed retiree under Subsection (4)(a).
             528          (b) If the retiree is eligible for retirement coverage in the reemployed position, the
             529      office shall cancel the allowance of a retiree subject to Subsection (7)(a), and reinstate the
             530      retiree to active member status on the first day of the month following the date of:
             531          (i) reemployment if the retiree is subject to Subsection (3); or
             532          (ii) an election by an employee under Subsection (4)(a).
             533          (c) If the retiree is not otherwise eligible for retirement coverage in the reemployed


             534      position:
             535          (i) the office shall cancel the allowance of a retiree subject to Subsection (7)(a)(i); and
             536          (ii) the participating employer shall pay the amortization rate to the office on behalf of
             537      the retiree.
             538          (8) (a) A retiree subject to Subsection (7)(b) who retires within two years from the date
             539      of reemployment:
             540          (i) is not entitled to a recalculated retirement benefit; and
             541          (ii) will resume the allowance that was being paid at the time of cancellation.
             542          (b) Subject to Subsection (2), a retiree who is reinstated to active membership under
             543      Subsection (7) and who retires two or more years after the date of reinstatement to active
             544      membership shall:
             545          (i) resume receiving the allowance that was being paid at the time of cancellation; and
             546          (ii) receive an additional allowance based on the formula in effect at the date of the
             547      subsequent retirement for all service credit accrued between the first and subsequent retirement
             548      dates.
             549          (9) (a) A retiree subject to this section shall report to the office the status of the
             550      reemployment under Subsection (3) or (4).
             551          (b) If the retiree fails to inform the office of an election under Subsection (4), the office
             552      shall withhold one month's benefit for each month the retiree fails to inform the office under
             553      Subsection (9)(a).
             554          (10) The board may make rules to implement this section.
             555          Section 5. Section 49-11-603 is amended to read:
             556           49-11-603. Participating employer to report and certify -- Time limit -- Penalties
             557      for failure to comply.
             558          (1) As soon as administratively possible, but in no event later than 60 days after the
             559      end of each pay period, a participating employer shall report and certify to the office:
             560          (a) the eligibility for service credit accrual of:
             561          (i) [all current members] each current employee;


             562          (ii) each new [member] employee as [they begin] the new employee begins
             563      employment; and
             564          (iii) any changes to eligibility for service credit accrual of each [member.] employee;
             565          (b) the compensation of each current [member] employee eligible for service credit;
             566      and
             567          (c) other factors relating to the proper administration of this title as required by the
             568      executive director.
             569          (2) Each participating employer shall submit the reports required under Subsection (1)
             570      in a format approved by the office.
             571          (3) A participating employer shall be liable to the office for:
             572          (a) any liabilities and expenses, including administrative expenses and the cost of
             573      increased benefits to [members] employees, resulting from the participating employer's failure
             574      to correctly report and certify records under this section;
             575          (b) a penalty equal to $250 or 50% of the total contributions for the [member]
             576      employees for the period of the reporting error, whichever is greater; and
             577          (c) attorney fees.
             578          (4) The executive director may waive all or any part of the interest, penalties, expenses,
             579      and fees if the executive director finds there were extenuating circumstances surrounding the
             580      participating employer's failure to comply with this section.
             581          (5) The executive director may estimate the length of service, compensation, or age of
             582      any [member] employee, if that information is not contained in the records.
             583          Section 6. Section 49-11-610 is amended to read:
             584           49-11-610. Benefits payable in name of beneficiary -- Delivery.
             585          (1) (a) Any benefits payable to a beneficiary shall be made in the name of and
             586      delivered to the beneficiary or the lawfully appointed guardian or conservator of the
             587      beneficiary, or delivered as otherwise ordered by a court of competent jurisdiction under Title
             588      75, Utah Uniform Probate Code.
             589          (b) If the benefit involves a payment not to exceed an amount authorized by the Utah


             590      Uniform Probate Code to any one beneficiary, the office may, without the appointment of a
             591      guardian or conservator or the giving of a bond, pay the amount due to the beneficiary or to the
             592      persons assuming their support.
             593          (c) The payment shall be in either a lump sum or in monthly amounts.
             594          (d) The total of the payments made under this section shall fully discharge and release
             595      the office from any further claims.
             596          [(2) All continuing monthly benefits payable to beneficiaries upon the death of a
             597      member or participant shall be effective on the first day of the month following the date of
             598      death of the member or participant.]
             599          (2) A beneficiary who qualifies for a monthly benefit under this section shall apply in
             600      writing to the office.
             601          (3) The allowance shall begin on the first day of the month following the month in
             602      which the:
             603          (a) member or participant died, if the application is received by the office within 90
             604      days of the date of death of the member or participant; or
             605          (b) application is received by the office, if the application is received by the office
             606      more than 90 days after the date of death of the member or participant.
             607          Section 7. Section 49-12-201 is amended to read:
             608           49-12-201. System membership -- Eligibility.
             609          (1) A regular full-time employee of a participating employer is eligible for service
             610      credit in this system upon the later of:
             611          (a) the date on which the participating employer began participating in this system; or
             612          (b) the effective date of employment of the regular full-time employee with the
             613      participating employer.
             614          (2) Beginning July 1, 1986, a person entering employment with the state and its
             615      educational institutions may not participate in this system.
             616          (3) Notwithstanding the provisions of Subsection (1), a person initially entering
             617      employment with a participating employer on or after July 1, 2011, who does not have service


             618      credit accrued before July 1, 2011, in a Tier I system or plan administered by the board, may
             619      not participate in this system.
             620          Section 8. Section 49-12-202 is amended to read:
             621           49-12-202. Participation of employers -- Limitations -- Exclusions -- Admission
             622      requirements -- Exceptions -- Nondiscrimination requirements.
             623          (1) (a) Unless excluded under Subsection (2), an employer is a participating employer
             624      and may not withdraw from participation in this system.
             625          (b) In addition to their participation in this system, participating employers may
             626      provide or participate in public or private retirement, supplemental or defined contribution
             627      plan, either directly or indirectly, for their employees.
             628          (2) The following employers may be excluded from participation in this system:
             629          (a) an employer not initially admitted or included as a participating employer in this
             630      system prior to January 1, 1982 if:
             631          (i) the employer elects not to provide or participate in any type of private or public
             632      retirement, supplemental or defined contribution plan, either directly or indirectly, for its
             633      employees, except for Social Security; or
             634          (ii) the employer offers another collectively bargained retirement benefit and has
             635      continued to do so on an uninterrupted basis since that date;
             636          (b) an employer that is a charter school sponsored by the State Board of Education or a
             637      school district that makes an election of nonparticipation in accordance with Section
             638      53A-1a-512 unless the charter school makes a one-time, irrevocable retraction of the election
             639      of nonparticipation in accordance with Subsection 53A-1a-512 (9); or
             640          (c) an employer that is a hospital created as a special service district under Title 17D,
             641      Chapter 1, Special Service District Act, that makes an election of nonparticipation in
             642      accordance with Subsection (4).
             643          (3) An employer who did not become a participating employer in this system prior to
             644      July 1, 1986, may not participate in this system.
             645          (4) (a) Until June 30, 2009, a employer that is a hospital created as a special service


             646      district under Title 17D, Chapter 1, Special Service District Act, may make an election of
             647      nonparticipation as an employer for retirement programs under this chapter.
             648          (b) An election provided under Subsection (4)(a):
             649          (i) is a one-time election made no later than the time specified under Subsection (4)(a);
             650          (ii) shall be documented by a resolution adopted by the governing body of the special
             651      service district;
             652          (iii) is irrevocable; and
             653          (iv) applies to the special service district as the employer and to all employees of the
             654      special service district.
             655          (c) The governing body of the special service district may offer employee benefit plans
             656      for its employees:
             657          (i) under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act;
             658      or
             659          (ii) under any other program.
             660          (5) (a) If a participating employer purchases service credit on behalf of regular
             661      full-time employees for service rendered prior to the participating employer's admission to this
             662      system, the service credit shall be purchased in a nondiscriminatory manner on behalf of all
             663      current and former regular full-time employees who were eligible for service credit at the time
             664      service was rendered.
             665          (b) For a purchase made under this Subsection (5), an employee is not required to:
             666          (i) have at least four years of service credit before the purchase can be made; or
             667          (ii) forfeit service credit or any defined contribution balance based on the employer
             668      contributions under any other retirement system or plan based on the period of employment for
             669      which service credit is being purchased.
             670          Section 9. Section 49-12-203 is amended to read:
             671           49-12-203. Exclusions from membership in system.
             672          (1) The following employees are not eligible for service credit in this system:
             673          (a) subject to the requirements of Subsection (2), an employee whose employment


             674      status is temporary in nature due to the nature or the type of work to be performed;
             675          (b) except as provided under Subsection (3)(a), an employee of an institution of higher
             676      education who participates in a retirement system with [the Teachers' Insurance and Annuity
             677      Association of America or with any other] a public or private retirement system, organization,
             678      or company designated by the State Board of Regents during any period in which required
             679      contributions based on compensation have been paid on behalf of the employee by the
             680      employer;
             681          (c) an employee serving as an exchange employee from outside the state;
             682          (d) an executive department head of the state, a member of the State Tax Commission,
             683      the Public Service Commission, and a member of a full-time or part-time board or commission
             684      who files a formal request for exemption;
             685          (e) an employee of the Department of Workforce Services who is covered under
             686      another retirement system allowed under Title 35A, Chapter 4, Employment Security Act; or
             687          (f) an employee who is employed on or after July 1, 2009 with an employer that has
             688      elected, prior to July 1, 2009, to be excluded from participation in this system under Subsection
             689      49-12-202 (2)(c).
             690          (2) If an employee whose status is temporary in nature due to the nature of type of
             691      work to be performed:
             692          (a) is employed for a term that exceeds six months and the employee otherwise
             693      qualifies for service credit in this system, the participating employer shall report and certify to
             694      the office that the employee is a regular full-time employee effective the beginning of the
             695      seventh month of employment; or
             696          (b) was previously terminated prior to being eligible for service credit in this system
             697      and is reemployed within three months of termination by the same participating employer, the
             698      participating employer shall report and certify that the member is a regular full-time employee
             699      when the total of the periods of employment equals six months and the employee otherwise
             700      qualifies for service credits in this system.
             701          (3) (a) Upon cessation of the participating employer contributions, an employee under


             702      Subsection (1)(b) is eligible for service credit in this system.
             703          (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
             704      credit earned by an employee under this chapter before July 1, 2009 is not affected under
             705      Subsection (1)(f).
             706          (4) Upon filing a written request for exemption with the office, the following
             707      employees shall be exempt from coverage under this system:
             708          (a) a full-time student or the spouse of a full-time student and individuals employed in
             709      a trainee relationship;
             710          (b) an elected official;
             711          (c) an executive department head of the state, a member of the State Tax Commission,
             712      a member of the Public Service Commission, and a member of a full-time or part-time board or
             713      commission;
             714          (d) an employee of the Governor's Office of Management and Budget;
             715          (e) an employee of the Governor's Office of Economic Development;
             716          (f) an employee of the Commission on Criminal and Juvenile Justice;
             717          (g) an employee of the Governor's Office;
             718          (h) an employee of the State Auditor's Office;
             719          (i) an employee of the State Treasurer's Office;
             720          (j) any other member who is permitted to make an election under Section 49-11-406 ;
             721          (k) a person appointed as a city manager or chief city administrator or another person
             722      employed by a municipality, county, or other political subdivision, who is an at-will employee;
             723      and
             724          (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
             725      Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
             726      membership in a labor organization that provides retirement benefits to its members.
             727          (5) (a) Each participating employer shall prepare a list designating those positions
             728      eligible for exemption under Subsection (4).
             729          (b) An employee may not be exempted unless the employee is employed in a position


             730      designated by the participating employer.
             731          (6) (a) In accordance with this section, a municipality, county, or political subdivision
             732      may not exempt more than 50 positions or a number equal to 10% of the employees of the
             733      municipality, county, or political subdivision whichever is lesser.
             734          (b) A municipality, county, or political subdivision may exempt at least one regular
             735      full-time employee.
             736          (7) Each participating employer shall:
             737          (a) file employee exemptions annually with the office; and
             738          (b) update the employee exemptions in the event of any change.
             739          (8) The office may make rules to implement this section.
             740          Section 10. Section 49-12-204 is amended to read:
             741           49-12-204. Higher education employees' eligibility requirements -- Election
             742      between different retirement plans -- Classification requirements -- Transfer between
             743      systems -- One-time election window -- Rulemaking.
             744          (1) (a) A regular full-time employee of an institution of higher education who is
             745      eligible to participate in either this system or [with the Teachers' Insurance and Annuity
             746      Association of America or with any other] a public or private retirement system, organization,
             747      or company, designated by the Board of Regents, shall, not later than January 1, 1979, elect to
             748      participate exclusively in this system or in an annuity contract allowed under this Subsection
             749      (1).
             750          (b) The election is final, and no right exists to make any further election.
             751          (2) (a) Except as provided under Subsection (2)(c), a regular full-time employee hired
             752      by an institution of higher education after January 1, 1979, may participate only in the
             753      retirement plan which attaches to the person's employment classification.
             754          (b) Each institution of higher education shall prepare or amend existing employment
             755      classifications, under the direction of the Board of Regents, so that each classification is
             756      assigned with either:
             757          (i) this system; or


             758          [(ii) the Teachers' Insurance and Annuity Association of America; or]
             759          [(iii) another] (ii) a public or private system, organization, or company designated by
             760      the Board of Regents.
             761          (c) Notwithstanding a person's employment classification assignment under Subsection
             762      (2)(b), a regular full-time employee who begins employment with an institution of higher
             763      education on or after May 11, 2010, has a one-time irrevocable election to continue
             764      participation in this system, if the employee has service credit in this system before the date of
             765      employment.
             766          (3) Notwithstanding an employment classification assignment change made under
             767      Subsection (2)(b), a regular full-time employee hired by an institution of higher education after
             768      January 1, 1979, whose employment classification requires participation in this system may
             769      elect to continue participation in this system.
             770          (4) A regular full-time employee hired by an institution of higher education after
             771      January 1, 1979, whose employment classification requires participation in this system shall
             772      participate in this system.
             773          (5) (a) Notwithstanding any other provision of this section, a regular full-time
             774      employee of an institution of higher education shall have a one-time irrevocable election to
             775      participate in this system if the employee:
             776          (i) was hired after January 1, 1979;
             777          (ii) whose employment classification assignment under Subsection (2)(b) required
             778      participation in a retirement program other than this system; and
             779          (iii) has service credit in a system under this title.
             780          (b) The election under Subsection (5)(a) shall be made before June 30, 2010.
             781          (c) All forms required by the office must be completed and received by the office no
             782      later than June 30, 2010, for the election to participate in this system to be effective.
             783          (d) Beginning July 1, 2010, a regular full-time employee of an institution of higher
             784      education who elects to be covered by this system under Subsection (5)(a) may begin to accrue
             785      service credit in this system.


