Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 12 (2015GS)

Sponsor

Rep. Powell, K.

Final action

Governor Signed 3/27/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• clarifies that a member may receive service credit for military service covered under the provisions of the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) instead of only member or participating employer purchases of service credit;
• allows a purchase of public service credit for employment with a participating employer in a qualifying position for which the individual filed a written request for exclusion from membership in a system;
• allows the Utah State Retirement Office to recover any overpayment to a retiree who receives a retirement allowance in violation of postretirement employment restrictions;
• requires a participating employer who reemploys a retiree to contribute the amortization rate to the system that would have covered the retiree regardless of whether the position is retirement eligible;
• amends the deadline from 60 days to 30 days for a participating employer to submit to the office required contributions and submit service credit reports for employees after the end of each pay period;
• amends penalty provisions for delinquent contributions from 12% per annum to equal to the greater of $250 or 50% of the total contributions for the employees for the period of the reporting error;
• provides that a court for a domestic relations order may not require the Utah State Retirement Office to provide any type of benefit that is not otherwise provided by statute;
• repeals the requirement for a participating employer to forward to the office certain documentation relating to terminated employees and requires the employers to maintain the records and make them available to the office upon request;
• clarifies that the definition of "benefits normally provided" includes employer contributions to a health savings account, health reimbursement account, health reimbursement arrangement, or medical expense reimbursement plan; and
• makes technical changes.

Every vote on this bill

Bill text

UTAH RETIREMENT SYSTEM AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Kraig Powell
Senate Sponsor: 
 Todd Weiler
LONG TITLE
Committee Note:
The Retirement and Independent Entities Interim Committee recommended this bill.
General Description:
This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
certain retirement provisions.
Highlighted Provisions:
This bill:
▸ clarifies that a member may receive service credit for military service covered under
the provisions of the federal Uniformed Services Employment and Reemployment
Rights Act of 1994 (USERRA) instead of only member or participating employer
purchases of service credit;
▸ allows a purchase of public service credit for employment with a participating
employer in a qualifying position for which the individual filed a written request for
exclusion from membership in a system;
▸ allows the Utah State Retirement Office to recover any overpayment to a retiree
who receives a retirement allowance in violation of postretirement employment
restrictions;
▸ requires a participating employer who reemploys a retiree to contribute the
amortization rate to the system that would have covered the retiree regardless of
whether the position is retirement eligible;
▸ amends the deadline from 60 days to 30 days for a participating employer to submit
to the office required contributions and submit service credit reports for employees
after the end of each pay period;
▸ amends penalty provisions for delinquent contributions from 12% per annum to
equal to the greater of $250 or 50% of the total contributions for the employees for
the period of the reporting error;
▸ 
provides that a court for a domestic relations order may not require the Utah State
Retirement Office to provide any type of benefit that is not otherwise provided by
statute;
▸ repeals the requirement for a participating employer to forward to the office certain
documentation relating to terminated employees and requires the employers to
maintain the records and make them available to the office upon request;
▸ clarifies that the definition of "benefits normally provided" includes employer
contributions to a health savings account, health reimbursement account, health
reimbursement arrangement, or medical expense reimbursement plan; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
49-11-402
, as renumbered and amended by Laws of Utah 2002, Chapter 250
49-11-403
, as last amended by Laws of Utah 2014, Chapter 15
49-11-505
, as last amended by Laws of Utah 2014, Chapters 15, 175, and 311
49-11-601
, as last amended by Laws of Utah 2014, Chapter 201
49-11-603
, as last amended by Laws of Utah 2014, Chapter 15
49-11-612
, as last amended by Laws of Utah 2013, Chapter 316
49-11-616
, as last amended by Laws of Utah 2013, Chapters 109, 316 and last amended
by Coordination Clause, Laws of Utah 2013, Chapter 109
49-12-102
, as last amended by Laws of Utah 2013, Chapters 109 and 127
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
49-11-402
 is amended to read:
49-11-402.
Purchase of military service credit.
