Representative Justin L. Fawson proposes the following substitute bill:




Chief Sponsor: Justin L. Fawson

Senate Sponsor: Brian Zehnder


8     General Description:
9          This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
10     provisions relating to determining retirement eligibility.
11     Highlighted Provisions:
12          This bill:
13          ▸     provides that a member who has service credit from two or more systems is required
14     to retire from the system which most recently covered the member for a minimum
15     of six months when combining service credit for purposes of determining eligibility
16     for retirement with exception;
17          ▸     authorizes an employee of the state auditor's office to elect to be exempt from
18     coverage under a defined benefit system and to have the member's defined benefit
19     balance transferred from the defined benefit system or plan to a defined contribution
20     plan in the member's own name; and
21          ▸     makes technical changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          This bill provides a special effective date.

26     Utah Code Sections Affected:
27     AMENDS:
28          49-11-405, as last amended by Laws of Utah 2016, Chapter 310
29          49-11-406, as last amended by Laws of Utah 2013, Chapter 310

31     Be it enacted by the Legislature of the state of Utah:
32          Section 1. Section 49-11-405 is amended to read:
33          49-11-405. Service credit from different systems or plans -- Eligibility and
34     calculation of service credit.
35          (1) (a) A member who has service credit from two or more systems or one or more
36     systems and the Utah Governors' and Legislators' Retirement Plan may combine service credit
37     for purposes of determining eligibility for retirement.
38          (b) The provisions of Subsection (1)(a) do not apply to concurrent service.
39          (2) (a) To be eligible for the calculation under Subsection (3)[,]:
40          (i) the member's service credit earned under the different systems or the Utah
41     Governors' and Legislators' Retirement Plan shall at least equal the minimum amount of
42     service credit required to retire from the system which most recently covered the member[.];
43     and
44          (ii) except as provided in Subsection (2)(b), the member shall be required to retire from
45     the system which most recently covered the member for a minimum of six months.
46          (b) The restriction in Subsection (2)(a)(ii) does not apply to a member if the member
47     has accrued at least the minimum years of service credit required to retire from a previous
48     system with an unreduced allowance prior to participation in a new system.
49          (3) If a member meets the requirements of Subsection (2), the office shall calculate the
50     member's allowance using all service credit earned from any system or the Utah Governors' and
51     Legislators' Retirement Plan, with no actuarial reduction applied to the allowance, except the
52     service credit used to calculate the benefit shall be increased or decreased to reflect the value of
53     the assets transferred.
54          (4) The office shall establish the standards used for calculating any increase or decrease
55     in the service credit.
56          (5) This section does not apply to a retiree who is subject to Section 49-11-504 and

57     Chapter 11, Part 12, Postretirement Reemployment Restrictions Act.
58          Section 2. Section 49-11-406 is amended to read:
59          49-11-406. Governor's appointed executives and senior staff -- Appointed
60     legislative employees -- Transfer of value of accrued defined benefit -- Procedures.
61          (1) As used in this section:
62          (a) "Defined benefit balance" means the total amount of the contributions made on
63     behalf of a member to a defined benefit system plus refund interest.
64          (b) "Senior staff" means an at-will employee who reports directly to an elected official,
65     executive director, or director and includes a deputy director and other similar, at-will
66     employee positions designated by the governor, the speaker of the House, or the president of
67     the Senate and filed with the Department of Human Resource Management and the Utah State
68     Retirement Office.
69          (2) In accordance with this section and subject to federal law, a member who has
70     service credit from a system may elect to be exempt from coverage under a defined benefit
71     system and to have the member's defined benefit balance transferred from the defined benefit
72     system or plan to a defined contribution plan in the member's own name if the member is:
73          (a) an employee in the state [auditor] auditor's office;
74          (b) the state treasurer;
75          (c) an appointed executive under Subsection 67-22-2(1)(a);
76          (d) an employee in the Governor's Office;
77          (e) senior staff in the Governor's Office of Management and Budget;
78          (f) senior staff in the Governor's Office of Economic Development;
79          (g) senior staff in the Commission on Criminal and Juvenile Justice;
80          (h) a legislative employee appointed under Subsection 36-12-7(3)(a);
81          (i) a legislative employee appointed by the speaker of the House of Representatives, the
82     House of Representatives minority leader, the president of the Senate, or the Senate minority
83     leader; or
84          (j) senior staff of the Utah Science Technology and Research Initiative created under
85     Title 63M, Chapter 2, Utah Science Technology and Research Governing Authority Act.
86          (3) An election made under Subsection (2):
87          (a) is final, and no right exists to make any further election;

88          (b) is considered a request to be exempt from coverage under a defined benefits
89     system; and
90          (c) shall be made on forms provided by the office.
91          (4) The board shall adopt rules to implement and administer this section.
92          Section 3. Effective date.
93          This bill takes effect on July 1, 2018.