This document includes Senate Committee Amendments incorporated into the bill on Tue, Feb 12, 2019 at 10:03 AM by lpoole.
1 2
3
4
5
6
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 ▸ increases the number of members serving on the Membership Council;
16 ▸ amends the powers and duties of the Utah Retirement Systems' executive director;
17 ▸ modifies provisions allowing the calculation and payment of benefits pending
18 settlement of a dispute;
19 ▸ clarifies the availability of certain retirement allowance payment options;
20 ▸ amends how the service status of certain justice court judges is established;
21 ▸ specifies additional names for the Tier II retirement systems and plans; and
22 ▸ makes technical changes.
23 Money Appropriated in this Bill:
24 None
25 Other Special Clauses:
26 This bill provides a special effective date.
27 Utah Code Sections Affected:
28 AMENDS:
29 49-11-102, as last amended by Coordination Clause, Laws of Utah 2018, Chapter 315
30 49-11-202, as last amended by Laws of Utah 2010, Chapters 286 and 321
31 49-11-204, as last amended by Laws of Utah 2008, Chapter 252
32 49-11-607, as last amended by Laws of Utah 2013, Chapter 316
33 49-12-406, as last amended by Laws of Utah 2015, Chapter 241
34 49-13-402, as last amended by Laws of Utah 2017, Chapter 141
35 49-13-406, as last amended by Laws of Utah 2015, Chapter 241
36 49-22-103, as enacted by Laws of Utah 2010, Chapter 266
37 49-22-305, as last amended by Laws of Utah 2017, Chapter 141
38 49-22-310, as enacted by Laws of Utah 2011, Chapter 439
39 49-23-103, as enacted by Laws of Utah 2010, Chapter 266
40 49-23-304, as last amended by Laws of Utah 2017, Chapter 141
41 49-23-309, as enacted by Laws of Utah 2011, Chapter 439
42 ENACTS:
43 49-11-205, Utah Code Annotated 1953
44
45 Be it enacted by the Legislature of the state of Utah:
46 Section 1. Section 49-11-102 is amended to read:
47 49-11-102. Definitions.
48 As used in this title:
49 (1) (a) "Active member" means a member who:
50 (i) is employed by a participating employer and accruing service credit; or
51 (ii) within the previous 120 days:
52 (A) has been employed by a participating employer; and
53 (B) accrued service credit.
54 (b) "Active member" does not include a retiree.
55 (2) "Actuarial equivalent" means a benefit of equal value when computed upon the
56 basis of mortality tables as recommended by the actuary and adopted by the executive director,
57 including regular interest.
58 (3) "Actuarial interest rate" means the interest rate as recommended by the actuary and
59 adopted by the board upon which the funding of system costs and benefits are computed.
60 (4) (a) "Agency" means:
61 (i) a department, division, agency, office, authority, commission, board, institution, or
62 hospital of the state;
63 (ii) a county, municipality, school district, local district, or special service district;
64 (iii) a state college or university; or
65 (iv) any other participating employer.
66 (b) "Agency" does not include an entity listed under Subsection (4)(a)(i) that is a
67 subdivision of another entity listed under Subsection (4)(a).
68 (5) "Allowance" or "retirement allowance" means the pension plus the annuity,
69 including any cost of living or other authorized adjustments to the pension and annuity.
70 (6) "Alternate payee" means a member's former spouse or family member eligible to
71 receive payments under a Domestic Relations Order in compliance with Section 49-11-612.
72 (7) "Amortization rate" means the board certified percent of salary required to amortize
73 the unfunded actuarial accrued liability in accordance with policies established by the board
74 upon the advice of the actuary.
75 (8) "Annuity" means monthly payments derived from member contributions.
76 (9) "Appointive officer" means an employee appointed to a position for a definite and
77 fixed term of office by official and duly recorded action of a participating employer whose
78 appointed position is designated in the participating employer's charter, creation document, or
79 similar document, and:
80 (a) who earns $500 or more per month, indexed as of January 1, 1990, as provided in
81 Section 49-12-407 for a Tier I appointive officer; and
82 (b) whose appointive position is full-time as certified by the participating employer for
83 a Tier II appointive officer.
84 (10) (a) "At-will employee" means a person who is employed by a participating
85 employer and:
86 (i) who is not entitled to merit or civil service protection and is generally considered
87 exempt from a participating employer's merit or career service personnel systems;
88 (ii) whose on-going employment status is entirely at the discretion of the person's
89 employer; or
90 (iii) who may be terminated without cause by a designated supervisor, manager, or
91 director.
92 (b) "At-will employee" does not include a career employee who has obtained a
93 reasonable expectation of continued employment based on inclusion in a participating
94 employer's merit system, civil service protection system, or career service personnel systems,
95 policies, or plans.
96 (11) "Beneficiary" means any person entitled to receive a payment under this title
97 through a relationship with or designated by a member, participant, covered individual, or
98 alternate payee of a defined contribution plan.
99 (12) "Board" means the Utah State Retirement Board established under Section
100 49-11-202.
101 (13) "Board member" means a person serving on the Utah State Retirement Board as
102 established under Section 49-11-202.
103 (14) "Board of Regents" or "State Board of Regents" means the State Board of Regents
104 established in Section 53B-1-103.
105 (15) "Certified contribution rate" means the board certified percent of salary paid on
106 behalf of an active member to the office to maintain the system on a financially and actuarially
107 sound basis.
108 (16) "Contributions" means the total amount paid by the participating employer and the
109 member into a system or to the Utah Governors' and Legislators' Retirement Plan under
110 Chapter 19, Utah Governors' and Legislators' Retirement Act.
111 (17) "Council member" means a person serving on the Membership Council
112 established under Section [
113 (18) "Covered individual" means any individual covered under Chapter 20, Public
114 Employees' Benefit and Insurance Program Act.
115 (19) "Current service" means covered service under:
116 (a) Chapter 12, Public Employees' Contributory Retirement Act;
117 (b) Chapter 13, Public Employees' Noncontributory Retirement Act;
118 (c) Chapter 14, Public Safety Contributory Retirement Act;
119 (d) Chapter 15, Public Safety Noncontributory Retirement Act;
120 (e) Chapter 16, Firefighters' Retirement Act;
121 (f) Chapter 17, Judges' Contributory Retirement Act;
122 (g) Chapter 18, Judges' Noncontributory Retirement Act;
123 (h) Chapter 19, Utah Governors' and Legislators' Retirement Act;
124 (i) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or
125 (j) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement Act.