(1) [
A
] 
Except as provided under Subsection (7), a
 member who is absent from
employment with a participating employer by reason of an official call to full-time United
States military service may receive service credit for that military service as follows:
(a) the member, the participating employer, or the member and participating employer
jointly shall make the required payments, as determined by the office, to the system in which
the member participated at the time of the official call, according to the law governing that
particular system;
(b) prior to a member's retirement date, the required payments shall be made:
(i) during the period of full-time United States military service;
(ii) after the military service, but within a period not to exceed three times the period of
military service up to a maximum of five years; or
(iii) as otherwise allowed by federal law;
(c) required payments shall be based on the member's compensation at the time of the
official military call;
(d) if a required payment is not made within the time allowed under Subsection (1)(b),
the member or participating employer may purchase the service credit as allowed in Subsection
(2); and
(e) the member shall return to employment with the participating employer upon
receiving an honorable discharge from military service and there may not be intervening
employment outside of the employment with the participating employer.
(2) (a) A member, a participating employer, or a member and a participating employer
jointly, may purchase service credit for full-time United States military service, resulting from
an official call to duty, if the member has four or more years of service credit and the military
service does not otherwise qualify for service credit under this title.
(b) Payment to the office for a military service credit purchase shall be made to the
system under which the member is currently covered in an amount determined by the office
based on a formula recommended by the actuary and adopted by the board.
(c) The purchase shall be made through payroll deductions or through a lump sum
deposit based upon the present value of future payments.
(d) If total payment is not completed prior to retirement, service credit shall be prorated
in accordance with the amount paid.
(3) For purposes of Subsection (2), full-time United States military service does not
include any regularly scheduled or annual military service that is required by a reserve unit,
National Guard unit, or any other United States military unit.
(4) (a) If any of the factors used to determine the cost of a service credit purchase
change at or before the member's retirement date, the cost of the purchase shall be recalculated.
(b) If the recalculated cost exceeds the amount paid for the purchase, the member may:
(i) pay the increased cost, plus interest, to receive the full amount of service credit; or
(ii) not pay the increased cost and have the purchased service credit prorated.
(5) If the recalculated cost under Subsection (4) is less than the amount paid for the
purchase, the office shall refund the excess payment to the member or participating employer
who paid for the purchase.
(6) (a) The board may adopt rules under which a member may make the necessary
payments to the office for purchases under this title as permitted by federal law.
(b) The office may reject any payments if the office determines the tax status of the
system, plans, or programs would be jeopardized by allowing the payment.
(7) Notwithstanding the provisions under Subsection (1), a member may receive
service credit for military service covered under the provisions of the federal Uniformed
Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. Sec. 4301
et seq., under the terms and conditions provided under that law.
Section 2. Section 
49-11-403
 is amended to read:
49-11-403.
 Purchase of public service credit not otherwise qualifying for benefit.
(1) A member, a participating employer, or a member and a participating employer
jointly may purchase service credit equal to the period of the member's employment in the
following:
(a) United States federal employment;
(b) employment in a private school based in the United States, if the member received
an employer paid retirement benefit for the employment;
(c) public employment in another state or territory of the United States which qualifies
the member for membership in the public plan or system covering the employment, but only if
the member does not qualify for any retirement benefits based on the employment;
(d) forfeited service credit in this state if the member does not qualify for an allowance
based on the service credit;
(e) full-time public service while on an approved leave of absence;
(f) the period of time for which disability benefits were paid if:
(i) the member was receiving:
(A) long-term disability benefits;
(B) short-term disability benefits; or
(C) worker's compensation disability benefits; and
(ii) the member's employer had not entered into a benefit protection contract under
Section 
49-11-404
 during the period the member had a disability due to sickness or accident;
(g) employment covered by a retirement plan offered by a public or private system,
organization, or company designated by the State Board of Regents, if the member forfeits any
retirement benefit from that retirement plan for the period of employment to be purchased
under this Subsection (1)(g); [
or
]
(h) employment in a charter school located within the state if the member forfeits any
retirement benefit under any other retirement system or plan for the period of employment to be
purchased under this Subsection (1)(h)[
.
