Senator Ralph Okerlund proposes the following substitute bill:


1     
POSTRETIREMENT EMPLOYMENT RESTRICTIONS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Rich Cunningham

5     
Senate Sponsor: Todd Weiler

6     Cosponsors:
7     Jacob L. Anderegg
8     Joel K. Briscoe
9     Melvin R. Brown
10     Susan Duckworth
Lynn N. Hemingway
Sandra Hollins
Eric K. Hutchings
Brad King
Brian S. King
Lee B. Perry
Dixon M. Pitcher
Marie H. Poulson
Angela Romero
John R. Westwood
11     

12     LONG TITLE
13     General Description:
14          This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
15     postretirement reemployment provisions.
16     Highlighted Provisions:
17          This bill:
18          ▸     requires that certain costs shall be included in the final contribution rates adapted
19     and certified by the board;
20          ▸     for a certain period of time, allows a retiree to be reemployed with a participating
21     employer after a certain period from the retiree's retirement date if the retiree:
22               •     does not receive certain employer provided retirement benefits for the
23     reemployment; and
24               •     is reemployed by a different agency;
25          ▸     requires a participating employer to pay a portion of the contribution rate for a
26     reemployed retiree in certain circumstances; and
27          ▸     makes technical changes.
28     Money Appropriated in this Bill:
29          None
30     Other Special Clauses:
31          This bill provides a special effective date.
32     Utah Code Sections Affected:
33     AMENDS:
34          49-11-301, as last amended by Laws of Utah 2004, Chapter 322
35          49-11-505, as last amended by Laws of Utah 2015, Chapters 243 and 256
36     

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 49-11-301 is amended to read:
39          49-11-301. Creation -- Board to act as trustees of the fund -- Commingling and
40     pooling of funds -- Interest earnings -- Funded ratio.
41          (1) There is created a common trust fund known as the "Utah State Retirement
42     Investment Fund" for the purpose of enlarging the investment base and simplifying investment
43     procedures and functions.
44          (2) (a) The board shall act as trustees of the Utah State Retirement Investment Fund
45     and, through the executive director, may commingle and pool the funds and investments of any
46     system, plan, or program into the Utah State Retirement Investment Fund, if the principal
47     amounts of the participating funds do not lose their individual identity and are maintained as
48     separate trust funds on the books of the office.
49          (b) (i) In combining the investments of any fund, each of the participating funds shall
50     be credited initially with its share of the total assets transferred to the Utah State Retirement
51     Investment Fund.
52          (ii) The value of the transferred assets shall be calculated in accordance with generally
53     accepted accounting principles.
54          (c) Subsequent transfers of additional capital from participating funds shall be credited
55     similarly to its respective trust account.
56          (d) The income or principal or equity credit belonging to one participating fund may
57     not be transferred to another, except for the purpose of:
58          (i) actuarially recommended transfers in order to adjust employer contribution rates for
59     an employer that participates in both contributory and noncontributory systems; or
60          (ii) transfers which reflect the value of service credit accrued in different systems
61     during a member's career.
62          (3) The assets of the funds are for the exclusive benefit of the members, participants,
63     and covered individuals and may not be diverted or appropriated for any purpose other than
64     that permitted by this title.
65          (4) (a) Interest and other earnings shall be credited to each participating fund on a pro
66     rata equity position basis.
67          (b) (i) A portion of the interest and other earnings of the common trust fund may be
68     credited to a reserve account within the Utah State Retirement Investment Fund to meet
69     adverse experiences arising from investments or other contingencies.
70          (ii) Each participating fund shall retain its proportionate equity in the reserve account.
71          (5) (a) The actuarial funded ratio of the systems may reach and be maintained at 110%,
72     as determined by the board's actuary using assumptions adopted by the board, before the board
73     is required to certify a decrease in contribution rates.
74          (b) [The] Except as provided in Subsection (6), the board may not increase
75     contribution rates to attain an actuarial funded ratio greater than 100%.
76          (6) (a) The cost of any amendment to this title shall be included in the final
77     contribution rates adopted and certified by the board in accordance with Subsections
78     49-11-102(14) and 49-11-203(1)(l).
79          (b) If a preliminary certified contribution rate approved by the board prior to an annual
80     General Session or Special Session of the Legislature was maintained at a previous year's level
81     that is higher than the contribution rate calculated by the board's actuary for that year in
82     accordance with Subsection (5)(a), the board's final certified contribution rate shall be the sum
83     of the actuarially determined costs from any amendment to this title during the General Session
84     or Special Session and the preliminary certified contribution rate.