126 (20) "Defined benefit" or "defined benefit plan" or "defined benefit system" means a
127 system or plan offered under this title to provide a specified allowance to a retiree or a retiree's
128 spouse after retirement that is based on a set formula involving one or more of the following
129 factors:
130 (a) years of service;
131 (b) final average monthly salary; or
132 (c) a retirement multiplier.
133 (21) "Defined contribution" or "defined contribution plan" means any defined
134 contribution plan or deferred compensation plan authorized under the Internal Revenue Code
135 and administered by the board.
136 (22) "Educational institution" means a political subdivision or instrumentality of the
137 state or a combination thereof primarily engaged in educational activities or the administration
138 or servicing of educational activities, including:
139 (a) the State Board of Education and its instrumentalities;
140 (b) any institution of higher education and its branches;
141 (c) any school district and its instrumentalities;
142 (d) any vocational and technical school; and
143 (e) any entity arising out of a consolidation agreement between entities described under
144 this Subsection (22).
145 (23) "Elected official":
146 (a) means a person elected to a state office, county office, municipal office, school
147 board or school district office, local district office, or special service district office;
148 (b) includes a person who is appointed to serve an unexpired term of office described
149 under Subsection (23)(a); and
150 (c) does not include a judge or justice who is subject to a retention election under
151 Section 20A-12-201.
152 (24) (a) "Employer" means any department, educational institution, or political
153 subdivision of the state eligible to participate in a government-sponsored retirement system
154 under federal law.
155 (b) "Employer" may also include an agency financed in whole or in part by public
156 funds.
157 (25) "Exempt employee" means an employee working for a participating employer:
158 (a) who is not eligible for service credit under Section 49-12-203, 49-13-203,
159 49-14-203, 49-15-203, or 49-16-203; and
160 (b) for whom a participating employer is not required to pay contributions or
161 nonelective contributions.
162 (26) "Final average monthly salary" means the amount computed by dividing the
163 compensation received during the final average salary period under each system by the number
164 of months in the final average salary period.
165 (27) "Fund" means any fund created under this title for the purpose of paying benefits
166 or costs of administering a system, plan, or program.
167 (28) (a) "Inactive member" means a member who has not been employed by a
168 participating employer for a period of at least 120 days.
169 (b) "Inactive member" does not include retirees.
170 (29) (a) "Initially entering" means hired, appointed, or elected for the first time, in
171 current service as a member with any participating employer.
172 (b) "Initially entering" does not include a person who has any prior service credit on
173 file with the office.
174 (c) "Initially entering" includes an employee of a participating employer, except for an
175 employee that is not eligible under a system or plan under this title, who:
176 (i) does not have any prior service credit on file with the office;
177 (ii) is covered by a retirement plan other than a retirement plan created under this title;
178 and
179 (iii) moves to a position with a participating employer that is covered by this title.
180 (30) "Institution of higher education" means an institution described in Section
181 53B-1-102.
182 (31) (a) "Member" means a person, except a retiree, with contributions on deposit with
183 a system, the Utah Governors' and Legislators' Retirement Plan under Chapter 19, Utah
184 Governors' and Legislators' Retirement Act, or with a terminated system.
185 (b) "Member" also includes leased employees within the meaning of Section 414(n)(2)
186 of the Internal Revenue Code, if the employees have contributions on deposit with the office.
187 If leased employees constitute less than 20% of the participating employer's work force that is
188 not highly compensated within the meaning of Section 414(n)(5)(c)(ii), Internal Revenue Code,
189 "member" does not include leased employees covered by a plan described in Section 414(n)(5)
190 of the federal Internal Revenue Code.
191 (32) "Member contributions" means the sum of the contributions paid to a system or
192 the Utah Governors' and Legislators' Retirement Plan, including refund interest if allowed by a
193 system, and which are made by:
194 (a) the member; and
195 (b) the participating employer on the member's behalf under Section 414(h) of the
196 Internal Revenue Code.
197 (33) "Nonelective contribution" means an amount contributed by a participating
198 employer into a participant's defined contribution account.
199 (34) "Normal cost rate":
200 (a) means the percent of salary that is necessary for a retirement system that is fully
201 funded to maintain its fully funded status; and
202 (b) is determined by the actuary based on the assumed rate of return established by the
203 board.
204 (35) "Office" means the Utah State Retirement Office.
205 (36) "Participant" means an individual with voluntary deferrals or nonelective
206 contributions on deposit with the defined contribution plans administered under this title.
207 (37) "Participating employer" means a participating employer, as defined by Chapter
208 12, Public Employees' Contributory Retirement Act, Chapter 13, Public Employees'
209 Noncontributory Retirement Act, Chapter 14, Public Safety Contributory Retirement Act,
210 Chapter 15, Public Safety Noncontributory Retirement Act, Chapter 16, Firefighters'
211 Retirement Act, Chapter 17, Judges' Contributory Retirement Act, and Chapter 18, Judges'
212 Noncontributory Retirement Act, or an agency financed in whole or in part by public funds
213 which is participating in a system or plan as of January 1, 2002.
214 (38) "Part-time appointed board member" means a person:
215 (a) who is appointed to serve as a member of a board, commission, council, committee,
216 or panel of a participating employer; and
217 (b) whose service as a part-time appointed board member does not qualify as a regular
218 full-time employee as defined under Section 49-12-102, 49-13-102, or 49-22-102.
219 (39) "Pension" means monthly payments derived from participating employer
220 contributions.
