Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 19 (2025GS)

Sponsor

Sen. Balderree, Heidi

Final action

Governor Signed 3/19/2025

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• provides that employer nonelective contributions made on behalf of an employee to a defined contribution plan vest upon the member's termination of employment, if the member or the member's spouse is a military service member who receives permanent change of station or relocation orders outside the state;
• allows specified Utah National Guard personnel, including the adjutant general, to elect to be exempt from the retirement systems, allowing employer contributions to vest immediately; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

12
49-12-203
49-13-203
49-22-205
49-22-303
49-22-401
49-22-504
49-23-302
49-23-401
49-23-505
1
Utah Retirement Systems Amendments for Military Personnel
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Heidi Balderree
House Sponsor: Val L. Peterson
LONG TITLE
General Description:
This bill modifies the vesting requirements for employer contributions made to a defined 
contribution plan.
Highlighted Provisions:
This bill:
provides that employer nonelective contributions made on behalf of an employee to a 
defined contribution plan vest upon the member's termination of employment, if the 
member or the member's spouse is a military service member who receives permanent 
change of station or relocation orders outside the state;
allows specified Utah National Guard personnel, including the adjutant general, to elect to 
be exempt from the retirement systems, allowing employer contributions to vest 
immediately; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
49-12-203
, as last amended by Laws of Utah 2023, Chapter 512
49-13-203
, as last amended by Laws of Utah 2023, Chapter 512
49-22-205
, as last amended by Laws of Utah 2022, Chapter 171
49-22-303
, as last amended by Laws of Utah 2016, Chapter 227
49-22-401
, as last amended by Laws of Utah 2022, Chapter 171
49-23-302
, as last amended by Laws of Utah 2019, Chapter 484
49-23-401
, as last amended by Laws of Utah 2022, Chapter 171
ENACTS:
49-22-504
, Utah Code Annotated 1953
49-23-505
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1, Section 
49-12-203
 is amended to read:
49-12-203
. Exclusions from membership in system.
(1)
The following employees are not eligible for service credit in this system:
(a)
subject to the requirements of Subsection 
(2)
, an employee whose employment status 
is temporary in nature due to the nature or the type of work to be performed;
(b)
except as provided under Subsection 
(3)(a)
, an employee of an institution of higher 
education who participates in a retirement system with a public or private retirement 
system, organization, or company designated by the Utah Board of Higher Education, 
or the technical college board of trustees for an employee of each technical college, 
during any period in which required contributions based on compensation have been 
paid on behalf of the employee by the employer;
(c)
an employee serving as an exchange employee from outside the state for an employer 
who has not elected to make all of the employer's exchange employees eligible for 
service credit in this system;
(d)
an executive department head of the state, a member of the State Tax Commission, 
the Public Service Commission, and a member of a full-time or part-time board or 
commission who files a formal request for exemption;
(e)
an employee of the Department of Workforce Services who is covered under another 
retirement system allowed under 
Title 35A, Chapter 4, Employment Security Act
;
(f)
an employee who is employed on or after July 1, 2009, with an employer that has 
elected, prior to July 1, 2009, to be excluded from participation in this system under 
Subsection 
49-12-202(2)(c)
;
(g)
an employee who is employed on or after July 1, 2014, with an employer that has 
elected, prior to July 1, 2014, to be excluded from participation in this system under 
Subsection 
49-12-202(2)(d)
;
(h)
an employee who is employed with a withdrawing entity that has elected under 
Section 
49-11-623
, prior to January 1, 2017, to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-623(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-623(3)(b)
;
(i)
an employee described in Subsection 
(1)(i)(i)
 or 
(ii)
 who is employed with a 
withdrawing entity that has elected under Section 
49-11-624
, before January 1, 2018, 
to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-624(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-624(3)(b)
;
(j)
an employee who is employed with a withdrawing entity that has elected under 
Section 
49-11-625
, before July 1, 2022, to exclude all employees from participation 
in this system; or
(k)
an employee who is employed with a withdrawing entity that elects under Section 
49-11-626
 to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-626(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-626(3)(b)
.
(2)
If an employee whose status is temporary in nature due to the nature of type of work to 
be performed:
(a)
is employed for a term that exceeds six months and the employee otherwise qualifies 
for service credit in this system, the participating employer shall report and certify to 
the office that the employee is a regular full-time employee effective the beginning of 
the seventh month of employment; or
(b)
was previously terminated prior to being eligible for service credit in this system and 
is reemployed within three months of termination by the same participating 
employer, the participating employer shall report and certify that the member is a 
regular full-time employee when the total of the periods of employment equals six 
months and the employee otherwise qualifies for service credits in this system.
(3)
(a)
Upon cessation of the participating employer contributions, an employee under 
Subsection 
(1)(b)
 is eligible for service credit in this system.
(b)
Notwithstanding the provisions of Subsection 
(1)(f)
, any eligibility for service credit 
earned by an employee under this chapter before July 1, 2009 is not affected under 