             786          (6) A regular full-time employee of an institution of higher education who elects to be
             787      covered by this system under Subsection (2)(c) or (5)(a), may purchase periods of employment
             788      while covered under another retirement program sponsored by the institution of higher
             789      education by complying with the requirements of Section 49-11-403 .
             790          (7) The board shall make rules to implement this section.
             791          Section 11. Section 49-12-401 is amended to read:
             792           49-12-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             793          (1) A member is qualified to receive an allowance from this system when:
             794          (a) except as provided under Subsection (3), the member ceases actual work for every
             795      participating employer that employs the member before the member's retirement date and
             796      provides evidence of the termination;
             797          (b) the member has submitted to the office a [notarized] retirement application form
             798      that states the member's proposed retirement date; and
             799          (c) one of the following conditions is met as of the member's retirement date:
             800          (i) the member has accrued at least four years of service credit and has attained an age
             801      of 65 years;
             802          (ii) the member has accrued at least 10 years of service credit and has attained an age
             803      of 62 years;
             804          (iii) the member has accrued at least 20 years of service credit and has attained an age
             805      of 60 years; or
             806          (iv) the member has accrued at least 30 years of service credit.
             807          (2) (a) The member's retirement date:
             808          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             809          (ii) shall be on or after the date of termination; and
             810          (iii) may not be more than 90 days before or after the date the application is received by
             811      the office.
             812          (b) Except as provided under Subsection (3), a member may not be employed by a
             813      participating employer in the system established by this chapter on the retirement date selected


             814      under Subsection (2)(a)(i).
             815          (3) (a) A member who is employed by a participating employer and who is also an
             816      elected official is not required to cease service as an elected official to be qualified to receive
             817      an allowance under Subsection (1), unless the member is retiring from service as an elected
             818      official.
             819          (b) A member who is employed by a participating employer and who is also a part-time
             820      appointed board member is not required to cease service as a part-time appointed board
             821      member to be qualified to receive an allowance under Subsection (1).
             822          Section 12. Section 49-12-402 is amended to read:
             823           49-12-402. Service retirement plans -- Calculation of retirement allowance --
             824      Social Security limitations.
             825          (1) (a) Except as provided under Section 49-12-701 , retirees of this system may choose
             826      from the six retirement options described in this section.
             827          (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
             828      calculation.
             829          (2) The Option One benefit is an annual allowance calculated as follows:
             830          (a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
             831      credit, the allowance is:
             832          (i) an amount equal to 1.25% of the retiree's final average monthly salary multiplied by
             833      the number of years of service credit accrued prior to July 1, 1975; plus
             834          (ii) an amount equal to 2% of the retiree's final average monthly salary multiplied by
             835      the number of years of service credit accrued on and after July 1, 1975.
             836          (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
             837      each year of retirement from age 60 to age 65, unless the member has 30 or more years of
             838      accrued credit in which event no reduction is made to the allowance.
             839          (c) (i) Years of service includes any fractions of years of service to which the retiree
             840      may be entitled.
             841          (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,


             842      service credit is within 1/10 of one year of the total years of service credit required for
             843      retirement, the retiree shall be considered to have the total years of service credit required for
             844      retirement.
             845          (d) An Option One allowance is only payable to the member during the member's
             846      lifetime.
             847          (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
             848      by reducing an Option One benefit based on actuarial computations to provide the following:
             849          (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
             850      retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
             851      member contributions, the remaining balance of the retiree's member contributions shall be
             852      paid in accordance with Sections 49-11-609 and 49-11-610 .
             853          (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
             854      retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
             855      the lifetime of the retiree's lawful spouse at the time of retirement.
             856          (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
             857      retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
             858      to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
             859          (d) Option Five is a modification of Option Three so that if the lawful spouse at the
             860      time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
             861      time of initial retirement under Option One shall be paid to the retiree for the remainder of the
             862      retiree's life, beginning on the first day of the month following the month in which the:
             863          (i) [following the month in which the] spouse died, if the application is received by the
             864      office within 90 days of the spouse's death; or
             865          (ii) [following the month in which the] application is received by the office, if the
             866      application is received by the office more than 90 days after the spouse's death.
             867          (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
             868      of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
             869      of initial retirement under Option One shall be paid to the retiree for the remainder of the


             870      retiree's life, beginning on the first day of the month following the month in which the:
             871          (i) [following the month in which the] spouse died, if the application is received by the
             872      office within 90 days of the spouse's death; or
             873          (ii) [following the month in which the] application is received by the office, if the
             874      application is received by the office more than 90 days after the spouse's death.
             875          (4) (a) (i) The final average salary is limited in the computation of that part of an
             876      allowance based on service rendered prior to July 1, 1967, during a period when the retiree
             877      received employer contributions on a portion of compensation from an educational institution
             878      toward the payment of the premium required on a retirement annuity contract with [the
             879      Teachers' Insurance and Annuity Association of America or with any other] a public or private
             880      system, organization, or company designated by the State Board of Regents to $4,800.
             881          (ii) This limitation is not applicable to retirees who elected to continue in this system
             882      by July 1, 1967.
             883          (b) Periods of employment which are exempt from this system under Subsection
             884      49-12-203 (1)(b), may be purchased by the member for the purpose of retirement only if all
             885      benefits from [the Teachers' Insurance and Annuity Association of America or any other public
             886      or private system or organization] a public or private system, organization, or company
             887      designated by the State Board of Regents based on this period of employment are forfeited.
             888          (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
             889      date, the retirement is canceled and the death shall be considered as that of a member before
             890      retirement.
             891          (b) Any payments made to the retiree shall be deducted from the amounts due to the
             892      beneficiary.
             893          (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
             894      retiree may elect to convert the benefit to a Option One benefit at the time of divorce, if there is
             895      no court order filed in the matter.
             896          Section 13. Section 49-13-102 is amended to read:
             897           49-13-102. Definitions.


             898          As used in this chapter:
             899          (1) "Benefits normally provided" has the same meaning as defined in Section
             900      49-12-102 .
             901          (2) (a) Except as provided in Subsection (2)(c), "compensation" means the total
             902      amount of payments made by a participating employer to a member of this system for services
             903      rendered to the participating employer, including:
             904          (i) bonuses;
             905          (ii) cost-of-living adjustments;
             906          (iii) other payments currently includable in gross income and that are subject to Social
             907      Security deductions, including any payments in excess of the maximum amount subject to
             908      deduction under Social Security law; and
             909          (iv) amounts that the member authorizes to be deducted or reduced for salary deferral
             910      or other benefits authorized by federal law.
             911          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed
             912      under Internal Revenue Code, Section 401(a)(17).
             913          (c) "Compensation" does not include:
             914          (i) the monetary value of remuneration paid in kind, including a residence or use of
             915      equipment;
             916          (ii) the cost of any employment benefits paid for by the participating employer;
             917          (iii) compensation paid to a temporary employee, an exempt employee, or an employee
             918      otherwise ineligible for service credit;
             919          (iv) any payments upon termination, including accumulated vacation, sick leave
             920      payments, severance payments, compensatory time payments, or any other special payments; or
             921          (v) any allowances or payments to a member for costs or expenses paid by the
             922      participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
             923      housing costs, insurance costs, equipment costs, and dependent care costs.
             924          (d) The executive director may determine if a payment not listed under this Subsection
             925      (2) falls within the definition of compensation.


             926          (3) "Final average salary" means the amount computed by averaging the highest three
             927      years of annual compensation preceding retirement subject to the following:
             928          (a) Except as provided in Subsection (3)(b), the percentage increase in annual
             929      compensation in any one of the years used may not exceed the previous year's compensation by
             930      more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power
             931      of the dollar during the previous year, as measured by a United States Bureau of Labor
             932      Statistics Consumer Price Index average as determined by the board.
             933          (b) In cases where the participating employer provides acceptable documentation to the
             934      office, the limitation in Subsection (3)(a) may be exceeded if:
             935          (i) the member has transferred from another agency; or
             936          (ii) the member has been promoted to a new position.
             937          (c) If the member retires more than six months from the date of termination of
             938      employment and for purposes of computing the member's final average salary only, the
             939      member is considered to have been in service at the member's last rate of pay from the date of
             940      the termination of employment to the effective date of retirement.
             941          (4) "Participating employer" means an employer which meets the participation
             942      requirements of Sections 49-13-201 and 49-13-202 .
             943          (5) (a) "Regular full-time employee" means an employee whose term of employment
             944      for a participating employer contemplates continued employment during a fiscal or calendar
             945      year and whose employment normally requires an average of 20 hours or more per week,
             946      except as modified by the board, and who receives benefits normally provided by the
             947      participating employer.
             948          (b) "Regular full-time employee" includes:
             949          (i) a teacher whose term of employment for a participating employer contemplates
             950      continued employment during a school year and who teaches half time or more;
             951          (ii) a classified school employee:
             952          (A) who is hired before July 1, 2013; and
             953          (B) whose employment normally requires an average of 20 hours per week or more for


             954      a participating employer, regardless of benefits provided;
             955          (iii) an officer, elective or appointive, who earns $500 or more per month, indexed as
             956      of January 1, 1990, as provided in Section 49-13-407 ;
             957          (iv) a faculty member or employee of an institution of higher education who is
             958      considered full time by that institution of higher education; and
             959          (v) an individual who otherwise meets the definition of this Subsection [(4)] (5) who
             960      performs services for a participating employer through a professional employer organization or
             961      similar arrangement.
             962          (c) "Regular full-time employee" does not include a classified school employee:
             963          (i) (A) who is hired on or after July 1, 2013; and
             964          (B) who does not receive benefits normally provided by the participating employer
             965      even if the employment normally requires an average of 20 hours per week or more for a
             966      participating employer; or
             967          (ii) (A) who is hired before July 1, 2013;
             968          (B) who did not qualify as a regular full-time employee before July 1, 2013;
             969          (C) who does not receive benefits normally provided by the participating employer;
             970      and
             971          (D) whose employment hours are increased on or after July 1, 2013, to require an
             972      average of 20 hours per week or more for a participating employer.
             973          (6) "System" means the Public Employees' Noncontributory Retirement System.
             974          (7) "Years of service credit" means:
             975          (a) a period consisting of 12 full months as determined by the board;
             976          (b) a period determined by the board, whether consecutive or not, during which a
             977      regular full-time employee performed services for a participating employer, including any time
             978      the regular full-time employee was absent on a paid leave of absence granted by a participating
             979      employer or was absent in the service of the United States government on military duty as
             980      provided by this chapter; or
             981          (c) the regular school year consisting of not less than eight months of full-time service


             982      for a regular full-time employee of an educational institution.
             983          Section 14. Section 49-13-201 is amended to read:
             984           49-13-201. System membership -- Eligibility.
             985          (1) Beginning July 1, 1986, the state and its educational institutions shall participate in
             986      this system.
             987          (a) A person entering regular full-time employment with the state or its educational
             988      institutions after July 1, 1986, but before July 1, 2011, is eligible for service credit in this
             989      system.
             990          (b) A person entering regular full-time employment with the state or its educational
             991      institutions after July 1, 2011, who has service credit accrued before July 1, 2011, in a Tier I
             992      system or plan administered by the board, is eligible for service credit in this system.
             993          [(b)] (c) A regular full-time employee of the state or its educational institutions prior to
             994      July 1, 1986, may either become eligible for service credit in this system or remain eligible for
             995      service in the system established under Chapter 12, Public Employees' Contributory Retirement
             996      Act, by following the procedures established by the board in accordance with this chapter.
             997          (2) An employer, other than the state and its educational institutions, may participate in
             998      this system except that once an employer elects to participate in this system, that election is
             999      irrevocable and the election must be made before July 1, 2011.
             1000          (a) Until June 30, 2011, a person initially entering regular full-time employment with a
             1001      participating employer which elects to participate in this system is eligible for service credit in
             1002      this system.
             1003          (b) A person in regular full-time employment with a participating employer prior to the
             1004      participating employer's election to participate in this system may either become eligible for
             1005      service credit in this system or remain eligible for service in the system established under
             1006      Chapter 12, Public Employees' Contributory Retirement Act, by following the procedures
             1007      established by the board in accordance with this chapter.
             1008          (3) Notwithstanding the provisions of Subsections (1) and (2), a person initially
             1009      entering employment with a participating employer on or after July 1, 2011, who does not have


