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7 LONG TITLE
8 Committee Note:
9 The Retirement and Independent Entities Interim Committee recommended this bill.
10 General Description:
11 This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
12 retirement and insurance provisions.
13 Highlighted Provisions:
14 This bill:
15 ▸ clarifies that the Utah State Retirement Investment Fund may sue and be sued in its
16 own name;
17 ▸ requires a participating employer to provide certain records to the Utah Retirement
18 Systems or its independent auditors;
19 ▸ modifies when a domestic relations order must be received by the Utah Retirement
20 Systems to be valid for determining benefits following a member's death;
21 ▸ modifies cancellation, reinstatement, and calculation provisions for a retiree's
22 retirement allowance affected by reemployment;
23 ▸ requires a participating employer to maintain a list of employee exemptions instead
24 of filing it annually with the Utah Retirement Systems; and
25 ▸ makes technical changes.
26 Money Appropriated in this Bill:
27 None
28 Other Special Clauses:
29 This bill provides a special effective date.
30 Utah Code Sections Affected:
31 AMENDS:
32 49-11-103, as renumbered and amended by Laws of Utah 2002, Chapter 250
33 49-11-301, as last amended by Laws of Utah 2016, Chapter 304
34 49-11-604, as last amended by Laws of Utah 2003, Chapter 240
35 49-11-612, as last amended by Laws of Utah 2015, Chapter 243
36 49-11-1204, as enacted by Laws of Utah 2016, Chapter 310
37 49-12-203, as last amended by Laws of Utah 2017, Chapters 20, 363 and last amended
38 by Coordination Clause, Laws of Utah 2017, Chapter 382
39 49-13-203, as last amended by Laws of Utah 2017, Chapters 20, 363 and last amended
40 by Coordination Clause, Laws of Utah 2017, Chapter 382
41 49-14-501, as last amended by Laws of Utah 2016, Chapter 84
42 49-15-501, as last amended by Laws of Utah 2016, Chapter 84
43 49-22-205, as last amended by Laws of Utah 2016, Chapter 227
44
45 Be it enacted by the Legislature of the state of Utah:
46 Section 1. Section 49-11-103 is amended to read:
47 49-11-103. Purpose -- Liberal construction.
48 (1) The purpose of this title is to establish:
49 (a) retirement systems and the Utah Governors' and Legislators' Retirement Plan for
50 members which provide:
51 (i) a uniform system of membership;
52 (ii) retirement requirements;
53 (iii) benefits for members;
54 (iv) funding on an actuarially sound basis;
55 (v) contributions; and
56 (vi) economy and efficiency in public service; and
57 (b) a central administrative office and a board to administer the various systems, plans,
58 and programs established by the Legislature or the board.
59 (2) This title shall be liberally construed to provide maximum benefits and protections
60 consistent with sound fiduciary and actuarial [
61 Section 2. Section 49-11-301 is amended to read:
62 49-11-301. Creation -- Board to act as trustees of the fund -- Commingling and
63 pooling of funds -- Interest earnings -- Funded ratio.
64 (1) (a) There is created a common trust fund known as the "Utah State Retirement
65 Investment Fund" for the purpose of enlarging the investment base and simplifying investment
66 procedures and functions.
67 (b) The Utah State Retirement Investment Fund may sue and be sued in its own name.
68 (2) (a) The board shall act as trustees of the Utah State Retirement Investment Fund
69 and, through the executive director, may commingle and pool the funds and investments of any
70 system, plan, or program into the Utah State Retirement Investment Fund, if the principal
71 amounts of the participating funds do not lose their individual identity and are maintained as
72 separate trust funds on the books of the office.
73 (b) (i) In combining the investments of any fund, each of the participating funds shall
74 be credited initially with its share of the total assets transferred to the Utah State Retirement
75 Investment Fund.
76 (ii) The value of the transferred assets shall be calculated in accordance with generally
77 accepted accounting principles.
