This document includes Senate Committee Amendments incorporated into the bill on Thu, Feb 8, 2024 at 11:30 AM by lpoole.
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POSTRETIREMENT REEMPLOYMENT RESTRICTIONS

2     
AMENDMENTS

3     
2024 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Matthew H. Gwynn

6     
Senate Sponsor: Wayne A. Harper

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions governing postretirement reemployment.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     creates an alternative method for a retiree within the Utah Retirement Systems
15     (URS) to be eligible to return to work with a URS participating employer and
16     receive a retirement allowance;
17          ▸     establishes reporting requirements; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides a special effective date.
23     Utah Code Sections Affected:
24     AMENDS:
25          49-11-1202, as last amended by Laws of Utah 2020, Chapter 449
26          49-11-1204, as last amended by Laws of Utah 2020, Chapter 24
27          49-11-1205, as last amended by Laws of Utah 2021, Chapter 193
28          49-11-1206, as enacted by Laws of Utah 2016, Chapter 310 and last amended by
29     Coordination Clause, Laws of Utah 2016, Chapter 310
30          49-11-1207, as last amended by Laws of Utah 2022, Chapter 171
31     ENACTS:
32          49-11-1209, Utah Code Annotated 1953
33     

34     Be it enacted by the Legislature of the state of Utah:
35          Section 1. Section 49-11-1202 is amended to read:
36          49-11-1202. Definitions.
37          As used in this part:
38          (1) (a) "Affiliated emergency services worker" means [a person] an individual who:
39          (i) is employed by a participating employer;
40          (ii) performs emergency services for another participating employer that is a different
41     agency;
42          (iii) is trained in techniques and skills required for the emergency service;
43          (iv) continues to receive regular training required for the service;
44          (v) is on the rolls as a trained affiliated emergency services worker of the participating
45     employer; and
46          (vi) provides ongoing service for a participating employer, which service may include
47     service as a volunteer firefighter, reserve law enforcement officer, search and rescue worker,
48     emergency medical technician, ambulance worker, park ranger, or public utilities worker.
49          (b) "Affiliated emergency services worker" does not include [a person] an individual
50     who performs work or service but does not meet the requirements of Subsection (1)(a).
51          (2) "Amortization rate" means the amortization rate, as defined in Section 49-11-102,
52     to be applied to the system that would have covered the retiree if the retiree's reemployed
53     position were deemed to be an eligible, full-time position within that system.
54          (3) "Bona fide termination of employment" means:
55          (a) permanent separation from employment or a fee-for-service relationship with any
56     participating employer; and
57          (b) separation from employment without a prearrangement that anticipates
58     postretirement reemployment or a postretirement fee-for-service relationship with a
59     participating employer.
60          (4) "Normal cost rate" means the normal cost rate, as defined in Section 49-11-102, to
61     be applied to the system that would have covered the retiree if the retiree's reemployed position
62     were deemed to be an eligible, full-time position within that system.
63          [(3)] (5) "Part-time appointed or elected board member" means an individual who:
64          (a) serves in a position:
65          (i) as a member of a board, commission, council, committee, panel, or other body of a
66     participating employer; and
67          (ii) that is designated in the participating employer's governing statute, charter, creation
68     document, or similar document;
69          (b) is appointed or elected to the position for a definite and fixed term of office by
70     official and duly recorded action of the participating employer;
71          (c) except for the service in the position, does not perform other work or service for
72     compensation for the participating employer, whether as an employee or under a contract; and
73          (d) retires from a participating employer that is different than the participating
74     employer with the position in which the person serves.
75          (6) "Public employee retiree" means a retiree who retires under:
76          (a) Chapter 12, Public Employees' Contributory Retirement Act;
77          (b) Chapter 13, Public Employees' Noncontributory Retirement Act; or
78          (c) Chapter 22, Part 3, Tier II Hybrid Retirement System.
79          (7) "Public safety or firefighter retiree" means a retiree who retires under:
80          (a) Chapter 14, Public Safety Contributory Retirement Act;
81          (b) Chapter 15, Public Safety Noncontributory Retirement Act;
82          (c) Chapter 16, Firefighters' Retirement Act; or
83          (d) Chapter 23, Part 3, Tier II Hybrid Retirement System.
84          [(4)] (8) (a) "Reemployed," "reemploy," or "reemployment" means work or service
85     performed for a participating employer after retirement, in exchange for compensation.
