Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 21 First Substitute (2017GS)

Sponsor

Sen. Hemmert, D.

Final action

Governor Signed 3/20/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies the responsibility for certain functions within the Utah Retirement Systems;
• modifies an exception to the postretirement reemployment restrictions;
• modifies certain retiree notification and benefit conversion provisions relating to retirement options affected by death or divorce;
• specifies additional names for the Public Employees' Benefit and Insurance Program; and
• makes technical changes.

Every vote on this bill

Bill text

RETIREMENT SYSTEMS AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Daniel Hemmert
House Sponsor: 
Jefferson Moss
LONG TITLE
General Description:
This bill modifies the Utah State Retirement and Insurance Benefit Act by amending
retirement and insurance provisions.
Highlighted Provisions:
This bill:
▸ modifies the responsibility for certain functions within the Utah Retirement
Systems;
▸ modifies an exception to the postretirement reemployment restrictions;
▸ modifies certain retiree notification and benefit conversion provisions relating to
retirement options affected by death or divorce;
▸ specifies additional names for the Public Employees' Benefit and Insurance
Program; 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:
49-11-602
, as last amended by Laws of Utah 2013, Chapter 109
49-11-603
, as last amended by Laws of Utah 2015, Chapter 243
49-11-1205
, as enacted by Laws of Utah 2016, Chapter 310
49-11-1207
, as enacted by Laws of Utah 2016, Chapter 310
49-12-402
, as last amended by Laws of Utah 2014, Chapter 15
49-13-402
, as last amended by Laws of Utah 2014, Chapter 15
49-20-103
, as renumbered and amended by Laws of Utah 2002, Chapter 250
49-22-305
, as last amended by Laws of Utah 2011, Chapter 439
49-23-304
, as last amended by Laws of Utah 2011, Chapter 439
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
49-11-602
 is amended to read:
49-11-602.
Participating employer to maintain records -- Time limit -- Penalties
for failure to comply.
(1) A participating employer shall:
(a) maintain records necessary to calculate benefits under this title and other records
necessary for proper administration of this title as required by the office; and
(b) maintain records that indicate whether an employee is receiving:
(i) a benefit under state or federal law that, under Subsection 
49-12-102
(1)(b)(vi) or
(vii), is excluded from the definition of benefits normally provided for purposes of Chapter 12,
Public Employees' Contributory Retirement Act, Chapter 13, Public Employees'
Noncontributory Retirement Act, or Chapter 22, New Public Employees' Tier II Contributory
Retirement Act; or
(ii) a benefit under a benefit package generally offered to similarly situated employees.
(2) A participating employer shall maintain the records required under Subsection (1)
until the earliest of:
(a) three years after the date of retirement of the employee from a system or plan;
(b) three years after the date of death of the employee; or
(c) 65 years from the date of employment with the participating employer.
(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 members, resulting from the participating employer's failure to maintain
records under this section; and
(b) a penalty equal to 1% of the participating employer's last month's contributions.
(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
] 
office
 may estimate the length of service, compensation, or
age of any member, if that information is not contained in the records.
(6) (a) A participating employer shall enroll an employee, make reports, submit
contributions, and provide other requested information electronically in a manner approved by
the office.
(b) A participating employer shall treat any information provided electronically or
otherwise by the office as subject to the confidentiality provisions of this title.
Section 2. 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 30 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; 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
] 
office
 may estimate the length of service, compensation, or
age of any employee, if that information is not contained in the records.
Section 3. Section 
49-11-1205
 is amended to read:
49-11-1205.
Postretirement reemployment restriction exceptions.
(1) (a) 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 (1)(a)(i), the retiree
does not receive any employer paid benefits, including:
(A) retirement service credit or retirement-related contributions;
(B) medical benefits;
(C) dental benefits;
(D) other insurance benefits except for workers' compensation as provided under Title
34A, Chapter 2, Workers' Compensation Act, Title 34A, Chapter 3, Utah Occupational Disease
Act, and withholdings required by federal or state law for social security, Medicare, and
unemployment insurance; or
(E) 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
.
(b) Beginning January 1, 2013, the board shall adjust the amounts under Subsection
(1)(a)(iii) 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.
(2) A retiree shall be considered as having completed the one-year separation from
employment with a participating employer required under Section 
49-11-1204
, 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 (2)(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 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 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.