78 (c) Subsequent transfers of additional capital from participating funds shall be credited
79 similarly to its respective trust account.
80 (d) The income or principal or equity credit belonging to one participating fund may
81 not be transferred to another, except for the purpose of:
82 (i) actuarially recommended transfers in order to adjust employer contribution rates for
83 an employer that participates in both contributory and noncontributory systems; or
84 (ii) transfers which reflect the value of service credit accrued in different systems
85 during a member's career.
86 (3) The assets of the funds are for the exclusive benefit of the members, participants,
87 and covered individuals and may not be diverted or appropriated for any purpose other than
88 that permitted by this title.
89 (4) (a) Interest and other earnings shall be credited to each participating fund on a pro
90 rata equity position basis.
91 (b) (i) A portion of the interest and other earnings of the common trust fund may be
92 credited to a reserve account within the Utah State Retirement Investment Fund to meet
93 adverse experiences arising from investments or other contingencies.
94 (ii) Each participating fund shall retain its proportionate equity in the reserve account.
95 (5) (a) The actuarial funded ratio of the systems may reach and be maintained at 110%,
96 as determined by the board's actuary using assumptions adopted by the board, before the board
97 is required to certify a decrease in contribution rates.
98 (b) Except as provided in Subsection (6), the board may not increase contribution rates
99 to attain an actuarial funded ratio greater than 100%.
100 (6) (a) The cost of any amendment to this title shall be included in the final
101 contribution rates adopted and certified by the board in accordance with Subsections
102 49-11-102(14) and 49-11-203(1)(l).
103 (b) If a preliminary certified contribution rate approved by the board prior to an annual
104 general session or special session of the Legislature was maintained at a previous year's level
105 that is higher than the contribution rate calculated by the board's actuary for that year in
106 accordance with Subsection (5)(a), the board's final certified contribution rate shall be the sum
107 of the actuarially determined costs from any amendment to this title during the general session
108 or special session and the preliminary certified contribution rate.
109 Section 3. Section 49-11-604 is amended to read:
110 49-11-604. Office audits of participating employers -- Penalties for failure to
111 comply.
112 (1) (a) The office may perform an on-site compliance [
113 [
114 requirements under this title.
115 (b) The office or its independent auditor may perform an on-site compliance audit of a
116 participating employer or request records to be provided by the participating employer,
117 including records required to complete:
118 (i) audited financial statements;
119 (ii) schedules of employer allocations and pension reporting in accordance with
120 Governmental Accounting Standards Board statements; and
121 (iii) service organizational controls reports.
122 [
123 the time of the audit.
124 [
125 notice to the participating employer of at least five working days.
126 [
127 the office in an appropriate, organized, and usable format.
128 [
129 in any way with an office audit shall result in the participating employer being liable to the
130 office for:
131 (i) any liabilities and expenses, including administrative expenses and travel expenses,
132 resulting from the participating employer's failure to comply with the audit; and
133 (ii) a penalty equal to 1% of the participating employer's last month's contributions.
134 (2) If the audit reveals a participating employer's failure to make contributions as
135 required under Section 49-11-601, a failure to maintain records as required under Section
136 49-11-602, or a failure to correctly report or certify eligibility as required under Section
137 49-11-603, the participating employer shall reimburse the office for the cost of the audit.
138 (3) If the audit reveals that an incorrect benefit has been paid by the office to a
139 member, participant, alternate payee, or beneficiary due to a participating employer's failure to
140 comply with the requirements of Section 49-11-601, 49-11-602, or 49-11-603, in addition to
141 the liabilities contained in Subsection (2), the participating employer shall be liable to the
142 office for the following:
143 (a) the actuarial cost of correcting the incorrect benefit; and
144 (b) administrative expenses.
145 (4) The executive director may waive all or any part of the interest, penalties, expenses,
146 and fees if the executive director finds there were extenuating circumstances surrounding the
147 participating employer's failure to comply with this section.
