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7 LONG TITLE
8 General Description:
9 This bill modifies the Utah State Retirement and Insurance Benefit Act by providing for
10 the withdrawal of employees of a withdrawing entity.
11 Highlighted Provisions:
12 This bill:
13 ▸ allows certain withdrawing entities to make an election to withdraw from
14 participation in a Utah retirement system or plan for current and future employees in
15 certain circumstances;
16 ▸ requires the withdrawing entity to pay certain costs that arise out of the election of
17 the withdrawal;
18 ▸ excludes all employees of a withdrawing entity from participation in the Public
19 Employees' Contributory Retirement System, the Public Employees'
20 Noncontributory Retirement System, and the New Public Employees' Tier II
21 Contributory Retirement Act under certain circumstances;
22 ▸ requires certain reporting from a withdrawing entity; and
23 ▸ makes technical changes.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 This bill provides a special effective date.
28 Utah Code Sections Affected:
29 AMENDS:
30 49-11-623, as enacted by Laws of Utah 2014, Chapter 365
31 49-12-203, as last amended by Laws of Utah 2014, Chapters 15, 201, and 365
32 49-13-203, as last amended by Laws of Utah 2014, Chapters 15 and 365
33 49-22-203, as last amended by Laws of Utah 2014, Chapters 15 and 365
34
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 49-11-623 is amended to read:
37 49-11-623. Withdrawing entity -- Participation election date -- Withdrawal costs
38 -- Rulemaking.
39 (1) As used in this section, "withdrawing entity" means an entity that:
40 (a) participates in a system or plan under this title prior to July 1, 2014;
41 (b) provides mental health and substance abuse services for a county under Section
42 17-50-318;
43 (c) after beginning participation with a system or plan under this title, has modified its
44 federal tax status to a nonprofit organization that qualifies under Section 501(c)(3) of the
45 Internal Revenue Code; and
46 (d) is not a state institution of higher education as described in Section 53B-2-101.
47 (2) Notwithstanding any other provision of this title, a withdrawing entity may provide
48 for the participation of its employees with that system or plan as follows:
49 (a) the withdrawing entity shall determine a date that is no later than January 1, 2017,
50 on which the withdrawing entity shall make an election under Subsection (3); and
51 (b) subject to the provisions of Subsection (6), the withdrawing entity shall pay to the
52 office any reasonable actuarial and administrative costs determined by the office to have arisen
53 out of an election made under this section.
54 (3) The withdrawing entity described under Subsection (2) may elect to:
55 (a) (i) continue its participation for all current employees of the withdrawing entity,
56 who are covered by a system or plan as of the date set under Subsection (2)(a); and
57 [
58 entering employment with the withdrawing entity, beginning on the date set under Subsection
59 (2)(a)[
60 (b) withdraw from participation in all systems or plans for all current and future
61 employees of the withdrawing entity, beginning on the date set under Subsection (2)(a).
62 (4) (a) An election provided under Subsection (3):
63 (i) is a one-time election made no later than the date specified under Subsection (2)(a);
64 (ii) shall be documented by a resolution adopted by the governing body of the
65 withdrawing entity;
66 (iii) is irrevocable; and
67 (iv) applies to the withdrawing entity as the employer and to all employees of the
68 withdrawing entity.
69 (b) Notwithstanding an election made under Subsection (3), any eligibility for service
70 credit earned by an employee under this title before the date specified under Subsection (2)(a)
71 is not affected by this section.
72 (5) If a withdrawing entity elects to continue participation under Subsection (3), the
73 withdrawing entity shall continue to be subject to the laws and the rules governing the system
74 or plan in which an employee participates, including the accrual of service credit and payment
75 of contributions.
76 (6) Before a withdrawing entity may withdraw under this section, the withdrawing
77 entity and the office shall enter into an agreement on:
78 (a) the costs described under Subsection (2)(b); and
79 (b) arrangements for the payment of the costs described under Subsection (2)(b).
80 (7) (a) A withdrawing entity that withdraws under Subsection (3)(a) or (b), shall
81 prepare and submit to the governor and the Retirement and Independent Entities Committee, by
82 October 1 of each year, an annual written report of its finances, operations, and services for the
83 preceding fiscal year.
84 (b) The report shall include:
85 (i) budget data showing personnel and employee benefit expenditures, financial status,
86 and any outstanding loan information; and
87 (ii) historical data from previous years for comparison with data reported under
88 Subsections (7)(a) and (b)(i).
89 [
90 Section 2. Section 49-12-203 is amended to read:
91 49-12-203. Exclusions from membership in system.