85          Section 2. Section 49-11-505 is amended to read:
86          49-11-505. Reemployment of a retiree -- Restrictions -- Penalties.
87          (1) (a) For purposes of this section, "retiree":
88          (i) means a person who:
89          (A) retired from a participating employer; and
90          (B) begins reemployment on or after July 1, 2010, with a participating employer;
91          (ii) does not include a person:
92          (A) who was reemployed by a participating employer before July 1, 2010; and
93          (B) whose participating employer that reemployed the person under Subsection
94     (1)(a)(ii)(A) was dissolved, consolidated, merged, or structurally changed in accordance with
95     Section 49-11-621 after July 1, 2010; and
96          (iii) does not include a person who is reemployed as an active senior judge or an active
97     senior justice court judge as described by Utah State Court Rules, appointed to hear cases by
98     the Utah Supreme Court in accordance with Article VIII, Section 4, Utah Constitution.
99          (b) (i) This section does not apply to employment as an elected official if the elected
100     official's position is not full time as certified by the participating employer.
101          (ii) The provisions of this section apply to an elected official whose elected position is
102     full time as certified by the participating employer.
103          (c) (i) This section does not apply to employment as a part-time appointed board
104     member who does not receive any remuneration, stipend, or other benefit for the part-time
105     appointed board member's service.
106          (ii) For purposes of this Subsection (1)(c), remuneration, stipend, or other benefit does
107     not include receipt of per diem and travel expenses up to the amounts established by the
108     Division of Finance in:
109          (A) Section 63A-3-106;
110          (B) Section 63A-3-107; and
111          (C) rules made by the Division of Finance according to Sections 63A-3-106 and
112     63A-3-107.
113          (d) (i) For purposes of this Subsection (1)(d), "affiliated emergency services worker"
114     means a person who:
115          (A) is employed by a participating employer [and who];
116          (B) performs emergency services for another participating employer that is a different
117     agency [in which the person:];
118          [(A)] (C) [has been] is trained in techniques and skills required for the service the
119     person provides to the participating employer;
120          [(B)] (D) continues to receive regular training required for the service;
121          [(C)] (E) is on the rolls as a trained affiliated emergency services worker of the
122     participating employer; and
123          [(D)] (F) provides ongoing service for a participating employer, which service may
124     include service as a volunteer firefighter, reserve law enforcement officer, search and rescue
125     personnel, emergency medical technician, ambulance personnel, park ranger, or public utilities
126     worker.
127          (ii) A person who performs work or service but does not meet the requirements of
128     Subsection (1)(d)(i) is not an affiliated emergency services worker for purposes of this
129     Subsection (1)(d).
130          (iii) The office may not cancel the retirement allowance of a retiree who is employed as
131     an affiliated emergency services worker within one year of the retiree's retirement date if the
132     affiliated emergency services worker does not receive any compensation, except for:
133          (A) a nominal fee, stipend, discount, tax credit, voucher, or other fixed sum of money
134     or cash equivalent payment not tied to productivity and paid periodically for services;
135          (B) a length-of-service award;
136          (C) insurance policy premiums paid by the participating employer in the event of death
137     of an affiliated emergency services worker or a line-of-duty accidental death or disability; or
138          (D) reimbursement of expenses incurred in the performance of duties.
139          (iv) For purposes of Subsections (1)(d)(iii)(A) and (B), the total amount of any
140     discounts, tax credits, vouchers, and payments to a volunteer may not exceed $500 per month.
141          (v) Beginning January 1, 2016, the board shall adjust the amount under Subsection
142     (1)(d)(iv) by the annual change in the Consumer Price Index during the previous calendar year
143     as measured by a United States Bureau of Labor Statistics Consumer Price Index average as
144     determined by the board.
145          (vi) The office shall cancel the retirement allowance of a retiree for the remainder of
146     the calendar year if employment as an affiliated emergency services worker with a participating
147     employer exceeds the limitation under Subsection (1)(d)(iv).
148          (vii) If a retiree is employed as an affiliated emergency services worker under the
149     provisions of Subsection (1)(d), the termination date of the employment as an affiliated
150     emergency services worker, as confirmed in writing by the participating employer, is
151     considered the retiree's retirement date for the purpose of calculating the separation
152     requirement under Subsection (3)(a).
153          (2) A retiree may not for the same period of reemployment:
154          (a) (i) earn additional service credit; or
155          (ii) receive any retirement related contribution from a participating employer; and
156          (b) receive a retirement allowance.