148 Section 4. Section 49-11-612 is amended to read:
149 49-11-612. Domestic relations order benefits -- Nonassignability of benefits or
150 payments -- Exemption from legal process.
151 (1) As used in this section, "domestic relations order benefits" means:
152 (a) an allowance;
153 (b) a defined contribution account established under:
154 (i) Part 8, Defined Contribution Plans;
155 (ii) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or
156 (iii) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement
157 Act;
158 (c) a continuing monthly death benefit established under:
159 (i) Chapter 14, Part 5, Death Benefit;
160 (ii) Chapter 15, Part 5, Death Benefit;
161 (iii) Chapter 16, Part 5, Death Benefit;
162 (iv) Chapter 17, Part 5, Death Benefit;
163 (v) Chapter 18, Part 5, Death Benefit; or
164 (vi) Chapter 19, Part 5, Death Benefit;
165 (d) a lump sum death benefit provided under:
166 (i) Chapter 12, Part 5, Death Benefit;
167 (ii) Chapter 13, Part 5, Death Benefit;
168 (iii) Chapter 22, Part 5, Death Benefit; or
169 (iv) Chapter 23, Part 5, Death Benefit; or
170 (e) a refund of member contributions upon termination.
171 (2) Except as provided in Subsections (3), (4), and (5), the right of any member, retiree,
172 participant, covered individual, or beneficiary to any retirement benefit, retirement payment, or
173 any other retirement right accrued or accruing under this title and the assets of the funds created
174 by this title are not subject to alienation or assignment by the member, retiree, participant, or
175 their beneficiaries and are not subject to attachment, execution, garnishment, or any other legal
176 or equitable process.
177 (3) (a) The office may, upon the request of the retiree, deduct from the retiree's
178 allowance, insurance premiums or other dues payable on behalf of the retiree, but only to those
179 entities that have received the deductions prior to February 1, 2002.
180 (b) The office may, upon the request of a retiree of a public safety or firefighter system,
181 deduct insurance premiums from the retiree's allowance.
182 (4) (a) The office shall provide for the division of domestic relations order benefits
183 with former spouses and family members under an order of a court of competent jurisdiction
184 with respect to domestic relations matters on file with the office.
185 (b) The court order shall specify the manner in which the domestic relations order
186 benefits shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
187 (c) Domestic relations order benefits split under a domestic relations order are subject
188 to the following:
189 (i) the amount to be paid or the period for which payments shall be made under the
190 original domestic relations order may not be altered if the alteration affects the actuarial
191 calculation of the allowance;
192 (ii) payments to an alternate payee shall begin at the time the member or beneficiary
193 begins receiving payments; and
194 (iii) the alternate payee shall receive payments in the same form as allowances received
195 by the member or beneficiary.
196 (d) (i) [
197 under this section must be [
198
199 (ii) A court order under this section received by the office after the member's date of
200 death shall be considered valid if it is received in good order before benefits relating to the
201 member's death are paid or settled.
202 (e) A court order under this section may not require and may not be interpreted in any
203 way to require the office to provide any type of benefit or any option not otherwise provided
204 under this title.
205 (5) In accordance with federal law, the board may deduct the required amount from any
206 benefit, payment, or other right accrued or accruing to any member or beneficiary of a system,
207 plan, or program under this title to offset any amount that member or beneficiary owes to a
208 system, plan, or program administered by the board.
209 (6) The board shall make rules to implement this section.
210 Section 5. Section 49-11-1204 is amended to read:
211 49-11-1204. General restrictions -- Election following one-year separation --
212 Amortization rate.
213 (1) A retiree may not for the same period of reemployment:
214 (a) (i) earn additional service credit; or
215 (ii) receive any retirement related contribution from a participating employer; and
216 (b) receive a retirement allowance.
217 (2) Except as provided under Section 49-11-1205, the office shall cancel the retirement
218 allowance of a retiree if the reemployment with a participating employer begins within one year
219 of the retiree's retirement date.