]
; or
(i) employment with a participating employer that is exempt from coverage under this
title under a written request for exemption with the office, if the member forfeits any retirement
benefit under any other retirement system or plan for the period of employment to be purchased
under this Subsection (1)(i).
(2) A member shall:
(a) have at least four years of service credit before a purchase can be made under this
section; and
(b) forfeit service credit and any defined contribution balance based on employer
contributions under any other retirement system or plan based on the period of employment for
which service credit is being purchased.
(3) (a) To purchase credit under this section, the member, a participating employer, or a
member and a participating employer jointly shall make payment to the system under which the
member is currently covered.
(b) The amount of the payment shall be determined by the office based on a formula
that is:
(i) recommended by the actuary; and
(ii) adopted by the board.
(4) The purchase may be made through payroll deductions or through a lump sum
deposit based upon the present value of future payments.
(5) Total payment must be completed prior to the member's effective date of retirement
or service credit will be prorated in accordance with the amount paid.
(6) (a) For a purchase made before July 1, 2010, if any of the factors used to determine
the cost of a service credit purchase change at or before the member's retirement date, the cost
of the purchase shall be recalculated at the time of retirement.
(b) For a purchase made before July 1, 2010, if the recalculated cost exceeds the
amount paid for the purchase, the member, a participating employer, or a member and a
participating employer jointly may:
(i) pay the increased cost, plus interest, to receive the full amount of service credit; or
(ii) not pay the increased cost and have the purchased service credit prorated.
(c) For a purchase made on or after July 1, 2010:
(i) the purchase shall be made in accordance with rules:
(A) adopted by the board based on recommendations by the board's actuary; and
(B) in effect at the time the purchase is completed; and
(ii) the cost of the service credit purchase shall not be recalculated at the time of
retirement.
(7) If the recalculated cost under Subsection (6)(a) is less than the amount paid for the
purchase, the office shall refund the excess payment to the member or participating employer
who paid for the purchase.
(8) (a) The board may adopt rules under which a member may make the necessary
payments to the office for purchases under this title as permitted by federal law.
(b) The office may reject any payments if the office determines the tax status of the
system, plans, or programs would be jeopardized by allowing the payment.
(9) An employee who elects to participate exclusively in the defined contribution plan
under Chapter 22, Part 4, Tier II Defined Contribution Plan, or Chapter 23, Part 4, Tier II
Defined Contribution Plan, may not purchase service credit for that period of employment.
Section 3. Section 
49-11-505
 is amended to read:
49-11-505.
Reemployment of a retiree -- Restrictions.
(1) (a) For purposes of this section, "retiree":
(i) means a person who:
(A) retired from a participating employer; and
(B) begins reemployment on or after July 1, 2010, with a participating employer;
(ii) does not include a person:
(A) who was reemployed by a participating employer before July 1, 2010; and
(B) whose participating employer that reemployed the person under Subsection
(1)(a)(ii)(A) was dissolved, consolidated, merged, or structurally changed in accordance with
Section 
49-11-621
 after July 1, 2010; and
(iii) does not include a person who is reemployed as an active senior judge or an active
senior justice court judge as described by Utah State Court Rules, appointed to hear cases by
the Utah Supreme Court in accordance with Article VIII, Section 4, Utah Constitution.
(b) (i) This section does not apply to employment as an elected official if the elected
official's position is not full time as certified by the participating employer.
(ii) The provisions of this section apply to an elected official whose elected position is
full time as certified by the participating employer.
(c) (i) This section does not apply to employment as a part-time appointed board
member who does not receive any remuneration, stipend, or other benefit for the part-time
appointed board member's service.
(ii) For purposes of this Subsection (1)(c), remuneration, stipend, or other benefit does
not include receipt of per diem and travel expenses up to the amounts established by the
Division of Finance in:
(A) Section 
63A-3-106
;
(B) Section 
63A-3-107
; and
(C) rules made by the Division of Finance according to Sections 
63A-3-106
 and
63A-3-107
.
(2) A retiree may not for the same period of reemployment:
(a) (i) earn additional service credit; or
(ii) receive any retirement related contribution from a participating employer; and
(b) receive a retirement allowance.