221 (40) "Plan" means the Utah Governors' and Legislators' Retirement Plan created by
222 Chapter 19, Utah Governors' and Legislators' Retirement Act, the New Public Employees' Tier
223 II Defined Contribution Plan created by Chapter 22, Part 4, Tier II Defined Contribution Plan,
224 the New Public Safety and Firefighter Tier II Defined Contribution Plan created by Chapter 23,
225 Part 4, Tier II Defined Contribution Plan, or the defined contribution plans created under
226 Section 49-11-801.
227 (41) (a) "Political subdivision" means any local government entity, including cities,
228 towns, counties, and school districts, but only if the subdivision is a juristic entity that is legally
229 separate and distinct from the state and only if its employees are not by virtue of their
230 relationship to the entity employees of the state.
231 (b) "Political subdivision" includes local districts, special service districts, or
232 authorities created by the Legislature or by local governments, including the office.
233 (c) "Political subdivision" does not include a project entity created under Title 11,
234 Chapter 13, Interlocal Cooperation Act, that was formed prior to July 1, 1987.
235 (42) "Program" means the Public Employees' Insurance Program created under Chapter
236 20, Public Employees' Benefit and Insurance Program Act, or the Public Employees'
237 Long-Term Disability program created under Chapter 21, Public Employees' Long-Term
238 Disability Act.
239 (43) "Public funds" means those funds derived, either directly or indirectly, from public
240 taxes or public revenue, dues or contributions paid or donated by the membership of the
241 organization, used to finance an activity whose objective is to improve, on a nonprofit basis,
242 the governmental, educational, and social programs and systems of the state or its political
243 subdivisions.
244 (44) "Qualified defined contribution plan" means a defined contribution plan that
245 meets the requirements of Section 401(k) or Section 403(b) of the Internal Revenue Code.
246 (45) "Refund interest" means the amount accrued on member contributions at a rate
247 adopted by the board.
248 (46) "Retiree" means an individual who has qualified for an allowance under this title.
249 (47) "Retirement" means the status of an individual who has become eligible, applies
250 for, and is entitled to receive an allowance under this title.
251 (48) "Retirement date" means the date selected by the member on which the member's
252 retirement becomes effective with the office.
253 (49) "Retirement related contribution":
254 (a) means any employer payment to any type of retirement plan or program made on
255 behalf of an employee; and
256 (b) does not include Social Security payments or Social Security substitute payments
257 made on behalf of an employee.
258 (50) "Service credit" means:
259 (a) the period during which an employee is employed and compensated by a
260 participating employer and meets the eligibility requirements for membership in a system or the
261 Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are
262 paid to the office; and
263 (b) periods of time otherwise purchasable under this title.
264 (51) "Surviving spouse" means:
265 (a) the lawful spouse who has been married to a member for at least six months
266 immediately before the death date of the member; or
267 (b) a former lawful spouse of a member with a valid domestic relations order benefits
268 on file with the office before the member's death date in accordance with Section 49-11-612.
269 (52) "System" means the individual retirement systems created by Chapter 12, Public
270 Employees' Contributory Retirement Act, Chapter 13, Public Employees' Noncontributory
271 Retirement Act, Chapter 14, Public Safety Contributory Retirement Act, Chapter 15, Public
272 Safety Noncontributory Retirement Act, Chapter 16, Firefighters' Retirement Act, Chapter 17,
273 Judges' Contributory Retirement Act, Chapter 18, Judges' Noncontributory Retirement Act, and
274 Chapter 19, Utah Governors' and Legislators' Retirement Act, the defined benefit portion of the
275 Tier II Hybrid Retirement System under Chapter 22, Part 3, Tier II Hybrid Retirement System,
276 and the defined benefit portion of the Tier II Hybrid Retirement System under Chapter 23, Part
277 3, Tier II Hybrid Retirement System.
278 (53) "Technical college" means the same as that term is defined in Section
279 53B-1-101.5.
280 (54) "Tier I" means a system or plan under this title for which:
281 (a) an employee is eligible to participate if the employee initially enters regular
282 full-time employment before July 1, 2011; or
283 (b) a governor or legislator who initially enters office before July 1, 2011.
284 (55) (a) "Tier II" means a system or plan under this title provided in lieu of a Tier I
285 system or plan for an employee, governor, legislator, or full-time elected official who does not
286 have Tier I service credit in a system or plan under this title:
287 (i) if the employee initially enters regular full-time employment on or after July 1,
288 2011; or
289 (ii) if the governor, legislator, or full-time elected official initially enters office on or
290 after July 1, 2011.
291 (b) "Tier II" includes:
292 (i) the Tier II hybrid system established under:
293 (A) Chapter 22, Part 3, Tier II Hybrid Retirement System; or
294 (B) Chapter 23, Part 3, Tier II Hybrid Retirement System; and
295 (ii) the Tier II Defined Contribution Plan (Tier II DC Plan) established under:
296 (A) Chapter 22, Part 4, Tier II Defined Contribution Plan; or
297 (B) Chapter 23, Part 4, Tier II Defined Contribution Plan.
298 (56) "Unfunded actuarial accrued liability" or "UAAL":
299 (a) is determined by the system's actuary; and
300 (b) means the excess, if any, of the accrued liability of a retirement system over the
301 actuarial value of its assets.
302 (57) "Voluntary deferrals" means an amount contributed by a participant into that
303 participant's defined contribution account.
304 Section 2. Section 49-11-202 is amended to read:
305 49-11-202. Establishment of Utah State Retirement Board -- Quorum -- Terms --
306 Officers -- Expenses and per diem.
307 (1) There is established the Utah State Retirement Board composed of seven board
308 members determined as follows:
309 (a) Four board members, with experience in investments or banking, shall be appointed
310 by the governor from the general public.
311 (b) One board member shall be a school employee appointed by the governor from at
312 least three nominations submitted by the governing board of the school employees' association
313 that is representative of a majority of the school employees who are members of a system
314 administered by the board.
315 (c) One board member shall be a public employee appointed by the governor from at
316 least three nominations submitted by the governing board of the public employee association
317 that is representative of a majority of the public employees who are members of a system
318 administered by the board.
319 (d) One board member shall be the state treasurer.
320 (2) Four board members constitute a quorum for the transaction of business.
