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S.B. 204

             1     

RETIREMENT SYSTEM OPT-OUT FOR RURAL HEALTH

             2     
CARE CENTERS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: David P. Hinkins

             6     
House Sponsor: Kay L. McIff

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah State Retirement and Insurance Benefit Act to allow certain
             11      employers and employees to be excluded from participation in the Public Employees'
             12      Contributory Retirement System and the Public Employees' Noncontributory
             13      Retirement System.
             14      Highlighted Provisions:
             15          This bill:
             16          .    allows an employer that is licensed as a nursing care facility and created as a special
             17      service district to elect to be excluded from participation in the Public Employees'
             18      Contributory Retirement System and the Public Employees' Noncontributory
             19      Retirement System under certain circumstances;
             20          .    provides procedures for the exclusion;
             21          .    excludes new and existing employees of a special service district that is licensed as
             22      a nursing care facility from participation in the Public Employees' Contributory
             23      Retirement System and the Public Employees' Noncontributory Retirement System
             24      under certain circumstances; and
             25          .    makes technical changes.
             26      Money Appropriated in this Bill:
             27          None


             28      Other Special Clauses:
             29          None
             30      Utah Code Sections Affected:
             31      AMENDS:
             32           49-11-601 , as last amended by Laws of Utah 2010, Chapter 280
             33           49-12-202 , as last amended by Laws of Utah 2009, Chapters 51 and 165
             34           49-12-203 , as last amended by Laws of Utah 2013, Chapters 310 and 316
             35           49-13-202 , as last amended by Laws of Utah 2012, Chapter 298
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 49-11-601 is amended to read:
             39           49-11-601. Payment of employer contributions -- Penalties for failure to comply --
             40      Adjustments to be made.
             41          (1) The employer contributions, fees, premium taxes, contribution adjustments, and
             42      other required payments shall be paid to the office by the participating employer as determined
             43      by the executive director.
             44          (2) A participating employer that fails to withhold the amount of any member
             45      contributions, as soon as administratively possible, shall also pay the member contributions to
             46      the office out of its own funds.
             47          (3) Except as limited by Subsections (6) and (7), if a participating employer does not
             48      make the contributions required by this title within 60 days of the end of the pay period, the
             49      participating employer is liable to the office as provided in Section 49-11-604 for:
             50          (a) delinquent contributions;
             51          (b) interest on the delinquent contributions as calculated under Section 49-11-503 ; and
             52          (c) a 12% per annum penalty on delinquent contributions.
             53          (4) The executive director may waive all or any part of the interest, penalties, expenses,
             54      and fees if the executive director finds there were extenuating circumstances surrounding the
             55      participating employer's failure to comply with this section.
             56          (5) Contributions made in error will be refunded to the participating employer or
             57      member that made the contributions.
             58          (6) (a) An employer described in [Subsections] Subsection 49-12-202 (2)(c) or (d), or


             59      Subsection 49-13-202 (2)(c) [or], (d), or (e) that paid retirement benefits to an employee or
             60      retiree that were not required by this title may offer the retirement benefits paid to the employee
             61      as a substantial substitute to service credit and retirement benefits that may have been earned
             62      by the employee under this title.
             63          (b) An employee who received retirement benefits under Subsection (6)(a) may sign an
             64      affidavit that:
             65          (i) acknowledges the substantial substitute received by the employee under Subsection
             66      (6)(a); and
             67          (ii) irrevocably relinquishes service credit and retirement benefits that may have
             68      accrued to the employee under this title effective from the employee's date of employment with
             69      the employer described in Subsection (6)(a) to the date of the employer's election under Section
             70      49-12-202 or 49-13-202 .
             71          (c) Nothing in this section shall be construed to diminish an employer's right to recover
             72      past retirement benefits other than Social Security, paid to an employee or retiree, in error or
             73      under mistaken belief that the employer was not a participating employer.
             74          (7) If the employer files with the office an irrevocable written relinquishment of service
             75      credit signed by the member or retiree:
             76          (a) the office shall proportionally reduce any delinquent contributions, penalties, fees,
             77      or interest assessed against a participating employer in connection with a member or retiree
             78      described in Subsection (6)(a); and
             79          (b) the system has no liability to the employee for benefits relinquished under
             80      Subsection (6)(b).
             81          Section 2. Section 49-12-202 is amended to read:
             82           49-12-202. Participation of employers -- Limitations -- Exclusions -- Admission
             83      requirements -- Exceptions -- Nondiscrimination requirements.
             84          (1) (a) Unless excluded under Subsection (2), an employer is a participating employer
             85      and may not withdraw from participation in this system.
             86          (b) In addition to their participation in this system, participating employers may
             87      provide or participate in public or private retirement, supplemental or defined contribution
             88      plan, either directly or indirectly, for their employees.
             89          (2) The following employers may be excluded from participation in this system:


