Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 208 (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:
• requires the Utah State Retirement Board to increase certified employer contribution rates to reflect any increased costs from retirement benefit enhancements enacted during a general session or special session under specified conditions;
• amends the definition of "regular full-time employee" to exclude from retirement participation certain classified school employees who work on a contract for the purposes of vocational rehabilitation and the employment and training of people with significant disabilities; and
• makes technical changes.

Every vote on this bill

Bill text

RETIREMENT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Todd Weiler
House Sponsor: 
 Kraig Powell
LONG TITLE
General Description:
This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
certain retirement provisions.
Highlighted Provisions:
This bill:
▸ requires the Utah State Retirement Board to increase certified employer contribution
rates to reflect any increased costs from retirement benefit enhancements enacted
during a general session or special session under specified conditions;
▸ amends the definition of "regular full-time employee" to exclude from retirement
participation certain classified school employees who work on a contract for the
purposes of vocational rehabilitation and the employment and training of people
with significant disabilities; 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:
49-11-301
, as last amended by Laws of Utah 2004, Chapter 322
49-12-102
, as last amended by Laws of Utah 2015, Chapter 243
49-13-102
, as last amended by Laws of Utah 2014, Chapter 15
49-22-102
, 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 
49-11-301
 is amended to read:
49-11-301.
Creation -- Board to act as trustees of the fund -- Commingling and
pooling of funds -- Interest earnings -- Funded ratio.
(1) There is created a common trust fund known as the "Utah State Retirement
Investment Fund" for the purpose of enlarging the investment base and simplifying investment
procedures and functions.
(2) (a) The board shall act as trustees of the Utah State Retirement Investment Fund
and, through the executive director, may commingle and pool the funds and investments of any
system, plan, or program into the Utah State Retirement Investment Fund, if the principal
amounts of the participating funds do not lose their individual identity and are maintained as
separate trust funds on the books of the office.
(b) (i) In combining the investments of any fund, each of the participating funds shall
be credited initially with its share of the total assets transferred to the Utah State Retirement
Investment Fund.
(ii) The value of the transferred assets shall be calculated in accordance with generally
accepted accounting principles.
(c) Subsequent transfers of additional capital from participating funds shall be credited
similarly to its respective trust account.
(d) The income or principal or equity credit belonging to one participating fund may
not be transferred to another, except for the purpose of:
(i) actuarially recommended transfers in order to adjust employer contribution rates for
an employer that participates in both contributory and noncontributory systems; or
(ii) transfers which reflect the value of service credit accrued in different systems
during a member's career.
(3) The assets of the funds are for the exclusive benefit of the members, participants,
and covered individuals and may not be diverted or appropriated for any purpose other than
that permitted by this title.
(4) (a) Interest and other earnings shall be credited to each participating fund on a pro
rata equity position basis.
(b) (i) A portion of the interest and other earnings of the common trust fund may be
credited to a reserve account within the Utah State Retirement Investment Fund to meet
adverse experiences arising from investments or other contingencies.
(ii) Each participating fund shall retain its proportionate equity in the reserve account.
(5) (a) The actuarial funded ratio of the systems may reach and be maintained at 110%,
as determined by the board's actuary using assumptions adopted by the board, before the board
is required to certify a decrease in contribution rates.
(b) [
The
] 
Except as provided in Subsection (6), the
 board may not increase
contribution rates to attain an actuarial funded ratio greater than 100%.
(6) (a) The cost of any amendment to this title shall be included in the final
contribution rates adopted and certified by the board in accordance with Subsections
49-11-102
(14) and 
49-11-203
(1)(l).
(b) If a preliminary certified contribution rate approved by the board prior to an annual
general session or special session of the Legislature was maintained at a previous year's level
that is higher than the contribution rate calculated by the board's actuary for that year in
accordance with Subsection (5)(a), the board's final certified contribution rate shall be the sum
of the actuarially determined costs from any amendment to this title during the general session
or special session and the preliminary certified contribution rate.
Section 2. 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;
(iii) employer contributions to a health savings account, health reimbursement account,
health reimbursement arrangement, or medical expense reimbursement plan; and
(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[
.
]
; or
(iii) who is a person working on a contract:
(A) for the purposes of vocational rehabilitation and the employment and training of
people with significant disabilities; and
(B) that has been set aside from procurement requirements by the state pursuant to
Section 
63G-6a-805
 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
(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.
Section 3. Section 
49-13-102
 is amended to read:
49-13-102.
Definitions.
As used in this chapter:
(1) "Benefits normally provided" has the same meaning as defined in Section
49-12-102
.
(2) (a) Except as provided in Subsection (2)(c), "compensation" means 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; and
(iv) amounts that the member authorizes to be deducted or reduced for salary deferral
or other benefits authorized by federal law.
(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 three
years of annual compensation preceding retirement subject to the following:
(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 and for purposes of computing the member's final average salary only, 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.
(4) "Participating employer" means an employer which meets the participation
requirements of Sections 
49-13-201
 and 
49-13-202
.
(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 
49-13-407
;
(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[
.
]
; or
(iii) who is a person working on a contract:
(A) for the purposes of vocational rehabilitation and the employment and training of
people with significant disabilities; and
(B) that has been set aside from procurement requirements by the state pursuant to
Section 
63G-6a-805
 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
(6) "System" means the Public Employees' Noncontributory Retirement System.
(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.
Section 4. Section 
49-22-102
 is amended to read:
49-22-102.
 Definitions.
As used in this chapter:
(1) "Benefits normally provided" has the same meaning as defined in Section
49-12-102
.
(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 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) "Corresponding Tier I system" means the system or plan that would have covered
the member if the member had initially entered employment before July 1, 2011.
(4) "Final average salary" means the amount computed by averaging the highest five
years of annual compensation preceding retirement subject to Subsections (4)(a), (b), (c), and
(d).
(a) Except as provided in Subsection (4)(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 (4)(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.
(5) "Participating employer" means an employer which meets the participation
requirements of:
(a) Sections 
49-12-201
 and 
49-12-202
;
(b) Sections 
49-13-201
 and 
49-13-202
;
(c) Section 
49-19-201
; or
(d) Section 
49-22-201
 or 
49-22-202
.
(6) (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 appointive officer whose appointed position is full time as certified by the
participating employer;
(iv) the governor, the lieutenant governor, the state auditor, the state treasurer, the
attorney general, and a state legislator;
(v) an elected official not included under Subsection (6)(b)(iv) whose elected position
is full time as certified by the participating employer;
(vi) a faculty member or employee of an institution of higher education who is
considered full time by that institution of higher education; and
(vii) an individual who otherwise meets the definition of this Subsection (6) who
performs services for a participating employer through a professional employer organization or
similar arrangement.
(c) "Regular full-time employee" does not include:
(i) a firefighter service employee as defined in Section 
49-23-102
;
(ii) a public safety service employee as defined in Section 
49-23-102
;
(iii) a classified school employee:
(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
]
(iv) a classified school employee:
(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[
.
]
; or
(E) who is a person working on a contract:
(I) for the purposes of vocational rehabilitation and the employment and training of
people with significant disabilities; and
(II) that has been set aside from procurement requirements by the state pursuant to
Section 
63G-6a-805
 or the federal government pursuant to 41 U.S.C. Sec. 8501 et seq.
(7) "System" means the New Public Employees' Tier II Contributory Retirement
System created under this chapter.
(8) "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.
Section 5. 
Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
the date of veto override.
Legislative Review Note
Office of Legislative Research and General Counsel