(3) (a) 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:
(i) 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;
(ii) a length-of-service award;
(iii) 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
(iv) reimbursement of expenses incurred in the performance of duties.
(b) For purposes of Subsections (3)(a)(i) and (ii), the total amount of any discounts, tax
credits, vouchers, and payments to an affiliated emergency services worker may not exceed
$500 per month.
(c) Beginning January 1, 2016, the board shall adjust the amount under Subsection
(3)(b) 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.
(4) (a) If a retiree is reemployed under the provisions of Subsection (1) or (3), 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 Section 
49-11-1204
.
(b) 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 (1)(a)(iii) or (3)(b).
Section 4. Section 
49-11-1207
 is amended to read:
49-11-1207.
Postretirement reemployment -- Violations -- Penalties.
(1) (a) If the office receives notice or learns of the reemployment of a retiree in
violation of Section 
49-11-1204
 or 
49-11-1205
, the office shall:
(i) immediately cancel the retiree's retirement allowance;
(ii) keep the retiree's retirement allowance cancelled for the remainder of the calendar
year if the reemployment with a participating employer exceeded the limitation under
Subsection 
49-11-1205
(1)(a)(iii)
(A)
 or (3)(b); and
(iii) recover any overpayment resulting from the violation in accordance with the
provisions of Section 
49-11-607
 before the allowance may be reinstated.
(b) Reinstatement of an allowance following cancellation for a violation under this
section is subject to the procedures and provisions under Section 
49-11-1204
.
(2) If a retiree or participating employer failed to report reemployment in violation of
Section 
49-11-1206
, the retiree, participating employer, or both, who are found to be
responsible for the failure to report, are liable to the office for the amount of any overpayment
resulting from the violation.
(3) A participating employer is liable to the office for a payment or failure to make a
payment in violation of this part.
(4) If a participating employer fails to notify the office in accordance with Section
49-11-1206
, the participating employer is immediately subject to a compliance audit by the
office.
Section 5. Section 
49-12-402
 is amended to read:
49-12-402.
Service retirement plans -- Calculation of retirement allowance --
Social security limitations.
(1) (a) Except as provided under Section 
49-12-701
, retirees of this system may choose
from the six retirement options described in this section.
(b) Options Two, Three, Four, Five, and Six are modifications of the Option One
calculation.
(2) The Option One benefit is an annual allowance calculated as follows:
(a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
credit, the allowance is:
(i) an amount equal to 1.25% of the retiree's final average monthly salary multiplied by
the number of years of service credit accrued prior to July 1, 1975; plus
(ii) an amount equal to 2% of the retiree's final average monthly salary multiplied by
the number of years of service credit accrued on and after July 1, 1975.
(b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
each year of retirement from age 60 to age 65, unless the member has 30 or more years of
accrued credit in which event no reduction is made to the allowance.
(c) (i) Years of service includes any fractions of years of service to which the retiree
may be entitled.
(ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
service credit is within 1/10 of one year of the total years of service credit required for
retirement, the retiree shall be considered to have the total years of service credit required for
retirement.
(d) An Option One allowance is only payable to the member during the member's
lifetime.
(3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
by reducing an Option One benefit based on actuarial computations to provide the following:
(a) Option Two is a reduced allowance paid to and throughout the lifetime of the
retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
member contributions, the remaining balance of the retiree's member contributions shall be
paid in accordance with Sections 
49-11-609
 and 
49-11-610
.
(b) Option Three is a reduced allowance paid to and throughout the lifetime of the
retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
the lifetime of the retiree's lawful spouse at the time of retirement.
(c) Option Four is a reduced allowance paid to and throughout the lifetime of the
retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance paid
to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
(d) Option Five is a modification of Option Three so that if the lawful spouse at the
time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
time of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month following the month in which the:
(i) spouse died, if [
the application is
] 
notification and supporting documentation for the
death are
 received by the office within 90 days of the spouse's death; or
(ii) [
application is
] 
notification and supporting documentation for the death are
received by the office, if the [
application is
] 
notification and supporting documentation are
received by the office more than 90 days after the spouse's death.