86          (b) [Reemployment] "Reemployed," "reemploy," or "reemployment" includes work or
87     service performed on a contract for a participating employer if the retiree is:
88          (i) listed as the contractor; or
89          (ii) an owner, partner, or principal of the contractor.
90          [(5)] (9) (a) "Retiree":
91          [(a)] means [a person] an individual who:
92          (i) retired from a participating employer; and
93          (ii) begins reemployment on or after July 1, 2010, with a participating employer[; and]
94     .
95          (b) "Retiree" does not include [a person] an individual:
96          (i) (A) who was reemployed by a participating employer before July 1, 2010; and
97          (B) whose participating employer that reemployed the [person] individual under
98     Subsection [(5)(b)(i)(A)] (9)(b)(i)(A) was dissolved, consolidated, merged, or structurally
99     changed in accordance with Section 49-11-621 on or after July 1, 2010; or
100          (ii) who is working under a phased retirement agreement in accordance with [Title 49,
101     Chapter 11, Part 13, Phased Retirement] Chapter 11, Part 13, Phased Retirement.
102          Section 2. Section 49-11-1204 is amended to read:
103          49-11-1204. General restrictions -- Election following one-year separation --
104     Amortization rate.
105          (1) A retiree may not for the same period of reemployment:
106          (a) (i) earn additional service credit; or
107          (ii) receive any retirement related contribution from a participating employer; and
108          (b) receive a retirement allowance.
109          (2) (a) Except as provided under Section 49-11-1205, the office shall cancel the
110     retirement allowance of a retiree if the reemployment with a participating employer begins
111     within one year of the retiree's retirement date.
112          (b) If the office cancels the retiree's retirement allowance under Subsection (2)(a), the
113     retiree may be eligible to earn additional service credit in the reemployed position and receive
114     an allowance in accordance with Subsections (4)(a) and (5) and other provisions of this title.
115          (3) If a reemployed retiree, in accordance with Subsection (2)(a), is exempt from
116     having the allowance cancelled, including for completing the one-year separation from
117     employment with a participating employer, the retiree may elect to:
118          (a) cancel the retiree's retirement allowance and instead earn additional service credit in
119     the reemployed position and receive an allowance in accordance with Subsections (4)(a) and
120     (5) and other provisions of this title; or
121          (b) continue to receive the retiree's retirement allowance, [forfeit earning] not earn
122     additional service credit, and [forfeit] not receive any retirement-related contribution from the
123     participating employer that reemployed the retiree.
124          (4) (a) If a retiree's retirement allowance is cancelled and the retiree is eligible for
125     retirement coverage in a reemployed position, the office shall reinstate the retiree to active
126     member status on the first day of the month following the date of the employee's eligible
127     reemployment.
128          (b) Except as provided under Subsection (4)(c), if the retiree is not otherwise eligible
129     for retirement coverage in the reemployed position, the participating employer that reemploys
130     the retiree shall contribute the amortization rate to the office on behalf of the retiree.
131          (c) A participating employer that reemploys a retiree in accordance with Subsection
132     49-11-1205(1) is not required to contribute the amortization rate to the office.
133          (5) (a) For a retiree reinstated to active member status under Subsection (4)(a) who
134     retires within two years from the date of reemployment, the office:
135          (i) may not recalculate a retirement benefit for the retiree; and
136          (ii) shall resume the allowance that was being paid to the retiree at the time of the
137     cancellation.
138          (b) Subject to Subsection (1), for a retiree who is reinstated to active membership
139     under Subsection (4)(a) and retires two or more years after the date of reinstatement to active
140     membership, the office shall:
141          (i) resume the allowance that was being paid at the time of cancellation; and
142          (ii) calculate an additional allowance for the retiree based on the formula in effect at
143     the date of the subsequent retirement for all service credit accrued between the first and
144     subsequent retirement dates.
145          Section 3. Section 49-11-1205 is amended to read:
146          49-11-1205. Postretirement reemployment restriction exceptions.