321 (3) (a) All appointments to the board shall be made on a nonpartisan basis, with the
322 consent of the Senate.
323 (b) Board members shall serve until their successors are appointed and take the
324 constitutional oath of office.
325 (c) When a vacancy occurs on the board for any reason, the replacement shall be
326 appointed for the unexpired term.
327 (4) (a) Except as required by Subsection (4)(b), all appointed board members shall
328 serve for four-year terms.
329 (b) Notwithstanding the requirements of Subsection (4)(a), the governor shall, at the
330 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
331 board members are staggered so that:
332 (i) approximately half of the board is appointed every two years; and
333 (ii) no more than two of the board members appointed under Subsection (1)(a) are
334 appointed every two years.
335 (c) A board member who is appointed as a school employee or as a public employee
336 who retires or who is no longer employed with a participating employer shall immediately
337 resign from the board.
338 (5) (a) Each year the board shall elect a president and vice president from its
339 membership.
340 (b) A board member may not receive compensation or benefits for the board member's
341 service, but may receive per diem and travel expenses in accordance with:
342 (i) Section 63A-3-106;
343 (ii) Section 63A-3-107; and
344 (iii) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
345 63A-3-107.
346 [
347
348 [
349
350 [
351 [
352 [
353
354 [
355
356 [
357
358
359 [
360
361
362 [
363
364
365 [
366
367
368 [
369
370
371 [
372
373 [
374
375
376 [
377
378
379
380 [
381
382
383
384 [
385
386 [
387
388 [
389
390 [
391 [
392
393 [
394 [
395 [
396
397 [
398
399 [
400
401 [
402
403 [
404
405 [
406 Section 3. Section 49-11-204 is amended to read:
407 49-11-204. Powers and duties of executive director.
408 The executive director shall:
409 (1) act as the executive officer of the board and the office;
410 (2) administer the various systems, plans, programs, and functions assigned to the
411 board or office;
412 (3) subject to board review, develop and implement internal policies and procedures
413 which administer and govern the day-to-day operations of the systems, plans, and programs;
414 (4) transmit orders of a hearing officer made under Section 49-11-613 to the board;
415 (5) provide information concerning the operation of the office to the board, the
416 governor, the Legislature, participating employers, and employer and employee associations,
417 unless otherwise restricted under Section 49-11-618;
418 (6) inform the Legislature of any recommendations from the board regarding any
419 necessary or desirable changes to this title;
420 (7) consult with the Legislature on all legislation under this title;
421 (8) (a) recommend to the board an annual administrative budget covering the
422 operations of the office and, upon approval, submit the budget along with the actuarial status of
423 the funds to the governor and the Legislature for review and comment; and
424 (b) direct and control the subsequent expenditures of the budget;
425 (9) employ, within the limitations of the budget, personnel to administer the systems,
426 plans, programs, and funds assigned to the office, including consultants, actuaries, attorneys,
427 medical examiners, investment counselors, and accountants to accomplish the purposes of this
428 title;
429 (10) establish independent financial records for each of the systems, plans, and
430 programs or combine all financial records using acceptable principles of accounting to identify
431 the assets and vested interests of each system, plan, or program;
432 (11) maintain individual records necessary to provide benefits under this title;
433 (12) keep in convenient form all records, accounts, and data necessary for the
434 administration and actuarial valuation of the systems, plans, and programs;
435 (13) adopt fees, charges, and upon the recommendation of the actuary, interest rates
436 and tables for the administration of the systems, plans, and programs;
437 (14) [
438 contribution distributions, and may consolidate payments at the sole discretion of the executive
439 director;
440 (15) ensure that [
441 accounting records;
442 [
443 (a) make an actuarial investigation into the mortality, service, and other experience of
444 the members, participants, beneficiaries, and covered individuals of the systems, plans, and
445 programs;
446 (b) actuarially value the assets and liabilities of the administered funds and accounts;
447 and
448 (c) determine the rate of interest being earned by the funds;
449 [
450 recommendations, including proposed changes in the rates of contribution or benefits that are
451 necessary to maintain the actuarial soundness of the systems, plans, or programs;
452 [
453 (a) educating them on their duties imposed by this title;
454 (b) specifying the time, place, and manner in which contributions shall be withheld and
455 paid; and
456 (c) requiring any reports necessary for the administration of this title; and
457 [
458 executive director by this title.
459 Section 4. Section 49-11-205 is enacted to read:
460 49-11-205. Membership Council established -- Members -- Chair -- Duties --
461 Expenses and per diem.
462 (1) There is established a Membership Council to perform the duties under Subsection
463 (5).
464 (2) The Membership Council shall be composed of 15 council members selected as
465 follows:
466 (a) three council members shall be school employees selected by the governing board
467 of an association representative of a majority of school employees who are members of a
468 system administered by the board;
469 (b) one council member shall be a classified school employee selected by the
470 governing board of the association representative of a majority of classified school employees
471 who are members of a system administered by the board;
472 (c) two council members shall be public employees selected by the governing board of
473 the association representative of a majority of the public employees who are members of a
474 system administered by the board;
475 (d) one council member shall be a municipal officer or employee selected by the
476 governing board of the association representative of a majority of the municipalities who
477 participate in a system administered by the board;
478 (e) one council member shall be a county officer or employee selected by the governing
479 board of the association representative of a majority of counties who participate in a system
480 administered by the board;
481 (f) one council member shall be a representative of members of the Judges'
482 Noncontributory Retirement System selected by the Judicial Council;
483 (g) one council member shall be a representative of members of the Public Safety
484 Retirement Systems selected by the governing board of the association representative of the
485 majority of peace officers who are members of the Public Safety Retirement Systems;
486 (h) one council member shall be a representative of members of the Firefighters'
487 Retirement System selected by the governing board of the association representative of the
488 majority of paid professional firefighters who are members of the Firefighters' Retirement
489 System;
490 (i) one council member shall be a retiree selected by the governing board of the
491 association representing the largest number of retirees, who are not public education retirees,
492 from the Public Employees' Contributory, Public Employees' Noncontributory, and New Public
493 Employees' Tier II Contributory Retirement Systems;
494 (j) one council member shall be a retiree selected by the governing board of the
495 association representing the largest number of public education retirees;
496 (k) one council member shall be a school business official selected by the governing
497 board of the association representative of a majority of the school business officials from
498 public education employers who participate in a system administered by the board; and
499 (l) one council member shall be a special district officer or employee selected by the
500 governing board of the association Ŝ→ [
500a number ←Ŝ of special service districts and
501 local districts who participate in a system administered by the board.