157          (3) (a) Except as provided under Subsection (1)(d), (3)(b), (3)(d), or (10), the office
158     shall cancel the retirement allowance of a retiree if the reemployment with a participating
159     employer begins within one year of the retiree's retirement date.
160          (b) The office may not cancel the retirement allowance of a retiree who is reemployed
161     with a participating employer within one year of the retiree's retirement date if:
162          (i) the retiree:
163          (A) is not reemployed by a participating employer for a period of at least 60 days from
164     the retiree's retirement date;
165          (B) is reemployed by a different agency;
166          (C) does not receive any employer paid retirement service credit or retirement related
167     contributions from the participating employer; and
168          (D) only participates in postretirement reemployment under this Subsection (3)(b) for a
169     maximum of five years; and
170          (ii) except as provided in Subsection (3)(c)(i), the participating employer pays the
171     certified contribution rate to the office as if the retiree's reemployed position were considered to
172     be an eligible, full-time position within that system but the retiree does not earn additional
173     service credit or receive a retirement related contribution.
174          (c) (i) The participating employer shall pay the full normal cost rate portion and 80% of
175     the amortization rate portion of the certified contribution rate to the office for a retiree
176     reemployed under Subsection (3)(b).
177          (ii) Any contribution paid to the office under Subsection (3)(b)(ii) shall be applied to
178     the system that would have covered the retiree if the retiree's reemployed position were
179     considered to be an eligible, full-time position within that system.
180          [(b) The] (d) The office may not cancel the retirement allowance of a retiree who is
181     reemployed with a participating employer within one year of the retiree's retirement date if:
182          (i) the retiree is not reemployed by a participating employer for a period of at least 60
183     days from the retiree's retirement date;
184          (ii) upon reemployment after the break in service under Subsection (3)[(b)](d)(i), the
185     retiree does not receive any employer provided benefits, including:
186          (A) medical benefits;
187          (B) dental benefits;
188          (C) other insurance benefits except for workers' compensation as provided under Title
189     34A, Chapter 2, Workers' Compensation Act, and withholdings required by federal or state law
190     for social security, Medicare, and unemployment insurance; or
191          (D) paid time off, including sick, annual, or other type of leave; and
192          (iii) (A) the retiree does not earn in any calendar year of reemployment an amount in
193     excess of the lesser of $15,000 or one-half of the retiree's final average salary upon which the
194     retiree's retirement allowance is based; or
195          (B) the retiree is reemployed as a judge as defined under Section 78A-11-102.
196          [(c)] (e) Beginning January 1, 2013, the board shall adjust the amounts under
197     Subsection (3)[(b)](d)(iii)(A) by the annual change in the Consumer Price Index during the
198     previous calendar year as measured by a United States Bureau of Labor Statistics Consumer
199     Price Index average as determined by the board.
200          [(d)] (f) The office shall cancel the retirement allowance of a retiree for the remainder
201     of the calendar year if the reemployment with a participating employer exceeds the limitation
202     under Subsection (3)[(b)](d)(iii)(A).
203          [(e)] (g) If a retiree is reemployed under the provisions of Subsection (3)(b) or (d)[,]
204     the termination date of the reemployment, as confirmed in writing by the participating
205     employer, is considered the retiree's retirement date for the purpose of calculating the
206     separation requirement under Subsection (3)(a).
207          [(f) If a retiree received a retirement allowance in error, due to reemployment in
208     violation of this section:]
209          [(i) the office shall cancel the retiree's retirement allowance; and]
210          [(ii) if the retiree applies for a future benefit, the office shall recover any overpayment
211     in accordance with the provisions of Section 49-11-607.]
212          (4) If a reemployed retiree has completed the one-year separation from employment
213     with a participating employer required under Subsection (3)(a), the retiree may elect to:
214          (a) earn additional service credit in accordance with this title and cancel the retiree's
215     retirement allowance; or
216          (b) continue to receive the retiree's retirement allowance and forfeit any retirement
217     related contribution from the participating employer who reemployed the retiree.
218          (5) (a) As used in this Subsection (5), "amortization rate" means the amortization rate,
219     as defined in Section 49-11-102, to be applied to the system that would have covered the retiree
220     if the retiree's reemployed position were deemed to be an eligible, full-time position within that
221     system.
222          (b) A participating employer who reemploys a retiree shall contribute to the office the
223     amortization rate if the reemployed retiree:
224          (i) has completed the one-year separation from employment with a participating
225     employer required under Subsection (3)(a); and
226          (ii) makes an election under Subsection (4)(b) to continue to receive a retirement
227     allowance while reemployed.