220 (3) If a reemployed retiree has completed the one-year separation from employment
221 with a participating employer required under Subsection (2), the retiree may elect to:
222 (a) cancel the retiree's retirement allowance and instead earn additional service credit in
223 accordance with this title; or
224 (b) continue to receive the retiree's retirement allowance, forfeit earning additional
225 service credit, and forfeit any retirement-related contribution from the participating employer
226 that reemployed the retiree.
227 (4) (a) [
228
229
230 retiree is eligible for retirement coverage in [
231 reinstate the retiree to active member status on the first day of the month following the date of
232 the employee's [
233 [
234 eligible for retirement coverage in the reemployed position, the participating employer that
235 reemploys the retiree shall contribute the amortization rate to the office on behalf of the retiree.
236 (c) A participating employer that reemploys a retiree in accordance with Subsection
237 49-11-1205(1) is not required to contribute the amortization rate to the office.
238 (5) (a) For a retiree under Subsection (4)[
239 date of reemployment, the office:
240 (i) may not recalculate a retirement benefit for the retiree; and
241 (ii) shall resume the allowance that was being paid to the retiree at the time of the
242 cancellation.
243 (b) Subject to Subsection (1), for a retiree who is reinstated to active membership
244 under Subsection (4)[
245 active membership, the office shall:
246 (i) resume the allowance that was being paid at the time of cancellation; and
247 (ii) calculate an additional allowance for the retiree based on the formula in effect at
248 the date of the subsequent retirement for all service credit accrued between the first and
249 subsequent retirement dates.
250 Section 6. Section 49-12-203 is amended to read:
251 49-12-203. Exclusions from membership in system.
252 (1) The following employees are not eligible for service credit in this system:
253 (a) subject to the requirements of Subsection (2), an employee whose employment
254 status is temporary in nature due to the nature or the type of work to be performed;
255 (b) except as provided under Subsection (3)(a), an employee of an institution of higher
256 education who participates in a retirement system with a public or private retirement system,
257 organization, or company designated by the State Board of Regents, or the Board of Directors
258 of each technical college for an employee of each technical college, during any period in which
259 required contributions based on compensation have been paid on behalf of the employee by the
260 employer;
261 (c) an employee serving as an exchange employee from outside the state;
262 (d) an executive department head of the state, a member of the State Tax Commission,
263 the Public Service Commission, and a member of a full-time or part-time board or commission
264 who files a formal request for exemption;
265 (e) an employee of the Department of Workforce Services who is covered under
266 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act;
267 (f) an employee who is employed on or after July 1, 2009, with an employer that has
268 elected, prior to July 1, 2009, to be excluded from participation in this system under Subsection
269 49-12-202(2)(c);
270 (g) an employee who is employed on or after July 1, 2014, with an employer that has
271 elected, prior to July 1, 2014, to be excluded from participation in this system under Subsection
272 49-12-202(2)(d);
273 (h) an employee who is employed with a withdrawing entity that has elected under
274 Section 49-11-623, prior to January 1, 2017, to exclude:
275 (i) new employees from participation in this system under Subsection 49-11-623(3)(a);
276 or
277 (ii) all employees from participation in this system under Subsection 49-11-623(3)(b);
278 or
279 (i) an employee described in Subsection (1)(i)(i) or (ii) who is employed with a
280 withdrawing entity that has elected under Section 49-11-624, before January 1, 2018, to
281 exclude:
282 (i) new employees from participation in this system under Subsection 49-11-624(3)(a);
283 or
284 (ii) all employees from participation in this system under Subsection 49-11-624(3)(b).
285 (2) If an employee whose status is temporary in nature due to the nature of type of
286 work to be performed:
287 (a) is employed for a term that exceeds six months and the employee otherwise
288 qualifies for service credit in this system, the participating employer shall report and certify to
289 the office that the employee is a regular full-time employee effective the beginning of the
290 seventh month of employment; or
291 (b) was previously terminated prior to being eligible for service credit in this system
292 and is reemployed within three months of termination by the same participating employer, the
293 participating employer shall report and certify that the member is a regular full-time employee
294 when the total of the periods of employment equals six months and the employee otherwise
295 qualifies for service credits in this system.