             1010      service credit accrued before July 1, 2011, in a Tier I system or plan administered by the board,
             1011      may not participate in this system.
             1012          Section 15. Section 49-13-202 is amended to read:
             1013           49-13-202. Participation of employers -- Limitations -- Exclusions -- Admission
             1014      requirements -- Nondiscrimination requirements -- Service credit purchases.
             1015          (1) (a) Unless excluded under Subsection (2), an employer is a participating employer
             1016      and may not withdraw from participation in this system.
             1017          (b) In addition to their participation in this system, participating employers may
             1018      provide or participate in any additional public or private retirement, supplemental or defined
             1019      contribution plan, either directly or indirectly, for their employees.
             1020          (2) The following employers may be excluded from participation in this system:
             1021          (a) an employer not initially admitted or included as a participating employer in this
             1022      system before January 1, 1982, if:
             1023          (i) the employer elects not to provide or participate in any type of private or public
             1024      retirement, supplemental or defined contribution plan, either directly or indirectly, for its
             1025      employees, except for Social Security; or
             1026          (ii) the employer offers another collectively bargained retirement benefit and has
             1027      continued to do so on an uninterrupted basis since that date;
             1028          (b) an employer that is a charter school sponsored by the State Board of Education or a
             1029      school district that makes an election of nonparticipation in accordance with Section
             1030      53A-1a-512 unless the charter school makes a one-time, irrevocable retraction of the election
             1031      of nonparticipation in accordance with Subsection 53A-1a-512 (9);
             1032          (c) an employer that is a hospital created as a special service district under Title 17D,
             1033      Chapter 1, Special Service District Act, that makes an election of nonparticipation in
             1034      accordance with Subsection (5); or
             1035          (d) an employer that is a risk management association initially created by interlocal
             1036      agreement before 1986 for the purpose of implementing a self-insurance joint protection
             1037      program for the benefit of member municipalities of the association.


             1038          (3) If an employer that may be excluded under Subsection (2)(a)(i) elects at any time to
             1039      provide or participate in any type of public or private retirement, supplemental or defined
             1040      contribution plan, either directly or indirectly, except for Social Security, the employer shall be
             1041      a participating employer in this system regardless of whether the employer has applied for
             1042      admission under Subsection (4).
             1043          (4) (a) An employer may, by resolution of its governing body, apply for admission to
             1044      this system.
             1045          (b) Upon approval of the resolution by the board, the employer is a participating
             1046      employer in this system and is subject to this title.
             1047          (5) (a) (i) Until June 30, 2009, a employer that is a hospital created as a special service
             1048      district under Title 17D, Chapter 1, Special Service District Act, may make an election of
             1049      nonparticipation as an employer for retirement programs under this chapter.
             1050          (ii) On or before July 1, 2010, an employer described in Subsection (2)(d) may make
             1051      an election of nonparticipation as an employer for retirement programs under this chapter.
             1052          (b) An election provided under Subsection (5)(a):
             1053          (i) is a one-time election made no later than the time specified under Subsection (5)(a);
             1054          (ii) shall be documented by a resolution adopted by the governing body of the
             1055      employer;
             1056          (iii) is irrevocable; and
             1057          (iv) applies to the employer described in Subsection (5)(a) and to all employees of that
             1058      employer.
             1059          (c) The employer making an election under Subsection (5)(a) may offer employee
             1060      benefit plans for its employees:
             1061          (i) under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act;
             1062      or
             1063          (ii) under any other program.
             1064          (6) (a) If a participating employer purchases service credit on behalf of regular
             1065      full-time employees for service rendered prior to the participating employer's admission to this


             1066      system, the service credit shall be purchased in a nondiscriminatory manner on behalf of all
             1067      current and former regular full-time employees who were eligible for service credit at the time
             1068      service was rendered.
             1069          (b) For a purchase made under this Subsection (6), an employee is not required to:
             1070          (i) have at least four years of service credit before the purchase can be made; or
             1071          (ii) forfeit service credit or any defined contribution balance based on the employer
             1072      contributions under any other retirement system or plan based on the period of employment for
             1073      which service credit is being purchased.
             1074          Section 16. Section 49-13-203 is amended to read:
             1075           49-13-203. Exclusions from membership in system.
             1076          (1) The following employees are not eligible for service credit in this system:
             1077          (a) subject to the requirements of Subsection (2), an employee whose employment
             1078      status is temporary in nature due to the nature or the type of work to be performed;
             1079          (b) except as provided under Subsection (3)(a), an employee of an institution of higher
             1080      education who participates in a retirement system with [the Teachers' Insurance and Annuity
             1081      Association of America or with any other] a public or private retirement system, organization,
             1082      or company designated by the State Board of Regents during any period in which required
             1083      contributions based on compensation have been paid on behalf of the employee by the
             1084      employer;
             1085          (c) an employee serving as an exchange employee from outside the state;
             1086          (d) an executive department head of the state or a legislative director, senior executive
             1087      employed by the governor's office, a member of the State Tax Commission, a member of the
             1088      Public Service Commission, and a member of a full-time or part-time board or commission
             1089      who files a formal request for exemption;
             1090          (e) an employee of the Department of Workforce Services who is covered under
             1091      another retirement system allowed under Title 35A, Chapter 4, Employment Security Act; or
             1092          (f) an employee who is employed with an employer that has elected to be excluded
             1093      from participation in this system under Subsection 49-13-202 (5), effective on or after the date


             1094      of the employer's election under Subsection 49-13-202 (5).
             1095          (2) If an employee whose status is temporary in nature due to the nature of type of
             1096      work to be performed:
             1097          (a) is employed for a term that exceeds six months and the employee otherwise
             1098      qualifies for service credit in this system, the participating employer shall report and certify to
             1099      the office that the employee is a regular full-time employee effective the beginning of the
             1100      seventh month of employment; or
             1101          (b) was previously terminated prior to being eligible for service credit in this system
             1102      and is reemployed within three months of termination by the same participating employer, the
             1103      participating employer shall report and certify that the member is a regular full-time employee
             1104      when the total of the periods of employment equals six months and the employee otherwise
             1105      qualifies for service credits in this system.
             1106          (3) (a) Upon cessation of the participating employer contributions, an employee under
             1107      Subsection (1)(b) is eligible for service credit in this system.
             1108          (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
             1109      credit earned by an employee under this chapter before the date of the election under
             1110      Subsection 49-13-202 (5) is not affected under Subsection (1)(f).
             1111          (4) Upon filing a written request for exemption with the office, the following
             1112      employees shall be exempt from coverage under this system:
             1113          (a) a full-time student or the spouse of a full-time student and individuals employed in
             1114      a trainee relationship;
             1115          (b) an elected official;
             1116          (c) an executive department head of the state, a member of the State Tax Commission,
             1117      a member of the Public Service Commission, and a member of a full-time or part-time board or
             1118      commission;
             1119          (d) an employee of the Governor's Office of Management and Budget;
             1120          (e) an employee of the Governor's Office of Economic Development;
             1121          (f) an employee of the Commission on Criminal and Juvenile Justice;


             1122          (g) an employee of the Governor's Office;
             1123          (h) an employee of the State Auditor's Office;
             1124          (i) an employee of the State Treasurer's Office;
             1125          (j) any other member who is permitted to make an election under Section 49-11-406 ;
             1126          (k) a person appointed as a city manager or chief city administrator or another person
             1127      employed by a municipality, county, or other political subdivision, who is an at-will employee;
             1128          (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
             1129      Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
             1130      membership in a labor organization that provides retirement benefits to its members; and
             1131          (m) an employee of the Utah Science Technology and Research Initiative created under
             1132      Title 63M, Chapter 2, Utah Science Technology and Research Governing Authority Act.
             1133          (5) (a) Each participating employer shall prepare a list designating those positions
             1134      eligible for exemption under Subsection (4).
             1135          (b) An employee may not be exempted unless the employee is employed in a position
             1136      designated by the participating employer.
             1137          (6) (a) In accordance with this section, a municipality, county, or political subdivision
             1138      may not exempt more than 50 positions or a number equal to 10% of the employees of the
             1139      municipality, county, or political subdivision, whichever is lesser.
             1140          (b) A municipality, county, or political subdivision may exempt at least one regular
             1141      full-time employee.
             1142          (7) Each participating employer shall:
             1143          (a) file employee exemptions annually with the office; and
             1144          (b) update the employee exemptions in the event of any change.
             1145          (8) The office may make rules to implement this section.
             1146          Section 17. Section 49-13-204 is amended to read:
             1147           49-13-204. Higher education employees' eligibility requirements -- Election
             1148      between different retirement plans -- Classification requirements -- Transfer between
             1149      systems -- One-time election window -- Rulemaking.


             1150          (1) (a) A regular full-time employee of an institution of higher education who is
             1151      eligible to participate in either this system or in a retirement system with [the Teachers'
             1152      Insurance and Annuity Association of America or with any other] a public or private retirement
             1153      system, organization, or company, designated by the Board of Regents, shall, not later than
             1154      January 1, 1979, elect to participate exclusively in this system or in an annuity contract allowed
             1155      under this Subsection (1)(a).
             1156          (b) The election is final, and no right exists to make any further election.
             1157          (2) (a) Except as provided under Subsection (2)(c), a regular full-time employee hired
             1158      by an institution of higher education after January 1, 1979, may participate only in the
             1159      retirement plan which attaches to the person's employment classification.
             1160          (b) Each institution of higher education shall prepare or amend existing employment
             1161      classifications, under the direction of the Board of Regents, so that each classification is
             1162      assigned with either:
             1163          (i) this system; or
             1164          [(ii) the Teachers' Insurance and Annuity Association of America; or]
             1165          [(iii) another] (ii) a public or private system, organization, or company designated by
             1166      the Board of Regents.
             1167          (c) Notwithstanding a person's employment classification assignment under Subsection
             1168      (2)(b), a regular full-time employee who begins employment with an institution of higher
             1169      education on or after May 11, 2010, has a one-time irrevocable election to continue
             1170      participation in this system, if the employee has service credit in this system before the date of
             1171      employment.
             1172          (3) Notwithstanding an employment classification assignment change made under
             1173      Subsection (2)(b), a regular full-time employee hired by an institution of higher education after
             1174      January 1, 1979, whose employment classification requires participation in this system may
             1175      elect to continue participation in this system.
             1176          (4) A regular full-time employee hired by an institution of higher education after
             1177      January 1, 1979, whose employment classification requires participation in this system shall


             1178      participate in this system.
             1179          (5) (a) Notwithstanding any other provision of this section, a regular full-time
             1180      employee of an institution of higher education whose employment classification assignment
             1181      under Subsection (2)(b) required participation in a retirement program other than this system
             1182      shall have a one-time irrevocable election to participate in this system.
             1183          (b) The election under Subsection (5)(a) shall be made before June 30, 2010.
             1184          (c) All forms required by the office must be completed and received by the office no
             1185      later than June 30, 2010, for the election to participate in this system to be effective.
             1186          (d) Beginning July 1, 2010, a regular full-time employee of an institution of higher
             1187      education who elects to be covered by this system under Subsection (5)(a) may begin to accrue
             1188      service credit in this system.
             1189          (6) A regular full-time employee of an institution of higher education who elects to be
             1190      covered by this system under Subsection (2)(c) or (5)(a) may purchase periods of employment
             1191      while covered under another retirement program by complying with the requirements of
             1192      Section 49-11-403 .
             1193          (7) The board shall make rules to implement this section.
             1194          Section 18. Section 49-13-401 is amended to read:
             1195           49-13-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             1196          (1) A member is qualified to receive an allowance from this system when:
             1197          (a) except as provided under Subsection (3), the member ceases actual work for every
             1198      participating employer that employs the member before the member's retirement date and
             1199      provides evidence of the termination;
             1200          (b) the member has submitted to the office a [notarized] retirement application form
             1201      that states the member's proposed retirement date; and
             1202          (c) one of the following conditions is met as of the member's retirement date:
             1203          (i) the member has accrued at least four years of service credit and has attained an age
             1204      of 65 years;
             1205          (ii) the member has accrued at least 10 years of service credit and has attained an age


             1206      of 62 years;
             1207          (iii) the member has accrued at least 20 years of service credit and has attained an age
             1208      of 60 years;
             1209          (iv) the member has accrued at least 30 years of service credit; or
             1210          (v) the member has accrued at least 25 years of service credit, in which case the
             1211      member shall be subject to the reduction under Subsection 49-13-402 (2)(b).
             1212          (2) (a) The member's retirement date:
             1213          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             1214          (ii) shall be on or after the date of termination; and
             1215          (iii) may not be more than 90 days before or after the date the application is received by
             1216      the office.
             1217          (b) Except as provided under Subsection (3), a member may not be employed by a
             1218      participating employer in the system established by this chapter on the retirement date selected
             1219      under Subsection (2)(a)(i).
             1220          (3) (a) A member who is employed by a participating employer and who is also an
             1221      elected official is not required to cease service as an elected official to be qualified to receive
             1222      an allowance under Subsection (1), unless the member is retiring from service as an elected
             1223      official.
             1224          (b) A member who is employed by a participating employer and who is also a part-time
             1225      appointed board member is not required to cease service as a part-time appointed board
             1226      member to be qualified to receive an allowance under Subsection (1).
             1227          Section 19. Section 49-13-402 is amended to read:
             1228           49-13-402. Service retirement plans -- Calculation of retirement allowance --
             1229      Social Security limitations.
             1230          (1) (a) Except as provided under Section 49-13-701 , retirees of this system may choose
             1231      from the six retirement options described in this section.
             1232          (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
             1233      calculation.