Subsection 
(1)(f)
.
(c)
Notwithstanding the provisions of Subsection 
(1)(g)
, any eligibility for service credit 
earned by an employee under this chapter before July 1, 2014, is not affected under 
Subsection 
(1)(g)
.
(4)
Upon filing a written request for exemption with the office, the following employees 
shall be exempt from coverage under this system:
(a)
a full-time student or the spouse of a full-time student and individuals employed in a 
trainee relationship;
(b)
an elected official;
(c)
an executive department head of the state, a member of the State Tax Commission, a 
member of the Public Service Commission, and a member of a full-time or part-time 
board or commission;
(d)
an employee of the Governor's Office of Planning and Budget;
(e)
an employee of the Governor's Office of Economic Opportunity;
(f)
an employee of the Commission on Criminal and Juvenile Justice;
(g)
an employee of the Governor's Office;
(h)
an employee of the Public Lands Policy Coordinating Office, created in Section 
63L-11-201
;
(i)
an employee of the State Auditor's Office;
(j)
an employee of the State Treasurer's Office;
(k)
any other member who is permitted to make an election under Section 
49-11-406
;
(l)
a person appointed as a city manager or chief city administrator or another person 
employed by a municipality, county, or other political subdivision, who is an at-will 
employee;
(m)
an employee of an interlocal cooperative agency created under 
Title 11, Chapter 13, 
Interlocal Cooperation Act
, who is engaged in a specialized trade customarily 
provided through membership in a labor organization that provides retirement 
benefits to the organization's members;
 and
(n)
an employee serving as an exchange employee from outside the state for an 
employer who has elected to make all of the employer's exchange employees eligible 
for service credit in this system
.
; and
(o)
the adjutant general of the Utah National Guard appointed under Section 
39A-1-201
and each individual listed in Subsection 
39A-1-203(1)
.
(5)
(a)
Each participating employer shall prepare and maintain a list designating those 
positions eligible for exemption under Subsection 
(4)
.
(b)
An employee may not be exempted unless the employee is employed in an exempted 
position designated by the participating employer.
(6)
(a)
In accordance with this section, Section 
49-13-203
, and Section 
49-22-205
, a 
municipality, county, or political subdivision may not exempt a total of more than 50 
positions or a number equal to 10% of the eligible employees of the municipality, 
county, or political subdivision, whichever is less.
(b)
A municipality, county, or political subdivision may exempt at least one regular 
full-time employee.
(7)
Each participating employer shall:
(a)
maintain a list of employee exemptions; and
(b)
update the employee exemptions in the event of any change.
(8)
The office may make rules to implement this section.
(9)
An employee's exclusion, exemption, participation, or election described in this section:
(a)
shall be made in accordance with this section; and
(b)
is subject to requirements under federal law and rules made by the board.
Section 2, Section 
49-13-203
 is amended to read:
49-13-203
. Exclusions from membership in system.
(1)
The following employees are not eligible for service credit in this system:
(a)
subject to the requirements of Subsection 
(2)
, an employee whose employment status 
is temporary in nature due to the nature or the type of work to be performed;
(b)
except as provided under Subsection 
(3)(a)
, an employee of an institution of higher 
education who participates in a retirement system with a public or private retirement 
system, organization, or company designated by the Utah Board of Higher Education, 
or the technical college board of trustees for an employee of each technical college, 
during any period in which required contributions based on compensation have been 
paid on behalf of the employee by the employer;
(c)
an employee serving as an exchange employee from outside the state for an employer 
who has not elected to make all of the employer's exchange employees eligible for 
service credit in this system;
(d)
an executive department head of the state or a legislative director, senior executive 
employed by the governor's office, a member of the State Tax Commission, a 
member of the Public Service Commission, and a member of a full-time or part-time 
board or commission who files a formal request for exemption;
(e)
an employee of the Department of Workforce Services who is covered under another 
retirement system allowed under 
Title 35A, Chapter 4, Employment Security Act
;
(f)
an employee who is employed with an employer that has elected to be excluded from 
participation in this system under Subsection 
49-13-202(5)
, effective on or after the 
date of the employer's election under Subsection 
49-13-202(5)
;
(g)
an employee who is employed with a withdrawing entity that has elected under 
Section 
49-11-623
, prior to January 1, 2017, to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-623(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-623(3)(b)
;
(h)
an employee described in Subsection 
(1)(h)(i)
 or 
(ii)
 who is employed with a 
withdrawing entity that has elected under Section 
49-11-624
, before January 1, 2018, 
to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-624(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-624(3)(b)
;
(i)
an employee who is employed with a withdrawing entity that has elected under 
Section 
49-11-625
, before July 1, 2022, to exclude all employees from participation 
in this system; or
(j)
an employee who is employed with a withdrawing entity that elects under Section 
49-11-626
 to exclude:
(i)
new employees from participation in this system under Subsection 
49-11-626(3)(a)
; 
or
(ii)
all employees from participation in this system under Subsection 
49-11-626(3)(b)
.
(2)
If an employee whose status is temporary in nature due to the nature of type of work to 
be performed:
(a)
is employed for a term that exceeds six months and the employee otherwise qualifies 
for service credit in this system, the participating employer shall report and certify to 