(e) Option Six is a modification of Option Four so that if the lawful spouse at the time
of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month following the month in which the:
(i) spouse died, if [
the application is
] 
notification and supporting documentation for the
death are
 received by the office within 90 days of the spouse's death; or
(ii) [
application is
] 
notification and supporting documentation for the death are
received by the office, if the [
application is
] 
notification and supporting documentation are
received by the office more than 90 days after the spouse's death.
(4) (a) (i) The final average salary is limited in the computation of that part of an
allowance based on service rendered prior to July 1, 1967, during a period when the retiree
received employer contributions on a portion of compensation from an educational institution
toward the payment of the premium required on a retirement annuity contract with a public or
private system, organization, or company designated by the State Board of Regents to $4,800.
(ii) This limitation is not applicable to retirees who elected to continue in this system
by July 1, 1967.
(b) Periods of employment which are exempt from this system under Subsection
49-12-203
(1)(b), may be purchased by the member for the purpose of retirement only if all
benefits from a public or private system, organization, or company designated by the State
Board of Regents based on this period of employment are forfeited.
(5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
date, the retirement is canceled and the death shall be considered as that of a member before
retirement.
(b) Any payments made to the retiree shall be deducted from the amounts due to the
beneficiary.
(6) 
(a)
 If a retiree retires under either Option Five or Six and subsequently divorces, the
retiree may elect to convert the benefit to a Option One benefit at the time of divorce, if there is
no court order filed in the matter.
(b) A conversion to an Option One benefit under this Subsection (6) begins on the first
day of the month following the month in which the notification and supporting documentation
for the divorce are received by the office.
Section 6. Section 
49-13-402
 is amended to read:
49-13-402.
Service retirement plans -- Calculation of retirement allowance --
Social security limitations.
(1) (a) Except as provided under Section 
49-13-701
, retirees of this system may choose
from the six retirement options described in this section.
(b) Options Two, Three, Four, Five, and Six are modifications of the Option One
calculation.
(2) The Option One benefit is an allowance calculated as follows:
(a) If the retiree is at least 65 years of age or has accrued at least 30 years of service
credit, the allowance is an amount equal to 2% of the retiree's final average monthly salary
multiplied by the number of years of service credit accrued.
(b) If the retiree is less than 65 years of age, the allowance shall be reduced 3% for
each year of retirement from age 60 to age 65, plus a full actuarial reduction for each year of
retirement prior to age 60, unless the member has 30 or more years of accrued credit, in which
event no reduction is made to the allowance.
(c) (i) Years of service include any fractions of years of service to which the retiree
may be entitled.
(ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
service credit is within 1/10 of one year of the total years of service credit required for
retirement, the retiree shall be considered to have the total years of service credit required for
retirement.
(d) An Option One allowance is only payable to the member during the member's
lifetime.
(3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
by reducing an Option One benefit based on actuarial computations to provide the following:
(a) Option Two is a reduced allowance paid to and throughout the lifetime of the
retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
member contributions, the remaining balance of the retiree's member contributions shall be
paid in accordance with Sections 
49-11-609
 and 
49-11-610
.
(b) Option Three is a reduced allowance paid to and throughout the lifetime of the
retiree, and, upon the death of the retiree, the same reduced allowance paid to and throughout
the lifetime of the retiree's lawful spouse at the time of retirement.
(c) Option Four is a reduced allowance paid to and throughout the lifetime of the
retiree, and upon the death of the retiree, an amount equal to one-half of the retiree's allowance
paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
(d) Option Five is a modification of Option Three so that if the lawful spouse at the
time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
time of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month following the month in which the:
(i) spouse died, if [
the application is
] 
notification and supporting documentation for the
death are
 received by the office within 90 days of the spouse's death; or
(ii) [
application is
] 
notification and supporting documentation for the death are
received by the office, if the [
application is
] 
notification and supporting documentation are
received by the office more than 90 days after the spouse's death.
(e) Option Six is a modification of Option Four so that if the lawful spouse at the time
of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month following the month in which the:
(i) spouse died, if [
the application is
] 
notification and supporting documentation for the
death are
 received by the office within 90 days of the spouse's death; or
(ii) [
application is
] 
notification and supporting documentation for the death are
received by the office, if the [
application is
] 
notification and supporting documentation are
received by the office more than 90 days after the spouse's death.