296 (3) (a) Upon cessation of the participating employer contributions, an employee under
297 Subsection (1)(b) is eligible for service credit in this system.
298 (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
299 credit earned by an employee under this chapter before July 1, 2009 is not affected under
300 Subsection (1)(f).
301 (c) Notwithstanding the provisions of Subsection (1)(g), any eligibility for service
302 credit earned by an employee under this chapter before July 1, 2014, is not affected under
303 Subsection (1)(g).
304 (4) Upon filing a written request for exemption with the office, the following
305 employees shall be exempt from coverage under this system:
306 (a) a full-time student or the spouse of a full-time student and individuals employed in
307 a trainee relationship;
308 (b) an elected official;
309 (c) an executive department head of the state, a member of the State Tax Commission,
310 a member of the Public Service Commission, and a member of a full-time or part-time board or
311 commission;
312 (d) an employee of the Governor's Office of Management and Budget;
313 (e) an employee of the Governor's Office of Economic Development;
314 (f) an employee of the Commission on Criminal and Juvenile Justice;
315 (g) an employee of the Governor's Office;
316 (h) an employee of the State Auditor's Office;
317 (i) an employee of the State Treasurer's Office;
318 (j) any other member who is permitted to make an election under Section 49-11-406;
319 (k) a person appointed as a city manager or chief city administrator or another person
320 employed by a municipality, county, or other political subdivision, who is an at-will employee;
321 and
322 (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
323 Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
324 membership in a labor organization that provides retirement benefits to its members.
325 (5) (a) Each participating employer shall prepare and maintain a list designating those
326 positions eligible for exemption under Subsection (4).
327 (b) An employee may not be exempted unless the employee is employed in an
328 exempted position designated by the participating employer.
329 (6) (a) In accordance with this section, Section 49-13-203, and Section 49-22-205, a
330 municipality, county, or political subdivision may not exempt a total of more than 50 positions
331 or a number equal to 10% of the eligible employees of the municipality, county, or political
332 subdivision, whichever is less.
333 (b) A municipality, county, or political subdivision may exempt at least one regular
334 full-time employee.
335 (7) Each participating employer shall:
336 (a) [
337 (b) update the employee exemptions in the event of any change.
338 (8) The office may make rules to implement this section.
339 Section 7. Section 49-13-203 is amended to read:
340 49-13-203. Exclusions from membership in system.
341 (1) The following employees are not eligible for service credit in this system:
342 (a) subject to the requirements of Subsection (2), an employee whose employment
343 status is temporary in nature due to the nature or the type of work to be performed;
344 (b) except as provided under Subsection (3)(a), an employee of an institution of higher
345 education who participates in a retirement system with a public or private retirement system,
346 organization, or company designated by the State Board of Regents, or the Board of Directors
347 of each technical college for an employee of each technical college, during any period in which
348 required contributions based on compensation have been paid on behalf of the employee by the
349 employer;
350 (c) an employee serving as an exchange employee from outside the state;
351 (d) an executive department head of the state or a legislative director, senior executive
352 employed by the governor's office, a member of the State Tax Commission, a member of the
353 Public Service Commission, and a member of a full-time or part-time board or commission
354 who files a formal request for exemption;
355 (e) an employee of the Department of Workforce Services who is covered under
356 another retirement system allowed under Title 35A, Chapter 4, Employment Security Act;
357 (f) an employee who is employed with an employer that has elected to be excluded
358 from participation in this system under Subsection 49-13-202(5), effective on or after the date
359 of the employer's election under Subsection 49-13-202(5);
360 (g) an employee who is employed with a withdrawing entity that has elected under
361 Section 49-11-623, prior to January 1, 2017, to exclude:
362 (i) new employees from participation in this system under Subsection 49-11-623(3)(a);
363 or
364 (ii) all employees from participation in this system under Subsection 49-11-623(3)(b);
365 or
366 (h) an employee described in Subsection (1)(h)(i) or (ii) who is employed with a
367 withdrawing entity that has elected under Section 49-11-624, before January 1, 2018, to
368 exclude:
369 (i) new employees from participation in this system under Subsection 49-11-624(3)(a);
370 or
371 (ii) all employees from participation in this system under Subsection 49-11-624(3)(b).