             1234          (2) The Option One benefit is an allowance calculated as follows:
             1235          (a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
             1236      credit, the allowance is an amount equal to 2% of the retiree's final average monthly salary
             1237      multiplied by the number of years of service credit accrued.
             1238          (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
             1239      each year of retirement from age 60 to age 65, plus a full actuarial reduction for each year of
             1240      retirement prior to age 60, unless the member has 30 or more years of accrued credit, in which
             1241      event no reduction is made to the allowance.
             1242          (c) (i) Years of service include any fractions of years of service to which the retiree
             1243      may be entitled.
             1244          (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
             1245      service credit is within 1/10 of one year of the total years of service credit required for
             1246      retirement, the retiree shall be considered to have the total years of service credit required for
             1247      retirement.
             1248          (d) An Option One allowance is only payable to the member during the member's
             1249      lifetime.
             1250          (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
             1251      by reducing an Option One benefit based on actuarial computations to provide the following:
             1252          (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
             1253      retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
             1254      member contributions, the remaining balance of the retiree's member contributions shall be
             1255      paid in accordance with Sections 49-11-609 and 49-11-610 .
             1256          (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
             1257      retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
             1258      the lifetime of the retiree's lawful spouse at the time of retirement.
             1259          (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
             1260      retiree, and upon the death of the retiree, an amount equal to one-half of the retiree's allowance
             1261      paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.


             1262          (d) Option Five is a modification of Option Three so that if the lawful spouse at the
             1263      time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
             1264      time of initial retirement under Option One shall be paid to the retiree for the remainder of the
             1265      retiree's life, beginning on the first day of the month following the month in which the:
             1266          (i) [following the month in which the] spouse died, if the application is received by the
             1267      office within 90 days of the spouse's death; or
             1268          (ii) [following the month in which the] application is received by the office, if the
             1269      application is received by the office more than 90 days after the spouse's death.
             1270          (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
             1271      of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
             1272      of initial retirement under Option One shall be paid to the retiree for the remainder of the
             1273      retiree's life, beginning on the first day of the month following the month in which the:
             1274          (i) [following the month in which the] spouse died, if the application is received by the
             1275      office within 90 days of the spouse's death; or
             1276          (ii) [following the month in which the] application is received by the office, if the
             1277      application is received by the office more than 90 days after the spouse's death.
             1278          (4) (a) (i) The final average salary is limited in the computation of that part of an
             1279      allowance based on service rendered prior to July 1, 1967, during a period when the retiree
             1280      received employer contributions on a portion of compensation from an educational institution
             1281      toward the payment of the premium required on a retirement annuity contract with [the
             1282      Teachers' Insurance and Annuity Association of America or with any other] a public or private
             1283      system, organization, or company designated by the State Board of Regents to $4,800.
             1284          (ii) This limitation is not applicable to retirees who elected to continue in the Public
             1285      Employees' Contributory Retirement System by July 1, 1967.
             1286          (b) Periods of employment which are exempt from this system as permitted under
             1287      Subsection 49-13-203 (1)(b) may be purchased by the member for the purpose of retirement
             1288      only if all benefits from [the Teachers' Insurance and Annuity Association of America or any
             1289      other] a public or private system [or organization], organization, or company designated by the


             1290      State Board of Regents based on this period of employment are forfeited.
             1291          (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
             1292      date, the retirement is canceled and the death shall be considered as that of a member before
             1293      retirement.
             1294          (b) Any payments made to the retiree shall be deducted from the amounts due to the
             1295      beneficiary.
             1296          (6) If a retiree retires under either Option Five or Six and subsequently divorces, the
             1297      retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
             1298      is no court order filed in the matter.
             1299          Section 20. Section 49-14-201 is amended to read:
             1300           49-14-201. System membership -- Eligibility.
             1301          (1) Except as provided in Section 49-15-201 , a public safety service employee of a
             1302      participating employer participating in this system is eligible for service credit in this system at
             1303      the earliest of:
             1304          (a) July 1, 1969, if the public safety service employee was employed by the
             1305      participating employer on July 1, 1969, and the participating employer was participating in this
             1306      system on that date;
             1307          (b) the date the participating employer begins participating in this system if the public
             1308      safety service employee was employed by the participating employer on that date; or
             1309          (c) the date the public safety service employee is employed by the participating
             1310      employer and is eligible to perform public safety service, except that a public safety service
             1311      employee initially entering employment with a participating employer on or after July 1, 2011,
             1312      who does not have service credit accrued before July 1, 2011, in a Tier I system or plan
             1313      administered by the board, may not participate in this system.
             1314          (2) (a) (i) A participating employer that has public safety service and firefighter service
             1315      employees that require cross-training and duty shall enroll those dual purpose employees in the
             1316      system in which the greatest amount of time is actually worked.
             1317          (ii) The employees shall either be full-time public safety service or full-time firefighter


             1318      service employees of the participating employer.
             1319          (b) (i) Prior to transferring a dual purpose employee from one system to another, the
             1320      participating employer shall receive written permission from the office.
             1321          (ii) The office may request documentation to verify the appropriateness of the transfer.
             1322          (3) The board may combine or segregate the actuarial experience of participating
             1323      employers in this system for the purpose of setting contribution rates.
             1324          (4) (a) (i) Each participating employer participating in this system shall annually
             1325      submit to the office a schedule indicating the positions to be covered under this system in
             1326      accordance with this chapter.
             1327          (ii) The office may require documentation to justify the inclusion of any position under
             1328      this system.
             1329          (b) If there is a dispute between the office and a participating employer or employee
             1330      over any position to be covered, the disputed position shall be submitted to the Peace Officer
             1331      Standards and Training Council established under Section 53-6-106 for determination.
             1332          (c) (i) The Peace Officer Standards and Training Council's authority to decide
             1333      eligibility for public safety service credit is limited to claims for coverage under this system for
             1334      time periods after July 1, 1989.
             1335          (ii) A decision of the Peace Officer Standards and Training Council may not be applied
             1336      to service credit earned in another system prior to July 1, 1989.
             1337          (iii) Except as provided under Subsection (4)(c)(iv), a decision of the Peace Officer
             1338      Standards and Training Council granting a position coverage under this system may only be
             1339      applied prospectively from the date of that decision.
             1340          (iv) A decision of the Peace Officer Standards and Training Council granting a position
             1341      coverage under this system may be applied retroactively only if:
             1342          (A) the participating employer covered other similarly situated positions under this
             1343      system during the time period in question; and
             1344          (B) the position otherwise meets all eligibility requirements for receiving service credit
             1345      in this system during the period for which service credit is to be granted.


             1346          (5) The Peace Officer Standards and Training Council may use a subcommittee to
             1347      provide a recommendation to the council in determining disputes between the office and a
             1348      participating employer or employee over a position to be covered under this system.
             1349          (6) The Peace Officer Standards and Training Council shall comply with Title 63G,
             1350      Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
             1351          (7) A public safety employee who is transferred or promoted to an administration
             1352      position not covered by this system shall continue to earn public safety service credit in this
             1353      system as long as the employee remains employed in the same department.
             1354          (8) Any employee who is reassigned to the Department of Technology Services or to
             1355      the Department of Human Resource Management, and who was a member of this system, shall
             1356      be entitled to remain a member of this system.
             1357          (9) (a) To determine that a position is covered under this system, the office and, if a
             1358      coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
             1359      position requires the employee to:
             1360          (i) place the employee's life or personal safety at risk; and
             1361          (ii) complete training as provided in Section 53-13-103 , 53-13-104 , or 53-13-105 .
             1362          (b) If a position satisfies the requirements of Subsection (9)(a), the office and the Peace
             1363      Officer Standards and Training Council shall consider whether or not the position requires the
             1364      employee to:
             1365          (i) perform duties that consist primarily of actively preventing or detecting crime and
             1366      enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
             1367          (ii) perform duties that consist primarily of providing community protection; and
             1368          (iii) respond to situations involving threats to public safety and make emergency
             1369      decisions affecting the lives and health of others.
             1370          (10) If a subcommittee is used to recommend the determination of disputes to the
             1371      Peace Officer Standards and Training Council, the subcommittee shall comply with the
             1372      requirements of Subsection (9) in making its recommendation.
             1373          (11) A final order of the Peace Officer Standards and Training Council regarding a


             1374      dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
             1375      Procedures Act.
             1376          (12) Except as provided under Subsection (13), if a participating employer's public
             1377      safety service employees are not covered by this system or under Chapter 15, Public Safety
             1378      Noncontributory Retirement Act, as of January 1, 1998, those public safety service employees
             1379      who may otherwise qualify for membership in this system shall, at the discretion of the
             1380      participating employer, remain in their current retirement system.
             1381          (13) (a) A public safety service employee employed by an airport police department,
             1382      which elects to cover its public safety service employees under the Public Safety
             1383      Noncontributory Retirement System under Subsection (12), may elect to remain in the public
             1384      safety service employee's current retirement system.
             1385          (b) The public safety service employee's election to remain in the current retirement
             1386      system under Subsection (13)(a):
             1387          (i) shall be made at the time the employer elects to move its public safety service
             1388      employees to a public safety retirement system;
             1389          (ii) documented by written notice to the participating employer; and
             1390          (iii) is irrevocable.
             1391          (14) Notwithstanding any other provision of this section, a person initially entering
             1392      employment with a participating employer on or after July 1, 2011, who does not have service
             1393      credit accrued before July 1, 2011, in a Tier I system or plan administered by the board, may
             1394      not participate in this system.
             1395          Section 21. Section 49-14-401 is amended to read:
             1396           49-14-401. Eligibility for service retirement -- Date of retirement --
             1397      Qualifications.
             1398          (1) A member is qualified to receive an allowance from this system when:
             1399          (a) except as provided under Subsection (3), the member ceases actual work for every
             1400      participating employer that employs the member before the member's retirement date and
             1401      provides evidence of the termination;


             1402          (b) the member has submitted to the office a [notarized] retirement application form
             1403      that states the member's proposed retirement date; and
             1404          (c) one of the following conditions is met as of the member's retirement date:
             1405          (i) the member has accrued at least 20 years of service credit;
             1406          (ii) the member has accrued at least 10 years of service credit and has attained an age
             1407      of 60 years; or
             1408          (iii) the member has accrued at least four years of service credit and has attained an age
             1409      of 65 years.
             1410          (2) (a) The member's retirement date:
             1411          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             1412          (ii) shall be on or after the date of termination; and
             1413          (iii) may not be more than 90 days before or after the date the application is received by
             1414      the office.
             1415          (b) Except as provided under Subsection (3), a member may not be employed by a
             1416      participating employer in the system established by this chapter on the retirement date selected
             1417      under Subsection (2)(a)(i).
             1418          (3) (a) A member who is employed by a participating employer and who is also an
             1419      elected official is not required to cease service as an elected official to be qualified to receive
             1420      an allowance under Subsection (1), unless the member is retiring from service as an elected
             1421      official.
             1422          (b) A member who is employed by a participating employer and who is also a part-time
             1423      appointed board member is not required to cease service as a part-time appointed board
             1424      member to be qualified to receive an allowance under Subsection (1).
             1425          Section 22. Section 49-14-501 is amended to read:
             1426           49-14-501. Death of active member in Division A -- Payment of benefits.
             1427          (1) If an active member of this system enrolled in Division A under Section 49-14-301
             1428      dies, benefits are payable as follows:
             1429          (a) If the death is classified by the office as a line-of-duty death, the spouse at the time


             1430      of death shall receive a lump sum of $1,000 and an allowance equal to 30% of the deceased
             1431      member's final average monthly salary.
             1432          (b) If the death is not classified by the office as a line-of-duty death, benefits are
             1433      payable as follows:
             1434          (i) If the member has accrued less than 10 years of public safety service credit, the
             1435      beneficiary shall receive the sum of $1,000 or a refund of the member's member contributions,
             1436      whichever is greater.
             1437          (ii) If the member has accrued 10 or more years of public safety service credit at the
             1438      time of death, the spouse at the time of death shall receive the sum of $500, plus an allowance
             1439      equal to 2% of the member's final average monthly salary for each year of service credit
             1440      accrued by the member up to a maximum of 30% of the member's final average monthly salary.
             1441          (2) [Benefits] Except as provided under Subsection (1)(b)(i), benefits are not payable
             1442      to minor children of members covered under Division A.
             1443          (3) If a benefit is not distributed under this section, and the member has designated a
             1444      beneficiary, the member's member contributions shall be paid to the beneficiary.
             1445          (4) (a) A spouse who requests a benefit under this section shall apply in writing to the
             1446      office.
             1447          (b) The allowance shall begin on the first day of the month following the month in
             1448      which the:
             1449          (i) [following the month in which the] member died, if the application is received by
             1450      the office within 90 days of the member's death; or
             1451          (ii) [following the month in which the] application is received by the office, if the
             1452      application is received by the office more than 90 days after the member's death.
             1453          Section 23. Section 49-14-504 is amended to read:
             1454           49-14-504. Benefits payable upon death of retired member -- Enhanced benefit
             1455      election -- Rulemaking.
             1456          (1) If a retiree who retired under either Division A or Division B dies, the retiree's
             1457      spouse at the time of death of the retiree shall receive an allowance equal to 65% of the


