Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 19 (2016GS)

Sponsor

Sen. Weiler, T.

Final action

Governor Signed 3/25/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• defines terms;
• allows a participating employer to participate in phased retirement for a retiree who has not completed the one-year employment separation requirement;
• requires a participating employer that offers phased retirement to establish written policies and enter into a written agreement with the retiree;
• provides for retiree eligibility for phased retirement and establishes restrictions;
• provides for participating employer and retiree reporting;
• provides penalties;
• allows the Legislature to make changes to the program;
• allows the Utah State Retirement Board to make related rules;
• provides for a sunset of the phased retirement provisions; and
• makes technical changes.

Every vote on this bill

Bill text

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Mon, Jan 25, 2016 at 4:10 PM by lpoole.
PHASED RETIREMENT
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Todd Weiler
House Sponsor:
 Kraig Powell
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 enacting
phased retirement provisions.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ allows a participating employer to participate in phased retirement for a retiree who
has not completed the one-year employment separation requirement;
▸ requires a participating employer that offers phased retirement to establish written
policies and enter into a written agreement with the retiree;
▸ provides for retiree eligibility for phased retirement and establishes restrictions;
▸ provides for participating employer and retiree reporting;
▸ provides penalties;
▸ allows the Legislature to make changes to the program;
▸ allows the Utah State Retirement Board to make related rules;
▸ provides for a sunset of the phased retirement provisions; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
49-11-505
, as last amended by Laws of Utah 2015, Chapters 243 and 256
ENACTS:
49-11-1201
, Utah Code Annotated 1953
49-11-1202
, Utah Code Annotated 1953
49-11-1203
, Utah Code Annotated 1953
49-11-1204
, Utah Code Annotated 1953
49-11-1205
, Utah Code Annotated 1953
49-11-1206
, Utah Code Annotated 1953
49-11-1207
, Utah Code Annotated 1953
49-11-1208
, Utah Code Annotated 1953
63I-1-249
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. 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[
.
]
; and
(iv) does not include a person who is working under a phased retirement agreement in
accordance with Section 
49-11-1201
.
(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
.
(d) (i) For purposes of this Subsection (1)(d), "affiliated emergency services worker"
means a person who is employed by a participating employer and who performs emergency
services for another participating employer that is a different agency in which the person:
(A) has been trained in techniques and skills required for the service the person
provides to the participating employer;
(B) continues to receive regular training required for the service;
(C) is on the rolls as a trained affiliated emergency services worker of the participating
employer; and
(D) provides ongoing service for a participating employer, which service may include
service as a volunteer firefighter, reserve law enforcement officer, search and rescue personnel,
emergency medical technician, ambulance personnel, park ranger, or public utilities worker.
(ii) A person who performs work or service but does not meet the requirements of
Subsection (1)(d)(i) is not an affiliated emergency services worker for purposes of this
Subsection (1)(d).
(iii) The office may not cancel the retirement allowance of a retiree who is employed as
an affiliated emergency services worker within one year of the retiree's retirement date if the
affiliated emergency services worker does not receive any compensation, except for:
(A) a nominal fee, stipend, discount, tax credit, voucher, or other fixed sum of money
or cash equivalent payment not tied to productivity and paid periodically for services;
(B) a length-of-service award;
(C) insurance policy premiums paid by the participating employer in the event of death
of an affiliated emergency services worker or a line-of-duty accidental death or disability; or
(D) reimbursement of expenses incurred in the performance of duties.
(iv) For purposes of Subsections (1)(d)(iii)(A) and (B), the total amount of any
discounts, tax credits, vouchers, and payments to a volunteer may not exceed $500 per month.
(v) Beginning January 1, 2016, the board shall adjust the amount under Subsection
(1)(d)(iv) 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.
(vi) The office shall cancel the retirement allowance of a retiree for the remainder of
the calendar year if employment as an affiliated emergency services worker with a participating
employer exceeds the limitation under Subsection (1)(d)(iv).
(vii) If a retiree is employed as an affiliated emergency services worker under the
provisions of Subsection (1)(d), the termination date of the employment as an affiliated
emergency services worker, 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).
(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.
(b) A participating employer who reemploys a retiree shall contribute to the office the
amortization rate if the reemployed retiree:
(i) has completed the one-year separation from employment with a participating
employer required under Subsection (3)(a); and
(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 2. Section 
49-11-1201
 is enacted to read:
Part 12. Phased Retirement
 49-11-1201.
Definitions.
As used in this part:
(1) "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 part-time position
were considered to be an eligible, full-time position within that system.
(2) "Full-time" means a:
(a) regular full-time 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 40 hours or more per week and who receives benefits normally
provided by the participating employer;
(b) teacher whose term of employment for a participating employer contemplates
continued employment during a school year and who teaches full time;
(c) firefighter service employee whose employment normally requires an average of
2,080 hours of regularly scheduled firefighter service per year; and
(d) public safety service employee whose employment normally requires an average of
2,080 hours of regularly scheduled public safety service per year.
(3) "Half-time" means a:
(a) regular 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 per week and who receives benefits normally
provided by the participating employer;
(b) teacher whose term of employment for a participating employer contemplates
continued employment during a school year and who teaches half time;