92 (1) The following employees are not eligible for service credit in this system:
93 (a) subject to the requirements of Subsection (2), an employee whose employment
94 status is temporary in nature due to the nature or the type of work to be performed;
95 (b) except as provided under Subsection (3)(a), an employee of an institution of higher
96 education who participates in a retirement system with a public or private retirement system,
97 organization, or company designated by the State Board of Regents during any period in which
98 required contributions based on compensation have been paid on behalf of the employee by the
99 employer;
100 (c) an employee serving as an exchange employee from outside the state;
101 (d) an executive department head of the state, a member of the State Tax Commission,
102 the Public Service Commission, and a member of a full-time or part-time board or commission
103 who files a formal request for exemption;
104 (e) an employee of the Department of Workforce Services who is covered under
105 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act;
106 (f) an employee who is employed on or after July 1, 2009, with an employer that has
107 elected, prior to July 1, 2009, to be excluded from participation in this system under Subsection
108 49-12-202(2)(c);
109 (g) an employee who is employed on or after July 1, 2014, with an employer that has
110 elected, prior to July 1, 2014, to be excluded from participation in this system under Subsection
111 49-12-202(2)(d); or
112 (h) an employee who is employed with a withdrawing entity that has elected, prior to
113 January 1, 2017, to exclude:
114 (i) new employees from participation in this system under Subsection
115 49-11-623(3)[
116 (ii) all employees from participation in this system under Subsection 49-11-623(3)(b).
117 (2) If an employee whose status is temporary in nature due to the nature of type of
118 work to be performed:
119 (a) is employed for a term that exceeds six months and the employee otherwise
120 qualifies for service credit in this system, the participating employer shall report and certify to
121 the office that the employee is a regular full-time employee effective the beginning of the
122 seventh month of employment; or
123 (b) was previously terminated prior to being eligible for service credit in this system
124 and is reemployed within three months of termination by the same participating employer, the
125 participating employer shall report and certify that the member is a regular full-time employee
126 when the total of the periods of employment equals six months and the employee otherwise
127 qualifies for service credits in this system.
128 (3) (a) Upon cessation of the participating employer contributions, an employee under
129 Subsection (1)(b) is eligible for service credit in this system.
130 (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
131 credit earned by an employee under this chapter before July 1, 2009 is not affected under
132 Subsection (1)(f).
133 (c) Notwithstanding the provisions of Subsection (1)(g), any eligibility for service
134 credit earned by an employee under this chapter before July 1, 2014, is not affected under
135 Subsection (1)(g).
136 (4) Upon filing a written request for exemption with the office, the following
137 employees shall be exempt from coverage under this system:
138 (a) a full-time student or the spouse of a full-time student and individuals employed in
139 a trainee relationship;
140 (b) an elected official;
141 (c) an executive department head of the state, a member of the State Tax Commission,
142 a member of the Public Service Commission, and a member of a full-time or part-time board or
143 commission;
144 (d) an employee of the Governor's Office of Management and Budget;
145 (e) an employee of the Governor's Office of Economic Development;
146 (f) an employee of the Commission on Criminal and Juvenile Justice;
147 (g) an employee of the Governor's Office;
148 (h) an employee of the State Auditor's Office;
149 (i) an employee of the State Treasurer's Office;
150 (j) any other member who is permitted to make an election under Section 49-11-406;
151 (k) a person appointed as a city manager or chief city administrator or another person
152 employed by a municipality, county, or other political subdivision, who is an at-will employee;
153 and
154 (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
155 Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
156 membership in a labor organization that provides retirement benefits to its members.
157 (5) (a) Each participating employer shall prepare a list designating those positions
158 eligible for exemption under Subsection (4).
159 (b) An employee may not be exempted unless the employee is employed in an
160 exempted position designated by the participating employer.
161 (6) (a) In accordance with this section, a municipality, county, or political subdivision
162 may not exempt more than 50 positions or a number equal to 10% of the employees of the
163 municipality, county, or political subdivision whichever is lesser.
164 (b) A municipality, county, or political subdivision may exempt at least one regular
165 full-time employee.
166 (7) Each participating employer shall:
167 (a) file employee exemptions annually with the office; and
168 (b) update the employee exemptions in the event of any change.
169 (8) The office may make rules to implement this section.
170 Section 3. Section 49-13-203 is amended to read:
171 49-13-203. Exclusions from membership in system.
172 (1) The following employees are not eligible for service credit in this system:
173 (a) subject to the requirements of Subsection (2), an employee whose employment
174 status is temporary in nature due to the nature or the type of work to be performed;
175 (b) except as provided under Subsection (3)(a), an employee of an institution of higher
176 education who participates in a retirement system with a public or private retirement system,
177 organization, or company designated by the State Board of Regents during any period in which
178 required contributions based on compensation have been paid on behalf of the employee by the
179 employer;
180 (c) an employee serving as an exchange employee from outside the state;
181 (d) an executive department head of the state or a legislative director, senior executive
182 employed by the governor's office, a member of the State Tax Commission, a member of the
183 Public Service Commission, and a member of a full-time or part-time board or commission
184 who files a formal request for exemption;
185 (e) an employee of the Department of Workforce Services who is covered under
186 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act;
187 (f) an employee who is employed with an employer that has elected to be excluded
188 from participation in this system under Subsection 49-13-202(5), effective on or after the date
189 of the employer's election under Subsection 49-13-202(5); or
190 (g) an employee who is employed with a withdrawing entity that has elected, prior to
191 January 1, 2017, to exclude:
192 (i) new employees from participation in this system under Subsection
193 49-11-623(3)[
194 (ii) all employees from participation in this system under Subsection 49-11-623(3)(b).