             1458      allowance that was being paid to the retiree at the time of death.
             1459          (2) (a) Notwithstanding the amount of the allowance under Subsection (1), at the time
             1460      of retirement, a retiree may elect to increase the spousal death benefit to 75% of an allowance
             1461      computed in accordance with Section 49-14-402 .
             1462          (b) If an election is made under Subsection (2)(a), the member's allowance shall be
             1463      reduced to an amount payable monthly for life to reflect the actuarial equivalent necessary to
             1464      pay for the increased spousal death benefit above 65%.
             1465          (3) (a) For a retiree whose retirement date is before July 1, 2009, the office shall
             1466      provide an optional spousal death benefit to bring the total spousal death benefit up to 75% of
             1467      an allowance computed in accordance with Section 49-14-402 .
             1468          (b) A retiree may elect to purchase the optional spousal death benefit until July 1,
             1469      2010.
             1470          (c) If an election is made under Subsection (3)(b), the retiree's allowance shall be
             1471      reduced to an amount payable monthly for life to reflect the actuarial equivalent necessary to
             1472      pay for the increased spousal death benefit above 65%.
             1473          (d) The board shall make rules to administer the death benefit under this Subsection
             1474      (3).
             1475          (4) If the retiree retired solely under Division B and dies leaving unmarried children
             1476      under the age of 18 or dependent unmarried children with a mental or physical disability, the
             1477      children shall qualify for a benefit as prescribed for children under Subsection 49-14-502 (1)(c)
             1478      [which is payable on the first day of the month following the month in which the retiree died].
             1479          (5) (a) A beneficiary who qualifies for a monthly benefit under this section shall apply
             1480      in writing to the office.
             1481          (b) The allowance shall begin on the first day of the month following the month in
             1482      which the:
             1483          (i) member or participant died, if the application is received by the office within 90
             1484      days of the date of death of the member or participant; or
             1485          (ii) application is received by the office, if the application is received by the office


             1486      more than 90 days after the date of death of the member or participant.
             1487          Section 24. Section 49-15-201 is amended to read:
             1488           49-15-201. System membership -- Eligibility.
             1489          (1) (a) A public safety service employee employed by the state after July 1, 1989, but
             1490      before July 1, 2011, is eligible for service credit in this system.
             1491          (b) A public safety service employee employed by the state prior to July 1, 1989, may
             1492      either elect to receive service credit in this system or continue to receive service credit under
             1493      the system established under Chapter 14, Public Safety Contributory Retirement Act, by
             1494      following the procedures established by the board under this chapter.
             1495          (2) (a) Public safety service employees of a participating employer other than the state
             1496      that elected on or before July 1, 1989, to remain in the Public Safety Contributory Retirement
             1497      System shall be eligible only for service credit in that system.
             1498          (b) (i) A participating employer other than the state that elected on or before July 1,
             1499      1989, to participate in this system shall, have allowed, prior to July 1, 1989, a public safety
             1500      service employee to elect to participate in either this system or the Public Safety Contributory
             1501      Retirement System.
             1502          (ii) Except as expressly allowed by this title, the election of the public safety service
             1503      employee is final and may not be changed.
             1504          (c) A public safety service employee hired by a participating employer other than the
             1505      state after July 1, 1989, but before July 1, 2011, shall become a member in this system.
             1506          (d) A public safety service employee of a participating employer other than the state
             1507      who began participation in this system after July 1, 1989, but before July 1, 2011, is only
             1508      eligible for service credit in this system.
             1509          (e) A person initially entering employment with a participating employer on or after
             1510      July 1, 2011, who does not have service credit accrued before July 1, 2011, in a Tier I system
             1511      or plan administered by the board, may not participate in this system.
             1512          (3) (a) (i) A participating employer that has public safety service and firefighter service
             1513      employees that require cross-training and duty shall enroll those dual purpose employees in the


             1514      system in which the greatest amount of time is actually worked.
             1515          (ii) The employees shall either be full-time public safety service or full-time firefighter
             1516      service employees of the participating employer.
             1517          (b) (i) Prior to transferring a dual purpose employee from one system to another, the
             1518      participating employer shall receive written permission from the office.
             1519          (ii) The office may request documentation to verify the appropriateness of the transfer.
             1520          (4) The board may combine or segregate the actuarial experience of participating
             1521      employers in this system for the purpose of setting contribution rates.
             1522          (5) (a) (i) Each participating employer participating in this system shall annually
             1523      submit to the office a schedule indicating the positions to be covered under this system in
             1524      accordance with this chapter.
             1525          (ii) The office may require documentation to justify the inclusion of any position under
             1526      this system.
             1527          (b) If there is a dispute between the office and a participating employer or employee
             1528      over any position to be covered, the disputed position shall be submitted to the Peace Officer
             1529      Standards and Training Council established under Section 53-6-106 for determination.
             1530          (c) (i) The Peace Officer Standards and Training Council's authority to decide
             1531      eligibility for public safety service credit is limited to claims for coverage under this system for
             1532      time periods after July 1, 1989.
             1533          (ii) A decision of the Peace Officer Standards and Training Council may not be applied
             1534      to service credit earned in another system prior to July 1, 1989.
             1535          (iii) Except as provided under Subsection (5)(c)(iv), a decision of the Peace Officer
             1536      Standards and Training Council granting a position coverage under this system may only be
             1537      applied prospectively from the date of that decision.
             1538          (iv) A decision of the Peace Officer Standards and Training Council granting a position
             1539      coverage under this system may be applied retroactively only if:
             1540          (A) the participating employer covered other similarly situated positions under this
             1541      system during the time period in question; and


             1542          (B) the position otherwise meets all eligibility requirements for receiving service credit
             1543      in this system during the period for which service credit is to be granted.
             1544          (6) The Peace Officer Standards and Training Council may use a subcommittee to
             1545      provide a recommendation to the council in determining disputes between the office and a
             1546      participating employer or employee over a position to be covered under this system.
             1547          (7) The Peace Officer Standards and Training Council shall comply with Title 63G,
             1548      Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
             1549          (8) A public safety service employee who is transferred or promoted to an
             1550      administration position not covered by this system shall continue to earn public safety service
             1551      credit in this system as long as the employee remains employed in the same department.
             1552          (9) Any employee who is reassigned to the Department of Technology Services or to
             1553      the Department of Human Resource Management, and who was a member in this system, shall
             1554      be entitled to remain a member in this system.
             1555          (10) (a) To determine that a position is covered under this system, the office and, if a
             1556      coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
             1557      position requires the employee to:
             1558          (i) place the employee's life or personal safety at risk; and
             1559          (ii) complete training as provided in Section 53-13-103 , 53-13-104 , or 53-13-105 .
             1560          (b) If a position satisfies the requirements of Subsection (10)(a), the office and Peace
             1561      Officer Standards and Training Council shall consider whether the position requires the
             1562      employee to:
             1563          (i) perform duties that consist primarily of actively preventing or detecting crime and
             1564      enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
             1565          (ii) perform duties that consist primarily of providing community protection; and
             1566          (iii) respond to situations involving threats to public safety and make emergency
             1567      decisions affecting the lives and health of others.
             1568          (11) If a subcommittee is used to recommend the determination of disputes to the
             1569      Peace Officer Standards and Training Council, the subcommittee shall comply with the


             1570      requirements of Subsection (10) in making its recommendation.
             1571          (12) A final order of the Peace Officer Standards and Training Council regarding a
             1572      dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
             1573      Procedures Act.
             1574          (13) Except as provided under Subsection (14), if a participating employer's public
             1575      safety service employees are not covered by this system or under Chapter 14, Public Safety
             1576      Contributory Retirement Act, as of January 1, 1998, those public safety service employees who
             1577      may otherwise qualify for membership in this system shall, at the discretion of the participating
             1578      employer, remain in their current retirement system.
             1579          (14) (a) A public safety service employee employed by an airport police department,
             1580      which elects to cover its public safety service employees under the Public Safety
             1581      Noncontributory Retirement System under Subsection (13), may elect to remain in the public
             1582      safety service employee's current retirement system.
             1583          (b) The public safety service employee's election to remain in the current retirement
             1584      system under Subsection (14)(a):
             1585          (i) shall be made at the time the employer elects to move its public safety service
             1586      employees to a public safety retirement system;
             1587          (ii) documented by written notice to the participating employer; and
             1588          (iii) is irrevocable.
             1589          (15) Notwithstanding any other provision of this section, a person initially entering
             1590      employment with a participating employer on or after July 1, 2011, who does not have service
             1591      credit accrued before July 1, 2011, in a Tier I system or plan administered by the board, may
             1592      not participate in this system.
             1593          Section 25. Section 49-15-202 is amended to read:
             1594           49-15-202. Participation of employers -- Requirements -- Admission -- Full
             1595      participation in system -- Supplemental programs authorized.
             1596          (1) An employer that employs public safety service employees and is required by
             1597      Section 49-12-202 or 49-13-202 to be a participating employer in the Public Employees'


             1598      Contributory Retirement System or the Public Employees' Noncontributory Retirement System
             1599      shall cover all its public safety service employees under one of the following systems or plans:
             1600          (a) Chapter 12, Public Employees' Contributory Retirement Act;
             1601          (b) Chapter 13, Public Employees' Noncontributory Retirement Act;
             1602          (c) Chapter 14, Public Safety Contributory Retirement Act;
             1603          (d) Chapter 15, Public Safety Noncontributory Retirement Act; or
             1604          (e) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
             1605          (2) An employer that covers its public safety employees under Subsection (1)(d) is a
             1606      participating employer in this system.
             1607          (3) If a participating employer under Subsection (1) covers any of its public safety
             1608      service employees under the Public Safety Contributory Retirement System or the Public
             1609      Safety Noncontributory Retirement System, that participating employer shall cover all of its
             1610      public safety service employees under one of those systems, except for a public safety service
             1611      employee initially entering employment with a participating employer beginning on or after
             1612      July 1, 2011.
             1613          (4) (a) Until June 30, 2011, an employer that is not participating in this system may by
             1614      resolution of its governing body apply for coverage of its public safety service employees by
             1615      this system.
             1616          (b) Upon approval of the board, the employer shall become a participating employer in
             1617      this system subject to this title.
             1618          (5) (a) If a participating employer purchases service credit on behalf of employees for
             1619      service rendered prior to the participating employer's admission to this system, the service
             1620      credit must be purchased in a nondiscriminatory manner on behalf of all current and former
             1621      employees who were eligible for service credit at the time service was rendered.
             1622          (b) For a purchase made under this Subsection (5), an employee is not required to:
             1623          (i) have at least four years of service credit before the purchase can be made; or
             1624          (ii) forfeit service credit or any defined contribution balance based on the employer
             1625      contributions under any other retirement system or plan based on the period of employment for


             1626      which service credit is being purchased.
             1627          (6) A participating employer may not withdraw from this system.
             1628          (7) In addition to their participation in the system, participating employers may provide
             1629      or participate in any additional public or private retirement, supplemental or defined
             1630      contribution plan, either directly or indirectly, for their employees.
             1631          Section 26. Section 49-15-401 is amended to read:
             1632           49-15-401. Eligibility for service retirement -- Date of retirement --
             1633      Qualifications.
             1634          (1) A member is qualified to receive an allowance from this system when:
             1635          (a) except as provided under Subsection (3), the member ceases actual work for every
             1636      participating employer that employs the member before the member's retirement date and
             1637      provides evidence of the termination;
             1638          (b) the member has submitted to the office a [notarized] retirement application form
             1639      that states the member's proposed retirement date; and
             1640          (c) one of the following conditions is met as of the member's retirement date:
             1641          (i) the member has accrued at least 20 years of service credit;
             1642          (ii) the member has accrued at least 10 years of service credit and has attained an age
             1643      of 60 years; or
             1644          (iii) the member has accrued at least four years of service and has attained an age of 65
             1645      years.
             1646          (2) (a) The member's retirement date:
             1647          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             1648          (ii) shall be on or after the date of termination; and
             1649          (iii) may not be more than 90 days before or after the date the application is received by
             1650      the office.
             1651          (b) Except as provided under Subsection (3), a member may not be employed by a
             1652      participating employer in the system established by this chapter on the retirement date selected
             1653      under Subsection (2)(a)(i).