372 (2) If an employee whose status is temporary in nature due to the nature of type of
373 work to be performed:
374 (a) is employed for a term that exceeds six months and the employee otherwise
375 qualifies for service credit in this system, the participating employer shall report and certify to
376 the office that the employee is a regular full-time employee effective the beginning of the
377 seventh month of employment; or
378 (b) was previously terminated prior to being eligible for service credit in this system
379 and is reemployed within three months of termination by the same participating employer, the
380 participating employer shall report and certify that the member is a regular full-time employee
381 when the total of the periods of employment equals six months and the employee otherwise
382 qualifies for service credits in this system.
383 (3) (a) Upon cessation of the participating employer contributions, an employee under
384 Subsection (1)(b) is eligible for service credit in this system.
385 (b) Notwithstanding the provisions of Subsection (1)(f), any eligibility for service
386 credit earned by an employee under this chapter before the date of the election under
387 Subsection 49-13-202(5) is not affected under Subsection (1)(f).
388 (4) Upon filing a written request for exemption with the office, the following
389 employees shall be exempt from coverage under this system:
390 (a) a full-time student or the spouse of a full-time student and individuals employed in
391 a trainee relationship;
392 (b) an elected official;
393 (c) an executive department head of the state, a member of the State Tax Commission,
394 a member of the Public Service Commission, and a member of a full-time or part-time board or
395 commission;
396 (d) an employee of the Governor's Office of Management and Budget;
397 (e) an employee of the Governor's Office of Economic Development;
398 (f) an employee of the Commission on Criminal and Juvenile Justice;
399 (g) an employee of the Governor's Office;
400 (h) an employee of the State Auditor's Office;
401 (i) an employee of the State Treasurer's Office;
402 (j) any other member who is permitted to make an election under Section 49-11-406;
403 (k) a person appointed as a city manager or chief city administrator or another person
404 employed by a municipality, county, or other political subdivision, who is an at-will employee;
405 (l) an employee of an interlocal cooperative agency created under Title 11, Chapter 13,
406 Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided through
407 membership in a labor organization that provides retirement benefits to its members; and
408 (m) an employee of the Utah Science Technology and Research Initiative created under
409 Title 63M, Chapter 2, Utah Science Technology and Research Governing Authority Act.
410 (5) (a) Each participating employer shall prepare and maintain a list designating those
411 positions eligible for exemption under Subsection (4).
412 (b) An employee may not be exempted unless the employee is employed in a position
413 designated by the participating employer.
414 (6) (a) In accordance with this section, Section 49-12-203, and Section 49-22-205, a
415 municipality, county, or political subdivision may not exempt a total of more than 50 positions
416 or a number equal to 10% of the eligible employees of the municipality, county, or political
417 subdivision, whichever is less.
418 (b) A municipality, county, or political subdivision may exempt at least one regular
419 full-time employee.
420 (7) Each participating employer shall:
421 (a) [
422 (b) update the employee exemptions in the event of any change.
423 (8) The office may make rules to implement this section.
424 Section 8. Section 49-14-501 is amended to read:
425 49-14-501. Death of active member in Division A -- Payment of benefits.
426 (1) If an active member of this system enrolled in Division A under Section 49-14-301
427 dies, benefits are payable as follows:
428 (a) If the death is classified by the office as a line-of-duty death, the surviving spouse
429 shall receive a lump sum equal to six months of the active member's final average salary and an
430 allowance equal to 30% of the deceased member's final average monthly salary.