(3) (a) Except as provided under Subsection (3)(b) or (10), the office shall cancel the
retirement allowance of a retiree if the reemployment with a participating employer begins
within one year of the retiree's retirement date.
(b) The office may not cancel the retirement allowance of a retiree who is reemployed
with a participating employer within one year of the retiree's retirement date if:
(i) the retiree is not reemployed by a participating employer for a period of at least 60
days from the retiree's retirement date;
(ii) upon reemployment after the break in service under Subsection (3)(b)(i), the retiree
does not receive any employer provided benefits, including:
(A) medical benefits;
(B) dental benefits;
(C) other insurance benefits except for workers' compensation as provided under Title
34A, Chapter 2, Workers' Compensation Act, and withholdings required by federal or state law
for Social Security, Medicare, and unemployment insurance; or
(D) paid time off, including sick, annual, or other type of leave; and
(iii) (A) the retiree does not earn in any calendar year of reemployment an amount in
excess of the lesser of $15,000 or one-half of the retiree's final average salary upon which the
retiree's retirement allowance is based; or
(B) the retiree is reemployed as a judge as defined under Section 
78A-11-102
.
(c) Beginning January 1, 2013, the board shall adjust the amounts under Subsection
(3)(b)(iii)(A) by the annual change in the Consumer Price Index during the previous calendar
year as measured by a United States Bureau of Labor Statistics Consumer Price Index average
as determined by the board.
(d) The office shall cancel the retirement allowance of a retiree for the remainder of the
calendar year if the reemployment with a participating employer exceeds the limitation under
Subsection (3)(b)(iii)(A).
(e) If a retiree is reemployed under the provisions of Subsection (3)(b), the termination
date of the reemployment, as confirmed in writing by the participating employer, is considered
the retiree's retirement date for the purpose of calculating the separation requirement under
Subsection (3)(a).
(f) If a retiree received a retirement allowance in error, due to reemployment in
violation of this section:
(i) the office shall cancel the retiree's retirement allowance; and
(ii) if the retiree applies for a future benefit, the office shall recover any overpayment in
accordance with the provisions of Section 
49-11-607
.
(4) If a reemployed retiree has completed the one-year separation from employment
with a participating employer required under Subsection (3)(a), the retiree may elect to:
(a) earn additional service credit in accordance with this title and cancel the retiree's
retirement allowance; or
(b) continue to receive the retiree's retirement allowance and forfeit any retirement
related contribution from the participating employer who reemployed the retiree.
(5) (a) As used in this Subsection (5), "amortization rate" means the amortization rate,
as defined in Section 
49-11-102
, to be applied to the system that would have covered the retiree
if the retiree's reemployed position were deemed to be an eligible, full-time position within that
system.
[
(5)
] 
(b)
 A participating employer who reemploys a retiree shall contribute to the office
the amortization rate[
, as defined in Section 
49-11-102
, to be applied to the system that would
have covered the retiree,
] if the reemployed retiree:
[
(a)
] 
(i)
 has completed the one-year separation from employment with a participating
employer required under Subsection (3)(a); and
[
(b)
] 
(ii)
 makes an election under Subsection (4)(b) to continue to receive a retirement
allowance while reemployed.
(6) (a) A participating employer shall immediately notify the office:
(i) if the participating employer reemploys a retiree;
(ii) whether the reemployment is subject to Subsection (3)(b) or (4) of this section; and
(iii) of any election by the retiree under Subsection (4).
(b) A participating employer shall certify to the office whether the position of an
elected official is or is not full time.
(c) A participating employer is liable to the office for a payment or failure to make a
payment in violation of this section.
(d) If a participating employer fails to notify the office in accordance with this section,
the participating employer is immediately subject to a compliance audit by the office.
(7) (a) The office shall immediately cancel the retirement allowance of a retiree in
accordance with Subsection (7)(b) if the office receives notice or learns of:
(i) the reemployment of a retiree in violation of Subsection (3); or
(ii) the election of a reemployed retiree under Subsection (4)(a).