502 (3) (a) Each entity granted authority to select council members under Subsection (2)
503 may also revoke the selection at any time.
504 (b) Each term on the council shall be for a period of four years, subject to Subsection
505 (3)(a).
506 (c) Each term begins on July 1 and expires on June 30.
507 (d) When a vacancy occurs on the council for any reason, the replacement shall be
508 selected for the remainder of the unexpired term.
509 (4) The council shall annually designate one council member as chair.
510 (5) The council shall:
511 (a) recommend to the board and to the Legislature benefits and policies for members of
512 any system or plan administered by the board;
513 (b) recommend procedures and practices to improve the administration of the systems
514 and plans and the public employee relations responsibilities of the board and office;
515 (c) examine the record of all decisions affecting retirement benefits made by a hearing
516 officer under Section 49-11-613;
517 (d) submit nominations to the board for the position of executive director if that
518 position is vacant;
519 (e) advise and counsel with the board and the director on policies affecting members of
520 the various systems administered by the office; and
521 (f) perform other duties assigned to it by the board.
522 (6) A member of the council may not receive compensation or benefits for the
523 member's service, but may receive per diem and travel expenses in accordance with:
524 (a) Section 63A-3-106;
525 (b) Section 63A-3-107; and
526 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
527 63A-3-107.
528 Section 5. Section 49-11-607 is amended to read:
529 49-11-607. Determination of benefits -- Errors in records or calculations --
530 Correction of errors by the office.
531 (1) After the retirement date, which shall be set by a member in the member's
532 application for retirement, no alteration, addition, or cancellation of a benefit may be made
533 except as provided in Subsections (2), (3), and (4) or other law.
534 (2) (a) Errors in the records or in the calculations of the office which result in an
535 incorrect benefit to any member, retiree, participant, covered individual, alternate payee, or
536 beneficiary shall be corrected by the office if the correction results in a modification of the
537 benefit amount of $5 or more.
538 (b) Future payments shall be made to any member, retiree, participant, covered
539 individual, alternate payee, or beneficiary to:
540 (i) pay the benefit to which the member or beneficiary was entitled; or
541 (ii) recover any overpayment.
542 (3) (a) Errors in the records or calculation of a participating employer which result in
543 an incorrect benefit to a member, retiree, participant, covered individual, alternate payee, or
544 beneficiary shall be corrected by the participating employer.
545 (b) If insufficient employer contributions have been received by the office, the
546 participating employer shall pay any delinquent employer contributions, plus interest under
547 Section 49-11-503, required by the office to maintain the system, plan, or program affected on
548 an actuarially sound basis.
549 (c) If excess contributions have been received by the office, the contributions shall be
550 refunded to the participating employer or member which paid the contributions.
551 (4) If a dispute exists between a participating employer and a member or the office and
552 a member at the time of the member's retirement which will affect the member's benefit
553 calculation, and notice of the dispute is given to the office prior to the calculation of a
554 member's benefit, the benefit may be paid based on the member's retirement date and the
555 records available and then recalculated upon settlement of the dispute.
556 Section 6. Section 49-12-406 is amended to read:
557 49-12-406. Exceptions for part-time elective or appointive service -- Computation
558 of allowance -- Justice court judges.
559 (1) Notwithstanding the provisions of Sections 49-11-401 and 49-12-102, and unless
560 otherwise provided in this section, a member's elective or appointive service rendered on a
561 basis not considered full-time by the office shall have a separate allowance computed on the
562 basis of compensation actually received by the member during the period of elective or
563 appointive service.
564 (2) (a) Ŝ→ (i) ←Ŝ A justice court judge who has service with only one participating
564a employer shall
565 be Ŝ→ [
565a ←Ŝ as Ŝ→ [
566 employment facts and circumstances
566a (ii) If there is a dispute between the office and a participating employer or justice court
566b judge over whether service is full-time or part-time for any employment period, the disputed
566c service shall be submitted by the office to the Administrative Office of the Courts for
566d determination. ←Ŝ
567 (b) If a justice court judge has a combination of part-time service and full-time position
568 service with one participating employer, the office shall compute separate allowances on the
569 basis of compensation actually received by the judge during the part-time and full-time periods
570 of service.
571 (3) (a) A justice court judge who has service with more than one participating
572 employer shall be considered full-time by the office for a period of service in which the judge
573 is certified as full-time by:
574 (i) a participating employer; or
575 (ii) the Administrative Office of the Courts beginning on or after January 1, 2009,
576 based on the judge's aggregate caseload of the multiple employers as determined by the judge's
577 caseloads of the individual courts of each employer in accordance with Subsection
578 78A-7-206(1)(b)(ii).
579 (b) If a justice court judge has full-time service under Subsection (3)(a), the office shall
580 compute an allowance on the basis of total compensation actually received from all
581 participating employers by the judge during the total period of full-time service.
582 (c) If a justice court judge has part-time service performed that is not within a period
583 considered full-time service under Subsection (3)(a), the office shall compute a separate
584 allowance on the basis of compensation actually received by the member during the period of
585 part-time service.
586 (4) All of the service rendered by a justice court judge in any one fiscal or calendar
587 year may not count for more than one year of service credit.
588 Section 7. Section 49-13-402 is amended to read:
589 49-13-402. Service retirement plans -- Calculation of retirement allowance.
590 (1) (a) Except as provided under Subsection (7) or Section 49-13-701, retirees of this
591 system may choose from the six retirement options described in this section.
592 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
593 calculation.
594 (2) The Option One benefit is an allowance calculated as follows:
595 (a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
596 credit, the allowance is an amount equal to 2% of the retiree's final average monthly salary
597 multiplied by the number of years of service credit accrued.