             1654          (3) (a) A member who is employed by a participating employer and who is also an
             1655      elected official is not required to cease service as an elected official to be qualified to receive
             1656      an allowance under Subsection (1), unless the member is retiring from service as an elected
             1657      official.
             1658          (b) A member who is employed by a participating employer and who is also a part-time
             1659      appointed board member is not required to cease service as a part-time appointed board
             1660      member to be qualified to receive an allowance under Subsection (1).
             1661          Section 27. Section 49-15-501 is amended to read:
             1662           49-15-501. Death of active member in Division A -- Payment of benefits.
             1663          (1) If an active member of this system enrolled in Division A under Section 49-15-301
             1664      dies, benefits are payable as follows:
             1665          (a) If the death is classified by the office as a line-of-duty death, benefits are payable as
             1666      follows:
             1667          (i) If the member has accrued less than 20 years of public safety service credit, the
             1668      spouse at the time of death shall receive a lump sum of $1,000 and an allowance equal to 30%
             1669      of the member's final average monthly salary.
             1670          (ii) If the member has accrued 20 or more years of public safety service credit, the
             1671      member shall be considered to have retired with an allowance calculated under Section
             1672      49-15-402 and the spouse at the time of death shall receive the death benefit payable to a
             1673      spouse at the time of death under Section 49-15-504 .
             1674          (b) If the death is not classified as a line-of-duty death by the office, benefits are
             1675      payable as follows:
             1676          (i) If the member has accrued less than 10 years of public safety service credit, the
             1677      beneficiary shall receive the sum of $1,000 or a refund of the member's member contributions,
             1678      whichever is greater.
             1679          (ii) If the member has accrued 10 or more years, but less than 20 years of public safety
             1680      service credit at the time of death, the spouse at the time of death shall receive the sum of $500,
             1681      plus an allowance equal to 2% of the member's final average monthly salary for each year of


             1682      service credit accrued by the member up to a maximum of 30% of the member's final average
             1683      monthly salary.
             1684          (iii) If the member has accrued 20 or more years of public safety service credit, the
             1685      benefit shall be calculated as provided in Subsection (1)(a)(ii).
             1686          (2) [Benefits] Except as provided under Subsection (1)(b)(i), benefits are not payable
             1687      to minor children under Division A.
             1688          (3) If a benefit is not distributed under this section, and the member has designated a
             1689      beneficiary, the member's member contribution shall be paid to the beneficiary.
             1690          (4) (a) A spouse who requests a benefit under this section shall apply in writing to the
             1691      office.
             1692          (b) The allowance shall begin on the first day of the month following the month in
             1693      which the:
             1694          (i) [following the month in which the] member died, if the application is received by
             1695      the office within 90 days of the member's death; or
             1696          (ii) [following the month in which the] application is received by the office, if the
             1697      application is received by the office more than 90 days after the member's death.
             1698          Section 28. Section 49-15-504 is amended to read:
             1699           49-15-504. Benefits payable upon death of retired member -- Enhanced benefit
             1700      election -- Rulemaking.
             1701          (1) If a retiree who retired under either Division A or Division B dies, the retiree's
             1702      spouse at the time of death of the retiree shall receive an allowance equal to 65% of the
             1703      allowance that was being paid to the retiree at the time of death.
             1704          (2) (a) Notwithstanding the amount of the allowance under Subsection (1), at the time
             1705      of retirement, a retiree may elect to increase the spousal death benefit to 75% of an allowance
             1706      computed in accordance with Section 49-15-402 .
             1707          (b) If an election is made under Subsection (2)(a), the member's allowance shall be
             1708      reduced to an amount payable monthly for life to reflect the actuarial equivalent necessary to
             1709      pay for the increased spousal death benefit above 65%.


             1710          (3) (a) For a retiree whose retirement date is before July 1, 2009, the office shall
             1711      provide an optional spousal death benefit to bring the total spousal death benefit up to 75% of
             1712      an allowance computed in accordance with Section 49-15-402 .
             1713          (b) A retiree may elect to purchase the optional spousal death benefit until July 1,
             1714      2010.
             1715          (c) If an election is made under Subsection (3)(b), the retiree's allowance shall be
             1716      reduced to an amount payable monthly for life to reflect the actuarial equivalent necessary to
             1717      pay for the increased spousal death benefit above 65%.
             1718          (d) The board shall make rules to administer the death benefit under this Subsection
             1719      (3).
             1720          (4) If the retiree retired solely under Division B and dies leaving unmarried children
             1721      under the age of 18 or dependent unmarried children with a mental or physical disability, the
             1722      children shall qualify for a benefit as prescribed under Subsection 49-15-502 (1)(d) [which is
             1723      payable on the first day of the month following the month in which the retiree died].
             1724          (5) (a) A beneficiary who qualifies for a monthly benefit under this section shall apply
             1725      in writing to the office.
             1726          (b) The allowance shall begin on the first day of the month following the month in
             1727      which the:
             1728          (i) member or participant died, if the application is received by the office within 90
             1729      days of the date of death of the member or participant; or
             1730          (ii) application is received by the office, if the application is received by the office
             1731      more than 90 days after the date of death of the member or participant.
             1732          Section 29. Section 49-16-201 is amended to read:
             1733           49-16-201. System membership -- Eligibility.
             1734          (1) A firefighter service employee who performs firefighter service for an employer
             1735      participating in this system is eligible for service credit in this system upon the earliest of:
             1736          (a) July 1, 1971, if the firefighter service employee was employed by the participating
             1737      employer on July 1, 1971, and the participating employer was participating in this system on


             1738      that date;
             1739          (b) the date the participating employer begins participating in this system if the
             1740      firefighter service employee was employed by the participating employer on that date; or
             1741          (c) the date the firefighter service employee is hired to perform firefighter services for a
             1742      participating employer, if the firefighter:
             1743          (i) initially enters employment before July 1, 2011[.]; or
             1744          (ii) has service credit accrued before July 1, 2011, in a Tier I system or plan
             1745      administered by the board.
             1746          (2) (a) (i) A participating employer that has public safety service and firefighter service
             1747      employees that require cross-training and duty shall enroll the dual purpose employees in the
             1748      system in which the greatest amount of time is actually worked.
             1749          (ii) The employees shall either be full-time public safety service or full-time firefighter
             1750      service employees of the participating employer.
             1751          (b) (i) Before transferring a dual purpose employee from one system to another, the
             1752      participating employer shall receive written permission from the office.
             1753          (ii) The office may request documentation to verify the appropriateness of the transfer.
             1754          (3) (a) A person hired by a regularly constituted fire department on or after July 1,
             1755      1971, who does not perform firefighter service is not eligible for service credit in this system.
             1756          (b) The nonfirefighter service employee shall become a member of the system for
             1757      which the nonfirefighter service employee qualifies for service credit.
             1758          (c) The service credit exclusion under this Subsection (3) may not be interpreted to
             1759      prohibit the assignment of a firefighter with a disability or partial disability to a nonfirefighter
             1760      service position.
             1761          (d) If Subsection (3)(c) applies, the firefighter service employee remains eligible for
             1762      service credit in this system.
             1763          (4) An allowance or other benefit may not be granted under this system that is based
             1764      upon the same service for benefits received under some other system.
             1765          (5) Service as a volunteer firefighter is not eligible for service credit in this system.


             1766          (6) An employer that maintains a regularly constituted fire department is eligible to
             1767      participate in this system.
             1768          (7) Beginning July 1, 2011, a person who is initially entering employment with a
             1769      participating employer and who does not have service credit accrued before July 1, 2011, in a
             1770      Tier I system or plan administered by the board may not participate in this system.
             1771          Section 30. Section 49-16-401 is amended to read:
             1772           49-16-401. Eligibility for service retirement -- Date of retirement --
             1773      Qualifications.
             1774          (1) A member is qualified to receive an allowance from this system when:
             1775          (a) except as provided under Subsection (3), the member ceases actual work for every
             1776      participating employer that employs the member before the member's retirement date and
             1777      provides evidence of the termination;
             1778          (b) the member has submitted to the office a [notarized] retirement application form
             1779      that states the member's proposed retirement date; and
             1780          (c) one of the following conditions is met as of the member's retirement date:
             1781          (i) the member has accrued at least 20 years of service credit;
             1782          (ii) the member has accrued at least 10 years of service credit and has attained an age
             1783      of 60 years; or
             1784          (iii) the member has accrued at least four years of service credit and has attained an age
             1785      of 65 years.
             1786          (2) (a) The member's retirement date:
             1787          (i) shall be the 1st or the 16th day of the month, as selected by the firefighter service
             1788      employee;
             1789          (ii) shall be on or after the date of termination; and
             1790          (iii) may not be more than 90 days before or after the date the application is received by
             1791      the office.
             1792          (b) Except as provided under Subsection (3), a member may not be employed by a
             1793      participating employer in the system established by this chapter on the retirement date selected


             1794      under Subsection (2)(a)(i).
             1795          (3) (a) A member who is employed by a participating employer and who is also an
             1796      elected official is not required to cease service as an elected official to be qualified to receive
             1797      an allowance under Subsection (1), unless the member is retiring from service as an elected
             1798      official.
             1799          (b) A member who is employed by a participating employer and who is also a part-time
             1800      appointed board member is not required to cease service as a part-time appointed board
             1801      member to be qualified to receive an allowance under Subsection (1).
             1802          Section 31. Section 49-16-504 is amended to read:
             1803           49-16-504. Benefits payable upon death of retired member.
             1804          (1) If a retiree who retired under either Division A or Division B dies, the retiree's
             1805      spouse at the time of death shall receive an allowance equal to 75% of the allowance that was
             1806      being paid to the retiree at the time of death.
             1807          (2) If the retiree retired solely under Division B and dies leaving unmarried children
             1808      under the age of 21 or dependent unmarried children with a mental or physical disability, the
             1809      children shall qualify for a benefit as prescribed under Subsection 49-16-502 (1)(c) [which is
             1810      payable on the first day of the month following the month in which the retiree died].
             1811          (3) (a) A beneficiary who qualifies for a monthly benefit under this section shall apply
             1812      in writing to the office.
             1813          (b) The allowance shall begin on the first day of the month following the month in
             1814      which the:
             1815          (i) member or participant died, if the application is received by the office within 90
             1816      days of the date of death of the member or participant; or
             1817          (ii) application is received by the office, if the application is received by the office
             1818      more than 90 days after the date of death of the member or participant.
             1819          Section 32. Section 49-17-401 is amended to read:
             1820           49-17-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             1821          (1) A member is qualified to receive an allowance when:


             1822          (a) the member ceases actual work for every participating employer that employs the
             1823      member before the member's retirement date and provides evidence of the termination;
             1824          (b) the member has submitted to the office a [notarized] retirement application form
             1825      that states the member's proposed retirement date; and
             1826          (c) one of the following conditions is met as of the member's retirement date:
             1827          (i) the member has accrued at least six years of service credit and has attained an age of
             1828      70 years;
             1829          (ii) the member has accrued at least 10 years of service credit and has attained an age
             1830      of 62 years;
             1831          (iii) the member has accrued at least 20 years of service credit and has attained an age
             1832      of 55 years; or
             1833          (iv) the member has accrued at least 25 years of service credit.
             1834          (2) (a) The member's retirement date:
             1835          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             1836          (ii) shall be on or after the date of termination; and
             1837          (iii) may not be more than 90 days before or after the date the application is received by
             1838      the office.
             1839          (b) A member may not be employed by a participating employer in the system
             1840      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             1841          Section 33. Section 49-17-402 is amended to read:
             1842           49-17-402. Calculation of retirement allowance.
             1843          (1) A retiree under this system shall receive an allowance equal to:
             1844          (a) 5% of the final average monthly salary multiplied by the number of years of service
             1845      credit, limited to 10 years; plus
             1846          (b) 2.25% of the final average monthly salary multiplied by the number of years of
             1847      service credit in excess of 10 years and up to and including 20 years; plus
             1848          (c) 1% of the final average monthly salary multiplied by the number of years of service
             1849      credit in excess of 20 years.


             1850          (2) (a) Except as modified by cost-of-living adjustments and except as provided under
             1851      Subsection (2)(b), an allowance under this system may not exceed 75% of the member's final
             1852      average monthly salary.
             1853          (b) The allowance limitation under Subsection (2)(a) does not apply to a member who
             1854      initially retires on or after July 1, 2010.
             1855          (3) If the retiree has attained the age of 55 years and has 20 years or more but less than
             1856      25 years of service credit, the retiree shall receive an early retirement reduction to the
             1857      allowance based on an actuarial calculation assuming a normal retirement age of 65 years.
             1858          Section 34. Section 49-17-502 is amended to read:
             1859           49-17-502. Benefits payable upon death of retired member.
             1860          (1) (a) The death benefit payable to a retiree's spouse at the time of death is an
             1861      allowance equal to 65% of the allowance which was being paid to the retiree at the time of
             1862      death.
             1863          (b) The effective date of the accrual of this allowance is the first day of the month
             1864      following the month in which the retiree died.
             1865          (2) (a) Notwithstanding the amount of the allowance under Subsection (1), at the time
             1866      of retirement, a retiree may elect to increase the spousal death benefit up to 75% of an
             1867      allowance computed in accordance with Section 49-17-402 .
             1868          (b) If an election is made under Subsection (2)(a), the member's allowance shall be
             1869      reduced to reflect the actuarial equivalent necessary to pay for the increased spousal death
             1870      benefit above 65%.
             1871          (3) (a) A spouse who qualifies for a monthly benefit under this section shall apply in
             1872      writing to the office.
             1873          (b) The allowance shall begin on the first day of the month following the month in
             1874      which the:
             1875          (i) member or participant died, if the application is received by the office within 90
             1876      days of the date of death of the member or participant; or
             1877          (ii) application is received by the office, if the application is received by the office


             1878      more than 90 days after the date of death of the member or participant.
             1879          Section 35. Section 49-18-401 is amended to read:
             1880           49-18-401. Eligibility for an allowance -- Date of retirement -- Qualifications.
             1881          (1) A member is qualified to receive an allowance when:
             1882          (a) the member ceases actual work for every participating employer that employs the
             1883      member before the member's retirement date and provides evidence of the termination;
             1884          (b) the member has submitted to the office a [notarized] retirement application form
             1885      that states the member's proposed retirement date; and
             1886          (c) one of the following conditions is met as of the member's retirement date:
             1887          (i) the member has accrued at least six years of service credit and has attained an age of
             1888      70 years;
             1889          (ii) the member has accrued at least 10 years of service credit and has attained an age
             1890      of 62 years;
             1891          (iii) the member has accrued at least 20 years of service credit and has attained an age
             1892      of 55 years; or
             1893          (iv) the member has accrued at least 25 years of service credit.
             1894          (2) (a) The member's retirement date:
             1895          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             1896          (ii) shall be on or after the date of termination; and
             1897          (iii) may not be more than 90 days before or after the date the application is received by
             1898      the office.
             1899          (b) A member may not be employed by a participating employer in the system
             1900      established by this chapter on the retirement date selected under Subsection (2)(a)(i).
             1901          Section 36. Section 49-18-402 is amended to read:
             1902           49-18-402. Calculation of retirement allowance.
             1903          (1) A retiree under this system shall receive an allowance equal to:
             1904          (a) 5% of the final average monthly salary multiplied by the number of years of service
             1905      credit, limited to 10 years; plus