147          (1) (a) The office may not cancel the retirement allowance of a retiree who is
148     reemployed with a participating employer within one year of the retiree's retirement date if:
149          (i) the retiree is not reemployed by a participating employer for a period of at least 60
150     days from the retiree's retirement date;
151          (ii) the retiree has a bona fide termination of employment on the retiree's retirement
152     date;
153          [(ii)] (iii) upon reemployment after the break in service under Subsection (1)(a)(i), the
154     retiree does not receive any employer paid benefits, including:
155          (A) retirement service credit or retirement-related contributions;
156          (B) medical benefits;
157          (C) dental benefits;
158          (D) other insurance benefits except for workers' compensation as provided under Title
159     34A, Chapter 2, Workers' Compensation Act, Title 34A, Chapter 3, Utah Occupational Disease
160     Act, and withholdings required by federal or state law for social security, Medicare, and
161     unemployment insurance; or
162          (E) paid time off, including sick, annual, or other type of leave; and
163          [(iii)] (iv) (A) the retiree does not earn in any calendar year of reemployment an
164     amount in excess of the lesser of $15,000 or one-half of the retiree's final average salary upon
165     which the retiree's retirement allowance is based; or
166          (B) the retiree is reemployed as a judge as defined under Section 78A-11-102.
167          (b) The board shall adjust the amounts under Subsection [(1)(a)(iii)] (1)(a)(iv) by the
168     annual change in the Consumer Price Index during the previous calendar year as measured by a
169     United States Bureau of Labor Statistics Consumer Price Index average as determined by the
170     board.
171          (2) A retiree shall be considered as having completed the one-year separation from
172     employment with a participating employer [required under] described in Section 49-11-1204, if
173     the retiree:
174          (a) before retiring:
175          (i) was employed with a participating employer as a public safety service employee as
176     defined in Section 49-14-102, 49-15-102, or 49-23-102;
177          (ii) during the employment under Subsection (2)(a)(i), suffered a physical injury
178     resulting from external force or violence while performing the duties of the employment, for
179     which injury the retiree would have been approved for total disability in accordance with the
180     provisions under Chapter 21, Public Employees' Long-Term Disability Act, if years of service
181     are not considered;
182          (iii) had less than 30 years of service credit but had sufficient service credit to retire,
183     with an unreduced allowance making the public safety service employee ineligible for
184     long-term disability payments under Chapter 21, Public Employees' Long-Term Disability Act,
185     or a substantially similar long-term disability program;
186          (iv) does not receive any long-term disability benefits from any participating employer;
187     and
188          (v) is at least 50 years old; and
189          (b) is reemployed by a different participating employer.
190          (3) (a) The office may not cancel the retirement allowance of a retiree who is employed
191     as an affiliated emergency services worker within one year of the retiree's retirement date if the
192     affiliated emergency services worker does not receive any compensation, except for:
193          (i) a nominal fee, stipend, discount, tax credit, voucher, or other fixed sum of money or
194     cash equivalent payment not tied to productivity and paid periodically for services;
195          (ii) a length-of-service award;
196          (iii) insurance policy premiums paid by the participating employer in the event of death
197     of an affiliated emergency services worker or a line-of-duty accidental death or disability; or
198          (iv) reimbursement of expenses incurred in the performance of duties.
199          (b) For purposes of Subsections (3)(a)(i) and (ii), the total amount of any discounts, tax
200     credits, vouchers, and payments to an affiliated emergency services worker may not exceed
201     $500 per month.
202          (c) The board shall adjust the amount under Subsection (3)(b) by the annual change in
203     the Consumer Price Index during the previous calendar year as measured by a United States
204     Bureau of Labor Statistics Consumer Price Index average as determined by the board.
205          (d) A retiree is eligible for an exemption from the requirement to cease service without
206     cancellation of a retirement allowance under this Subsection (3) only if the retiree, at the time
207     of retirement, is at least:
208          (i) 50 years old, if the retiree is retiring from a public safety system or a firefighter
209     system; or
210          (ii) 55 years old.
211          (4) (a) The office may not cancel the retirement allowance of a retiree who is employed
212     as a part-time appointed or elected board member within one year after the retiree's retirement
213     date if the part-time appointed or elected board member does not receive any compensation
214     exceeding the amount described in this Subsection (4).
215          (b) A retiree who is a part-time appointed or elected board member for one or more
216     boards, commissions, councils, committees, panels, or other bodies of participating employers:
217          (i) may receive an aggregate amount of compensation, remuneration, a stipend, or other
218     benefit for service on a single or multiple boards, commissions, councils, committees, panels,
219     or other bodies of no more than $5,000 per year; and
220          (ii) may not receive an employer paid retirement service credit or retirement-related
221     contribution.