             90          (a) an employer not initially admitted or included as a participating employer in this
             91      system prior to January 1, 1982 if:
             92          (i) the employer elects not to provide or participate in any type of private or public
             93      retirement, supplemental or defined contribution plan, either directly or indirectly, for its
             94      employees, except for Social Security; or
             95          (ii) the employer offers another collectively bargained retirement benefit and has
             96      continued to do so on an uninterrupted basis since that date;
             97          (b) an employer that is a charter school sponsored by the State Board of Education or a
             98      school district that makes an election of nonparticipation in accordance with Section
             99      53A-1a-512 unless the charter school makes a one-time, irrevocable retraction of the election
             100      of nonparticipation in accordance with Subsection 53A-1a-512 (9); [or]
             101          (c) an employer that is a hospital created as a special service district under Title 17D,
             102      Chapter 1, Special Service District Act, that makes an election of nonparticipation in
             103      accordance with Subsection (4)[.]; or
             104          (d) an employer that is licensed as a nursing care facility under Title 26, Chapter 21,
             105      Health Care Facility Licensing and Inspection Act, and created as a special service district
             106      under Title 17D, Chapter 1, Special Service District Act, in a rural area of the state that makes
             107      an election of nonparticipation in accordance with Subsection (4).
             108          (3) An employer who did not become a participating employer in this system prior to
             109      July 1, 1986, may not participate in this system.
             110          (4) (a) (i) Until June 30, 2009, a employer that is a hospital created as a special service
             111      district under Title 17D, Chapter 1, Special Service District Act, may make an election of
             112      nonparticipation as an employer for retirement programs under this chapter.
             113          (ii) Until June 30, 2014, an employer that is licensed as a nursing care facility under
             114      Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, and created as a
             115      special service district under Title 17D, Chapter 1, Special Service District Act, in a rural area
             116      of the state may make an election of nonparticipation as an employer for retirement programs
             117      under this chapter.
             118          (b) An election provided under Subsection (4)(a):
             119          (i) is a one-time election made no later than the time specified under Subsection (4)(a);
             120          (ii) shall be documented by a resolution adopted by the governing body of the special


             121      service district;
             122          (iii) is irrevocable; and
             123          (iv) applies to the special service district as the employer and to all employees of the
             124      special service district.
             125          (c) The governing body of the special service district may offer employee benefit plans
             126      for its employees:
             127          (i) under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act;
             128      or
             129          (ii) under any other program.
             130          (5) If a participating employer purchases service credit on behalf of regular full-time
             131      employees for service rendered prior to the participating employer's admission to this system,
             132      the service credit shall be purchased in a nondiscriminatory manner on behalf of all current and
             133      former regular full-time employees who were eligible for service credit at the time service was
             134      rendered.
             135          Section 3. Section 49-12-203 is amended to read:
             136           49-12-203. Exclusions from membership in system.
             137          (1) The following employees are not eligible for service credit in this system:
             138          (a) subject to the requirements of Subsection (2), an employee whose employment
             139      status is temporary in nature due to the nature or the type of work to be performed;
             140          (b) except as provided under Subsection (3)(a), an employee of an institution of higher
             141      education who participates in a retirement system with the Teachers' Insurance and Annuity
             142      Association of America or with any other public or private retirement system, organization, or
             143      company during any period in which required contributions based on compensation have been
             144      paid on behalf of the employee by the employer;
             145          (c) an employee serving as an exchange employee from outside the state;
             146          (d) an executive department head of the state, a member of the State Tax Commission,
             147      the Public Service Commission, and a member of a full-time or part-time board or commission
             148      who files a formal request for exemption;
             149          (e) an employee of the Department of Workforce Services who is covered under
             150      another retirement system allowed under Title 35A, Chapter 4, Employment Security Act; [or]
             151          (f) an employee who is employed on or after July 1, 2009, with an employer that has