228          (6) (a) A participating employer shall immediately notify the office:
229          (i) if the participating employer reemploys a retiree;
230          (ii) whether the reemployment is subject to Subsection (3)(b), (3)(d), or (4) of this
231     section; and
232          (iii) of any election by the retiree under Subsection (4).
233          (b) A participating employer shall certify to the office whether the position of an
234     elected official is or is not full time.
235          (c) A participating employer is liable to the office for a payment or failure to make a
236     payment in violation of this section.
237          (d) If a participating employer fails to notify the office in accordance with this section,
238     the participating employer is immediately subject to a compliance audit by the office.
239          (7) (a) The office shall immediately cancel the retirement allowance of a retiree in
240     accordance with Subsection (7)(b) if the office receives notice or learns of:
241          (i) the reemployment of a retiree in violation of Subsection (1)(d) or (3); or
242          (ii) the election of a reemployed retiree under Subsection (4)(a).
243          (b) If the retiree is eligible for retirement coverage in the reemployed position, the
244     office shall cancel the allowance of a retiree who is subject to Subsection (7)(a), and reinstate
245     the retiree to active member status on the first day of the month following the date of:
246          (i) reemployment if the retiree is subject to Subsection (3); or
247          (ii) an election by an employee under Subsection (4)(a).
248          (c) If the retiree is not otherwise eligible for retirement coverage in the reemployed
249     position:
250          (i) the office shall cancel the allowance of a retiree subject to Subsection (7)(a)(i); and
251          (ii) except as provided under Subsection (5)(c), the participating employer shall pay the
252     amortization rate to the office on behalf of the retiree.
253          (8) (a) [A] For a retiree subject to Subsection (7)(b) who retires within two years from
254     the date of reemployment, the office:
255          (i) [is not entitled to a recalculated] may not recalculate a retirement benefit for the
256     retiree; and
257          (ii) [will] shall resume the allowance that was being paid to the retiree at the time of
258     the cancellation.
259          (b) Subject to Subsection (2), for a retiree who is reinstated to active membership
260     under Subsection (7) and who retires two or more years after the date of reinstatement to active
261     membership, the office shall:
262          (i) resume [receiving] the allowance that was being paid at the time of cancellation;
263     and
264          (ii) [receive] calculate an additional allowance for the retiree based on the formula in
265     effect at the date of the subsequent retirement for all service credit accrued between the first
266     and subsequent retirement dates.
267          (9) (a) A retiree subject to this section shall report to the office the status of the
268     reemployment under Subsection (3) or (4).
269          (b) If the retiree fails to inform the office of an election under Subsection (4), the office
270     shall withhold one month's benefit for each month the retiree fails to inform the office under
271     Subsection (9)(a).
272          (10) A retiree shall be considered as having completed the one-year separation from
273     employment with a participating employer required under Subsection (3)(a), if the retiree:
274          (a) before retiring:
275          (i) was employed with a participating employer as a public safety service employee as
276     defined in Section 49-14-102, 49-15-102, or 49-23-102;
277          (ii) and during the employment under Subsection (10)(a)(i), suffered a physical injury
278     resulting from external force or violence while performing the duties of the employment, and
279     for which injury the retiree would have been approved for total disability in accordance with
280     the provisions under Title 49, Chapter 21, Public Employees' Long-Term Disability Act, if
281     years of service are not considered;
282          (iii) had less than 30 years of service credit but had sufficient service credit to retire,
283     with an unreduced allowance making the public safety service employee ineligible for
284     long-term disability payments under Title 49, Chapter 21, Public Employees' Long-Term
285     Disability Act, or a substantially similar long-term disability program; and
286          (iv) does not receive any long-term disability benefits from any participating employer;
287     and
288          (b) is reemployed by a different participating employer.
289          (11) If a retiree received a retirement allowance in error, due to reemployment in
290     violation of this section:
291          (a) the office shall cancel the retiree's retirement allowance;
292          (b) if the retiree applies for a future benefit, the office shall recover any overpayment in
293     accordance with the provisions of Section 49-11-607; and
294          (c) if a retiree or participating employer failed to report reemployment in violation of
295     this section, the retiree, participating employer, or both that are found to be responsible for the
296     failure to report are liable to the office for the amount of any overpayment resulting from the
297     violation.
298          [(11)] (12) The board may make rules to implement this section.
299          Section 3. Effective date.
300          This bill takes effect on July 1, 2016.