Senator Wayne A. Harper proposes the following substitute bill:


1     
UTAH RETIREMENT SYSTEMS REVISIONS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Wayne A. Harper

5     
House Sponsor: Walt Brooks

6     

7     LONG TITLE
8     General Description:
9          This bill modifies the Utah State Retirement and Insurance Benefit Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     requires a participating employer to certify each employee's status for retirement
13     benefits;
14          ▸     provides the time period for which a retiree's retirement allowance is cancelled due
15     to a violation of the earnings limitation for a part-time appointed or elected board
16     member;
17          ▸     aligns the time period for determining final average salary with the time period for
18     calculating years of service credit;
19          ▸     adds the commissioner of the Department of Public Safety and the executive
20     director of the Department of Corrections to the definitions of public safety service
21     employee;
22          ▸     clarifies when an elected official who is initially elected to office on or after July 1,
23     2011, may continue to participate in a retirement plan in which the elected official
24     had previously accrued service credit;
25          ▸     provides that a full-time Tier II employee who begins employment with an

26     institution of higher education and has previously accrued service credit has a one-time
27     irrevocable election to continue participation in the Utah Retirement Systems;
28          ▸     provides that a member who exempts from participation in the Utah Retirement
29     Systems is exempt from earning years of service credit during the period of
30     exemption;
31          ▸     permits a public safety service employee who is promoted to certain administrative
32     positions to continue participation in a public safety retirement system while the
33     employee remains employed with the same department;
34          ▸     permits a fire department chief to exempt from participation in the New Public
35     Safety and Firefighters Tier II Contributory Retirement Act;
36          ▸     repeals the New Public Safety and Firefighter Tier II Retirement Benefits Restricted
37     Account; and
38          ▸     makes technical and conforming changes.
39     Money Appropriated in this Bill:
40          None
41     Other Special Clauses:
42          This bill provides a special effective date.
43     Utah Code Sections Affected:
44     AMENDS:
45          49-11-603, as last amended by Laws of Utah 2017, Chapter 141
46          49-11-1207, as last amended by Laws of Utah 2017, Chapter 141
47          49-12-102, as last amended by Laws of Utah 2018, Chapter 415
48          49-13-102, as last amended by Laws of Utah 2018, Chapter 415
49          49-14-102, as last amended by Laws of Utah 2016, Chapter 227
50          49-14-201, as last amended by Laws of Utah 2021, Chapter 344
51          49-15-102, as last amended by Laws of Utah 2016, Chapter 227
52          49-15-201, as last amended by Laws of Utah 2021, Chapter 344
53          49-16-102, as last amended by Laws of Utah 2019, Chapter 349
54          49-22-102, as last amended by Laws of Utah 2018, Chapter 415
55          49-22-201, as last amended by Laws of Utah 2020, Chapter 24
56          49-22-204, as last amended by Laws of Utah 2020, Chapters 24 and 365

57          49-22-205, as last amended by Laws of Utah 2021, Chapters 64 and 382
58          49-22-401, as last amended by Laws of Utah 2016, Chapter 227
59          49-23-102, as last amended by Laws of Utah 2020, Chapter 180
60          49-23-201, as last amended by Laws of Utah 2015, Chapters 315 and 463
61          49-23-203, as last amended by Laws of Utah 2020, Chapter 24
62          49-23-401, as last amended by Laws of Utah 2020, Chapter 437
63     REPEALS:
64          49-11-904, as enacted by Laws of Utah 2020, Chapter 437
65     

66     Be it enacted by the Legislature of the state of Utah:
67          Section 1. Section 49-11-603 is amended to read:
68          49-11-603. Participating employer to report and certify -- Time limit -- Penalties
69     for failure to comply.
70          (1) As soon as administratively possible, but in no event later than 30 days after the
71     end of each pay period, a participating employer shall report and certify to the office:
72          (a) the eligibility for service credit accrual of:
73          (i) each current employee;
74          (ii) each new employee as the new employee begins employment; and
75          (iii) any changes to eligibility for service credit accrual of each employee;
76          (b) the compensation of each current employee eligible for service credit; and
77          (c) other factors relating to the proper administration of this title as required by the
78     executive director.
79          (2) (a) Each participating employer shall submit the reports required under Subsection
80     (1) in a format approved by the office.
81          (b) Each participating employer shall include in the reports a certification, for each
82     employee, whether the employee is:
83          (i) an eligible employee who is accruing service credit;
84          (ii) an ineligible employee who may not accrue service credit;
85          (iii) a reemployed retiree; or
86          (iv) an employee who is eligible for employer contributions to a defined contribution
87     plan administered under this title.

88          (3) A participating employer shall be liable to the office for:
89          (a) any liabilities and expenses, including administrative expenses and the cost of
90     increased benefits to employees, resulting from the participating employer's failure to correctly
91     report and certify records under this section;
92          (b) a penalty equal to the greater of:
93          (i) $250; or
94          (ii) 50% of the total contributions for the employees for the period of the reporting
95     error; and
96          (c) attorney fees.
97          (4) The executive director may waive all or any part of the interest, penalties, expenses,
98     and fees if the executive director finds there were extenuating circumstances surrounding the
99     participating employer's failure to comply with this section.
100          (5) The office may estimate the length of service, compensation, or age of any
101     employee, if that information is not contained in the records.
102          Section 2. Section 49-11-1207 is amended to read:
103          49-11-1207. Postretirement reemployment -- Violations -- Penalties.
104          (1) (a) If the office receives notice or learns of the reemployment of a retiree in
105     violation of Section 49-11-1204 or 49-11-1205, the office shall:
106          (i) immediately cancel the retiree's retirement allowance;
107          (ii) keep the retiree's retirement allowance cancelled for the remainder of the calendar
108     year if the reemployment with a participating employer exceeded the limitation under
109     Subsection 49-11-1205(1)(a)(iii)(A) [or], (3)(b), or (4)(b); and
110          (iii) recover any overpayment resulting from the violation in accordance with the
111     provisions of Section 49-11-607 before the allowance may be reinstated.
112          (b) Reinstatement of an allowance following cancellation for a violation under this
113     section is subject to the procedures and provisions under Section 49-11-1204.
114          (2) If a retiree or participating employer failed to report reemployment in violation of
115     Section 49-11-1206, the retiree, participating employer, or both, who are found to be
116     responsible for the failure to report, are liable to the office for the amount of any overpayment
117     resulting from the violation.
118          (3) A participating employer is liable to the office for a payment or failure to make a

119     payment in violation of this part.
120          (4) If a participating employer fails to notify the office in accordance with Section
121     49-11-1206, the participating employer is immediately subject to a compliance audit by the
122     office.
123          Section 3. Section 49-12-102 is amended to read:
124          49-12-102. Definitions.
125          As used in this chapter:
126          (1) (a) "Benefits normally provided"[: (a)] means a benefit offered by an employer,
127     including:
128          (i) a leave benefit of any kind;
129          (ii) insurance coverage of any kind if the employer pays some or all of the premium for
130     the coverage;
131          (iii) employer contributions to a health savings account, health reimbursement account,
132     health reimbursement arrangement, or medical expense reimbursement plan; and
133          (iv) a retirement benefit of any kind if the employer pays some or all of the cost of the
134     benefit[; and].
135          (b) "Benefits normally provided" does not include:
136          (i) a payment for social security;
137          (ii) workers' compensation insurance;
138          (iii) unemployment insurance;
139          (iv) a payment for Medicare;
140          (v) a payment or insurance required by federal or state law that is similar to a payment
141     or insurance listed in Subsection (1)(b)(i), (ii), (iii), or (iv);
142          (vi) any other benefit that state or federal law requires an employer to provide an
143     employee who would not otherwise be eligible to receive the benefit; or
144          (vii) any benefit that an employer provides an employee in order to avoid a penalty or
145     tax under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 and the Health
146     Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and related federal
147     regulations, including a penalty imposed by Internal Revenue Code, Section 4980H.
148          (2) (a) "Compensation" means[, except as provided in Subsection (2)(c),] the total
149     amount of payments made by a participating employer to a member of this system for services

150     rendered to the participating employer, including:
151          (i) bonuses;
152          (ii) cost-of-living adjustments;
153          (iii) other payments currently includable in gross income and that are subject to social
154     security deductions, including any payments in excess of the maximum amount subject to
155     deduction under social security law;
156          (iv) amounts that the member authorizes to be deducted or reduced for salary deferral
157     or other benefits authorized by federal law; and
158          (v) member contributions.
159          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed
160     under Internal Revenue Code, Section 401(a)(17).
161          (c) "Compensation" does not include:
162          (i) the monetary value of remuneration paid in kind, including a residence or use of
163     equipment;
164          (ii) the cost of any employment benefits paid for by the participating employer;
165          (iii) compensation paid to a temporary employee, an exempt employee, or an employee
166     otherwise ineligible for service credit;
167          (iv) any payments upon termination, including accumulated vacation, sick leave
168     payments, severance payments, compensatory time payments, or any other special payments;
169          (v) any allowances or payments to a member for costs or expenses paid by the
170     participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
171     housing costs, insurance costs, equipment costs, and dependent care costs; or
172          (vi) a teacher salary bonus described in Section 53F-2-513.
173          (d) The executive director may determine if a payment not listed under this Subsection
174     (2) falls within the definition of compensation.
175          (3) (a) "Final average salary" means the amount calculated by averaging the highest
176     five years of annual compensation preceding retirement subject to Subsections [(3)(a), (b), (c),
177     (d), and (e)] (3)(b), (c), (d), (e), and (f).
178          [(a)] (b) Except as provided in Subsection [(3)(b)] (3)(c), the percentage increase in
179     annual compensation in any one of the years used may not exceed the previous year's
180     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the

181     purchasing power of the dollar during the previous year, as measured by a United States Bureau
182     of Labor Statistics Consumer Price Index average as determined by the board.
183          [(b)] (c) In cases where the participating employer provides acceptable documentation
184     to the office, the limitation in Subsection [(3)(a)] (3)(b) may be exceeded if:
185          (i) the member has transferred from another agency; or
186          (ii) the member has been promoted to a new position.
187          [(c)] (d) If the member retires more than six months from the date of termination of
188     employment, the member is considered to have been in service at the member's last rate of pay
189     from the date of the termination of employment to the effective date of retirement for purposes
190     of computing the member's final average salary only.
191          [(d)] (e) If the member has less than five years of service credit in this system, final
192     average salary means the average annual compensation paid to the member during the full
193     period of service credit.
194          [(e)] (f) The annual compensation used to calculate final average salary shall be based
195     on[:] a period, as determined by the board, consistent with the period used to determine years
196     of service credit in accordance with Subsection (7).
197          [(i) a calendar year for a member employed by a participating employer that is not an
198     educational institution; or]
199          [(ii) a contract year for a member employed by an educational institution.]
200          (4) "Participating employer" means an employer [which] that meets the participation
201     requirements of Sections 49-12-201 and 49-12-202.
202          (5) (a) "Regular full-time employee" means an employee:
203          (i) whose term of employment for a participating employer contemplates continued
204     employment during a fiscal or calendar year [and];
205          (ii) whose employment normally requires an average of 20 hours or more per week,
206     except as modified by the board[,]; and
207          (iii) who receives benefits normally provided by the participating employer.
208          (b) "Regular full-time employee" includes:
209          (i) a teacher whose term of employment for a participating employer contemplates
210     continued employment during a school year and who teaches half-time or more;
211          (ii) a classified school employee:

212          (A) who is hired before July 1, 2013; and
213          (B) whose employment normally requires an average of 20 hours per week or more for
214     a participating employer, regardless of benefits provided;
215          (iii) an officer, elective or appointive, who earns $500 or more per month, indexed as
216     of January 1, 1990, as provided in Section 49-12-407;
217          (iv) a faculty member or employee of an institution of higher education who is
218     considered full-time by that institution of higher education; and
219          (v) an individual who otherwise meets the definition of this Subsection (5) who
220     performs services for a participating employer through a professional employer organization or
221     similar arrangement.
222          (c) "Regular full-time employee" does not include a classified school employee:
223          (i) (A) who is hired on or after July 1, 2013; and
224          (B) who does not receive benefits normally provided by the participating employer
225     even if the employment normally requires an average of 20 hours per week or more for a
226     participating employer;
227          (ii) (A) who is hired before July 1, 2013;
228          (B) who did not qualify as a regular full-time employee before July 1, 2013;
229          (C) who does not receive benefits normally provided by the participating employer;
230     and
231          (D) whose employment hours are increased on or after July 1, 2013, to require an
232     average of 20 hours per week or more for a participating employer; or
233          (iii) who is a person working on a contract:
234          (A) for the purposes of vocational rehabilitation and the employment and training of
235     people with significant disabilities; and
236          (B) that has been set aside from procurement requirements by the state pursuant to
237     Section 63G-6a-805 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
238          (6) "System" means the Public Employees' Contributory Retirement System created
239     under this chapter.
240          (7) "Years of service credit" means:
241          (a) a period consisting of 12 full months as determined by the board;
242          (b) a period determined by the board, whether consecutive or not, during which a

243     regular full-time employee performed services for a participating employer, including any time
244     the regular full-time employee was absent on a paid leave of absence granted by a participating
245     employer or was absent in the service of the United States government on military duty as
246     provided by this chapter; or
247          (c) the regular school year consisting of not less than eight months of full-time service
248     for a regular full-time employee of an educational institution.
249          Section 4. Section 49-13-102 is amended to read:
250          49-13-102. Definitions.
251          As used in this chapter:
252          (1) "Benefits normally provided" [has the same meaning as] means the same as that
253     term is defined in Section 49-12-102.
254          (2) (a) [Except as provided in Subsection (2)(c), "compensation"] "Compensation"
255     means the total amount of payments made by a participating employer to a member of this
256     system for services rendered to the participating employer, including:
257          (i) bonuses;
258          (ii) cost-of-living adjustments;
259          (iii) other payments currently includable in gross income and that are subject to social
260     security deductions, including any payments in excess of the maximum amount subject to
261     deduction under social security law; and
262          (iv) amounts that the member authorizes to be deducted or reduced for salary deferral
263     or other benefits authorized by federal law.
264          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed
265     under Internal Revenue Code, Section 401(a)(17).
266          (c) "Compensation" does not include:
267          (i) the monetary value of remuneration paid in kind, including a residence or use of
268     equipment;
269          (ii) the cost of any employment benefits paid for by the participating employer;
270          (iii) compensation paid to a temporary employee, an exempt employee, or an employee
271     otherwise ineligible for service credit;
272          (iv) any payments upon termination, including accumulated vacation, sick leave
273     payments, severance payments, compensatory time payments, or any other special payments;

274          (v) any allowances or payments to a member for costs or expenses paid by the
275     participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
276     housing costs, insurance costs, equipment costs, and dependent care costs; or
277          (vi) a teacher salary bonus described in Section 53F-2-513.
278          (d) The executive director may determine if a payment not listed under this Subsection
279     (2) falls within the definition of compensation.
280          (3) (a) "Final average salary" means the amount calculated by averaging the highest
281     three years of annual compensation preceding retirement subject to Subsections [(3)(a), (b), (c),
282     and (d)] (3)(b), (c), (d), and (e).
283          [(a)] (b) Except as provided in Subsection [(3)(b)] (3)(c), the percentage increase in
284     annual compensation in any one of the years used may not exceed the previous year's
285     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
286     purchasing power of the dollar during the previous year, as measured by a United States Bureau
287     of Labor Statistics Consumer Price Index average as determined by the board.
288          [(b)] (c) In cases where the participating employer provides acceptable documentation
289     to the office, the limitation in Subsection [(3)(a)] (3)(b) may be exceeded if:
290          (i) the member has transferred from another agency; or
291          (ii) the member has been promoted to a new position.
292          [(c)] (d) If the member retires more than six months from the date of termination of
293     employment and for purposes of computing the member's final average salary only, the
294     member is considered to have been in service at the member's last rate of pay from the date of
295     the termination of employment to the effective date of retirement.
296          [(d)] (e) The annual compensation used to calculate final average salary shall be based
297     on[:] a period, as determined by the board, consistent with the period used to determine years
298     of service credit in accordance with Subsection (7).
299          [(i) a calendar year for a member employed by a participating employer that is not an
300     educational institution; or]
301          [(ii) a contract year for a member employed by an educational institution.]
302          (4) "Participating employer" means an employer [which] that meets the participation
303     requirements of Sections 49-13-201 and 49-13-202.
304          (5) (a) "Regular full-time employee" means an employee:

305          (i) whose term of employment for a participating employer contemplates continued
306     employment during a fiscal or calendar year [and];
307          (ii) whose employment normally requires an average of 20 hours or more per week,
308     except as modified by the board[,]; and
309          (iii) who receives benefits normally provided by the participating employer.
310          (b) "Regular full-time employee" includes:
311          (i) a teacher whose term of employment for a participating employer contemplates
312     continued employment during a school year and who teaches half time or more;
313          (ii) a classified school employee:
314          (A) who is hired before July 1, 2013; and
315          (B) whose employment normally requires an average of 20 hours per week or more for
316     a participating employer, regardless of benefits provided;
317          (iii) an officer, elective or appointive, who earns $500 or more per month, indexed as
318     of January 1, 1990, as provided in Section 49-13-407;
319          (iv) a faculty member or employee of an institution of higher education who is
320     considered full time by that institution of higher education; and
321          (v) an individual who otherwise meets the definition of this Subsection (5) who
322     performs services for a participating employer through a professional employer organization or
323     similar arrangement.
324          (c) "Regular full-time employee" does not include a classified school employee:
325          (i) (A) who is hired on or after July 1, 2013; and
326          (B) who does not receive benefits normally provided by the participating employer
327     even if the employment normally requires an average of 20 hours per week or more for a
328     participating employer;
329          (ii) (A) who is hired before July 1, 2013;
330          (B) who did not qualify as a regular full-time employee before July 1, 2013;
331          (C) who does not receive benefits normally provided by the participating employer;
332     and
333          (D) whose employment hours are increased on or after July 1, 2013, to require an
334     average of 20 hours per week or more for a participating employer; or
335          (iii) who is a person working on a contract:

336          (A) for the purposes of vocational rehabilitation and the employment and training of
337     people with significant disabilities; and
338          (B) that has been set aside from procurement requirements by the state pursuant to
339     Section 63G-6a-805 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
340          (6) "System" means the Public Employees' Noncontributory Retirement System.
341          (7) "Years of service credit" means:
342          (a) a period consisting of 12 full months as determined by the board;
343          (b) a period determined by the board, whether consecutive or not, during which a
344     regular full-time employee performed services for a participating employer, including any time
345     the regular full-time employee was absent on a paid leave of absence granted by a participating
346     employer or was absent in the service of the United States government on military duty as
347     provided by this chapter; or
348          (c) the regular school year consisting of not less than eight months of full-time service
349     for a regular full-time employee of an educational institution.
350          Section 5. Section 49-14-102 is amended to read:
351          49-14-102. Definitions.
352          As used in this chapter:
353          (1) (a) "Compensation" means the total amount of payments that are includable in
354     gross income [which are] received by a public safety service employee as base income for the
355     regularly scheduled work period. The participating employer shall establish the regularly
356     scheduled work period. Base income shall be determined prior to the deduction of member
357     contributions or any amounts the public safety service employee authorizes to be deducted for
358     salary deferral or other benefits authorized by federal law.
359          (b) "Compensation" includes performance-based bonuses and cost-of-living
360     adjustments.
361          (c) "Compensation" does not include:
362          (i) overtime;
363          (ii) sick pay incentives;
364          (iii) retirement pay incentives;
365          (iv) the monetary value of remuneration paid in kind, including a residence, use of
366     equipment or uniform, travel, or similar payments;

367          (v) a lump-sum payment or special payments covering accumulated leave; and
368          (vi) all contributions made by a participating employer under this system or under any
369     other employee benefit system or plan maintained by a participating employer for the benefit of
370     a member or participant.
371          (d) "Compensation" for purposes of this chapter may not exceed the amount allowed
372     under Internal Revenue Code Section 401(a)(17).
373          (2) "Dispatcher" means the same as that term is defined in Section 53-6-102.
374          (3) (a) "Final average salary" means the amount calculated by averaging the highest
375     three years of annual compensation preceding retirement subject to Subsections [(3)(a), (b), and
376     (c)] (3)(b), (c), and (d).
377          [(a)] (b) Except as provided in Subsection [(3)(b)] (3)(c), the percentage increase in
378     annual compensation in any one of the years used may not exceed the previous year's
379     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
380     purchasing power of the dollar during the previous year, as measured by a United States Bureau
381     of Labor Statistics Consumer Price Index average as determined by the board.
382          [(b)] (c) In cases where the participating employer provides acceptable documentation
383     to the office, the limitation in Subsection [(3)(a)] (3)(b) may be exceeded if:
384          (i) the public safety service employee has transferred from another agency; or
385          (ii) the public safety service employee has been promoted to a new position.
386          [(c)] (d) The annual compensation used to calculate final average salary shall be based
387     on[:] a period, as determined by the board, consistent with the period used to determine years
388     of service credit in accordance with Subsection (10).
389          [(i) a calendar year for a member employed by a participating employer that is not an
390     educational institution; or]
391          [(ii) a contract year for a member employed by an educational institution.]
392          (4) (a) "Line-of-duty death" means a death resulting from:
393          (i) external force, violence, or disease occasioned by an act of duty as a public safety
394     service employee; or
395          (ii) strenuous activity, including a heart attack or stroke, that occurs during strenuous
396     training or another strenuous activity required as an act of duty as a public safety service
397     employee.