             152      elected, prior to July 1, 2009, to be excluded from participation in this system under Subsection
             153      49-12-202 (2)(c)[.]; or
             154          (g) an employee who is employed on or after July 1, 2014, with an employer that has
             155      elected, prior to July 1, 2014, to be excluded from participation in this system under Subsection
             156      49-12-202 (2)(d).
             157          (2) If an employee whose status is temporary in nature due to the nature of type of
             158      work to be performed:
             159          (a) is employed for a term that exceeds six months and the employee otherwise
             160      qualifies for service credit in this system, the participating employer shall report and certify to
             161      the office that the employee is a regular full-time employee effective the beginning of the
             162      seventh month of employment; or
             163          (b) was previously terminated prior to being eligible for service credit in this system
             164      and is reemployed within three months of termination by the same participating employer, the
             165      participating employer shall report and certify that the member is a regular full-time employee
             166      when the total of the periods of employment equals six months and the employee otherwise
             167      qualifies for service credits in this system.
             168          (3) (a) Upon cessation of the participating employer contributions, an employee under
             169      Subsection (1)(b) is eligible for service credit in this system.
             170          (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
             171      credit earned by an employee under this chapter before July 1, 2009 is not affected under
             172      Subsection (1)(f).
             173          (c) Notwithstanding the provisions of Subsection (1)(g), any eligibility for service
             174      credit earned by an employee under this chapter before July 1, 2014, is not affected under
             175      Subsection (1)(g).
             176          (4) Upon filing a written request for exemption with the office, the following
             177      employees shall be exempt from coverage under this system:
             178          (a) a full-time student or the spouse of a full-time student and individuals employed in
             179      a trainee relationship;
             180          (b) an elected official;
             181          (c) an executive department head of the state, a member of the State Tax Commission,
             182      a member of the Public Service Commission, and a member of a full-time or part-time board or


             183      commission;
             184          (d) an employee of the Governor's Office of Management and Budget;
             185          (e) an employee of the Governor's Office of Economic Development;
             186          (f) an employee of the Commission on Criminal and Juvenile Justice;
             187          (g) an employee of the Governor's Office;
             188          (h) an employee of the State Auditor's Office;
             189          (i) an employee of the State Treasurer's Office;
             190          (j) any other member who is permitted to make an election under Section 49-11-406 ;
             191          (k) a person appointed as a city manager or chief city administrator or another person
             192      employed by a municipality, county, or other political subdivision, who is an at-will employee;
             193      and
             194          (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
             195      Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
             196      membership in a labor organization that provides retirement benefits to its members.
             197          (5) (a) Each participating employer shall prepare a list designating those positions
             198      eligible for exemption under Subsection (4).
             199          (b) An employee may not be exempted unless the employee is employed in [a] an
             200      exempted position designated by the participating employer.
             201          (6) (a) In accordance with this section, a municipality, county, or political subdivision
             202      may not exempt more than 50 positions or a number equal to 10% of the employees of the
             203      municipality, county, or political subdivision whichever is lesser.
             204          (b) A municipality, county, or political subdivision may exempt at least one regular
             205      full-time employee.
             206          (7) Each participating employer shall:
             207          (a) file employee exemptions annually with the office; and
             208          (b) update the employee exemptions in the event of any change.
             209          (8) The office may make rules to implement this section.
             210          Section 4. Section 49-13-202 is amended to read:
             211           49-13-202. Participation of employers -- Limitations -- Exclusions -- Admission
             212      requirements -- Nondiscrimination requirements -- Service credit purchases.
             213          (1) (a) Unless excluded under Subsection (2), an employer is a participating employer