             1906          (b) 2.25% of the final average monthly salary multiplied by the number of years of
             1907      service credit in excess of 10 years and up to and including 20 years; plus
             1908          (c) 1% of the final average monthly salary multiplied by the number of years of service
             1909      credit in excess of 20 years.
             1910          (2) (a) Except as modified by cost-of-living adjustments and except as provided under
             1911      Subsection (2)(b), an allowance under this system may not exceed 75% of the member's final
             1912      average monthly salary.
             1913          (b) The allowance limitation under Subsection (2)(a) does not apply to a member who
             1914      initially retires on or after July 1, 2010.
             1915          (3) If the retiree has attained the age of 55 years and has 20 years or more but less than
             1916      25 years of service credit, the retiree shall receive an early retirement reduction to the
             1917      allowance based on an actuarial calculation assuming a normal retirement age of 65 years.
             1918          Section 37. Section 49-18-502 is amended to read:
             1919           49-18-502. Benefits payable upon death of retired member.
             1920          (1) [(a)] The death benefit payable to a retiree's spouse at the time of death is an
             1921      allowance equal to 65% of the allowance which was being paid to the retiree at the time of
             1922      death.
             1923          [(b) The effective date of the accrual of this allowance is the first day of the month
             1924      following the month in which the retiree died.]
             1925          (2) (a) Notwithstanding the amount of the allowance under Subsection (1), at the time
             1926      of retirement, a retiree may elect to increase the spousal death benefit up to 75% of an
             1927      allowance computed in accordance with Section 49-18-402 .
             1928          (b) If an election is made under Subsection (2)(a), the member's allowance shall be
             1929      reduced to an amount payable monthly for life to reflect the actuarial equivalent necessary to
             1930      pay for the increased spousal death benefit above 65%.
             1931          (3) (a) A spouse who qualifies for a monthly benefit under this section shall apply in
             1932      writing to the office.
             1933          (b) The allowance shall begin on the first day of the month following the month in


             1934      which the:
             1935          (i) member or participant died, if the application is received by the office within 90
             1936      days of the date of death of the member or participant; or
             1937          (ii) application is received by the office, if the application is received by the office
             1938      more than 90 days after the date of death of the member or participant.
             1939          Section 38. Section 49-19-201 is amended to read:
             1940           49-19-201. Plan participation -- Eligibility.
             1941          (1) [Governors and legislators who enter office before July 1, 2011, are] A governor or
             1942      legislator is eligible for service credit in this plan during their term of service in their elected
             1943      position[.] if the governor or legislator:
             1944          (a) entered office before July 1, 2011; or
             1945          (b) accrued service credit in a Tier I system or plan administered by the board before
             1946      July 1, 2011.
             1947          (2) A governor or legislator initially entering office on or after July 1, 2011, who does
             1948      not have service credit accrued before July 1, 2011, in a Tier I system or plan administered by
             1949      the board:
             1950          (a) may not participate in this system;
             1951          (b) is only eligible to participate in the Tier II Defined Contribution Plan established
             1952      under Chapter 22, Part 4, Tier II Defined Contribution Plan; and
             1953          (c) is not eligible to participate in the Tier II hybrid retirement system established under
             1954      Chapter 22, Part 3, Tier II Hybrid Retirement System.
             1955          Section 39. Section 49-19-401 is amended to read:
             1956           49-19-401. Eligibility for an allowance -- Governor -- Legislator.
             1957          (1) A governor is qualified to receive an allowance when:
             1958          (a) the governor has submitted to the office a [notarized] retirement application form
             1959      that states the proposed retirement date; and
             1960          (b) one of the following conditions is met as of the retirement date:
             1961          (i) the governor has completed at least one full term in office and has attained an age of


             1962      65 years; or
             1963          (ii) the governor has served as governor of the state for at least 10 years and has
             1964      attained an age of 62 years.
             1965          (2) A legislator is qualified to receive an allowance when:
             1966          (a) the legislator has submitted to the office a [notarized] retirement application form
             1967      that states the proposed retirement date; and
             1968          (b) one of the following conditions is met as of the retirement date:
             1969          (i) the legislator has completed at least four years in the Legislature and has attained an
             1970      age of 65 years; or
             1971          (ii) the legislator has completed at least 10 years in the Legislature and has attained an
             1972      age of 62 years.
             1973          (3) (a) The retirement date shall be the 1st or the 16th day of the month as selected by
             1974      the member.
             1975          (b) The retirement date may not be more than 90 days before or after the date the
             1976      application is received by the office.
             1977          (4) A member who withdraws member contributions shall forfeit all allowances based
             1978      on those contributions.
             1979          (5) If a retired legislator is elected to another term in the Legislature or continues to
             1980      serve in the Legislature, the legislative allowance ceases at the beginning of each session under
             1981      rules established by the board, but is restored at the same amount at the end of the session.
             1982          (6) A member receiving an allowance while serving as a legislator is eligible for
             1983      additional service credits and allowance adjustments at the end of each term of office if the
             1984      legislator continues as a contributing member during the member's service as a legislator.
             1985          Section 40. Section 49-21-102 is amended to read:
             1986           49-21-102. Definitions.
             1987          As used in this chapter:
             1988          (1) "Date of disability" means the date on which a period of continuous disability
             1989      commences, and may not commence on or before the last day of actual work.


             1990          (2) (a) "Eligible employee" means the following employee whose employer provides
             1991      coverage under this chapter:
             1992          (i) (A) any regular full-time employee as defined under Section 49-12-102 , 49-13-102 ,
             1993      or 49-22-102 ;
             1994          (B) any public safety service employee as defined under Section 49-14-102 , 49-15-102 ,
             1995      or 49-23-102 ;
             1996          (C) any firefighter service employee or volunteer firefighter as defined under Section
             1997      49-23-102 who began firefighter service on or after July 1, 2011;
             1998          (D) any judge as defined under Section 49-17-102 or 49-18-102 ; or
             1999          (E) the governor of the state;
             2000          (ii) an employee who is exempt from participating in a retirement system under
             2001      Subsection 49-12-203 (4), 49-13-203 (4), 49-14-203 (1), or 49-15-203 (1); and
             2002          (iii) an employee who is covered by a retirement program offered by [the Teachers'
             2003      Insurance and Annuity Association of America] a public or private system, organization, or
             2004      company designated by the State Board of Regents.
             2005          (b) "Eligible employee" does not include:
             2006          (i) any employee that is exempt from coverage under Section 49-21-201 ; or
             2007          (ii) a retiree.
             2008          (3) "Elimination period" means the three months at the beginning of each continuous
             2009      period of total disability for which no benefit will be paid. The elimination period begins on
             2010      the nearest first day of the month from the date of disability. The elimination period may
             2011      include a one-time trial return to work period of less than 15 consecutive calendar days.
             2012          (4) "Maximum benefit period" means the maximum period of time the monthly
             2013      disability income benefit will be paid under Section 49-21-403 for any continuous period of
             2014      total disability.
             2015          (5) "Monthly disability benefit" means the monthly payments and accrual of service
             2016      credit under Section 49-21-401 .
             2017          (6) "Objective medical impairment" means an impairment resulting from an injury or


             2018      illness which is diagnosed by a physician and which is based on accepted objective medical
             2019      tests or findings rather than subjective complaints.
             2020          (7) "Physician" means a licensed physician.
             2021          (8) "Regular monthly salary" means the amount certified by the participating employer
             2022      as the monthly salary of the eligible employee, unless there is a discrepancy between the
             2023      certified amount and the amount actually paid, in which case the office shall determine the
             2024      regular monthly salary.
             2025          (9) "Regular occupation" means either the primary duties performed by the eligible
             2026      employee for the 12 months preceding the date of disability, or a permanent assignment of duty
             2027      to the eligible employee.
             2028          (10) "Rehabilitative employment" means any occupation or employment for wage or
             2029      profit, for which the eligible employee is reasonably qualified to perform based on education,
             2030      training, or experience.
             2031          (11) (a) "Total disability" means the complete inability, due to objective medical
             2032      impairment, whether physical or mental, to engage in the eligible employee's regular
             2033      occupation during the elimination period and the first 24 months of disability benefits.
             2034          (b) (i) "Total disability" means, after the elimination period and the first 24 months of
             2035      disability benefits, the complete inability, as determined under Subsection (11)(b)(ii), to engage
             2036      in any gainful occupation which is reasonable, considering the eligible employee's education,
             2037      training, and experience.
             2038          (ii) For purposes of Subsection (11)(b)(i), inability is determined:
             2039          (A) based solely on physical objective medical impairment; and
             2040          (B) regardless of the existence or absence of any mental impairment.
             2041          Section 41. Section 49-21-408 is enacted to read:
             2042          49-21-408. Limitation of service credit accrual -- Disability benefits from a
             2043      long-term disability program other than under this chapter.
             2044          Beginning on July 1, 2014, an eligible employee who receives a monthly disability
             2045      benefit from a long-term disability program other than under this chapter and who is eligible


             2046      for service credit under a system or plan shall accrue service credit in that system or plan until
             2047      the earlier of:
             2048          (1) the date of the eligible employee's death;
             2049          (2) the date the eligible employee retires from the system or plan; or
             2050          (3) the date the eligible employee has accumulated or would have accumulated service
             2051      credit in a defined benefit system or plan under this title, sufficient to be eligible to retire with
             2052      an unreduced allowance, if the employee had not:
             2053          (a) chosen a defined contribution plan under Title 49, Chapter 22, Part 4, Tier II
             2054      Defined Contribution Plan, or under Title 49, Chapter 23, Part 4, Tier II Defined Contribution
             2055      Plan;
             2056          (b) been a volunteer firefighter; or
             2057          (c) been exempted from a retirement system or plan under this title.
             2058          Section 42. Section 49-22-201 is amended to read:
             2059           49-22-201. System membership -- Eligibility.
             2060          (1) Beginning July 1, 2011, a participating employer shall participate in this system.
             2061          (2) (a) A person initially entering regular full-time employment with a participating
             2062      employer on or after July 1, 2011, who does not have service credit accrued before July 1,
             2063      2011, in a Tier I system or plan administered by the board, is eligible:
             2064          (i) as a member for service credit and defined contributions under the Tier II hybrid
             2065      retirement system established by Part 3, Tier II Hybrid Retirement System; or
             2066          (ii) as a participant for defined contributions under the Tier II defined contribution plan
             2067      established by Part 4, Tier II Defined Contribution Plan.
             2068          (b) A person initially entering regular full-time employment with a participating
             2069      employer on or after July 1, 2011, shall:
             2070          (i) make an election to participate in the system created under this chapter within 30
             2071      days from the date of eligibility for accrual of benefits:
             2072          (A) as a member for service credit and defined contributions under the Tier II hybrid
             2073      retirement system established by Part 3, Tier II Hybrid Retirement System; or


             2074          (B) as a participant for defined contributions under the Tier II defined contribution plan
             2075      established by Part 4, Tier II Defined Contribution Plan; and
             2076          (ii) electronically submit to the office notification of the member's election under
             2077      Subsection (2)(b)(i) in a manner approved by the office.
             2078          (c) An election made by a person initially entering regular full-time employment with a
             2079      participating employer under this Subsection (2) is irrevocable beginning one year from the
             2080      date of eligibility for accrual of benefits.
             2081          (d) If no election is made under Subsection (2)(b)(i), the person shall become a
             2082      member eligible for service credit and defined contributions under the Tier II hybrid retirement
             2083      system established by Part 3, Tier II Hybrid Retirement System.
             2084          (3) Notwithstanding the provisions of this section, an elected official initially entering
             2085      office on or after July 1, 2011:
             2086          (a) is only eligible to participate in the Tier II defined contribution plan established
             2087      under Chapter 22, Part 4, Tier II Defined Contribution Plan; and
             2088          (b) is not eligible to participate in the Tier II hybrid retirement system established
             2089      under Chapter 22, Part 3, Tier II Hybrid Retirement System.
             2090          Section 43. Section 49-22-203 is amended to read:
             2091           49-22-203. Exclusions from membership in system.
             2092          (1) The following employees are not eligible for service credit in this system:
             2093          (a) subject to the requirements of Subsection (2), an employee whose employment
             2094      status is temporary in nature due to the nature or the type of work to be performed;
             2095          (b) except as provided under Subsection (3), an employee of an institution of higher
             2096      education who participates in a retirement system with [the Teachers' Insurance and Annuity
             2097      Association of America or with any other] a public or private retirement system, organization,
             2098      or company designated by the State Board of Regents during any period in which required
             2099      contributions based on compensation have been paid on behalf of the employee by the
             2100      employer;
             2101          (c) an employee serving as an exchange employee from outside the state; or