398          (b) "Line-of-duty death" does not include a death that:
399          (i) occurs during an activity that is required as an act of duty as a public safety service
400     employee if the activity is not a strenuous activity, including an activity that is clerical,
401     administrative, or of a nonmanual nature;
402          (ii) occurs during the commission of a crime committed by the employee;
403          (iii) the employee's intoxication or use of alcohol or drugs, whether prescribed or
404     nonprescribed, contributes to the employee's death; or
405          (iv) occurs in a manner other than as described in Subsection (4)(a).
406          (5) "Participating employer" means an employer [which] that meets the participation
407     requirements of Section 49-14-201.
408          (6) (a) "Public safety service" means employment normally requiring an average of
409     2,080 hours of regularly scheduled employment per year rendered by a member who is [a]:
410          (i) a law enforcement officer in accordance with Section 53-13-103;
411          (ii) a correctional officer in accordance with Section 53-13-104;
412          (iii) a special function officer approved in accordance with Sections 49-14-201 and
413     53-13-105;
414          (iv) a dispatcher who is certified in accordance with Section 53-6-303; [or]
415          (v) a full-time member of the Board of Pardons and Parole created under Section
416     77-27-2[.];
417          (vi) the commissioner of the Department of Public Safety; or
418          (vii) the executive director of the Department of Corrections.
419          (b) Except [as provided under Subsections (6)(a)(iv) and (v)] for a position described
420     in Subsection (6)(a)(iv), (v), (vi), or (vii), "public safety service" also requires that, in the
421     course of employment, the employee's life or personal safety is at risk.
422          (c) Except for the minimum hour requirement, Subsections (6)(a) and (b) do not apply
423     to any person who was eligible for service credit in this system before January 1, 1984.
424          (7) "Public safety service employee" means an employee of a participating employer
425     who performs public safety service under this chapter.
426          (8) (a) "Strenuous activity" means engagement involving a difficult, stressful, or
427     vigorous fire suppression, rescue, hazardous material response, emergency medical service,
428     physical law enforcement, prison security, disaster relief, or other emergency response activity.

429          (b) "Strenuous activity" includes participating in a participating employer sanctioned
430     and funded training exercise that involves difficult, stressful, or vigorous physical activity.
431          (9) "System" means the Public Safety Contributory Retirement System created under
432     this chapter.
433          (10) "Years of service credit" means the number of periods, each to consist of 12 full
434     months as determined by the board, whether consecutive or not, during which a public safety
435     service employee was employed by a participating employer, including time the public safety
436     service employee was absent in the service of the United States government on military duty.
437          Section 6. Section 49-14-201 is amended to read:
438          49-14-201. System membership -- Eligibility.
439          (1) Except as provided in Section 49-15-201, a public safety service employee of a
440     participating employer participating in this system is eligible for service credit in this system at
441     the earliest of:
442          (a) July 1, 1969, if the public safety service employee was employed by the
443     participating employer on July 1, 1969, and the participating employer was participating in this
444     system on that date;
445          (b) the date the participating employer begins participating in this system if the public
446     safety service employee was employed by the participating employer on that date; or
447          (c) the date the public safety service employee is employed by the participating
448     employer and is eligible to perform public safety service, except that a public safety service
449     employee initially entering employment with a participating employer on or after July 1, 2011,
450     who does not have service credit accrued before July 1, 2011, in a Tier I system or plan
451     administered by the board, may not participate in this system.
452          (2) (a) (i) A participating employer that has public safety service and firefighter service
453     employees that require cross-training and duty shall enroll those dual purpose employees in the
454     system in which the greatest amount of time is actually worked.
455          (ii) The employees shall either be full-time public safety service or full-time firefighter
456     service employees of the participating employer.
457          (b) (i) [Prior to] Before transferring a dual purpose employee from one system to
458     another, the participating employer shall receive written permission from the office.
459          (ii) The office may request documentation to verify the appropriateness of the transfer.

460          (3) The board may combine or segregate the actuarial experience of participating
461     employers in this system for the purpose of setting contribution rates.
462          (4) (a) (i) Each participating employer participating in this system shall annually
463     submit to the office a schedule indicating the positions to be covered under this system in
464     accordance with this chapter.
465          (ii) The office may require documentation to justify the inclusion of any position under
466     this system.
467          (b) If there is a dispute between the office and a participating employer or employee
468     over any position to be covered, the disputed position shall be submitted to the Peace Officer
469     Standards and Training Council established under Section 53-6-106 for determination.
470          (c) (i) The Peace Officer Standards and Training Council's authority to decide
471     eligibility for public safety service credit is limited to claims for coverage under this system for
472     time periods after July 1, 1989.
473          (ii) A decision of the Peace Officer Standards and Training Council may not be applied
474     to service credit earned in another system [prior to] before July 1, 1989.
475          (iii) Except as provided under Subsection (4)(c)(iv), a decision of the Peace Officer
476     Standards and Training Council granting a position coverage under this system may only be
477     applied prospectively from the date of that decision.
478          (iv) A decision of the Peace Officer Standards and Training Council granting a position
479     coverage under this system may be applied retroactively only if:
480          (A) the participating employer covered other similarly situated positions under this
481     system during the time period in question; and
482          (B) the position otherwise meets all eligibility requirements for receiving service credit
483     in this system during the period for which service credit is to be granted.
484          (5) The Peace Officer Standards and Training Council may use a subcommittee to
485     provide a recommendation to the council in determining disputes between the office and a
486     participating employer or employee over a position to be covered under this system.
487          (6) The Peace Officer Standards and Training Council shall comply with Title 63G,
488     Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
489          (7) A public safety employee who is transferred or promoted to an administration
490     position requiring the performance of duties that consist primarily of management or

491     supervision of public safety service employees shall continue to earn public safety service
492     credit in this system [as long as] during the period in which the employee remains employed in
493     the same department.
494          (8) An employee of the Department of Corrections shall continue to earn public safety
495     service credit in this system if:
496          (a) the employee's position is no longer covered under this system for new employees
497     hired on or after July 1, 2015; and
498          (b) the employee:
499          (i) remains employed by the Department of Corrections;
500          (ii) meets the eligibility requirements of this system;
501          (iii) was hired into a position covered by this system [prior to] before July 1, 2015; and
502          (iv) has not had a break in service on or after July 1, 2015.
503          (9) An employee who is reassigned to the Division of Technology Services or to the
504     Division of Human Resource Management, and who was a member of this system, is entitled
505     to remain a member of this system.
506          (10) (a) To determine that a position is covered under this system, the office and, if a
507     coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
508     position requires the employee to:
509          (i) except for a dispatcher, place the employee's life or personal safety at risk; and
510          (ii) complete training as provided in Section 53-6-303, 53-13-103, 53-13-104, or
511     53-13-105.
512          (b) If a position satisfies the requirements of Subsection (10)(a), the office and the
513     Peace Officer Standards and Training Council shall consider whether or not the position
514     requires the employee to:
515          (i) perform duties that consist primarily of actively preventing or detecting crime and
516     enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
517          (ii) perform duties that consist primarily of providing community protection; and
518          (iii) respond to situations involving threats to public safety and make emergency
519     decisions affecting the lives and health of others.
520          (11) If a subcommittee is used to recommend the determination of disputes to the
521     Peace Officer Standards and Training Council, the subcommittee shall comply with the

522     requirements of Subsection (10) in making [its] the subcommittee's recommendation.
523          (12) A final order of the Peace Officer Standards and Training Council regarding a
524     dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
525     Procedures Act.
526          (13) Except as provided under Subsection (14), if a participating employer's public
527     safety service employees are not covered by this system or under Chapter 15, Public Safety
528     Noncontributory Retirement Act, as of January 1, 1998, those public safety service employees
529     who may otherwise qualify for membership in this system shall, at the discretion of the
530     participating employer, remain in their current retirement system.
531          (14) (a) A public safety service employee employed by an airport police department,
532     which elects to cover [its] the airport police department's public safety service employees under
533     the Public Safety Noncontributory Retirement System under Subsection (13), may elect to
534     remain in the public safety service employee's current retirement system.
535          (b) The public safety service employee's election to remain in the current retirement
536     system under Subsection (14)(a):
537          (i) shall be made at the time the employer elects to move [its] the employer's public
538     safety service employees to a public safety retirement system;
539          (ii) documented by written notice to the participating employer; and
540          (iii) is irrevocable.
541          (15) (a) Subject to Subsection (16), beginning July 1, 2015, a public safety service
542     employee who is a dispatcher employed by:
543          (i) the state shall be eligible for service credit in this system; and
544          (ii) a participating employer other than the state shall be eligible for service credit in
545     this system if the dispatcher's participating employer elects to cover [its] the participating
546     employer's dispatchers under this system.
547          (b) A participating employer's election to cover [its] the participating employer's
548     dispatchers under this system under Subsection (15)(a)(ii) is irrevocable and shall be
549     documented by a resolution adopted by the governing body of the participating employer in
550     accordance with rules made by the office.
551          (c) A dispatcher's service before July 1, 2015, or before a date specified by resolution
552     of a participating employer under Subsection (15)(b), is not eligible for service credit in this

553     system.
554          (16) Notwithstanding any other provision of this section, a person initially entering
555     employment with a participating employer on or after July 1, 2011, who does not have service
556     credit accrued before July 1, 2011, in a Tier I system or plan administered by the board, may
557     not participate in this system.
558          Section 7. Section 49-15-102 is amended to read:
559          49-15-102. Definitions.
560          As used in this chapter:
561          (1) (a) "Compensation" means the total amount of payments that are includable in
562     gross income received by a public safety service employee as base income for the regularly
563     scheduled work period. The participating employer shall establish the regularly scheduled
564     work period. Base income shall be determined prior to the deduction of any amounts the
565     public safety service employee authorizes to be deducted for salary deferral or other benefits
566     authorized by federal law.
567          (b) "Compensation" includes performance-based bonuses and cost-of-living
568     adjustments.
569          (c) "Compensation" does not include:
570          (i) overtime;
571          (ii) sick pay incentives;
572          (iii) retirement pay incentives;
573          (iv) the monetary value of remuneration paid in kind, as in a residence, use of
574     equipment or uniform, travel, or similar payments;
575          (v) a lump-sum payment or special payment covering accumulated leave; and
576          (vi) all contributions made by a participating employer under this system or under any
577     other employee benefit system or plan maintained by a participating employer for the benefit of
578     a member or participant.
579          (d) "Compensation" for purposes of this chapter may not exceed the amount allowed
580     under Internal Revenue Code Section 401(a)(17).
581          (2) "Dispatcher" means the same as that term is defined in Section 53-6-102.
582          (3) (a) "Final average salary" means the amount calculated by averaging the highest
583     three years of annual compensation preceding retirement subject to Subsections [(3)(a), (b), and

584     (c)] (3)(b), (c), and (d).
585          [(a)] (b) Except as provided in Subsection [(3)(b)] (3)(c), the percentage increase in
586     annual compensation in any one of the years used may not exceed the previous year's
587     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
588     purchasing power of the dollar during the previous year, as measured by a United States Bureau
589     of Labor Statistics Consumer Price Index average as determined by the board.
590          [(b)] (c) In cases where the participating employer provides acceptable documentation
591     to the office, the limitation in Subsection [(3)(a)] (3)(b) may be exceeded if:
592          (i) the public safety service employee has transferred from another agency; or
593          (ii) the public safety service employee has been promoted to a new position.
594          [(c)] (d) The annual compensation used to calculate final average salary shall be based
595     on[:] a period, as determined by the board, consistent with the period used to determine years
596     of service credit in accordance with Subsection (10).
597          [(i) a calendar year for a member employed by a participating employer that is not an
598     educational institution; or]
599          [(ii) a contract year for a member employed by an educational institution.]
600          (4) (a) "Line-of-duty death" means a death resulting from:
601          (i) external force, violence, or disease occasioned by an act of duty as a public safety
602     service employee; or
603          (ii) strenuous activity, including a heart attack or stroke, that occurs during strenuous
604     training or another strenuous activity required as an act of duty as a public safety service
605     employee.
606          (b) "Line-of-duty death" does not include a death that:
607          (i) occurs during an activity that is required as an act of duty as a public safety service
608     employee if the activity is not a strenuous activity, including an activity that is clerical,
609     administrative, or of a nonmanual nature;
610          (ii) occurs during the commission of a crime committed by the employee;
611          (iii) the employee's intoxication or use of alcohol or drugs, whether prescribed or
612     nonprescribed, contributes to the employee's death; or
613          (iv) occurs in a manner other than as described in Subsection (4)(a).
614          (5) "Participating employer" means an employer [which] that meets the participation