             214      and may not withdraw from participation in this system.
             215          (b) In addition to their participation in this system, participating employers may
             216      provide or participate in any additional public or private retirement, supplemental or defined
             217      contribution plan, either directly or indirectly, for their employees.
             218          (2) The following employers may be excluded from participation in this system:
             219          (a) an employer not initially admitted or included as a participating employer in this
             220      system before January 1, 1982, if:
             221          (i) the employer elects not to provide or participate in any type of private or public
             222      retirement, supplemental or defined contribution plan, either directly or indirectly, for its
             223      employees, except for Social Security; or
             224          (ii) the employer offers another collectively bargained retirement benefit and has
             225      continued to do so on an uninterrupted basis since that date;
             226          (b) an employer that is a charter school sponsored by the State Board of Education or a
             227      school district that makes an election of nonparticipation in accordance with Section
             228      53A-1a-512 unless the charter school makes a one-time, irrevocable retraction of the election
             229      of nonparticipation in accordance with Subsection 53A-1a-512 (9);
             230          (c) an employer that is a hospital created as a special service district under Title 17D,
             231      Chapter 1, Special Service District Act, that makes an election of nonparticipation in
             232      accordance with Subsection (5); [or]
             233          (d) an employer that is licensed as a nursing care facility under Title 26, Chapter 21,
             234      Health Care Facility Licensing and Inspection Act, and created as a special service district
             235      under Title 17D, Chapter 1, Special Service District Act, in a rural area of the state that makes
             236      an election of nonparticipation in accordance with Subsection (5); or
             237          [(d)] (e) an employer that is a risk management association initially created by
             238      interlocal agreement before 1986 for the purpose of implementing a self-insurance joint
             239      protection program for the benefit of member municipalities of the association.
             240          (3) If an employer that may be excluded under Subsection (2)(a)(i) elects at any time to
             241      provide or participate in any type of public or private retirement, supplemental or defined
             242      contribution plan, either directly or indirectly, except for Social Security, the employer shall be
             243      a participating employer in this system regardless of whether the employer has applied for
             244      admission under Subsection (4).


             245          (4) (a) An employer may, by resolution of its governing body, apply for admission to
             246      this system.
             247          (b) Upon approval of the resolution by the board, the employer is a participating
             248      employer in this system and is subject to this title.
             249          (5) (a) (i) Until June 30, 2009, a employer that is a hospital created as a special service
             250      district under Title 17D, Chapter 1, Special Service District Act, may make an election of
             251      nonparticipation as an employer for retirement programs under this chapter.
             252          (ii) Until June 30, 2014, an employer that is licensed as a nursing care facility under
             253      Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, and created as a
             254      special service district under Title 17D, Chapter 1, Special Service District Act, in a rural area
             255      of the state may make an election of nonparticipation as an employer for retirement programs
             256      under this chapter.
             257          [(ii)] (iii) On or before July 1, 2010, an employer described in Subsection (2)[(d)](e)
             258      may make an election of nonparticipation as an employer for retirement programs under this
             259      chapter.
             260          (b) An election provided under Subsection (5)(a):
             261          (i) is a one-time election made no later than the time specified under Subsection (5)(a);
             262          (ii) shall be documented by a resolution adopted by the governing body of the
             263      employer;
             264          (iii) is irrevocable; and
             265          (iv) applies to the employer as described in Subsection (5)(a)(i), (ii), or (iii) and to all
             266      employees of that employer.
             267          (c) The employer making an election under Subsection (5)(a) may offer employee
             268      benefit plans for its employees:
             269          (i) under Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act;
             270      or
             271          (ii) under any other program.
             272          (6) If a participating employer purchases service credit on behalf of regular full-time
             273      employees for service rendered prior to the participating employer's admission to this system,
             274      the service credit shall be purchased in a nondiscriminatory manner on behalf of all current and
             275      former regular full-time employees who were eligible for service credit at the time service was


             276      rendered.




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    as of 2-18-14 10:40 AM


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