598 (b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
599 each year of retirement from age 60 to age 65, plus a full actuarial reduction for each year of
600 retirement prior to age 60, unless the member has 30 or more years of accrued credit, in which
601 event no reduction is made to the allowance.
602 (c) (i) Years of service include any fractions of years of service to which the retiree
603 may be entitled.
604 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
605 service credit is within 1/10 of one year of the total years of service credit required for
606 retirement, the retiree shall be considered to have the total years of service credit required for
607 retirement.
608 (d) An Option One allowance is only payable to the member during the member's
609 lifetime.
610 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
611 by reducing an Option One benefit based on actuarial computations to provide the following:
612 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
613 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
614 member contributions, the remaining balance of the retiree's member contributions shall be
615 paid in accordance with Sections 49-11-609 and 49-11-610.
616 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
617 retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
618 the lifetime of the retiree's lawful spouse at the time of retirement.
619 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
620 retiree, and upon the death of the retiree, an amount equal to one-half of the retiree's allowance
621 paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
622 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
623 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
624 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
625 retiree's life, beginning on the first day of the month following the month in which the:
626 (i) spouse died, if notification and supporting documentation for the death are received
627 by the office within 90 days of the spouse's death; or
628 (ii) notification and supporting documentation for the death are received by the office,
629 if the notification and supporting documentation are received by the office more than 90 days
630 after the spouse's death.
631 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
632 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
633 of initial retirement under Option One shall be paid to the retiree for the remainder of the
634 retiree's life, beginning on the first day of the month following the month in which the:
635 (i) spouse died, if notification and supporting documentation for the death are received
636 by the office within 90 days of the spouse's death; or
637 (ii) notification and supporting documentation for the death are received by the office,
638 if the notification and supporting documentation are received by the office more than 90 days
639 after the spouse's death.
640 (4) (a) (i) The final average salary is limited in the computation of that part of an
641 allowance based on service rendered prior to July 1, 1967, during a period when the retiree
642 received employer contributions on a portion of compensation from an educational institution
643 toward the payment of the premium required on a retirement annuity contract with a public or
644 private system, organization, or company designated by the State Board of Regents to $4,800.
645 (ii) This limitation is not applicable to retirees who elected to continue in the Public
646 Employees' Contributory Retirement System by July 1, 1967.
647 (b) Periods of employment which are exempt from this system as permitted under
648 Subsection 49-13-203(1)(b) may be purchased by the member for the purpose of retirement
649 only if all benefits from a public or private system, organization, or company designated by the
650 State Board of Regents based on this period of employment are forfeited.
651 (5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
652 date, the retirement is canceled and the death shall be considered as that of a member before
653 retirement.
654 (b) Any payments made to the retiree shall be deducted from the amounts due to the
655 beneficiary.
656 (6) (a) If a retiree retires under either Option Five or Six and subsequently divorces, the
657 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
658 is no court order filed in the matter.
659 (b) A conversion to an Option One benefit under this Subsection (6) begins on the first
660 day of the month following the month in which the notification and supporting documentation
661 for the divorce are received by the office.
662 (7) A retiree may not choose payment of an allowance under a retirement option
663 described in this section that is not applicable to that retiree, including because the retiree did
664 not make member contributions or does not have a lawful spouse at the time of retirement.
665 Section 8. Section 49-13-406 is amended to read:
666 49-13-406. Exceptions for part-time elective or appointive service -- Computation
667 of allowance -- Justice court judges.
668 (1) Notwithstanding the provisions of Sections 49-11-401 and 49-13-102, and unless
669 otherwise provided in this section, a member's elective or appointive service rendered on a
670 basis not considered full-time by the office shall have a separate allowance computed on the
671 basis of compensation actually received by the member during the period of elective or
672 appointive service.
673 (2) (a) Ŝ→ (i) ←Ŝ A justice court judge who has service with only one participating
673a employer shall
674 be Ŝ→ [
674a ←Ŝ as Ŝ→ [
675 employment facts and circumstances
675a (ii) If there is a dispute between the office and a participating employer or justice court
675b judge over whether service is full-time or part-time for any employment period, the disputed
675c service shall be submitted by the office to the Administrative Office of the Courts for
675d determination. ←Ŝ
676 (b) If a justice court judge has a combination of part-time service and full-time position
677 service with one participating employer, the office shall compute separate allowances on the
678 basis of compensation actually received by the judge during the part-time and full-time periods
679 of service.
680 (3) (a) A justice court judge who has service with more than one participating
681 employer shall be considered full-time by the office for a period of service in which the judge
682 is certified as full-time by:
683 (i) a participating employer; or
684 (ii) the Administrative Office of the Courts beginning on or after January 1, 2009,
685 based on the judge's aggregate caseload of the multiple employers as determined by the judge's
686 caseloads of the individual courts of each employer in accordance with Subsection
687 78A-7-206(1)(b)(ii).
688 (b) If a justice court judge has full-time service under Subsection (3)(a), the office shall
689 compute an allowance on the basis of total compensation actually received from all
690 participating employers by the judge during the total period of full-time service.
691 (c) If a justice court judge has part-time service performed that is not within a period
692 considered full-time service under Subsection (3)(a), the office shall compute a separate
693 allowance on the basis of compensation actually received by the member during the period of
694 part-time service.
695 (4) All of the service rendered by a justice court judge in any one fiscal or calendar
696 year may not count for more than one year of service credit.
697 Section 9. Section 49-22-103 is amended to read:
698 49-22-103. Creation of system.
699 (1) There is created for members employed by a participating employer the "New
700 Public Employees' Tier II Contributory Retirement System."
701 (2) The New Public Employees' Tier II Contributory Retirement System includes:
702 (a) the Tier II hybrid retirement system created in Part 3, Tier II Hybrid Retirement
703 System; and
704 (b) the Tier II defined contribution plan created in Part 4, Tier II Defined Contribution
705 Plan.
706 (3) The system may also be known and function as the Public Employees' Tier 2
707 Contributory Retirement System, the Tier 2 Hybrid Retirement System, and the Tier 2 Defined
708 Contribution Plan.
709 Section 10. Section 49-22-305 is amended to read:
710 49-22-305. Defined benefit service retirement plans -- Calculation of retirement
711 allowance -- Social security limitations.