615     requirements of Section 49-15-201.
616          (6) (a) "Public safety service" means employment normally requiring an average of
617     2,080 hours of regularly scheduled employment per year rendered by a member who is [a]:
618          (i) a law enforcement officer in accordance with Section 53-13-103;
619          (ii) a correctional officer in accordance with Section 53-13-104;
620          (iii) a special function officer approved in accordance with Sections 49-15-201 and
621     53-13-105;
622          (iv) a dispatcher who is certified in accordance with Section 53-6-303; or
623          (v) a full-time member of the Board of Pardons and Parole created under Section
624     77-27-2[.];
625          (vi) the commissioner of the Department of Public Safety; or
626          (vii) the executive director of the Department of Corrections.
627          (b) Except [as provided under Subsections (6)(a)(iv) and (v)] for a position described
628     in Subsection (6)(a)(iv), (v), (vi), or (vii), "public safety service" also requires that, in the
629     course of employment, the employee's life or personal safety is at risk.
630          (7) "Public safety service employee" means an employee of a participating employer
631     who performs public safety service under this chapter.
632          (8) (a) "Strenuous activity" means engagement involving a difficult, stressful, or
633     vigorous fire suppression, rescue, hazardous material response, emergency medical service,
634     physical law enforcement, prison security, disaster relief, or other emergency response activity.
635          (b) "Strenuous activity" includes participating in a participating employer sanctioned
636     and funded training exercise that involves difficult, stressful, or vigorous physical activity.
637          (9) "System" means the Public Safety Noncontributory Retirement System created
638     under this chapter.
639          (10) "Years of service credit" means the number of periods, each to consist of 12 full
640     months as determined by the board, whether consecutive or not, during which a public safety
641     service employee was employed by a participating employer, including time the public safety
642     service employee was absent in the service of the United States government on military duty.
643          Section 8. Section 49-15-201 is amended to read:
644          49-15-201. System membership -- Eligibility.
645          (1) (a) A public safety service employee employed by the state after July 1, 1989, but

646     before July 1, 2011, is eligible for service credit in this system.
647          (b) A public safety service employee employed by the state [prior to] before July 1,
648     1989, may either elect to receive service credit in this system or continue to receive service
649     credit under the system established under Chapter 14, Public Safety Contributory Retirement
650     Act, by following the procedures established by the board under this chapter.
651          (2) (a) Public safety service employees of a participating employer other than the state
652     that elected on or before July 1, 1989, to remain in the Public Safety Contributory Retirement
653     System shall be eligible only for service credit in that system.
654          (b) (i) A participating employer other than the state that elected on or before July 1,
655     1989, to participate in this system shall, have allowed, [prior to] before July 1, 1989, a public
656     safety service employee to elect to participate in either this system or the Public Safety
657     Contributory Retirement System.
658          (ii) Except as expressly allowed by this title, the election of the public safety service
659     employee is final and may not be changed.
660          (c) A public safety service employee hired by a participating employer other than the
661     state after July 1, 1989, but before July 1, 2011, shall become a member in this system.
662          (d) A public safety service employee of a participating employer other than the state
663     who began participation in this system after July 1, 1989, but before July 1, 2011, is only
664     eligible for service credit in this system.
665          (e) A person initially entering employment with a participating employer on or after
666     July 1, 2011, who does not have service credit accrued before July 1, 2011, in a Tier I system
667     or plan administered by the board, may not participate in this system.
668          (3) (a) (i) A participating employer that has public safety service and firefighter service
669     employees that require cross-training and duty shall enroll those dual purpose employees in the
670     system in which the greatest amount of time is actually worked.
671          (ii) The employees shall either be full-time public safety service or full-time firefighter
672     service employees of the participating employer.
673          (b) (i) [Prior to] Before transferring a dual purpose employee from one system to
674     another, the participating employer shall receive written permission from the office.
675          (ii) The office may request documentation to verify the appropriateness of the transfer.
676          (4) The board may combine or segregate the actuarial experience of participating

677     employers in this system for the purpose of setting contribution rates.
678          (5) (a) (i) Each participating employer participating in this system shall annually
679     submit to the office a schedule indicating the positions to be covered under this system in
680     accordance with this chapter.
681          (ii) The office may require documentation to justify the inclusion of any position under
682     this system.
683          (b) If there is a dispute between the office and a participating employer or employee
684     over any position to be covered, the disputed position shall be submitted to the Peace Officer
685     Standards and Training Council established under Section 53-6-106 for determination.
686          (c) (i) The Peace Officer Standards and Training Council's authority to decide
687     eligibility for public safety service credit is limited to claims for coverage under this system for
688     time periods after July 1, 1989.
689          (ii) A decision of the Peace Officer Standards and Training Council may not be applied
690     to service credit earned in another system [prior to] before July 1, 1989.
691          (iii) Except as provided under Subsection (5)(c)(iv), a decision of the Peace Officer
692     Standards and Training Council granting a position coverage under this system may only be
693     applied prospectively from the date of that decision.
694          (iv) A decision of the Peace Officer Standards and Training Council granting a position
695     coverage under this system may be applied retroactively only if:
696          (A) the participating employer covered other similarly situated positions under this
697     system during the time period in question; and
698          (B) the position otherwise meets all eligibility requirements for receiving service credit
699     in this system during the period for which service credit is to be granted.
700          (6) The Peace Officer Standards and Training Council may use a subcommittee to
701     provide a recommendation to the council in determining disputes between the office and a
702     participating employer or employee over a position to be covered under this system.
703          (7) The Peace Officer Standards and Training Council shall comply with Title 63G,
704     Chapter 4, Administrative Procedures Act, in resolving coverage disputes in this system.
705          (8) A public safety service employee who is transferred or promoted to an
706     administration position requiring the performance of duties that consist primarily of
707     management or supervision of public safety service employees shall continue to earn public

708     safety service credit in this system [as long as] during the period in which the employee
709     remains employed in the same department.
710          (9) An employee of the Department of Corrections shall continue to earn public safety
711     service credit in this system if:
712          (a) the employee's position is no longer covered under this system for new employees
713     hired on or after July 1, 2015; and
714          (b) the employee:
715          (i) remains employed by the Department of Corrections;
716          (ii) meets the eligibility requirements of this system;
717          (iii) was hired into a position covered by this system [prior to] before July 1, 2015; and
718          (iv) has not had a break in service on or after July 1, 2015.
719          (10) Any employee who is reassigned to the Division of Technology Services or to the
720     Division of Human Resource Management, and who was a member in this system, shall be
721     entitled to remain a member in this system.
722          (11) (a) To determine that a position is covered under this system, the office and, if a
723     coverage dispute arises, the Peace Officer Standards and Training Council shall find that the
724     position requires the employee to:
725          (i) except for a dispatcher, place the employee's life or personal safety at risk; and
726          (ii) complete training as provided in Section 53-6-303, 53-13-103, 53-13-104, or
727     53-13-105.
728          (b) If a position satisfies the requirements of Subsection (11)(a), the office and Peace
729     Officer Standards and Training Council shall consider whether the position requires the
730     employee to:
731          (i) perform duties that consist primarily of actively preventing or detecting crime and
732     enforcing criminal statutes or ordinances of this state or any of its political subdivisions;
733          (ii) perform duties that consist primarily of providing community protection; and
734          (iii) respond to situations involving threats to public safety and make emergency
735     decisions affecting the lives and health of others.
736          (12) If a subcommittee is used to recommend the determination of disputes to the
737     Peace Officer Standards and Training Council, the subcommittee shall comply with the
738     requirements of Subsection (11) in making [its] the subcommittee's recommendation.

739          (13) A final order of the Peace Officer Standards and Training Council regarding a
740     dispute is a final agency action for purposes of Title 63G, Chapter 4, Administrative
741     Procedures Act.
742          (14) Except as provided under Subsection (15), if a participating employer's public
743     safety service employees are not covered by this system or under Chapter 14, Public Safety
744     Contributory Retirement Act, as of January 1, 1998, those public safety service employees who
745     may otherwise qualify for membership in this system shall, at the discretion of the participating
746     employer, remain in their current retirement system.
747          (15) (a) A public safety service employee employed by an airport police department,
748     which elects to cover [its] the airport police department's public safety service employees under
749     the Public Safety Noncontributory Retirement System under Subsection (14), may elect to
750     remain in the public safety service employee's current retirement system.
751          (b) The public safety service employee's election to remain in the current retirement
752     system under Subsection (15)(a):
753          (i) shall be made at the time the employer elects to move [its] the employer's public
754     safety service employees to a public safety retirement system;
755          (ii) shall be documented by written notice to the participating employer; and
756          (iii) is irrevocable.
757          (16) (a) Subject to Subsection (17), beginning July 1, 2015, a public safety service
758     employee who is a dispatcher employed by:
759          (i) the state shall be eligible for service credit in this system; and
760          (ii) a participating employer other than the state shall be eligible for service credit in
761     this system if the dispatcher's participating employer elects to cover [its] the participating
762     employer's dispatchers under this system.
763          (b) A participating employer's election to cover [its] the participating employer's
764     dispatchers under this system under Subsection (16)(a)(ii) is irrevocable and shall be
765     documented by a resolution adopted by the governing body of the participating employer in
766     accordance with rules made by the office.
767          (c) A dispatcher's service before July 1, 2015, or before a date specified by resolution
768     of a participating employer under Subsection (16)(b), is not eligible for service credit in this
769     system.