(b) If the retiree is eligible for retirement coverage in the reemployed position, the
office shall cancel the allowance of a retiree subject to Subsection (7)(a), and reinstate the
retiree to active member status on the first day of the month following the date of:
(i) reemployment if the retiree is subject to Subsection (3); or
(ii) an election by an employee under Subsection (4)(a).
(c) If the retiree is not otherwise eligible for retirement coverage in the reemployed
position:
(i) the office shall cancel the allowance of a retiree subject to Subsection (7)(a)(i); and
(ii) the participating employer shall pay the amortization rate to the office on behalf of
the retiree.
(8) (a) A retiree subject to Subsection (7)(b) who retires within two years from the date
of reemployment:
(i) is not entitled to a recalculated retirement benefit; and
(ii) will resume the allowance that was being paid at the time of cancellation.
(b) Subject to Subsection (2), a retiree who is reinstated to active membership under
Subsection (7) and who retires two or more years after the date of reinstatement to active
membership shall:
(i) resume receiving the allowance that was being paid at the time of cancellation; and
(ii) receive an additional allowance based on the formula in effect at the date of the
subsequent retirement for all service credit accrued between the first and subsequent retirement
dates.
(9) (a) A retiree subject to this section shall report to the office the status of the
reemployment under Subsection (3) or (4).
(b) If the retiree fails to inform the office of an election under Subsection (4), the office
shall withhold one month's benefit for each month the retiree fails to inform the office under
Subsection (9)(a).
(10) A retiree shall be considered as having completed the one-year separation from
employment with a participating employer required under Subsection (3)(a), if the retiree:
(a) before retiring:
(i) was employed with a participating employer as a public safety service employee as
defined in Section 
49-14-102
, 
49-15-102
, or 
49-23-102
;
(ii) and during the employment under Subsection (10)(a)(i), suffered a physical injury
resulting from external force or violence while performing the duties of the employment, and
for which injury the retiree would have been approved for total disability in accordance with
the provisions under Title 49, Chapter 21, Public Employees' Long-Term Disability Act, if
years of service are not considered;
(iii) had less than 30 years of service credit but had sufficient service credit to retire,
with an unreduced allowance making the public safety service employee ineligible for
long-term disability payments under Title 49, Chapter 21, Public Employees' Long-Term
Disability Act, or a substantially similar long-term disability program; and
(iv) does not receive any long-term disability benefits from any participating employer;
and
(b) is reemployed by a different participating employer.
(11) The board may make rules to implement this section.
Section 4. Section 
49-11-601
 is amended to read:
49-11-601.
Payment of employer contributions -- Penalties for failure to comply --
Adjustments to be made.
(1) The employer contributions, fees, premium taxes, contribution adjustments, and
other required payments shall be paid to the office by the participating employer as determined
by the executive director.
(2) A participating employer that fails to withhold the amount of any member
contributions, as soon as administratively possible, shall also pay the member contributions to
the office out of its own funds.
(3) Except as limited by Subsections (6) and (7), if a participating employer does not
make the contributions required by this title within [
] 
 days of the end of the pay period,
the participating employer is liable to the office as provided in Section 
49-11-604
 for:
(a) delinquent contributions;
(b) interest on the delinquent contributions as calculated under Section 
49-11-503
; and
(c) a [
12% per annum penalty on delinquent contributions.
] 
penalty equal to the greater
of:
(i) $250; or
(ii) 50% of the total contributions for the employees for the period of the reporting
error.
(4) The executive director may waive all or any part of the interest, penalties, expenses,
and fees if the executive director finds there were extenuating circumstances surrounding the
participating employer's failure to comply with this section.
(5) Contributions made in error will be refunded to the participating employer or
member that made the contributions.
(6) (a) An employer described in Subsection 
49-12-202
(2)(c) or (d), or Subsection
49-13-202
(2)(c), (d), or (e) that paid retirement benefits to an employee or retiree that were not
required by this title may offer the retirement benefits paid to the employee as a substantial
substitute to service credit and retirement benefits that may have been earned by the employee
under this title.