195 (2) If an employee whose status is temporary in nature due to the nature of type of
196 work to be performed:
197 (a) is employed for a term that exceeds six months and the employee otherwise
198 qualifies for service credit in this system, the participating employer shall report and certify to
199 the office that the employee is a regular full-time employee effective the beginning of the
200 seventh month of employment; or
201 (b) was previously terminated prior to being eligible for service credit in this system
202 and is reemployed within three months of termination by the same participating employer, the
203 participating employer shall report and certify that the member is a regular full-time employee
204 when the total of the periods of employment equals six months and the employee otherwise
205 qualifies for service credits in this system.
206 (3) (a) Upon cessation of the participating employer contributions, an employee under
207 Subsection (1)(b) is eligible for service credit in this system.
208 (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
209 credit earned by an employee under this chapter before the date of the election under
210 Subsection 49-13-202(5) is not affected under Subsection (1)(f).
211 (4) Upon filing a written request for exemption with the office, the following
212 employees shall be exempt from coverage under this system:
213 (a) a full-time student or the spouse of a full-time student and individuals employed in
214 a trainee relationship;
215 (b) an elected official;
216 (c) an executive department head of the state, a member of the State Tax Commission,
217 a member of the Public Service Commission, and a member of a full-time or part-time board or
218 commission;
219 (d) an employee of the Governor's Office of Management and Budget;
220 (e) an employee of the Governor's Office of Economic Development;
221 (f) an employee of the Commission on Criminal and Juvenile Justice;
222 (g) an employee of the Governor's Office;
223 (h) an employee of the State Auditor's Office;
224 (i) an employee of the State Treasurer's Office;
225 (j) any other member who is permitted to make an election under Section 49-11-406;
226 (k) a person appointed as a city manager or chief city administrator or another person
227 employed by a municipality, county, or other political subdivision, who is an at-will employee;
228 (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
229 Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
230 membership in a labor organization that provides retirement benefits to its members; and
231 (m) an employee of the Utah Science Technology and Research Initiative created under
232 Title 63M, Chapter 2, Utah Science Technology and Research Governing Authority Act.
233 (5) (a) Each participating employer shall prepare a list designating those positions
234 eligible for exemption under Subsection (4).
235 (b) An employee may not be exempted unless the employee is employed in a position
236 designated by the participating employer.
237 (6) (a) In accordance with this section, a municipality, county, or political subdivision
238 may not exempt more than 50 positions or a number equal to 10% of the employees of the
239 municipality, county, or political subdivision, whichever is lesser.
240 (b) A municipality, county, or political subdivision may exempt at least one regular
241 full-time employee.
242 (7) Each participating employer shall:
243 (a) file employee exemptions annually with the office; and
244 (b) update the employee exemptions in the event of any change.
245 (8) The office may make rules to implement this section.
246 Section 4. Section 49-22-203 is amended to read:
247 49-22-203. Exclusions from membership in system.
248 (1) The following employees are not eligible for service credit in this system:
249 (a) subject to the requirements of Subsection (2), an employee whose employment
250 status is temporary in nature due to the nature or the type of work to be performed;
251 (b) except as provided under Subsection (3), an employee of an institution of higher
252 education who participates in a retirement system with a public or private retirement system,
253 organization, or company designated by the State Board of Regents during any period in which
254 required contributions based on compensation have been paid on behalf of the employee by the
255 employer;
256 (c) an employee serving as an exchange employee from outside the state;
257 (d) an employee of the Department of Workforce Services who is covered under
258 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act; or
259 (e) an employee who is employed with a withdrawing entity that has elected, prior to
260 January 1, 2017, to exclude:
261 (i) new employees from participation in this system under Subsection
262 49-11-623(3)[
263 (ii) all employees from participation in this system under Subsection 49-11-623(3)(b).
264 (2) If an employee whose status is temporary in nature due to the nature of type of
265 work to be performed:
266 (a) is employed for a term that exceeds six months and the employee otherwise
267 qualifies for service credit in this system, the participating employer shall report and certify to
268 the office that the employee is a regular full-time employee effective the beginning of the
269 seventh month of employment; or
270 (b) was previously terminated prior to being eligible for service credit in this system
271 and is reemployed within three months of termination by the same participating employer, the
272 participating employer shall report and certify that the member is a regular full-time employee
273 when the total of the periods of employment equals six months and the employee otherwise
274 qualifies for service credits in this system.
275 (3) Upon cessation of the participating employer contributions, an employee under
276 Subsection (1)(b) is eligible for service credit in this system.
277 Section 5. Effective date.
278 If approved by two-thirds of all the members elected to each house, this bill takes effect
279 upon approval by the governor, or the day following the constitutional time limit of Utah
280 Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
281 the date of veto override.