770          (17) Notwithstanding any other provision of this section, a person initially entering
771     employment with a participating employer on or after July 1, 2011, who does not have service
772     credit accrued before July 1, 2011, in a Tier I system or plan administered by the board, may
773     not participate in this system.
774          Section 9. Section 49-16-102 is amended to read:
775          49-16-102. Definitions.
776          As used in this chapter:
777          (1) (a) "Compensation" means the total amount of payments that are includable as
778     gross income [which are] received by a firefighter service employee as base income for the
779     regularly scheduled work period. The participating employer shall establish the regularly
780     scheduled work period. Base income shall be determined prior to the deduction of member
781     contributions or any amounts the firefighter service employee authorizes to be deducted for
782     salary deferral or other benefits authorized by federal law.
783          (b) "Compensation" includes performance-based bonuses and cost-of-living
784     adjustments.
785          (c) "Compensation" does not include:
786          (i) overtime;
787          (ii) sick pay incentives;
788          (iii) retirement pay incentives;
789          (iv) remuneration paid in kind such as a residence, use of equipment, uniforms, travel,
790     or similar payments;
791          (v) a lump-sum payment or special payments covering accumulated leave; and
792          (vi) all contributions made by a participating employer under this system or under any
793     other employee benefit system or plan maintained by a participating employer for the benefit of
794     a member or participant.
795          (d) "Compensation" for purposes of this chapter may not exceed the amount allowed
796     under Section 401(a)(17), Internal Revenue Code.
797          (2) (a) "Disability" means the complete inability, due to objective medical impairment,
798     whether physical or mental, to perform firefighter service.
799          (b) "Disability" does not include the inability to meet an employer's required standards
800     or tests relating to fitness, physical ability, or agility that is not a result of a disability as defined

801     under Subsection (2)(a).
802          (3) (a) "Final average salary" means the amount calculated by averaging the highest
803     three years of annual compensation preceding retirement subject to Subsections [(3)(a), (b), and
804     (c)] (3)(b), (c), and (d).
805          [(a)] (b) Except as provided in Subsection [(3)(b)] (3)(c), the percentage increase in
806     annual compensation in any one of the years used may not exceed the previous year's
807     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
808     purchasing power of the dollar during the previous year, as measured by a United States Bureau
809     of Labor Statistics Consumer Price Index average as determined by the board.
810          [(b)] (c) In cases where the participating employer provides acceptable documentation
811     to the office the limitation in Subsection (3)(a) may be exceeded if:
812          (i) the member has transferred from another agency; or
813          (ii) the member has been promoted to a new position.
814          [(c)] (d) The annual compensation used to calculate final average salary shall be based
815     on[:] a period, as determined by the board, consistent with the period used to determine years
816     of service credit in accordance with Subsection (13).
817          [(i) a calendar year for a member employed by a participating employer that is not an
818     educational institution; or]
819          [(ii) a contract year for a member employed by an educational institution.]
820          (4) (a) "Firefighter service" means employment normally requiring an average of 2,080
821     hours of regularly scheduled employment per year rendered by a member who is:
822          (i) a firefighter service employee trained in firefighter techniques and assigned to a
823     position of hazardous duty with a regularly constituted fire department; or
824          (ii) the state fire marshal appointed under Section 53-7-103 or a deputy state fire
825     marshal.
826          (b) "Firefighter service" does not include secretarial staff or other similar employees.
827          (5) (a) "Firefighter service employee" means an employee of a participating employer
828     who provides firefighter service under this chapter. [An]
829          (b) "Firefighter service employee" does not include an employee of a regularly
830     constituted fire department who does not perform firefighter service [is not a firefighter service
831     employee].

832          (6) (a) "Line-of-duty death or disability" means a death or disability resulting from:
833          (i) external force, violence, or disease directly resulting from firefighter service; or
834          (ii) strenuous activity, including a heart attack or stroke, that occurs during strenuous
835     training or another strenuous activity required as an act of duty as a firefighter service
836     employee.
837          (b) "Line-of-duty death or disability" does not include a death or disability that:
838          (i) occurs during an activity that is required as an act of duty as a firefighter service
839     employee if the activity is not a strenuous activity, including an activity that is clerical,
840     administrative, or of a nonmanual nature;
841          (ii) occurs during the commission of a crime committed by the employee;
842          (iii) occurs when the employee's intoxication or use of alcohol or drugs, whether
843     prescribed or nonprescribed, contributes to the employee's death or disability; or
844          (iv) occurs in a manner other than as described in Subsection (6)(a).
845          (c) "Line-of-duty death or disability" includes the death or disability of a paid
846     firefighter resulting from heart disease, lung disease, or a respiratory tract condition if the paid
847     firefighter has five years of firefighter service credit.
848          (7) "Objective medical impairment" means an impairment resulting from an injury or
849     illness [which] that is diagnosed by a physician or physician assistant and [which] that is based
850     on accepted objective medical tests or findings rather than subjective complaints.
851          (8) "Participating employer" means an employer [which] that meets the participation
852     requirements of Section 49-16-201.
853          (9) "Regularly constituted fire department" means a fire department that employs a fire
854     chief who performs firefighter service for at least 2,080 hours of regularly scheduled paid
855     employment per year.
856          (10) (a) "Strenuous activity" means engagement involving a difficult, stressful, or
857     vigorous fire suppression, rescue, hazardous material response, emergency medical service,
858     physical law enforcement, prison security, disaster relief, or other emergency response activity.
859          (b) "Strenuous activity" includes participating in a participating employer sanctioned
860     and funded training exercise that involves difficult, stressful, or vigorous physical activity.
861          (11) "System" means the Firefighters' Retirement System created under this chapter.
862          (12) (a) "Volunteer firefighter" means any individual [that] who is not regularly

863     employed as a firefighter service employee, but who:
864          (i) has been trained in firefighter techniques and skills;
865          (ii) continues to receive regular firefighter training; and
866          (iii) is on the rolls of a legally organized volunteer fire department [which] that
867     provides ongoing training and serves a political subdivision of the state.
868          (b) [An individual that] "Volunteer firefighter" does not include an individual who
869     volunteers assistance but does not meet the requirements of Subsection (12)(a) [is not a
870     volunteer firefighter for purposes of this chapter].
871          (13) "Years of service credit" means the number of periods, each to consist of 12 full
872     months as determined by the board, whether consecutive or not, during which a firefighter
873     service employee was employed by a participating employer or received full-time pay while on
874     sick leave, including any time the firefighter service employee was absent in the service of the
875     United States on military duty.
876          Section 10. Section 49-22-102 is amended to read:
877          49-22-102. Definitions.
878          As used in this chapter:
879          (1) "Benefits normally provided" [has the same meaning as] means the same as that
880     term is defined in Section 49-12-102.
881          (2) (a) "Compensation" means[, except as provided in Subsection (2)(c),] the total
882     amount of payments made by a participating employer to a member of this system for services
883     rendered to the participating employer, including:
884          (i) bonuses;
885          (ii) cost-of-living adjustments;
886          (iii) other payments currently includable in gross income and that are subject to social
887     security deductions, including any payments in excess of the maximum amount subject to
888     deduction under social security law;
889          (iv) amounts that the member authorizes to be deducted or reduced for salary deferral
890     or other benefits authorized by federal law; and
891          (v) member contributions.
892          (b) "Compensation" for purposes of this chapter may not exceed the amount allowed
893     under Internal Revenue Code, Section 401(a)(17).

894          (c) "Compensation" does not include:
895          (i) the monetary value of remuneration paid in kind, including a residence or use of
896     equipment;
897          (ii) the cost of any employment benefits paid for by the participating employer;
898          (iii) compensation paid to a temporary employee or an employee otherwise ineligible
899     for service credit;
900          (iv) any payments upon termination, including accumulated vacation, sick leave
901     payments, severance payments, compensatory time payments, or any other special payments;
902          (v) any allowances or payments to a member for costs or expenses paid by the
903     participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
904     housing costs, insurance costs, equipment costs, and dependent care costs; or
905          (vi) a teacher salary bonus described in Section 53F-2-513.
906          (d) The executive director may determine if a payment not listed under this Subsection
907     (2) falls within the definition of compensation.
908          (3) "Corresponding Tier I system" means the system or plan that would have covered
909     the member if the member had initially entered employment before July 1, 2011.
910          (4) (a) "Final average salary" means the amount calculated by averaging the highest
911     five years of annual compensation preceding retirement subject to Subsections [(4)(a), (b), (c),
912     (d), and (e)] (4)(b), (c), (d), (e), and (f).
913          [(a)] (b) Except as provided in Subsection [(4)(b)] (4)(c), the percentage increase in
914     annual compensation in any one of the years used may not exceed the previous year's
915     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
916     purchasing power of the dollar during the previous year, as measured by a United States Bureau
917     of Labor Statistics Consumer Price Index average as determined by the board.
918          [(b)] (c) In cases where the participating employer provides acceptable documentation
919     to the office, the limitation in Subsection [(4)(a)] (4)(b) may be exceeded if:
920          [(i)] (i) the member has transferred from another agency; or
921          [(ii)] (ii) the member has been promoted to a new position.
922          [(c)] (d) If the member retires more than six months from the date of termination of
923     employment, the member is considered to have been in service at the member's last rate of pay
924     from the date of the termination of employment to the effective date of retirement for purposes

925     of computing the member's final average salary only.
926          [(d)] (e) If the member has less than five years of service credit in this system, final
927     average salary means the average annual compensation paid to the member during the full
928     period of service credit.
929          [(e)] (f) The annual compensation used to calculate final average salary shall be based
930     on[:] a period, as determined by the board, consistent with the period used to determine years
931     of service credit in accordance with Subsection (8).
932          [(i) a calendar year for a member employed by a participating employer that is not an
933     educational institution; or]
934          [(ii) a contract year for a member employed by an educational institution.]
935          (5) "Participating employer" means an employer [which] that meets the participation
936     requirements of:
937          (a) Sections 49-12-201 and 49-12-202;
938          (b) Sections 49-13-201 and 49-13-202;
939          (c) Section 49-19-201; or
940          (d) Section 49-22-201 or 49-22-202.
941          (6) (a) "Regular full-time employee" means an employee:
942          (i) whose term of employment for a participating employer contemplates continued
943     employment during a fiscal or calendar year [and];
944          (ii) whose employment normally requires an average of 20 hours or more per week,
945     except as modified by the board[,]; and
946          (iii) who receives benefits normally provided by the participating employer.
947          (b) "Regular full-time employee" includes:
948          (i) a teacher whose term of employment for a participating employer contemplates
949     continued employment during a school year and who teaches half time or more;
950          (ii) a classified school employee:
951          (A) who is hired before July 1, 2013; and
952          (B) whose employment normally requires an average of 20 hours per week or more for
953     a participating employer, regardless of benefits provided;
954          (iii) an appointive officer whose appointed position is full time as certified by the
955     participating employer;

956          (iv) the governor, the lieutenant governor, the state auditor, the state treasurer, the
957     attorney general, and a state legislator;
958          (v) an elected official not included under Subsection (6)(b)(iv) whose elected position
959     is full time as certified by the participating employer;
960          (vi) a faculty member or employee of an institution of higher education who is
961     considered full time by that institution of higher education; and
962          (vii) an individual who otherwise meets the definition of this Subsection (6) who
963     performs services for a participating employer through a professional employer organization or
964     similar arrangement.
965          (c) "Regular full-time employee" does not include:
966          (i) a firefighter service employee as defined in Section 49-23-102;
967          (ii) a public safety service employee as defined in Section 49-23-102;
968          (iii) a classified school employee:
969          (A) who is hired on or after July 1, 2013; and
970          (B) who does not receive benefits normally provided by the participating employer
971     even if the employment normally requires an average of 20 hours per week or more for a
972     participating employer;
973          (iv) a classified school employee:
974          (A) who is hired before July 1, 2013;
975          (B) who did not qualify as a regular full-time employee before July 1, 2013;
976          (C) who does not receive benefits normally provided by the participating employer;
977     and
978          (D) whose employment hours are increased on or after July 1, 2013, to require an
979     average of 20 hours per week or more for a participating employer; or
980          (E) who is a person working on a contract:
981          (I) for the purposes of vocational rehabilitation and the employment and training of
982     people with significant disabilities; and
983          (II) that has been set aside from procurement requirements by the state pursuant to
984     Section 63G-6a-805 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
985          (7) "System" means the New Public Employees' Tier II Contributory Retirement
986     System created under this chapter.