(b) An employee who received retirement benefits under Subsection (6)(a) may sign an
affidavit that:
(i) acknowledges the substantial substitute received by the employee under Subsection
(6)(a); and
(ii) irrevocably relinquishes service credit and retirement benefits that may have
accrued to the employee under this title effective from the employee's date of employment with
the employer described in Subsection (6)(a) to the date of the employer's election under Section
49-12-202
 or 
49-13-202
.
(c) Nothing in this section shall be construed to diminish an employer's right to recover
past retirement benefits other than Social Security, paid to an employee or retiree, in error or
under mistaken belief that the employer was not a participating employer.
(7) If the employer files with the office an irrevocable written relinquishment of service
credit signed by the member or retiree:
(a) the office shall proportionally reduce any delinquent contributions, penalties, fees,
or interest assessed against a participating employer in connection with a member or retiree
described in Subsection (6)(a); and
(b) the system has no liability to the employee for benefits relinquished under
Subsection (6)(b).
Section 5. Section 
49-11-603
 is amended to read:
49-11-603.
Participating employer to report and certify -- Time limit -- Penalties
for failure to comply.
(1) As soon as administratively possible, but in no event later than [
] 
 days after
the end of each pay period, a participating employer shall report and certify to the office:
(a) the eligibility for service credit accrual of:
(i) each current employee;
(ii) each new employee as the new employee begins employment; and
(iii) any changes to eligibility for service credit accrual of each employee;
(b) the compensation of each current employee eligible for service credit; and
(c) other factors relating to the proper administration of this title as required by the
executive director.
(2) Each participating employer shall submit the reports required under Subsection (1)
in a format approved by the office.
(3) A participating employer shall be liable to the office for:
(a) any liabilities and expenses, including administrative expenses and the cost of
increased benefits to employees, resulting from the participating employer's failure to correctly
report and certify records under this section;
(b) a penalty equal to 
the greater of:
(i)
 $250
;
 or
(ii)
 50% of the total contributions for the employees for the period of the reporting
error[
, whichever is greater
]; and
(c) attorney fees.
(4) The executive director may waive all or any part of the interest, penalties, expenses,
and fees if the executive director finds there were extenuating circumstances surrounding the
participating employer's failure to comply with this section.
(5) The executive director may estimate the length of service, compensation, or age of
any employee, if that information is not contained in the records.
Section 6. Section 
49-11-612
 is amended to read:
49-11-612.
Domestic relations order benefits -- Nonassignability of benefits or
payments -- Exemption from legal process.
(1) As used in this section, "domestic relations order benefits" means:
(a) an allowance;
(b) a defined contribution account established under:
(i) Part 8, Defined Contribution Plans;
(ii) Chapter 22, New Public Employees' Tier II Contributory Retirement Act; or
(iii) Chapter 23, New Public Safety and Firefighter Tier II Contributory Retirement
Act;
(c) a continuing monthly death benefit established under:
(i) Chapter 14, Part 5, Death Benefit;
(ii) Chapter 15, Part 5, Death Benefit;
(iii) Chapter 16, Part 5, Death Benefit;
(iv) Chapter 17, Part 5, Death Benefit;
(v) Chapter 18, Part 5, Death Benefit; or
(vi) Chapter 19, Part 5, Death Benefit;
(d) a lump sum death benefit provided under:
(i) Chapter 12, Part 5, Death Benefit;
(ii) Chapter 13, Part 5, Death Benefit;
(iii) Chapter 22, Part 5, Death Benefit; or
(iv) Chapter 23, Part 5, Death Benefit; or
(e) a refund of member contributions upon termination.
(2) Except as provided in Subsections (3), (4), and (5), the right of any member, retiree,
participant, covered individual, or beneficiary to any retirement benefit, retirement payment, or
any other retirement right accrued or accruing under this title and the assets of the funds created
by this title are not subject to alienation or assignment by the member, retiree, participant, or
their beneficiaries and are not subject to attachment, execution, garnishment, or any other legal
or equitable process.
(3) The office may, upon the request of the retiree, deduct from the retiree's allowance
insurance premiums or other dues payable on behalf of the retiree, but only to those entities
that have received the deductions prior to February 1, 2002.