222          (c) For purposes of Subsection (4)(b)(i):
223          (i) a part-time appointed or elected board member's compensation includes:
224          (A) an amount paid for the part-time appointed or elected board member's coverage in
225     a group insurance plan provided by the participating employer; and
226          (B) the part-time appointed or elected board member's receipt of any other benefit
227     provided by the participating employer; and
228          (ii) the part-time appointed or elected board member's compensation does not include:
229          (A) an amount the participating employer pays for employer-matching employment
230     taxes, if the participating employer treats the part-time appointed or elected board member as
231     an employee for federal tax purposes; or
232          (B) an amount that the part-time appointed or elected board member receives for per
233     diem and travel expenses for up to 12 approved meetings or activities of the government board
234     per year, if the per diem and travel expenses do not exceed the amounts established by the
235     Division of Finance under Sections 63A-3-106 and 63A-3-107 or by rules made by the
236     Division of Finance according to Sections 63A-3-106 and 63A-3-107.
237          (d) The board shall adjust the amount under Subsection (4)(b)(i) by the annual change
238     in the Consumer Price Index during the previous calendar year as measured by a United States
239     Bureau of Labor Statistics Consumer Price Index average, as determined by the board.
240          (5) (a) The office may not cancel the retirement allowance of a retiree who is
241     reemployed with a participating employer within one year of the retiree's retirement date if:
242          (i) the retiree has a bona fide termination of employment on the retiree's retirement
243     date;
244          (ii) the retiree is not employed, including by a fee-for-service relationship, with any
245     participating employer for a period of:
246          (A) at least 90 days if the retiree is a public employee retiree; or
247          (B) at least Ŝ→ [60] 90 ←Ŝ days if the retiree is a public safety or firefighter retiree;
248          (iii) the retiree agrees to a modified retirement allowance as described in Subsections
249     (5)(b), (c), and (d); and
250          (iv) the participating employer that reemploys the retiree agrees to pay to the office the
251     normal cost rate in addition to the amortization rate.
252          (b) During a period of reemployment, the retiree:
253          (i) receives a retirement allowance that is 20% less than the retirement allowance the
254     retiree is entitled to receive in accordance with:
255          (A) for a retiree who retired under Chapter 12, Public Employees' Contributory
256     Retirement Act, Section 49-12-402;
257          (B) for a retiree who retired under Chapter 13, Public Employees' Noncontributory
258     Retirement Act, Section 49-13-402; or
259          (C) for a retiree who retired under Chapter 22, Part 3, Tier II Hybrid Retirement
260     System, Section 49-22-305; or
261          (ii) a retirement allowance that is 15% less than the retirement allowance the retiree is
262     entitled to receive in accordance with:
263          (A) for a retiree who retired under Chapter 14, Public Safety Contributory Retirement
264     Act, Section 49-14-402;
265          (B) for a retiree who retired under Chapter 15, Public Safety Noncontributory
266     Retirement Act, Section 49-15-402;
267          (C) for a retiree who retired under Chapter 16, Firefighters' Retirement Act, Section
268     49-16-402; or
269          (D) for a retiree who retired under Chapter 23, Part 3, Tier II Hybrid Retirement
270     System, Section 49-23-304.
271          (c) During the period of reemployment, the retiree does not receive the annual
272     cost-of-living adjustment described in:
273          (i) for a retiree who retired under Chapter 12, Public Employees' Contributory
274     Retirement Act, Section 49-12-407;
275          (ii) for a retiree who retired under Chapter 13, Public Employees' Noncontributory
276     Retirement Act, Section 49-13-407;
277          (iii) for a retiree who retired under Chapter 14, Public Safety Contributory Retirement
278     Act, Section 49-14-403;
279          (iv) for a retiree who retired under Chapter 15, Public Safety Noncontributory
280     Retirement Act, Section 49-15-403;
281          (v) for a retiree who retired under Chapter 16, Firefighters' Retirement Act, Section
282     49-16-403;
283          (vi) for a retiree who retired under Chapter 22, Part 3, Tier II Hybrid Retirement
284     System, Section 49-22-308; or
285          (vii) for a retiree who retired under Chapter 23, Part 3, Tier II Hybrid Retirement
286     System, Section 49-23-307.
287          (d) (i) The office shall begin paying the retiree's full retirement allowance on the first
288     day of the month following the month in which the office receives written notification that the
289     reemployed retiree has a subsequent retirement date based on a termination of the
290     reemployment.