987          (8) "Years of service credit" means:
988          (a) a period consisting of 12 full months as determined by the board;
989          (b) a period determined by the board, whether consecutive or not, during which a
990     regular full-time employee performed services for a participating employer, including any time
991     the regular full-time employee was absent on a paid leave of absence granted by a participating
992     employer or was absent in the service of the United States government on military duty as
993     provided by this chapter; or
994          (c) the regular school year consisting of not less than eight months of full-time service
995     for a regular full-time employee of an educational institution.
996          Section 11. Section 49-22-201 is amended to read:
997          49-22-201. System membership -- Eligibility.
998          (1) Beginning July 1, 2011, a participating employer shall participate in this system.
999          (2) (a) A person initially entering regular full-time employment with a participating
1000     employer on or after July 1, 2011, who does not have service credit accrued before July 1,
1001     2011, in a Tier I system or plan administered by the board, is eligible:
1002          (i) as a member for service credit and defined contributions under the Tier II hybrid
1003     retirement system established by Part 3, Tier II Hybrid Retirement System; or
1004          (ii) as a participant for defined contributions under the Tier II defined contribution plan
1005     established by Part 4, Tier II Defined Contribution Plan.
1006          (b) A person initially entering regular full-time employment with a participating
1007     employer on or after July 1, 2011, shall:
1008          (i) make an election to participate in the system created under this chapter:
1009          (A) as a member for service credit and defined contributions under the Tier II hybrid
1010     retirement system established by Part 3, Tier II Hybrid Retirement System; or
1011          (B) as a participant for defined contributions under the Tier II defined contribution plan
1012     established by Part 4, Tier II Defined Contribution Plan; and
1013          (ii) electronically submit to the office notification of the member's election under
1014     Subsection (2)(b)(i) in a manner approved by the office.
1015          (c) An election made by a person initially entering regular full-time employment with a
1016     participating employer under this Subsection (2) is irrevocable beginning one year from the
1017     date of eligibility for accrual of benefits.

1018          (d) If no election is made under Subsection (2)(b)(i), the person shall become a
1019     member eligible for service credit and defined contributions under the Tier II hybrid retirement
1020     system established by Part 3, Tier II Hybrid Retirement System.
1021          (3) Notwithstanding the provisions of this section and except as provided in Subsection
1022     (4), an elected official initially entering office on or after July 1, 2011:
1023          (a) is only eligible to participate in the Tier II defined contribution plan established
1024     under Part 4, Tier II Defined Contribution Plan;
1025          (b) is not eligible to participate in the Tier II hybrid retirement system established
1026     under Part 3, Tier II Hybrid Retirement System; and
1027          (c) is vested immediately in the elected official's benefit and the benefit is
1028     nonforfeitable, including the total amount contributed by the participating employer and the
1029     total amount contributed by the member in the Tier II defined contribution plan.
1030          (4) [Notwithstanding the provisions of Subsection (3), a] A legislator or full-time
1031     elected official initially entering office on or after July 1, 2011, who has previously accrued
1032     service credit:
1033          (a) in a Tier I retirement system or plan administered by the board shall continue in the
1034     Tier I system or plan for which the legislator or full-time elected official is eligible; or
1035          (b) in a Tier II hybrid retirement system shall continue in the Tier II system for which
1036     the [legislator or] full-time elected official is eligible.
1037          Section 12. Section 49-22-204 is amended to read:
1038          49-22-204. Higher education employees' eligibility requirements -- Election
1039     between different retirement plans -- Classification requirements -- Transfer between
1040     systems.
1041          (1) (a) A regular full-time employee of an institution of higher education who is
1042     eligible to participate in either this system or in a retirement annuity contract with a public or
1043     private system, organization, or company, designated as described in Subsection (1)(c) or (d),
1044     shall, not later than January 1, 1979, elect to participate exclusively in this system or in an
1045     annuity contract allowed under this Subsection (1).
1046          (b) The election is final, and no right exists to make any further election.
1047          (c) Except as provided in Subsection (1)(d), the Utah Board of Higher Education shall
1048     designate the public or private retirement systems, organizations, or companies that a regular

1049     full-time employee of an institution of higher education is eligible to participate in under
1050     Subsection (1)(a).
1051          (d) The technical college board of trustees of each technical college shall designate the
1052     public or private retirement systems, organizations, or companies that a regular full-time
1053     employee of each technical college is eligible to participate in under Subsection (1)(a).
1054          (2) (a) A regular full-time employee hired by an institution of higher education after
1055     January 1, 1979, may participate only in the retirement plan [which attaches to] designated for
1056     the person's employment classification.
1057          (b) Each institution of higher education shall prepare or amend existing employment
1058     classifications, under the direction of the Utah Board of Higher Education, or the technical
1059     college board of trustees of each technical college for each technical college, so that each
1060     classification is assigned with either:
1061          (i) this system; or
1062          (ii) a public or private system, organization, or company designated by:
1063          (A) except as provided under Subsection (2)(b)(ii)(B), the Utah Board of Higher
1064     Education; or
1065          (B) the technical college board of trustees of each technical college for regular
1066     full-time employees of each technical college.
1067          (c) Notwithstanding a person's employment classification assignment under Subsection
1068     (2)(b), a regular full-time employee who begins employment with an institution of higher
1069     education has a one-time irrevocable election to continue participation in this system if the
1070     employee:
1071          (i) has service credit in this system before the date of employment with the institution
1072     of higher education; and
1073          (ii) makes the election before participating in the system described in Subsection
1074     (2)(b)(ii).
1075          (3) A regular full-time employee hired by an institution of higher education on or after
1076     July 1, 2011, whose employment classification requires participation in this system may elect
1077     to continue participation in this system upon change to an employment classification [which]
1078     that requires participation in a public or private system, organization, or company designated
1079     by:

1080          (a) except as provided in Subsection (3)(b), the Utah Board of Higher Education; or
1081          (b) the technical college board of trustees of each technical college for regular full-time
1082     employees of each technical college.
1083          (4) A regular full-time employee hired by an institution of higher education on or after
1084     July 1, 2011, whose employment classification requires participation in this system shall
1085     participate in this system.
1086          (5) An employee's participation or election described in this section:
1087          (a) shall be made in accordance with this section; and
1088          (b) is subject to requirements under federal law and rules made by the board.
1089          Section 13. Section 49-22-205 is amended to read:
1090          49-22-205. Exemptions from participation in system.
1091          (1) Upon filing a written request for exemption with the office, the following
1092     employees are exempt from participation in the system as provided in this section:
1093          (a) an executive department head of the state;
1094          (b) a member of the State Tax Commission;
1095          (c) a member of the Public Service Commission;
1096          (d) a member of a full-time or part-time board or commission;
1097          (e) an employee of the Governor's Office of Planning and Budget;
1098          (f) an employee of the Governor's Office of Economic Opportunity;
1099          (g) an employee of the Commission on Criminal and Juvenile Justice;
1100          (h) an employee of the Governor's Office;
1101          (i) an employee of the State Auditor's Office;
1102          (j) an employee of the State Treasurer's Office;
1103          (k) any other member who is permitted to make an election under Section 49-11-406;
1104          (l) a person appointed as a city manager or appointed as a city administrator or another
1105     at-will employee of a municipality, county, or other political subdivision;
1106          (m) an employee of an interlocal cooperative agency created under Title 11, Chapter
1107     13, Interlocal Cooperation Act, who is engaged in a specialized trade customarily provided
1108     through membership in a labor organization that provides retirement benefits to its members;
1109     and
1110          (n) an employee serving as an exchange employee from outside the state for an

1111     employer who has elected to make all of the employer's exchange employees eligible for
1112     service credit in this system.
1113          (2) (a) A participating employer shall prepare and maintain a list designating those
1114     positions eligible for exemption under Subsection (1).
1115          (b) An employee may not be exempted unless the employee is employed in a position
1116     designated by the participating employer under Subsection (1).
1117          (3) (a) In accordance with this section, Section 49-12-203, and Section 49-13-203, a
1118     municipality, county, or political subdivision may not exempt a total of more than 50 positions
1119     or a number equal to 10% of the eligible employees of the municipality, county, or political
1120     subdivision, whichever is less.
1121          (b) A municipality, county, or political subdivision may exempt at least one regular
1122     full-time employee.
1123          (4) Each participating employer shall:
1124          (a) maintain a list of employee exemptions; and
1125          (b) update an employee exemption in the event of any change.
1126          (5) Beginning on the effective date of the exemption for an employee who elects to be
1127     exempt in accordance with Subsection (1):
1128          (a) for a member of the Tier II defined contribution plan:
1129          (i) the participating employer shall contribute the nonelective contribution and the
1130     amortization rate described in Section 49-22-401, except that the nonelective contribution is
1131     exempt from the vesting requirements of Subsection 49-22-401(3)(a); [and]
1132          (ii) the member may make voluntary deferrals as provided in Section 49-22-401; and
1133          (iii) the member is not eligible for additional service credit in the plan for the period of
1134     exempt employment; and
1135          (b) for a member of the Tier II hybrid retirement system:
1136          (i) the participating employer shall contribute the nonelective contribution and the
1137     amortization rate described in Section 49-22-401, except that the contribution is exempt from
1138     the vesting requirements of Subsection 49-22-401(3)(a);
1139          (ii) the member may make voluntary deferrals as provided in Section 49-22-401; and
1140          (iii) the member is not eligible for additional service credit in the system for the period
1141     of exempt employment.

1142          (6) If an employee who is a member of the Tier II hybrid retirement system
1143     subsequently revokes the election of exemption made under Subsection (1), the provisions
1144     described in Subsection (5)(b) shall no longer be applicable and the coverage for the employee
1145     shall be effective prospectively as provided in Part 3, Tier II Hybrid Retirement System.
1146          (7) (a) All employer contributions made on behalf of an employee shall be invested in
1147     accordance with Subsection 49-22-303(3)(a) or 49-22-401(4)(a) until the one-year election
1148     period under Subsection 49-22-201(2)(c) is expired if the employee:
1149          (i) elects to be exempt in accordance with Subsection (1); and
1150          (ii) continues employment with the participating employer through the one-year
1151     election period under Subsection 49-22-201(2)(c).
1152          (b) An employee is entitled to receive a distribution of the employer contributions
1153     made on behalf of the employee and all associated investment gains and losses if the employee:
1154          (i) elects to be exempt in accordance with Subsection (1); and
1155          (ii) terminates employment prior to the one-year election period under Subsection
1156     49-22-201(2)(c).
1157          (8) (a) The office shall make rules to implement this section.
1158          (b) The rules made under this Subsection (8) shall include provisions to allow the
1159     exemption provided under Subsection (1) to apply to all contributions made beginning on or
1160     after July 1, 2011, on behalf of an exempted employee who began the employment before May
1161     8, 2012.
1162          (9) An employee's exemption, participation, or election described in this section:
1163          (a) shall be made in accordance with this section; and
1164          (b) is subject to requirements under federal law and rules made by the board.
1165          Section 14. Section 49-22-401 is amended to read:
1166          49-22-401. Contributions -- Rates.
1167          (1) Up to the amount allowed by federal law, the participating employer shall make a
1168     nonelective contribution of 10% of the participant's compensation to a defined contribution
1169     plan.
1170          (2) (a) The participating employer shall contribute the 10% nonelective contribution
1171     described in Subsection (1) to a defined contribution plan qualified under Section 401(k) of the
1172     Internal Revenue Code [which] that:

1173          (i) is sponsored by the board; and
1174          (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
1175          (b) The member may make voluntary deferrals to:
1176          (i) the qualified 401(k) plan [which] that receives the employer contribution described
1177     in this Subsection (2); or
1178          (ii) at the member's option, another defined contribution plan established by the
1179     participating employer.
1180          (c) In addition to the percent specified under Subsection (2)(a), the participating
1181     employer shall pay the corresponding Tier I system amortization rate of the employee's
1182     compensation to the office to be applied to the employer's corresponding Tier I system liability.
1183          (3) (a) Except as provided under Subsection (3)(c), the total amount contributed by the
1184     participating employer under Subsection (2)(a) vests to the member upon accruing four years of
1185     employment as a regular full-time employee under this title.
1186          (b) The total amount contributed by the member under Subsection (2)(b) vests to the
1187     member's benefit immediately and is nonforfeitable.
1188          (c) (i) Upon filing a written request for exemption with the office, an eligible employee
1189     is exempt from the vesting requirements of Subsection (3)(a) in accordance with Section
1190     49-22-205.
1191          (ii) An employee who is exempt under this Subsection (3)(c) is not eligible for
1192     additional service credit in the plan for the period of exempt employment.
1193          (d) (i) Years of employment under Subsection (3)(a) includes any fraction of a year to
1194     which the member may be entitled.
1195          (ii) At the time of vesting, if a member's years of service credit is within one-tenth of
1196     one year of the total years required for vesting, the member shall be considered to have the total
1197     years of employment required for vesting.
1198          (4) (a) Contributions made by a participating employer under Subsection (2)(a) shall be
1199     invested in a default option selected by the board until the member is vested in accordance with
1200     Subsection (3)(a).
1201          (b) A member may direct the investment of contributions including associated
1202     investment gains and losses made by a participating employer under Subsection (2)(a) only
1203     after the contributions have vested in accordance with Subsection (3)(a).

1204          (c) A member may direct the investment of contributions made by the member under
1205     Subsection (3)(b).
1206          (5) No loans shall be available from contributions made by a participating employer
1207     under Subsection (2)(a).
1208          (6) No hardship distributions shall be available from contributions made by a
1209     participating employer under Subsection (2)(a).
1210          (7) (a) Except as provided in Subsection (7)(b), if a member terminates employment
1211     with a participating employer prior to the vesting period described in Subsection (3)(a), all
1212     contributions made by a participating employer on behalf of the member including associated
1213     investment gains and losses under Subsection (2)(a) are subject to forfeiture.
1214          (b) If a member who terminates employment with a participating employer prior to the
1215     vesting period described in Subsection (3)(a) subsequently enters employment with the same or
1216     another participating employer within 10 years of the termination date of the previous
1217     employment:
1218          (i) all contributions made by the previous participating employer on behalf of the
1219     member including associated investment gains and losses shall be reinstated upon the member's
1220     employment as a regular full-time employee; and
1221          (ii) the length of time that the member worked with the previous employer shall be
1222     included in determining whether the member has completed the vesting period under
1223     Subsection (3)(a).
1224          (c) The office shall establish a forfeiture account and shall specify the uses of the
1225     forfeiture account, which may include an offset against administrative costs or employer
1226     contributions made under this section.
1227          (8) The office may request from any other [qualified 401(k)] plan under Subsection
1228     (2)(b)(ii) any relevant information pertaining to the maintenance of [its] the plan's tax
1229     qualification under the Internal Revenue Code.
1230          (9) The office may take any action [which in its] that in the office's judgment is
1231     necessary to maintain the tax-qualified status of [its] the office's 401(k) defined contribution
1232     plan under federal law.
1233          Section 15. Section 49-23-102 is amended to read:
1234          49-23-102. Definitions.

1235          As used in this chapter:
1236          (1) (a) "Compensation" means the total amount of payments that are includable in
1237     gross income received by a public safety service employee or a firefighter service employee as
1238     base income for the regularly scheduled work period. The participating employer shall
1239     establish the regularly scheduled work period. Base income shall be determined prior to the
1240     deduction of any amounts the public safety service employee or firefighter service employee
1241     authorizes to be deducted for salary deferral or other benefits authorized by federal law.
1242          (b) "Compensation" includes performance-based bonuses and cost-of-living
1243     adjustments.
1244          (c) "Compensation" does not include:
1245          (i) overtime;
1246          (ii) sick pay incentives;
1247          (iii) retirement pay incentives;
1248          (iv) the monetary value of remuneration paid in kind, as in a residence, use of
1249     equipment or uniform, travel, or similar payments;
1250          (v) a lump-sum payment or special payment covering accumulated leave; and
1251          (vi) all contributions made by a participating employer under this system or under any
1252     other employee benefit system or plan maintained by a participating employer for the benefit of
1253     a member or participant.
1254          (d) "Compensation" for purposes of this chapter may not exceed the amount allowed
1255     under Section 401(a)(17), Internal Revenue Code.
1256          (2) "Corresponding Tier I system" means the system or plan that would have covered
1257     the member if the member had initially entered employment before July 1, 2011.
1258          (3) "Dispatcher" means the same as that term is defined in Section 53-6-102.
1259          (4) (a) "Final average salary" means the amount calculated by averaging the highest
1260     five years of annual compensation preceding retirement subject to Subsections [(4)(a), (b), (c),
1261     (d), and (e)] (4)(b), (c), (d), (e), and (f).
1262          [(a)] (b) Except as provided in Subsection [(4)(b)] (4)(c), the percentage increase in
1263     annual compensation in any one of the years used may not exceed the previous year's
1264     compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the
1265     purchasing power of the dollar during the previous year, as measured by a United States Bureau

1266     of Labor Statistics Consumer Price Index average as determined by the board.
1267          [(b)] (c) In cases where the participating employer provides acceptable documentation
1268     to the office, the limitation in Subsection [(4)(a)] (4)(b) may be exceeded if:
1269          (i) the member has transferred from another agency; or
1270          (ii) the member has been promoted to a new position.
1271          [(c)] (d) If the member retires more than six months from the date of termination of
1272     employment, the member is considered to have been in service at the member's last rate of pay
1273     from the date of the termination of employment to the effective date of retirement for purposes
1274     of computing the member's final average salary only.
1275          [(d)] (e) If the member has less than five years of service credit in this system, final
1276     average salary means the average annual compensation paid to the member during the full
1277     period of service credit.
1278          [(e)] (f) The annual compensation used to calculate final average salary shall be based
1279     on[:] a period, as determined by the board, consistent with the period used to determine years
1280     of service credit in accordance with Subsection (14).
1281          [(i) a calendar year for a member employed by a participating employer that is not an
1282     educational institution; or]
1283          [(ii) a contract year for a member employed by an educational institution.]
1284          (5) (a) "Firefighter service" means employment normally requiring an average of 2,080
1285     hours of regularly scheduled employment per year rendered by a member who is:
1286          (i) a firefighter service employee trained in firefighter techniques and assigned to a
1287     position of hazardous duty with a regularly constituted fire department;
1288          (ii) the state fire marshal appointed under Section 53-7-103 or a deputy state fire
1289     marshal; or
1290          (iii) a firefighter service employee who is:
1291          (A) hired on or after July 1, 2021;
1292          (B) trained in firefighter techniques;
1293          (C) assigned to a position of hazardous duty; and
1294          (D) employed by the state as a participating employer.
1295          (b) "Firefighter service" does not include secretarial staff or other similar employees.
1296          (6) (a) "Firefighter service employee" means an employee of a participating employer

1297     who provides firefighter service under this chapter.
1298          (b) "Firefighter service employee" does not include an employee of a regularly
1299     constituted fire department who does not perform firefighter service.
1300          (7) (a) "Line-of-duty death" means a death resulting from:
1301          (i) external force, violence, or disease occasioned by an act of duty as a public safety
1302     service or firefighter service employee; or
1303          (ii) strenuous activity, including a heart attack or stroke, that occurs during strenuous
1304     training or another strenuous activity required as an act of duty as a public safety service or
1305     firefighter service employee.
1306          (b) "Line-of-duty death" does not include a death that:
1307          (i) occurs during an activity that is required as an act of duty as a public safety service
1308     or firefighter service employee if the activity is not a strenuous activity, including an activity
1309     that is clerical, administrative, or of a nonmanual nature;
1310          (ii) occurs during the commission of a crime committed by the employee;
1311          (iii) the employee's intoxication or use of alcohol or drugs, whether prescribed or
1312     nonprescribed, contributes to the employee's death; or
1313          (iv) occurs in a manner other than as described in Subsection (7)(a).
1314          (8) "Participating employer" means an employer [which] that meets the participation
1315     requirements of:
1316          (a) Sections 49-14-201 and 49-14-202;
1317          (b) Sections 49-15-201 and 49-15-202;
1318          (c) Sections 49-16-201 and 49-16-202; or
1319          (d) Sections 49-23-201 and 49-23-202.
1320          (9) (a) "Public safety service" means employment normally requiring an average of
1321     2,080 hours of regularly scheduled employment per year rendered by a member who is [a]:
1322          (i) a law enforcement officer in accordance with Section 53-13-103;
1323          (ii) a correctional officer in accordance with Section 53-13-104;
1324          (iii) a special function officer approved in accordance with Sections 49-15-201 and
1325     53-13-105;
1326          (iv) a dispatcher who is certified in accordance with Section 53-6-303; [and]
1327          (v) a full-time member of the Board of Pardons and Parole created under Section

1328     77-27-2[.];
1329          (vi) the commissioner of the Department of Public Safety; or
1330          (vii) the executive director of the Department of Corrections.
1331          (b) Except [as provided under Subsections (9)(a)(iv) and (v)] for a position described
1332     in Subsection (9)(a)(iv), (v), (vi), or (vii), "public safety service" also requires that, in the
1333     course of employment, the employee's life or personal safety is at risk.
1334          (10) "Public safety service employee" means an employee of a participating employer
1335     who performs public safety service under this chapter.
1336          (11) (a) "Strenuous activity" means engagement involving a difficult, stressful, or
1337     vigorous fire suppression, rescue, hazardous material response, emergency medical service,
1338     physical law enforcement, prison security, disaster relief, or other emergency response activity.
1339          (b) "Strenuous activity" includes participating in a participating employer sanctioned
1340     and funded training exercise that involves difficult, stressful, or vigorous physical activity.
1341          (12) "System" means the New Public Safety and Firefighter Tier II Contributory
1342     Retirement System created under this chapter.
1343          (13) (a) "Volunteer firefighter" means any individual [that] who is not regularly
1344     employed as a firefighter service employee, but who:
1345          (i) has been trained in firefighter techniques and skills;
1346          (ii) continues to receive regular firefighter training; and
1347          (iii) is on the rolls of a legally organized volunteer fire department [which] that
1348     provides ongoing training and serves a political subdivision of the state.
1349          (b) An individual that volunteers assistance but does not meet the requirements of
1350     Subsection (13)(a) is not a volunteer firefighter for purposes of this chapter.
1351          (14) "Years of service credit" means:
1352          (a) a period, consisting of 12 full months as determined by the board; or
1353          (b) a period determined by the board, whether consecutive or not, during which a
1354     regular full-time employee performed services for a participating employer, including any time
1355     the regular full-time employee was absent on a paid leave of absence granted by a participating
1356     employer or was absent in the service of the United States government on military duty as
1357     provided by this chapter.
1358          Section 16. Section 49-23-201 is amended to read:

1359          49-23-201. System membership -- Eligibility.
1360          (1) Beginning July 1, 2011, a participating employer that employs public safety service
1361     employees or firefighter service employees shall participate in this system.
1362          (2) (a) A public safety service employee or a firefighter service employee initially
1363     entering employment with a participating employer on or after July 1, 2011, who does not have
1364     service credit accrued before July 1, 2011, in a Tier I system or plan administered by the board,
1365     is eligible:
1366          (i) as a member for service credit and defined contributions under the Tier II hybrid
1367     retirement system established by Part 3, Tier II Hybrid Retirement System; or
1368          (ii) as a participant for defined contributions under the Tier II defined contributions
1369     plan established by Part 4, Tier II Defined Contribution Plan.
1370          (b) A public safety service employee or a firefighter service employee initially entering
1371     employment with a participating employer on or after July 1, 2011, shall:
1372          (i) make an election to participate in the system created under this chapter:
1373          (A) as a member for service credit and defined contributions under the Tier II hybrid
1374     retirement system established by Part 3, Tier II Hybrid Retirement System; or
1375          (B) as a participant for defined contributions under the Tier II defined contribution plan
1376     established by Part 4, Tier II Defined Contribution Plan; and
1377          (ii) electronically submit to the office notification of the member's election under
1378     Subsection (2)(b)(i) in a manner approved by the office.
1379          (c) An election made by a public safety service employee or firefighter service
1380     employee initially entering employment with a participating employer under this Subsection (2)
1381     is irrevocable beginning one year from the date of eligibility for accrual of benefits.
1382          (d) If no election is made under Subsection (2)(b)(i), the public safety service employee
1383     or firefighter service employee shall become a member eligible for service credit and defined
1384     contributions under the Tier II hybrid retirement system established by Part 3, Tier II Hybrid
1385     Retirement System.
1386          (3) (a) Beginning July 1, 2015, a public safety service employee who is a dispatcher
1387     employed by:
1388          (i) the state shall be eligible for service credit in this system; and
1389          (ii) a participating employer other than the state shall be eligible for service credit in

1390     this system if the dispatcher's participating employer elects to cover [its] the participating
1391     employer's dispatchers under this system.
1392          (b) A participating employer's election to cover [its] the participating employer's
1393     dispatchers under this system under Subsection (3)(a)(ii) is irrevocable and shall be
1394     documented by a resolution adopted by the governing body of the participating employer in
1395     accordance with rules made by the office.
1396          (c) A dispatcher's service before July 1, 2015, or before a date specified by resolution
1397     of a participating employer under Subsection (3)(b), is not eligible for service credit in this
1398     system.
1399          (4) A public safety service employee who is transferred or promoted to an
1400     administration position requiring the performance of duties that consist primarily of
1401     management or supervision of public safety service employees shall continue to earn public
1402     safety service credit in this system during the period in which the employee remains employed
1403     in the same department.
1404          Section 17. Section 49-23-203 is amended to read:
1405          49-23-203. Exemptions from participation in system.
1406          (1) Upon filing a written request for exemption with the office, the following
1407     employees are exempt from participation in the system as provided in this section if the
1408     employee is a public safety service employee or firefighter service employee and is:
1409          (a) an executive department head of the state;
1410          (b) an elected or appointed sheriff of a county; [or]
1411          (c) an elected or appointed chief of police of a municipality[.]; or
1412          (d) the chief of any fire department or district.
1413          (2) (a) A participating employer shall prepare a list designating those positions eligible
1414     for exemption under Subsection (1).
1415          (b) An employee may not be exempted unless the employee is employed in a position
1416     designated by the participating employer under Subsection (1).
1417          (3) Each participating employer shall:
1418          (a) file each employee exemption annually with the office; and
1419          (b) update an employee exemption in the event of any change.
1420          (4) Beginning on the effective date of the exemption for an employee who elects to be

1421     exempt in accordance with Subsection (1):
1422          (a) for a member of the Tier II defined contribution plan:
1423          (i) the participating employer shall contribute the nonelective contribution and the
1424     amortization rate described in Section 49-23-401, except that the contribution is exempt from
1425     the vesting requirements of Subsection 49-23-401(3)(a); [and]
1426          (ii) the member may make voluntary deferrals as provided in Section 49-23-401; and
1427          (iii) the member is not eligible for additional service credit in the plan for the period of
1428     exempt employment; and
1429          (b) for a member of the Tier II hybrid retirement system:
1430          (i) the participating employer shall contribute the nonelective contribution and the
1431     amortization rate described in Section 49-23-401, except that the contribution is exempt from
1432     the vesting requirements of Subsection 49-23-401(3)(a);
1433          (ii) the member may make voluntary deferrals as provided in Section 49-23-401; and
1434          (iii) the member is not eligible for additional service credit in the system for the period
1435     of exempt employment.
1436          (5) If an employee who is a member of the Tier II hybrid retirement system
1437     subsequently revokes the election of exemption made under Subsection (1), the provisions
1438     described in Subsection (4)(b) shall no longer be applicable and the coverage for the employee
1439     shall be effective prospectively as provided in Part 3, Tier II Hybrid Retirement System.
1440          (6) (a) All employer contributions made on behalf of an employee shall be invested in
1441     accordance with Subsection 49-23-302(3)(a) or 49-23-401(4)(a) until the one-year election
1442     period under Subsection 49-23-201(2)(c) is expired if the employee:
1443          (i) elects to be exempt in accordance with Subsection (1); and
1444          (ii) continues employment with the participating employer through the one-year
1445     election period under Subsection 49-23-201(2)(c).
1446          (b) An employee is entitled to receive a distribution of the employer contributions
1447     made on behalf of the employee and all associated investment gains and losses if the employee:
1448          (i) elects to be exempt in accordance with Subsection (1); and
1449          (ii) terminates employment prior to the one-year election period under Subsection
1450     49-23-201(2)(c).
1451          (7) (a) The office shall make rules to implement this section.

1452          (b) The rules made under this Subsection (7) shall include provisions to allow the
1453     exemption provided under Subsection (1) to apply to all contributions made beginning on or
1454     after July 1, 2011, on behalf of an exempted employee who began the employment before May
1455     8, 2012.
1456          (8) An employee's exemption, participation, or election described in this section:
1457          (a) shall be made in accordance with this section; and
1458          (b) is subject to requirements under federal law and rules made by the board.
1459          Section 18. Section 49-23-401 is amended to read:
1460          49-23-401. Contributions -- Rates.
1461          (1) (a) Up to the amount allowed by federal law, the participating employer shall make
1462     a nonelective contribution of 14% of the participant's compensation to a defined contribution
1463     plan.
1464          (b) In addition to the nonelective contribution described in Subsection (1)(a), if a
1465     participating employer elects under Subsection 49-23-301(2)(c) to pay all or part of the
1466     required member contribution on behalf of the participating employer's employees that are
1467     members covered under Part 3, Tier II Hybrid Retirement System, the participating employer
1468     shall make an additional nonelective contribution to an employee that is a member covered
1469     under this part at the same percentage rate of the participant's compensation as the participating
1470     employer's election to pay required member contributions on behalf of the participating
1471     employer's employees that are members covered under Part 3, Tier II Hybrid Retirement
1472     System.
1473          (2) (a) The participating employer shall contribute the contributions described in
1474     Subsection (1) to a defined contribution plan qualified under Section 401(k) of the Internal
1475     Revenue Code [which] that:
1476          (i) is sponsored by the board; and
1477          (ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
1478          (b) The member may make voluntary deferrals to:
1479          (i) the qualified 401(k) plan [which] that receives the employer contribution described
1480     in this Subsection (2); or
1481          (ii) at the member's option, another defined contribution plan established by the
1482     participating employer.

1483          (c) In addition to the contributions specified under Subsection (2)(a), the participating
1484     employer shall pay the corresponding Tier I system amortization rate of the employee's
1485     compensation to the office to be applied to the employer's corresponding Tier I system liability.
1486          (3) (a) Except as provided under Subsection (3)(c), the total amount contributed by the
1487     participating employer under Subsection (2)(a) vests to the member upon accruing four years of
1488     service credit under this title.
1489          (b) The total amount contributed by the member under Subsection (2)(b) vests to the
1490     member's benefit immediately and is nonforfeitable.
1491          (c) (i) Upon filing a written request for exemption with the office, an eligible employee
1492     is exempt from the vesting requirements of Subsection (3)(a) in accordance with Section
1493     49-23-203.
1494          (ii) An employee who is exempt under this Subsection (3)(c) is not eligible for
1495     additional service credit in the plan for the period of exempt employment.
1496          (d) (i) Years of service credit under Subsection (3)(a) includes any fraction of a year to
1497     which the member may be entitled.
1498          (ii) At the time of vesting, if a member's years of service credit is within one-tenth of
1499     one year of the total years required for vesting, the member shall be considered to have the total
1500     years of service credit required for vesting.
1501          (4) (a) Contributions made by a participating employer under Subsection (2)(a) shall be
1502     invested in a default option selected by the board until the member is vested in accordance with
1503     Subsection (3)(a).
1504          (b) A member may direct the investment of contributions, including associated
1505     investment gains and losses, made by a participating employer under Subsection (2)(a) only
1506     after the contributions have vested in accordance with Subsection (3)(a).
1507          (c) A member may direct the investment of contributions made by the member under
1508     Subsection (3)(b).
1509          (5) No loans shall be available from contributions made by a participating employer
1510     under Subsection (2)(a).
1511          (6) No hardship distributions shall be available from contributions made by a
1512     participating employer under Subsection (2)(a).
1513          (7) (a) Except as provided in Subsection (7)(b), if a member terminates employment

1514     with a participating employer prior to the vesting period described in Subsection (3)(a), all
1515     contributions made by a participating employer on behalf of the member under Subsection
1516     (2)(a), including associated investment gains and losses are subject to forfeiture.
1517          (b) If a member who terminates employment with a participating employer prior to the
1518     vesting period described in Subsection (3)(a) subsequently enters employment with the same or
1519     another participating employer within 10 years of the termination date of the previous
1520     employment:
1521          (i) all contributions made by the previous participating employer on behalf of the
1522     member, including associated investment gains and losses, shall be reinstated upon the
1523     member's employment as a regular full-time employee; and
1524          (ii) the length of time that the member worked with the previous employer shall be
1525     included in determining whether the member has completed the vesting period under
1526     Subsection (3)(a).
1527          (c) The office shall establish a forfeiture account and shall specify the uses of the
1528     forfeiture account, which may include an offset against administrative costs of employer
1529     contributions made under this section.
1530          (8) The office may request from any other [qualified 401(k)] plan under Subsection
1531     (2)(b)(ii) any relevant information pertaining to the maintenance of [its] the plan's tax
1532     qualification under the Internal Revenue Code.
1533          (9) The office may take any action [which in its] that in the office's judgment is
1534     necessary to maintain the tax-qualified status of [its] the office's 401(k) defined contribution
1535     plan under federal law.
1536          Section 19. Repealer.
1537          This bill repeals:
1538          Section 49-11-904, New Public Safety and Firefighter Tier II Retirement Benefits
1539     Restricted Account -- Insurance premium tax revenues -- Distribution.
1540          Section 20. Effective date.
1541          This bill takes effect on July 1, 2022.