(c) firefighter service employee whose employment normally requires an average of
1,040 hours of regularly scheduled firefighter service per year; and
(d) public safety service employee whose employment normally requires an average of
1,040 hours of regularly scheduled public safety service per year.
(4) "Phased retirement" means continuing employment on a half-time basis of a retiree
with the same participating employer
Ŝ→ 
immediately
 ←Ŝ
after the retiree's retirement date while
256a 
the retiree receives
a reduced retirement allowance.
Section 3. Section 
49-11-1202
 is enacted to read:
 49-11-1202.
Phased retirement -- Voluntary participation -- Employer duties.
A participating employer may elect to participate in phased retirement for a retiree who
has not completed the one-year employment separation requirement under Section 
49-11-505
under the conditions established under this part, if the participating employer:
(1) establishes written policies and procedures for phased retirement that shall include
provisions for:
(a) granting and denying a request for phased retirement;
(b) needed approvals within the participating employer;
(c) time limits or other restrictions;
(d) identifying positions that may be included or excluded; and
(e) the elements of a written agreement described under Section 
49-11-1204
;
(2) enters into an agreement described under Section 
49-11-1204
;
(3) submits an application to the office for phased retirement on behalf of the parties of
the agreement described under Section 
49-11-1204
; and
(4) complies with this part.
Section 4. Section 
49-11-1203
 is enacted to read:
 49-11-1203.
Phased retirement -- Eligibility -- Restrictions -- Amortization rate.
(1) A retiree is eligible for employment with only one position for only one
participating employer under phased retirement following the retiree's retirement date if:
(a) the retiree:
(i) is eligible to retire and retires in accordance with this title;
(ii) has been employed full time, for not less than four years immediately before the
retiree's retirement date;
(iii) completes and submits all required retirement forms to the office; and
(iv) completes and submits any phased retirement forms required by rules established
under Section 
49-11-1207
; and
(b) the retiree and the participating employer enter into an agreement described under
Section 
49-11-1204
.
(2) For the period of the phased retirement:
(a) the retiree receives 50% of the retiree's monthly allowance;
(b) the participating employer employs the retiree on a half-time basis;
(c) a participating employer that employs the retiree shall contribute to the office the
amortization rate;
(d) the retiree may not receive an annual cost-of-living adjustment to the retiree's
allowance;
(e) any death benefits payable to a surviving spouse or other beneficiary shall be paid
based on 100% of the retiree's retirement allowance;
(f) the retiree may not receive any employer provided retirement benefits, service credit
accruals, or any retirement related contributions from the participating employer; and
(g) except as specified under this section, a retiree working under phased retirement
shall be treated in the same manner as any other part-time employee working a similar position
and number of hours with the participating employer, including:
(i) any non-retirement related benefits;
(ii) leave benefits;
(iii) medical benefits; and
(iv) other benefits.
Section 5. Section 
49-11-1204
 is enacted to read:
 49-11-1204.
Phased retirement agreements.
(1) The participating employer and a willing and eligible retiree shall enter into a
written agreement to participate in phased retirement.
(2) The agreement shall specify the period of the phased retirement and, at the
discretion of the agreeing parties, address:
(a) hours of work;
(b) job duties; and
(c) other arrangements related to the employment.
Section 6. Section 
49-11-1205
 is enacted to read:
 49-11-1205.
Reporting -- Penalties.
(1) (a) A participating employer shall, within five business days, notify the office if the
participating employer enters a phased retirement agreement with a retiree.
(b) A participating employer shall report to the office any change in status of the
phased retirement in accordance with rules established under Section 
49-11-1207
.
(c) 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.
(2) (a) A retiree who has entered into phased retirement agreement under this section
shall report to the office the phased retirement agreement in accordance with rules established
under Section 
49-11-1207
.
(b) If the retiree fails to report to the office as required under this section, the office
shall withhold one month's allowance for each month the retiree fails to make the report, in a
timely manner, required under Subsection (2)(a).
(3) If a retiree receives a retirement allowance or portion of a retirement allowance in
error or in violation of this part:
(a) the office shall cancel the retiree's retirement allowance; and
(b) the office shall recover any overpayment in accordance with Section 
49-11-607
.
(4) If a retiree or participating employer violates this part, including a failure to report
in accordance with this section, the retiree, participating employer, or both that are found to be
responsible for the violation are liable to the office for the amount of any allowance
overpayment, failure to make a required payment or contribution, or other amount needed to
correct an error or incorrect benefit resulting from the violation.
Section 7. Section 
49-11-1206
 is enacted to read:
 49-11-1206.
Reset of one year separation.
If a retiree is employed under phased retirement under this section, the termination date
of the phased retirement employment, 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 
49-11-505
(3)(a).
Section 8. Section 
49-11-1207
 is enacted to read:
 49-11-1207.
Phased retirement -- Adjustments or termination.
(1) The Legislature may make adjustments to or terminate the phased retirement option
created under this part, including:
(a) amending phased retirement eligibility, restrictions, scope, or duration provisions;
(b) closing phased retirement to additional retirees; or
(c) terminating phased retirement for all participating retirees.
(2) A participating employer and retiree enter into a phased retirement agreement
subject to the adjustments or termination reserved in this section.
Section 9. Section 
49-11-1208
 is enacted to read:
 49-11-1208.
Rulemaking.
The board may make rules to implement this part.
Section 10. Section 
63I-1-249
 is enacted to read:
 63I-1-249.
Repeal dates, Title 49.
Title 49, Chapter 11, Part 12, Phased Retirement, is repealed
Ŝ→ [
July 1, 2021
] 
January 1,
357a 
 ←Ŝ
.
Section 11. 
Effective date.
This bill takes effect on
Ŝ→ [
July 1, 2016.
] 
January 1, 2017.
 ←Ŝ
Legislative Review Note
Office of Legislative Research and General Counsel