             2102          (d) an employee of the Department of Workforce Services who is covered under
             2103      another retirement system allowed under Title 35A, Chapter 4, Employment Security Act.
             2104          (2) If an employee whose status is temporary in nature due to the nature of type of
             2105      work to be performed:
             2106          (a) is employed for a term that exceeds six months and the employee otherwise
             2107      qualifies for service credit in this system, the participating employer shall report and certify to
             2108      the office that the employee is a regular full-time employee effective the beginning of the
             2109      seventh month of employment; or
             2110          (b) was previously terminated prior to being eligible for service credit in this system
             2111      and is reemployed within three months of termination by the same participating employer, the
             2112      participating employer shall report and certify that the member is a regular full-time employee
             2113      when the total of the periods of employment equals six months and the employee otherwise
             2114      qualifies for service credits in this system.
             2115          (3) Upon cessation of the participating employer contributions, an employee under
             2116      Subsection (1)(b) is eligible for service credit in this system.
             2117          Section 44. Section 49-22-204 is amended to read:
             2118           49-22-204. Higher education employees' eligibility requirements -- Election
             2119      between different retirement plans -- Classification requirements -- Transfer between
             2120      systems.
             2121          (1) (a) Regular full-time employees of institutions of higher education who are eligible
             2122      to participate in either this system or in a retirement annuity contract with [the Teachers'
             2123      Insurance and Annuity Association of America or with any other] a public or private system,
             2124      organization, or company, designated by the Board of Regents, shall, not later than January 1,
             2125      1979, elect to participate exclusively in this system or in an annuity contract allowed under this
             2126      Subsection (1)(a).
             2127          (b) The election is final, and no right exists to make any further election.
             2128          (2) (a) A regular full-time employee hired by an institution of higher education after
             2129      January 1, 1979, may participate only in the retirement plan which attaches to the person's


             2130      employment classification.
             2131          (b) Each institution of higher education shall prepare or amend existing employment
             2132      classifications, under the direction of the Board of Regents, so that each classification is
             2133      assigned with either:
             2134          (i) this system; or
             2135          [(ii) the Teachers' Insurance and Annuity Association of America; or]
             2136          [(iii) another] (ii) a public or private system, organization, or company designated by
             2137      the Board of Regents.
             2138          (3) A regular full-time employee hired by an institution of higher education on or after
             2139      July 1, 2011, whose employment classification requires participation in this system may elect
             2140      to continue participation in this system upon change to an employment classification which
             2141      requires participation in[: (a) an annuity plan with the Teachers' Insurance and Annuity
             2142      Association of America; or (b) another] a public or private system, organization, or company
             2143      designated by the Board of Regents.
             2144          (4) A regular full-time employee hired by an institution of higher education on or after
             2145      July 1, 2011, whose employment classification requires participation in this system shall
             2146      participate in this system.
             2147          Section 45. Section 49-22-304 is amended to read:
             2148           49-22-304. Defined benefit eligibility for an allowance -- Date of retirement --
             2149      Qualifications.
             2150          (1) A member is qualified to receive an allowance from this system when:
             2151          (a) except as provided under Subsection (3), the member ceases actual work for every
             2152      participating employer that employs the member before the member's retirement date and
             2153      provides evidence of the termination;
             2154          (b) the member has submitted to the office a [notarized] retirement application form
             2155      that states the member's proposed retirement date; and
             2156          (c) one of the following conditions is met as of the member's retirement date:
             2157          (i) the member has accrued at least four years of service credit and has attained an age


             2158      of 65 years;
             2159          (ii) the member has accrued at least 10 years of service credit and has attained an age
             2160      of 62 years;
             2161          (iii) the member has accrued at least 20 years of service credit and has attained an age
             2162      of 60 years; or
             2163          (iv) the member has accrued at least 35 years of service credit.
             2164          (2) (a) The member's retirement date:
             2165          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             2166          (ii) shall be on or after the date of termination; and
             2167          (iii) may not be more than 90 days before or after the date the application is received by
             2168      the office.
             2169          (b) Except as provided under Subsection (3), a member may not be employed by a
             2170      participating employer in the system established by this chapter on the retirement date selected
             2171      under Subsection (2)(a)(i).
             2172          (3) (a) A member who is employed by a participating employer and who is also an
             2173      elected official is not required to cease service as an elected official to be qualified to receive
             2174      an allowance under Subsection (1), unless the member is retiring from service as an elected
             2175      official.
             2176          (b) A member who is employed by a participating employer and who is also a part-time
             2177      appointed board member is not required to cease service as a part-time appointed board
             2178      member to be qualified to receive an allowance under Subsection (1).
             2179          Section 46. Section 49-23-201 is amended to read:
             2180           49-23-201. System membership -- Eligibility.
             2181          (1) Beginning July 1, 2011, a participating employer that employs public safety service
             2182      employees or firefighter service employees shall participate in this system.
             2183          (2) (a) A public safety service employee or a firefighter service employee initially
             2184      entering employment with a participating employer on or after July 1, 2011, who does not have
             2185      service credit accrued before July 1, 2011, in a Tier I system or plan administered by the board,


             2186      is eligible:
             2187          (i) as a member for service credit and defined contributions under the Tier II hybrid
             2188      retirement system established by Part 3, Tier II Hybrid Retirement System; or
             2189          (ii) as a participant for defined contributions under the Tier II defined contributions
             2190      plan established by Part 4, Tier II Defined Contribution Plan.
             2191          (b) A public safety service employee or a firefighter service employee initially entering
             2192      employment with a participating employer on or after July 1, 2011, shall:
             2193          (i) make an election to participate in the system created under this chapter within 30
             2194      days from the date of eligibility for accrual of benefits:
             2195          (A) as a member for service credit and defined contributions under the Tier II hybrid
             2196      retirement system established by Part 3, Tier II Hybrid Retirement System; or
             2197          (B) as a participant for defined contributions under the Tier II defined contribution plan
             2198      established by Part 4, Tier II Defined Contribution Plan; and
             2199          (ii) electronically submit to the office notification of the member's election under
             2200      Subsection (2)(b)(i) in a manner approved by the office.
             2201          (c) An election made by a public safety service employee or firefighter service
             2202      employee initially entering employment with a participating employer under this Subsection (2)
             2203      is irrevocable beginning one year from the date of eligibility for accrual of benefits.
             2204          (d) If no election is made under Subsection (2)(b)(i), the public safety service employee
             2205      or firefighter service employee shall become a member eligible for service credit and defined
             2206      contributions under the Tier II hybrid retirement system established by Part 3, Tier II Hybrid
             2207      Retirement System.
             2208          Section 47. Section 49-23-303 is amended to read:
             2209           49-23-303. Defined benefit eligibility for an allowance -- Date of retirement --
             2210      Qualifications.
             2211          (1) A member is qualified to receive an allowance from this system when:
             2212          (a) except as provided under Subsection (3), the member ceases actual work for every
             2213      participating employer that employs the member before the member's retirement date and


             2214      provides evidence of the termination;
             2215          (b) the member has submitted to the office a [notarized] retirement application form
             2216      that states the member's proposed retirement date; and
             2217          (c) one of the following conditions is met as of the member's retirement date:
             2218          (i) the member has accrued at least four years of service credit and has attained an age
             2219      of 65 years;
             2220          (ii) the member has accrued at least 10 years of service credit and has attained an age
             2221      of 62 years;
             2222          (iii) the member has accrued at least 20 years of service credit and has attained an age
             2223      of 60 years; or
             2224          (iv) the member has accrued at least 25 years of service credit.
             2225          (2) (a) The member's retirement date:
             2226          (i) shall be the 1st or the 16th day of the month, as selected by the member;
             2227          (ii) shall be on or after the date of termination; and
             2228          (iii) may not be more than 90 days before or after the date the application is received by
             2229      the office.
             2230          (b) Except as provided under Subsection (3), a member may not be employed by a
             2231      participating employer in the system established by this chapter on the retirement date selected
             2232      under Subsection (2)(a)(i).
             2233          (3) (a) A member who is employed by a participating employer and who is also an
             2234      elected official is not required to cease service as an elected official to be qualified to receive
             2235      an allowance under Subsection (1), unless the member is retiring from service as an elected
             2236      official.
             2237          (b) A member who is employed by a participating employer and who is also a part-time
             2238      appointed board member is not required to cease service as a part-time appointed board
             2239      member to be qualified to receive an allowance under Subsection (1).
             2240          Section 48. Section 49-23-503 is amended to read:
             2241           49-23-503. Death of active member in line of duty -- Payment of benefits.


             2242          If an active member of this system dies, benefits are payable as follows:
             2243          (1) If the death is classified by the office as a line-of-duty death, benefits are payable as
             2244      follows:
             2245          (a) If the member has accrued less than 20 years of public safety service or firefighter
             2246      service credit, the spouse at the time of death shall receive a lump sum of $1,000 and an
             2247      allowance equal to 30% of the member's final average monthly salary.
             2248          (b) If the member has accrued 20 or more years of public safety service or firefighter
             2249      service credit, the member shall be considered to have retired with an Option One allowance
             2250      calculated without an actuarial reduction under Section 49-23-304 and the spouse at the time of
             2251      death shall receive the allowance that would have been payable to the member.
             2252          (2) (a) A volunteer firefighter is eligible for a line-of-duty death benefit under this
             2253      section if the death results from external force, violence, or disease directly resulting from
             2254      firefighter service.
             2255          (b) The lowest monthly compensation of firefighters of a city of the first class in this
             2256      state at the time of death shall be considered to be the final average monthly salary of a
             2257      volunteer firefighter for purposes of computing these benefits.
             2258          (c) Each volunteer fire department shall maintain a current roll of all volunteer
             2259      firefighters which meet the requirements of Subsection 49-23-102 (12) to determine the
             2260      eligibility for this benefit.
             2261          (3) (a) If the death is classified as a line-of-duty death by the office, death benefits are
             2262      payable under this section and the spouse at the time of death is not eligible for benefits under
             2263      Section 49-23-502 .
             2264          (b) If the death is not classified as a line-of-duty death by the office, benefits are
             2265      payable in accordance with Section 49-23-502 .
             2266          (4) (a) A spouse who qualifies for a monthly benefit under this section shall apply in
             2267      writing to the office.
             2268          (b) The allowance shall begin on the first day of the month following the month in
             2269      which the:


             2270          (i) member or participant died, if the application is received by the office within 90
             2271      days of the date of death of the member or participant; or
             2272          (ii) application is received by the office, if the application is received by the office
             2273      more than 90 days after the date of death of the member or participant.
             2274          Section 49. Section 67-19-43 is amended to read:
             2275           67-19-43. State employee matching supplemental defined contribution benefit.
             2276          (1) As used in this section, "qualifying employee" means an employee who is:
             2277          (a) in a position that is [receiving]:
             2278          (i) receiving retirement benefits under Title 49, Utah State Retirement and Insurance
             2279      Benefit Act; and
             2280          (ii) accruing paid leave benefits that can be used in the current and future calendar
             2281      years; and
             2282          (b) not an employee who is reemployed as defined in Section 49-11-102 .
             2283          (2) Subject to the requirements of Subsection (3) and beginning on or after January 4,
             2284      2014, an employer shall make a biweekly matching contribution to every qualifying employee's
             2285      defined contribution plan qualified under Section 401(k) of the Internal Revenue Code, subject
             2286      to federal requirements and limitations, which is sponsored by the Utah State Retirement
             2287      Board.
             2288          (3) (a) In accordance with the requirements of this Subsection (3), each qualifying
             2289      employee shall be eligible to receive the same dollar amount for the contribution under
             2290      Subsection (2).
             2291          (b) A qualifying employee:
             2292          (i) shall receive the contribution amount determined under Subsection (3)(c) if the
             2293      qualifying employee makes a voluntary personal contribution to the defined contribution plan
             2294      account described in Subsection (2) in an amount equal to or greater than the employer's
             2295      contribution amount determined in Subsection (3)(c);
             2296          (ii) shall receive a partial contribution amount that is equal to the qualifying employee's
             2297      personal contribution amount if the employee makes a voluntary personal contribution to the


             2298      defined contribution plan account described in Subsection (2) in an amount less than the
             2299      employer's contribution amount determined in Subsection (3)(c); or
             2300          (iii) may not receive a contribution under Subsection (2) if the qualifying employee
             2301      does not make a voluntary personal contribution to the defined contribution plan account
             2302      described in Subsection (2).
             2303          (c) (i) Subject to the maximum limit under Subsection (3)(c)(iii), the Legislature shall
             2304      annually determine the contribution amount that an employer shall provide to each qualifying
             2305      employee under Subsection (2).
             2306          (ii) The department shall make recommendations annually to the Legislature on the
             2307      contribution amount required under Subsection (2), in consultation with the Governor's Office
             2308      of Management and Budget and the Division of Finance.
             2309          (iii) The biweekly matching contribution amount required under Subsection (2) may
             2310      not exceed $26 for each qualifying employee.
             2311          (4) A qualifying employee is eligible to receive the biweekly contribution under this
             2312      section for any pay period in which the employee is in a paid status or other status protected by
             2313      federal or state law.
             2314          (5) The employer and employee contributions made under this section vest
             2315      immediately upon deposit and can be withdrawn by the employee at any time, subject to
             2316      Internal Revenue Code regulations on the withdrawals.
             2317          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             2318      executive director shall make rules establishing procedures to implement the provisions of this
             2319      section.
             2320          Section 50. Effective date.
             2321          If approved by two-thirds of all the members elected to each house, this bill takes effect
             2322      upon approval by the governor, or the day following the constitutional time limit of Utah
             2323      Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
             2324      the date of veto override.


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