(4) (a) The office shall provide for the division of domestic relations order benefits
with former spouses and family members under an order of a court of competent jurisdiction
with respect to domestic relations matters on file with the office.
(b) The court order shall specify the manner in which the domestic relations order
benefits shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
(c) Domestic relations order benefits split under a domestic relations order are subject
to the following:
(i) the amount to be paid or the period for which payments shall be made under the
original domestic relations order may not be altered if the alteration affects the actuarial
calculation of the allowance;
(ii) payments to an alternate payee shall begin at the time the member or beneficiary
begins receiving payments; and
(iii) the alternate payee shall receive payments in the same form as allowances received
by the member or beneficiary.
(d) To be valid, a court order under this section must be received by the office within
12 months of the death of the member.
(e) A court order under this section may not require and may not be interpreted in any
way to require the office to provide any type of benefit or any option not otherwise provided
under this title.
(5) In accordance with federal law, the board may deduct the required amount from any
benefit, payment, or other right accrued or accruing to any member or beneficiary of a system,
plan, or program under this title to offset any amount that member or beneficiary owes to a
system, plan, or program administered by the board.
(6) The board shall make rules to implement this section.
Section 7. Section 
49-11-616
 is amended to read:
49-11-616.
Benefits information.
(1) The office shall provide written general information to each participating employer
concerning benefits available under this title.
(2) (a) A participating employer shall provide the information under Subsection (1) to
each eligible employee:
(i) immediately upon termination of service, leave of absence, commencement of
long-term disability benefits, or retirement; and
(ii) in person or, if the employee is unavailable to receive the information in person, by
mailing the information to the employee's last known address.
(b) (i) Each participating employer shall maintain the records necessary to demonstrate
that the employer has provided the information outlined in Subsection (1) as required in
Subsection (2)(a).
(ii) The records shall be made available to the office upon request.
(3) (a) The office shall provide each participating employer with a form to be signed by
each employee to verify that the employee has been given in person the information required by
this section.
(b) [
A copy of the signed form shall be immediately forwarded to the office by the
participating employer or the employee. (c)
] If an employer provides information under
Subsection (1) by mail as provided in Subsection (2)(a)(ii), the employer shall:
(i) indicate on the form that the information was mailed to the employee and the
address to which the information was mailed; [
and
]
(ii) [
immediately forward the form to the office.
] 
maintain the records necessary to
demonstrate that the employer complied with the requirements under this Subsection (3); and
(iii) make the records available to the office upon request.
Section 8. Section 
49-12-102
 is amended to read:
49-12-102.
Definitions.
As used in this chapter:
(1) "Benefits normally provided":
(a) means a benefit offered by an employer, including:
(i) a leave benefit of any kind;
(ii) insurance coverage of any kind if the employer pays some or all of the premium for
the coverage; [
and
]
(iii) employer contributions to a health savings account, health reimbursement account,
health reimbursement arrangement, or medical expense reimbursement plan; and
[
(iii)
] 
(iv)
 a retirement benefit of any kind if the employer pays some or all of the cost
of the benefit; and
(b) does not include:
(i) a payment for Social Security;
(ii) workers' compensation insurance;
(iii) unemployment insurance;
(iv) a payment for Medicare;
(v) a payment or insurance required by federal or state law that is similar to a payment
or insurance listed in Subsection (1)(b)(i), (ii), (iii), or (iv);
(vi) any other benefit that state or federal law requires an employer to provide an
employee who would not otherwise be eligible to receive the benefit; or
(vii) any benefit that an employer provides an employee in order to avoid a penalty or
tax under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 and the Health
Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and related federal
regulations, including a penalty imposed by Internal Revenue Code, Section 4980H.
(2) (a) "Compensation" means, except as provided in Subsection (2)(c), the total
amount of payments made by a participating employer to a member of this system for services
rendered to the participating employer, including:
(i) bonuses;
(ii) cost-of-living adjustments;
(iii) other payments currently includable in gross income and that are subject to Social
Security deductions, including any payments in excess of the maximum amount subject to
deduction under Social Security law;
(iv) amounts that the member authorizes to be deducted or reduced for salary deferral
or other benefits authorized by federal law; and
(v) member contributions.