712 (1) (a) [
713 choose from the six retirement options described in this section.
714 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
715 calculation.
716 (2) The Option One benefit is an annual allowance calculated as follows:
717 (a) If the retiree is at least 65 years of age or has accrued at least 35 years of service
718 credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
719 by the number of years of service credit accrued on and after July 1, 2011.
720 (b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
721 actuarial amount for each year of retirement from age 60 to age 65, unless the member has 35
722 or more years of accrued credit in which event no reduction is made to the allowance.
723 (c) (i) Years of service includes any fractions of years of service to which the retiree
724 may be entitled.
725 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
726 service credit is within one-tenth of one year of the total years of service credit required for
727 retirement, the retiree shall be considered to have the total years of service credit required for
728 retirement.
729 (d) An Option One allowance is only payable to the member during the member's
730 lifetime.
731 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
732 by reducing an Option One benefit based on actuarial computations to provide the following:
733 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
734 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
735 member contributions, the remaining balance of the retiree's member contributions shall be
736 paid in accordance with Sections 49-11-609 and 49-11-610.
737 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
738 retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
739 the lifetime of the retiree's lawful spouse at the time of retirement.
740 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
741 retiree, and upon the death of the retiree, an amount equal to one-half of the retiree's allowance
742 is paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
743 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
744 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
745 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
746 retiree's life, beginning on the first day of the month following the month in which the:
747 (i) spouse died, if notification and supporting documentation for the death are received
748 by the office within 90 days of the spouse's death; or
749 (ii) notification and supporting documentation for the death are received by the office,
750 if the notification and supporting documentation are received by the office more than 90 days
751 after the spouse's death.
752 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
753 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
754 of initial retirement under Option One shall be paid to the retiree for the remainder of the
755 retiree's life, beginning on the first day of the month following the month in which the:
756 (i) spouse died, if notification and supporting documentation for the death are received
757 by the office within 90 days of the spouse's death; or
758 (ii) notification and supporting documentation for the death are received by the office,
759 if the notification and supporting documentation are received by the office more than 90 days
760 after the spouse's death.
761 (4) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
762 date, the retirement is canceled and the death shall be considered as that of a member before
763 retirement.
764 (b) Any payments made to the retiree shall be deducted from the amounts due to the
765 beneficiary.
766 (5) (a) If a retiree retires under either Option Five or Six and subsequently divorces, the
767 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
768 is no court order filed in the matter.
769 (b) A conversion to an Option One benefit under this Subsection (5) begins on the first
770 day of the month following the month in which the notification and supporting documentation
771 for the divorce are received by the office.
772 (6) A retiree may not choose payment of an allowance under a retirement option
773 described in this section that is not applicable to that retiree, including because the retiree did
774 not make member contributions or does not have a lawful spouse at the time of retirement.
775 Section 11. Section 49-22-310 is amended to read:
776 49-22-310. Defined benefit adjustments -- Conditions -- Process -- Future years
777 accrual.
778 (1) In accordance with this section, the Legislature may make adjustments to the
779 benefits provided for the defined benefit portion of the Tier II Hybrid Retirement System
780 created under this part if the member's contribution required under Subsection 49-22-301(2)(b)
781 to the certified contribution rate for the defined benefit portion of this system exceeds 2% of
782 the member's salary and:
783 (a) (i) the membership council created under Section [
784 recommends an adjustment to the board in accordance with Subsection (2); and
785 (ii) the board recommends specific adjustments to the Legislature in accordance with
786 Subsection (2); or
787 (b) an actuarial study that conforms with generally accepted actuarial principles and
788 practices and with the Actuarial Standards of Practice issued by the Actuarial Standards Board
789 and requested or commissioned by the board or the Legislature concludes:
790 (i) there is a significant likelihood that contribution rates will continue to rise; and
791 (ii) that participating employers are liable for system costs above the contribution rate
792 established under Subsection 49-22-301(2)(a).
793 (2) If the conditions under Subsection (1)(a) or (b) are met, the Legislature may adjust
794 benefits for the defined benefit portion of the Tier II Hybrid Retirement System accrued or
795 applied for future years of service including:
796 (a) the final average salary calculation provided under Section 49-22-102;
797 (b) the years of service required to be eligible to receive a retirement allowance under
798 Section 49-22-304;
799 (c) the years of service credit multiplier established under Subsection 49-22-305(2)(a);
800 (d) the annual cost-of-living adjustment under Section 49-22-308; or
801 (e) other provisions of the defined benefit portion of the Tier II Hybrid Retirement
802 System.
803 (3) (a) Notwithstanding the provisions of Subsections (1) and (2), the Legislature may
804 make adjustments to the benefits provided for the defined benefit portion of the Tier II Hybrid
805 Retirement System created under this part if an actuarial study described under Subsection
806 (1)(b) concludes, due to current and projected economic conditions, member participation
807 levels, and system structure, that the system:
808 (i) cannot reasonably be sustained under its current provisions;
809 (ii) is critically underfunded; and
810 (iii) has become unstable and is in risk of collapse.
811 (b) Subject to federal law, the adjustments under Subsection (3)(a) may include:
812 (i) conversion to a different type of retirement plan;
813 (ii) equitable distribution of system assets to retirees and members; and
814 (iii) a closure of the system.
815 Section 12. Section 49-23-103 is amended to read:
816 49-23-103. Creation of system.
817 (1) There is created for members employed by a participating employer the "New
818 Public Safety and Firefighter Tier II Contributory Retirement System."
819 (2) The New Public Safety and Firefighter Tier II Contributory Retirement System
820 includes:
821 (a) the Tier II hybrid retirement system created in Part 3, Tier II Hybrid Retirement
822 System; and
823 (b) the Tier II defined contribution plan created in Part 4, Tier II Defined Contribution
824 Plan.
825 (3) The system may also be known and function as the Public Safety and Firefighter
826 Tier 2 Contributory Retirement System, the Tier 2 Hybrid Retirement System, and the Tier 2
827 Defined Contribution Plan.
828 Section 13. Section 49-23-304 is amended to read:
829 49-23-304. Defined benefit service retirement plans -- Calculation of retirement
830 allowance -- Social security limitations.