431 (b) If the death is not classified by the office as a line-of-duty death, benefits are
432 payable as follows:
433 (i) If the member has accrued less than 10 years of public safety service credit, the
434 [
435 member contributions, whichever is greater.
436 (ii) If the member has accrued 10 or more years of public safety service credit at the
437 time of death, the surviving spouse shall receive the sum of $500, plus an allowance equal to
438 2% of the member's final average monthly salary for each year of service credit accrued by the
439 member up to a maximum of 30% of the member's final average monthly salary.
440 (2) Except as provided under Subsection (1)(b)(i), benefits are not payable to minor
441 children of members covered under Division A.
442 (3) If a benefit is not distributed under this section, and the member has designated a
443 beneficiary, the member's member contributions shall be paid to the beneficiary.
444 (4) (a) A surviving spouse who requests a benefit under this section shall apply in
445 writing to the office.
446 (b) The allowance shall begin on the first day of the month following the month in
447 which the:
448 (i) member died, if the application is received by the office within 90 days of the
449 member's death; or
450 (ii) application is received by the office, if the application is received by the office
451 more than 90 days after the member's death.
452 Section 9. Section 49-15-501 is amended to read:
453 49-15-501. Death of active member in Division A -- Payment of benefits.
454 (1) If an active member of this system enrolled in Division A under Section 49-15-301
455 dies, benefits are payable as follows:
456 (a) If the death is classified by the office as a line-of-duty death, benefits are payable as
457 follows:
458 (i) If the member has accrued less than 20 years of public safety service credit, the
459 surviving spouse shall receive a lump sum equal to six months of the active member's final
460 average salary and an allowance equal to 30% of the member's final average monthly salary.
461 (ii) If the member has accrued 20 or more years of public safety service credit, the
462 member shall be considered to have retired with an allowance calculated under Section
463 49-15-402 and the surviving spouse shall receive the death benefit payable to a surviving
464 spouse under Section 49-15-504.
465 (b) If the death is not classified as a line-of-duty death by the office, benefits are
466 payable as follows:
467 (i) If the member has accrued less than 10 years of public safety service credit, the
468 [
469 member contributions, whichever is greater.
470 (ii) If the member has accrued 10 or more years, but less than 20 years of public safety
471 service credit at the time of death, the surviving spouse shall receive the sum of $500, plus an
472 allowance equal to 2% of the member's final average monthly salary for each year of service
473 credit accrued by the member up to a maximum of 30% of the member's final average monthly
474 salary.
475 (iii) If the member has accrued 20 or more years of public safety service credit, the
476 benefit shall be calculated as provided in Subsection (1)(a)(ii).
477 (2) Except as provided under Subsection (1)(b)(i), benefits are not payable to minor
478 children under Division A.
479 (3) If a benefit is not distributed under this section, and the member has designated a
480 beneficiary, the member's member contribution shall be paid to the beneficiary.
481 (4) (a) A surviving spouse who requests a benefit under this section shall apply in
482 writing to the office.
483 (b) The allowance shall begin on the first day of the month following the month in
484 which the:
485 (i) member died, if the application is received by the office within 90 days of the
486 member's death; or
487 (ii) application is received by the office, if the application is received by the office
488 more than 90 days after the member's death.
489 Section 10. Section 49-22-205 is amended to read:
490 49-22-205. Exemptions from participation in system.