(b) "Compensation" for purposes of this chapter may not exceed the amount allowed
under Internal Revenue Code, Section 401(a)(17).
(c) "Compensation" does not include:
(i) the monetary value of remuneration paid in kind, including a residence or use of
equipment;
(ii) the cost of any employment benefits paid for by the participating employer;
(iii) compensation paid to a temporary employee, an exempt employee, or an employee
otherwise ineligible for service credit;
(iv) any payments upon termination, including accumulated vacation, sick leave
payments, severance payments, compensatory time payments, or any other special payments; or
(v) any allowances or payments to a member for costs or expenses paid by the
participating employer, including automobile costs, uniform costs, travel costs, tuition costs,
housing costs, insurance costs, equipment costs, and dependent care costs.
(d) The executive director may determine if a payment not listed under this Subsection
(2) falls within the definition of compensation.
(3) "Final average salary" means the amount computed by averaging the highest five
years of annual compensation preceding retirement subject to Subsections (3)(a), (b), (c), and
(d).
(a) Except as provided in Subsection (3)(b), the percentage increase in annual
compensation in any one of the years used may not exceed the previous year's compensation by
more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power
of the dollar during the previous year, as measured by a United States Bureau of Labor
Statistics Consumer Price Index average as determined by the board.
(b) In cases where the participating employer provides acceptable documentation to the
office, the limitation in Subsection (3)(a) may be exceeded if:
(i) the member has transferred from another agency; or
(ii) the member has been promoted to a new position.
(c) If the member retires more than six months from the date of termination of
employment, the member is considered to have been in service at the member's last rate of pay
from the date of the termination of employment to the effective date of retirement for purposes
of computing the member's final average salary only.
(d) If the member has less than five years of service credit in this system, final average
salary means the average annual compensation paid to the member during the full period of
service credit.
(4) "Participating employer" means an employer which meets the participation
requirements of Sections 
49-12-201
 and 
49-12-202
.
(5) (a) "Regular full-time employee" means an employee whose term of employment
for a participating employer contemplates continued employment during a fiscal or calendar
year and whose employment normally requires an average of 20 hours or more per week,
except as modified by the board, and who receives benefits normally provided by the
participating employer.
(b) "Regular full-time employee" includes:
(i) a teacher whose term of employment for a participating employer contemplates
continued employment during a school year and who teaches half-time or more;
(ii) a classified school employee:
(A) who is hired before July 1, 2013; and
(B) whose employment normally requires an average of 20 hours per week or more for
a participating employer, regardless of benefits provided;
(iii) an officer, elective or appointive, who earns $500 or more per month, indexed as
of January 1, 1990, as provided in Section 
49-12-407
;
(iv) a faculty member or employee of an institution of higher education who is
considered full-time by that institution of higher education; and
(v) an individual who otherwise meets the definition of this Subsection (5) who
performs services for a participating employer through a professional employer organization or
similar arrangement.
(c) "Regular full-time employee" does not include a classified school employee:
(i) (A) who is hired on or after July 1, 2013; and
(B) who does not receive benefits normally provided by the participating employer
even if the employment normally requires an average of 20 hours per week or more for a
participating employer; or
(ii) (A) who is hired before July 1, 2013;
(B) who did not qualify as a regular full-time employee before July 1, 2013;
(C) who does not receive benefits normally provided by the participating employer;
and
(D) whose employment hours are increased on or after July 1, 2013, to require an
average of 20 hours per week or more for a participating employer.
(6) "System" means the Public Employees' Contributory Retirement System created
under this chapter.
(7) "Years of service credit" means:
(a) a period consisting of 12 full months as determined by the board;
(b) a period determined by the board, whether consecutive or not, during which a
regular full-time employee performed services for a participating employer, including any time
the regular full-time employee was absent on a paid leave of absence granted by a participating
employer or was absent in the service of the United States government on military duty as
provided by this chapter; or
(c) the regular school year consisting of not less than eight months of full-time service
for a regular full-time employee of an educational institution.
Legislative Review Note
 as of 11-13-14 1:06 PM
Office of Legislative Research and General Counsel