831 (1) (a) [
832 choose from the six retirement options described in this section.
833 (b) Options Two, Three, Four, Five, and Six are modifications of the Option One
834 calculation.
835 (2) The Option One benefit is an annual allowance calculated as follows:
836 (a) If the retiree is at least 65 years of age or has accrued at least 25 years of service
837 credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
838 by the number of years of service credit accrued on and after July 1, 2011.
839 (b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
840 actuarial amount for each year of retirement from age 60 to age 65, unless the member has 25
841 or more years of accrued credit in which event no reduction is made to the allowance.
842 (c) (i) Years of service includes any fractions of years of service to which the retiree
843 may be entitled.
844 (ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
845 service credit is within 1/10 of one year of the total years of service credit required for
846 retirement, the retiree shall be considered to have the total years of service credit required for
847 retirement.
848 (d) An Option One allowance is only payable to the member during the member's
849 lifetime.
850 (3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
851 by reducing an Option One benefit based on actuarial computations to provide the following:
852 (a) Option Two is a reduced allowance paid to and throughout the lifetime of the
853 retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
854 member contributions, the remaining balance of the retiree's member contributions shall be
855 paid in accordance with Sections 49-11-609 and 49-11-610.
856 (b) Option Three is a reduced allowance paid to and throughout the lifetime of the
857 retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
858 the lifetime of the retiree's lawful spouse at the time of retirement.
859 (c) Option Four is a reduced allowance paid to and throughout the lifetime of the
860 retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance is
861 paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
862 (d) Option Five is a modification of Option Three so that if the lawful spouse at the
863 time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
864 time of initial retirement under Option One shall be paid to the retiree for the remainder of the
865 retiree's life, beginning on the first day of the month following the month in which the:
866 (i) spouse died, if notification and supporting documentation for the death are received
867 by the office within 90 days of the spouse's death; or
868 (ii) notification and supporting documentation for the death are received by the office,
869 if the notification and supporting documentation are received by the office more than 90 days
870 after the spouse's death.
871 (e) Option Six is a modification of Option Four so that if the lawful spouse at the time
872 of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
873 of initial retirement under Option One shall be paid to the retiree for the remainder of the
874 retiree's life, beginning on the first day of the month following the month in which the:
875 (i) spouse died, if notification and supporting documentation for the death are received
876 by the office within 90 days of the spouse's death; or
877 (ii) notification and supporting documentation for the death are received by the office,
878 if the notification and supporting documentation are received by the office more than 90 days
879 after the spouse's death.
880 (4) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
881 date, the retirement is canceled and the death shall be considered as that of a member before
882 retirement.
883 (b) Any payments made to the retiree shall be deducted from the amounts due to the
884 beneficiary.
885 (5) (a) If a retiree retires under either Option Five or Six and subsequently divorces, the
886 retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
887 is no court order filed in the matter.
888 (b) A conversion to an Option One benefit under this Subsection (5) begins on the first
889 day of the month following the month in which the notification and supporting documentation
890 for the divorce are received by the office.
891 (6) A retiree may not choose payment of an allowance under a retirement option
892 described in this section that is not applicable to that retiree, including because the retiree did
893 not make member contributions or does not have a lawful spouse at the time of retirement.
894 Section 14. Section 49-23-309 is amended to read:
895 49-23-309. Defined benefit adjustments -- Conditions -- Process -- Future years
896 accrual.
897 (1) In accordance with this section, the Legislature may make adjustments to the
898 benefits provided for the defined benefit portion of the Tier II Hybrid Retirement System
899 created under this part if the member's contribution required under Subsection 49-23-301(2)(b)
900 to the certified contribution rate for the defined benefit portion of this system exceeds 2% of
901 the member's salary and:
902 (a) (i) the membership council created under Section [
903 recommends an adjustment to the board in accordance with Subsection (2); and
904 (ii) the board recommends specific adjustments to the Legislature in accordance with
905 Subsection (2); or
906 (b) an actuarial study that conforms with generally accepted actuarial principles and
907 practices and with the Actuarial Standards of Practice issued by the Actuarial Standards Board
908 and requested or commissioned by the board or the Legislature concludes:
909 (i) there is a significant likelihood that contribution rates will continue to rise; and
910 (ii) that participating employers are liable for system costs above the contribution rate
911 established under Subsection 49-23-301(2)(a).
912 (2) If the conditions under Subsection (1)(a) or (b) are met, the Legislature may adjust
913 benefits for the defined benefit portion of the Tier II Hybrid Retirement System accrued or
914 applied for future years of service including:
915 (a) the final average salary calculation provided under Section 49-23-102;
916 (b) the years of service required to be eligible to receive a retirement allowance under
917 Section 49-23-303;
918 (c) the years of service credit multiplier established under Subsection 49-23-304(2)(a);
919 (d) the annual cost-of-living adjustment under Section 49-23-307; or
920 (e) other provisions of the defined benefit portion of the Tier II Hybrid Retirement
921 System.
922 (3) (a) Notwithstanding the provisions of Subsections (1) and (2), the Legislature may
923 make adjustments to the benefits provided for the defined benefit portion of the Tier II Hybrid
924 Retirement System created under this part if an actuarial study described under Subsection
925 (1)(b) concludes, due to current and projected economic conditions, member participation
926 levels, and system structure, that the system:
927 (i) cannot reasonably be sustained under its current provisions;
928 (ii) is critically underfunded; and
929 (iii) has become unstable and is in risk of collapse.
930 (b) Subject to federal law, the adjustments under Subsection (3)(a) may include:
931 (i) conversion to a different type of retirement plan;
932 (ii) equitable distribution of system assets to retirees and members; and
933 (iii) a closure of the system.
934 Section 15. Effective date.
935 This bill takes effect on July 1, 2019.