491 (1) Upon filing a written request for exemption with the office, the following
492 employees are exempt from participation in the system as provided in this section:
493 (a) an executive department head of the state;
494 (b) a member of the State Tax Commission;
495 (c) a member of the Public Service Commission;
496 (d) a member of a full-time or part-time board or commission;
497 (e) an employee of the Governor's Office of Management and Budget;
498 (f) an employee of the Governor's Office of Economic Development;
499 (g) an employee of the Commission on Criminal and Juvenile Justice;
500 (h) an employee of the Governor's Office;
501 (i) an employee of the State Auditor's Office;
502 (j) an employee of the State Treasurer's Office;
503 (k) any other member who is permitted to make an election under Section 49-11-406;
504 (l) a person appointed as a city manager or appointed as a city administrator or another
505 at-will employee of a municipality, county, or other political subdivision;
506 (m) an employee of an interlocal cooperative agency created under Title 11, Chapter
507 13, Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided
508 through membership in a labor organization that provides retirement benefits to its members;
509 and
510 (n) an employee of the Utah Science Technology and Research Initiative created under
511 Title 63M, Chapter 2, Utah Science Technology and Research Governing Authority Act.
512 (2) (a) A participating employer shall prepare and maintain a list designating those
513 positions eligible for exemption under Subsection (1).
514 (b) An employee may not be exempted unless the employee is employed in a position
515 designated by the participating employer under Subsection (1).
516 (3) (a) In accordance with this section, Section 49-12-203, and Section 49-13-203, a
517 municipality, county, or political subdivision may not exempt a total of more than 50 positions
518 or a number equal to 10% of the eligible employees of the municipality, county, or political
519 subdivision, whichever is less.
520 (b) A municipality, county, or political subdivision may exempt at least one regular
521 full-time employee.
522 (4) Each participating employer shall:
523 (a) [
524 exemptions; and
525 (b) update an employee exemption in the event of any change.
526 (5) Beginning on the effective date of the exemption for an employee who elects to be
527 exempt in accordance with Subsection (1):
528 (a) for a member of the Tier II defined contribution plan:
529 (i) the participating employer shall contribute the nonelective contribution and the
530 amortization rate described in Section 49-22-401, except that the nonelective contribution is
531 exempt from the vesting requirements of Subsection 49-22-401(3)(a); and
532 (ii) the member may make voluntary deferrals as provided in Section 49-22-401; and
533 (b) for a member of the Tier II hybrid retirement system:
534 (i) the participating employer shall contribute the nonelective contribution and the
535 amortization rate described in Section 49-22-401, except that the contribution is exempt from
536 the vesting requirements of Subsection 49-22-401(3)(a);
537 (ii) the member may make voluntary deferrals as provided in Section 49-22-401; and
538 (iii) the member is not eligible for additional service credit in the system.
539 (6) If an employee who is a member of the Tier II hybrid retirement system
540 subsequently revokes the election of exemption made under Subsection (1), the provisions
541 described in Subsection (5)(b) shall no longer be applicable and the coverage for the employee
542 shall be effective prospectively as provided in Part 3, Tier II Hybrid Retirement System.
543 (7) (a) All employer contributions made on behalf of an employee shall be invested in
544 accordance with Subsection 49-22-303(3)(a) or 49-22-401(4)(a) until the one-year election
545 period under Subsection 49-22-201(2)(c) is expired if the employee:
546 (i) elects to be exempt in accordance with Subsection (1); and
547 (ii) continues employment with the participating employer through the one-year
548 election period under Subsection 49-22-201(2)(c).
549 (b) An employee is entitled to receive a distribution of the employer contributions
550 made on behalf of the employee and all associated investment gains and losses if the employee:
551 (i) elects to be exempt in accordance with Subsection (1); and
552 (ii) terminates employment prior to the one-year election period under Subsection
553 49-22-201(2)(c).
554 (8) (a) The office shall make rules to implement this section.
555 (b) The rules made under this Subsection (8) shall include provisions to allow the
556 exemption provided under Subsection (1) to apply to all contributions made beginning on or
557 after July 1, 2011, on behalf of an exempted employee who began the employment before May
558 8, 2012.
559 Section 11. Effective date.
560 If approved by two-thirds of all the members elected to each house, this bill takes effect
561 upon approval by the governor, or the day following the constitutional time limit of Utah
562 Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
563 the date of veto override.
Legislative Review Note
Office of Legislative Research and General Counsel