(4) (a) (i) The final average salary is limited in the computation of that part of an
allowance based on service rendered prior to July 1, 1967, during a period when the retiree
received employer contributions on a portion of compensation from an educational institution
toward the payment of the premium required on a retirement annuity contract with a public or
private system, organization, or company designated by the State Board of Regents to $4,800.
(ii) This limitation is not applicable to retirees who elected to continue in the Public
Employees' Contributory Retirement System by July 1, 1967.
(b) Periods of employment which are exempt from this system as permitted under
Subsection 
49-13-203
(1)(b) may be purchased by the member for the purpose of retirement
only if all benefits from a public or private system, organization, or company designated by the
State Board of Regents based on this period of employment are forfeited.
(5) (a) If a retiree under Option One dies within 90 days after the retiree's retirement
date, the retirement is canceled and the death shall be considered as that of a member before
retirement.
(b) Any payments made to the retiree shall be deducted from the amounts due to the
beneficiary.
(6) 
(a)
 If a retiree retires under either Option Five or Six and subsequently divorces, the
retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
is no court order filed in the matter.
(b) A conversion to an Option One benefit under this Subsection (6) begins on the first
day of the month following the month in which the notification and supporting documentation
for the divorce are received by the office.
Section 7. Section 
49-20-103
 is amended to read:
49-20-103.
Creation of insurance program.
(1)
 There is created for the employees of the state, its educational institutions, and
political subdivisions the "Public Employees' Benefit and Insurance Program" within the office.
(2) The program may also be known and function as the Public Employees' Health
Program, PEHP, or PEHP Health and Benefits.
Section 8. Section 
49-22-305
 is amended to read:
49-22-305.
Defined benefit service retirement plans -- Calculation of retirement
allowance -- Social security limitations.
(1) (a) The retirees of this system may choose from the six retirement options described
in this section.
(b) Options Two, Three, Four, Five, and Six are modifications of the Option One
calculation.
(2) The Option One benefit is an annual allowance calculated as follows:
(a) If the retiree is at least 65 years of age or has accrued at least 35 years of service
credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
by the number of years of service credit accrued on and after July 1, 2011.
(b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
actuarial amount for each year of retirement from age 60 to age 65, unless the member has 35
or more years of accrued credit in which event no reduction is made to the allowance.
(c) (i) Years of service includes any fractions of years of service to which the retiree
may be entitled.
(ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
service credit is within one-tenth of one year of the total years of service credit required for
retirement, the retiree shall be considered to have the total years of service credit required for
retirement.
(d) An Option One allowance is only payable to the member during the member's
lifetime.
(3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
by reducing an Option One benefit based on actuarial computations to provide the following:
(a) Option Two is a reduced allowance paid to and throughout the lifetime of the
retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
member contributions, the remaining balance of the retiree's member contributions shall be
paid in accordance with Sections 
49-11-609
 and 
49-11-610
.
(b) Option Three is a reduced allowance paid to and throughout the lifetime of the
retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
the lifetime of the retiree's lawful spouse at the time of retirement.
(c) Option Four is a reduced allowance paid to and throughout the lifetime of the
retiree, and upon the death of the retiree, an amount equal to one-half of the retiree's allowance
is paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
(d) Option Five is a modification of Option Three so that if the lawful spouse at the
time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
time of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month 
following the month in which the
:
(i) [
following the month in which the
] spouse died, if [
the application is
] 
notification
and supporting documentation for the death are
 received by the office within 90 days of the
spouse's death; or
(ii) [
following the month in which the application is
] 
notification and supporting
documentation for the death are
 received by the office, if the [
application is
] 
notification and
supporting documentation are
 received by the office more than 90 days after the spouse's death.
(e) Option Six is a modification of Option Four so that if the lawful spouse at the time
of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month 
following the month in which the
:
(i) [
following the month in which the
] spouse died, if [
the application is
] 
notification
and supporting documentation for the death are
 received by the office within 90 days of the
spouse's death; or
(ii) [
following the month in which the application is
] 
notification and supporting
documentation for the death are
 received by the office, if the [
application is
] 
notification and
supporting documentation are
 received by the office more than 90 days after the spouse's death.
(4) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
date, the retirement is canceled and the death shall be considered as that of a member before
retirement.
(b) Any payments made to the retiree shall be deducted from the amounts due to the
beneficiary.