291          (ii) (A) For purposes of Subsection (5)(d)(i), the full retirement allowance includes the
292     elimination of the allowance reduction described in Subsection (5)(b)(i) or (4)(b)(ii) and the
293     annual cost-of-living adjustment that was prohibited under Subsection (5)(c) during the period
294     of reemployment.
295          (B) A retiree may not receive the difference between the full retirement allowance and
296     the reduced retirement allowance described in Subsection (5)(b)(i) or (5)(b)(ii) or the annual
297     cost-of-living adjustment that the retiree would have received if the retiree had not been
298     reemployed.
299          [(5)] (6) (a) If a retiree is reemployed under the provisions of Subsection (1) or (4), the
300     termination date of the reemployment, as confirmed in writing by the participating employer, is
301     considered the retiree's retirement date for the purpose of calculating the separation
302     requirement [under] described in Section 49-11-1204.
303          (b) The office shall cancel the retirement allowance of a retiree for the remainder of the
304     calendar year if the reemployment with a participating employer exceeds the limitation under
305     Subsection [(1)(a)(iii)] (1)(a)(iv), (3)(b), or (4)(b).
306          (7) A retiree who is reemployed under the provisions of Subsection (5) may not
307     subsequently be reemployed under Section 49-11-1204 unless the office cancels the retirement
308     allowance during the subsequent reemployment.
309          Section 4. Section 49-11-1206 is amended to read:
310          49-11-1206. Notice of postretirement reemployment.
311          (1) A participating employer shall immediately notify the office:
312          (a) if the participating employer reemploys a retiree;
313          (b) whether the reemployment is subject to Section 49-11-1204 or Subsection
314     49-11-1205(1), (2), [or] (3), or (5); and
315          (c) of any election by the retiree under Section 49-11-1204.
316          (2) A participating employer shall certify to the office whether the position of an
317     elected official is or is not full time.
318          (3) A retiree subject to this part shall report to the office the status of the reemployment
319     under Section 49-11-1204 or 49-11-1205.
320          Section 5. Section 49-11-1207 is amended to read:
321          49-11-1207. Postretirement reemployment -- Violations -- Penalties.
322          (1) (a) If the office receives notice or learns of the reemployment of a retiree in
323     violation of Section 49-11-1204 or 49-11-1205, the office shall:
324          (i) immediately cancel the retiree's retirement allowance;
325          (ii) keep the retiree's retirement allowance cancelled for the remainder of the calendar
326     year if the reemployment with a participating employer exceeded the limitation under
327     Subsection [49-11-1205(1)(a)(iii)(A)] 49-11-1205(1)(a)(iv), (3)(b), or (4)(b); and
328          (iii) recover any overpayment resulting from the violation in accordance with the
329     provisions of Section 49-11-607 before the allowance may be reinstated.
330          (b) Reinstatement of an allowance following cancellation for a violation under this
331     section is subject to the procedures and provisions under Section 49-11-1204.
332          (2) If a retiree or participating employer failed to report reemployment in violation of
333     Section 49-11-1206, the retiree, participating employer, or both, who are found to be
334     responsible for the failure to report, are liable to the office for the amount of any overpayment
335     resulting from the violation.
336          (3) A participating employer is liable to the office for a payment or failure to make a
337     payment in violation of this part.
338          (4) If a participating employer fails to notify the office in accordance with Section
339     49-11-1206, the participating employer is immediately subject to a compliance audit by the
340     office.
341          Section 6. Section 49-11-1209 is enacted to read:
342          49-11-1209. Reporting requirement.
343          (1) On or before October 1, 2027, and every other interim thereafter, the office shall
344     report to the Retirement and Independent Entities Committee:
345          (a) the number of retirees who are reemployed and receiving a retirement allowance;
346          (b) the number of retirees described in Subsection (1)(a) who are public employee
347     retirees and the number who are public safety or firefighter retirees;
348          (c) the average number of years of service credit before retirement for each type of
349     retiree; and
350          (d) the number of retirees who reemployed on or after July 1, 2025, and have
351     subsequently retired.
352          (2) The office shall report the information described in Subsection (1) separately for
353     retirees who reemploy under Section 49-11-1204 and Subsection 49-11-1205(5).
354          Section 7. Effective date.
355          This bill takes effect on July 1, 2025.