(5) 
(a)
 If a retiree retires under either Option Five or Six and subsequently divorces, the
retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
is no court order filed in the matter.
(b) A conversion to an Option One benefit under this Subsection (5) begins on the first
day of the month following the month in which the notification and supporting documentation
for the divorce are received by the office.
Section 9. Section 
49-23-304
 is amended to read:
49-23-304.
Defined benefit service retirement plans -- Calculation of retirement
allowance -- Social security limitations.
(1) (a) The retirees of this system may choose from the six retirement options described
in this section.
(b) Options Two, Three, Four, Five, and Six are modifications of the Option One
calculation.
(2) The Option One benefit is an annual allowance calculated as follows:
(a) If the retiree is at least 65 years of age or has accrued at least 25 years of service
credit, the allowance is an amount equal to 1.5% of the retiree's final average salary multiplied
by the number of years of service credit accrued on and after July 1, 2011.
(b) If the retiree is less than 65 years of age, the allowance shall be reduced by the full
actuarial amount for each year of retirement from age 60 to age 65, unless the member has 25
or more years of accrued credit in which event no reduction is made to the allowance.
(c) (i) Years of service includes any fractions of years of service to which the retiree
may be entitled.
(ii) At the time of retirement, if a retiree's combined years of actual, not purchased,
service credit is within 1/10 of one year of the total years of service credit required for
retirement, the retiree shall be considered to have the total years of service credit required for
retirement.
(d) An Option One allowance is only payable to the member during the member's
lifetime.
(3) The allowance payable under Options Two, Three, Four, Five, and Six is calculated
by reducing an Option One benefit based on actuarial computations to provide the following:
(a) Option Two is a reduced allowance paid to and throughout the lifetime of the
retiree, and, if the retiree receives less in annuity payments than the amount of the retiree's
member contributions, the remaining balance of the retiree's member contributions shall be
paid in accordance with Sections 
49-11-609
 and 
49-11-610
.
(b) Option Three is a reduced allowance paid to and throughout the lifetime of the
retiree, and, upon the death of the retiree, the same reduced allowance is paid to and throughout
the lifetime of the retiree's lawful spouse at the time of retirement.
(c) Option Four is a reduced allowance paid to and throughout the lifetime of the
retiree, and upon the death of the retiree, an amount equal to 1/2 of the retiree's allowance is
paid to and throughout the lifetime of the retiree's lawful spouse at the time of retirement.
(d) Option Five is a modification of Option Three so that if the lawful spouse at the
time of retirement predeceases the retiree, an allowance equivalent to the amount payable at the
time of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month 
following the month in which the
:
(i) [
following the month in which the
] spouse died, if [
the application is
] 
notification
and supporting documentation for the death are
 received by the office within 90 days of the
spouse's death; or
(ii) [
following the month in which the application is
] 
notification and supporting
documentation for the death are
 received by the office, if the [
application is
] 
notification and
supporting documentation are
 received by the office more than 90 days after the spouse's death.
(e) Option Six is a modification of Option Four so that if the lawful spouse at the time
of retirement predeceases the retiree, an allowance equivalent to the amount payable at the time
of initial retirement under Option One shall be paid to the retiree for the remainder of the
retiree's life, beginning on the first day of the month 
following the month in which the
:
(i) [
following the month in which the
] spouse died, if [
the application is
] 
notification
and supporting documentation for the death are
 received by the office within 90 days of the
spouse's death; or
(ii) [
following the month in which the application is
] 
notification and supporting
documentation for the death are
 received by the office, if the [
application is
] 
notification and
supporting documentation are
 received by the office more than 90 days after the spouse's death.
(4) (a) If a retiree under Option One dies within 120 days after the retiree's retirement
date, the retirement is canceled and the death shall be considered as that of a member before
retirement.
(b) Any payments made to the retiree shall be deducted from the amounts due to the
beneficiary.
(5) 
(a)
 If a retiree retires under either Option Five or Six and subsequently divorces, the
retiree may elect to convert the benefit to an Option One benefit at the time of divorce, if there
is no court order filed in the matter.
(b) A conversion to an Option One benefit under this Subsection (5) begins on the first
day of the month following the month in which the notification and supporting documentation
for the divorce are received by the office.
Section 10. 
Effective date.
This bill takes effect on July 1, 2017.