the office that the employee is a regular full-time employee effective the beginning of 
the seventh month of employment; or
(b)
was previously terminated prior to being eligible for service credit in this system and 
is reemployed within three months of termination by the same participating 
employer, the participating employer shall report and certify that the member is a 
regular full-time employee when the total of the periods of employment equals six 
months and the employee otherwise qualifies for service credits in this system.
(3)
(a)
Upon cessation of the participating employer contributions, an employee under 
Subsection 
(1)(b)
 is eligible for service credit in this system.
(b)
Notwithstanding the provisions of Subsection 
(1)(f)
, any eligibility for service credit 
earned by an employee under this chapter before the date of the election under 
Subsection 
49-13-202(5)
 is not affected under Subsection 
(1)(f)
.
(4)
Upon filing a written request for exemption with the office, the following employees 
shall be exempt from coverage under this system:
(a)
a full-time student or the spouse of a full-time student and individuals employed in a 
trainee relationship;
(b)
an elected official;
(c)
an executive department head of the state, a member of the State Tax Commission, a 
member of the Public Service Commission, and a member of a full-time or part-time 
board or commission;
(d)
an employee of the Governor's Office of Planning and Budget;
(e)
an employee of the Governor's Office of Economic Opportunity;
(f)
an employee of the Commission on Criminal and Juvenile Justice;
(g)
an employee of the Governor's Office;
(h)
an employee of the State Auditor's Office;
(i)
an employee of the State Treasurer's Office;
(j)
any other member who is permitted to make an election under Section 
49-11-406
;
(k)
a person appointed as a city manager or chief city administrator or another person 
employed by a municipality, county, or other political subdivision, who is an at-will 
employee;
(l)
an employee of an interlocal cooperative agency created under 
Title 11, Chapter 13, 
Interlocal Cooperation Act
, who is engaged in a specialized trade customarily 
provided through membership in a labor organization that provides retirement 
benefits to its members;
 and
(m)
an employee serving as an exchange employee from outside the state for an 
employer who has elected to make all of the employer's exchange employees eligible 
for service credit in this system
.
; and
(n)
the adjutant general of the Utah National Guard appointed under Section 
39A-1-201
and each individual listed in Subsection 
39A-1-203(1)
.
(5)
(a)
Each participating employer shall prepare and maintain a list designating those 
positions eligible for exemption under Subsection 
(4)
.
(b)
An employee may not be exempted unless the employee is employed in a position 
designated by the participating employer.
(6)
(a)
In accordance with this section, Section 
49-12-203
, and Section 
49-22-205
, a 
municipality, county, or political subdivision may not exempt a total of more than 50 
positions or a number equal to 10% of the eligible employees of the municipality, 
county, or political subdivision, whichever is less.
(b)
A municipality, county, or political subdivision may exempt at least one regular 
full-time employee.
(7)
Each participating employer shall:
(a)
maintain a list of employee exemptions; and
(b)
update the employee exemptions in the event of any change.
(8)
The office may make rules to implement this section.
(9)
An employee's exclusion, exemption, participation, or election described in this section:
(a)
shall be made in accordance with this section; and
(b)
is subject to requirements under federal law and rules made by the board.
Section 3, Section 
49-22-205
 is amended to read:
49-22-205
. Exemptions from participation in system.
(1)
Upon filing a written request for exemption with the office, the following employees are 
exempt from participation in the system as provided in this section:
(a)
an executive department head of the state;
(b)
a member of the State Tax Commission;
(c)
a member of the Public Service Commission;
(d)
a member of a full-time or part-time board or commission;
(e)
an employee of the Governor's Office of Planning and Budget;
(f)
an employee of the Governor's Office of Economic Opportunity;
(g)
an employee of the Commission on Criminal and Juvenile Justice;
(h)
an employee of the Governor's Office;
(i)
an employee of the State Auditor's Office;
(j)
an employee of the State Treasurer's Office;
(k)
any other member who is permitted to make an election under Section 
49-11-406
;
(l)
a person appointed as a city manager or appointed as a city administrator or another 
at-will employee of a municipality, county, or other political subdivision;
(m)
an employee of an interlocal cooperative agency created under 
Title 11, Chapter 13, 
Interlocal Cooperation Act
, who is engaged in a specialized trade customarily 
provided through membership in a labor organization that provides retirement 
benefits to its members;
 and
(n)
an employee serving as an exchange employee from outside the state for an 
employer who has elected to make all of the employer's exchange employees eligible 
for service credit in this system
.
; and
(o)
the adjutant general of the Utah National Guard appointed under Section 
39A-1-201
and each individual listed in Subsection 
39A-1-203(1)
.
(2)
(a)
A participating employer shall prepare and maintain a list designating those 
positions eligible for exemption under Subsection 
(1)
.
(b)
An employee may not be exempted unless the employee is employed in a position 
designated by the participating employer under Subsection 
(1)
.
(3)
(a)
In accordance with this section, Section 
49-12-203
, and Section 
49-13-203
, a 
municipality, county, or political subdivision may not exempt a total of more than 50 
positions or a number equal to 10% of the eligible employees of the municipality, 
county, or political subdivision, whichever is less.
(b)
A municipality, county, or political subdivision may exempt at least one regular 
full-time employee.
(4)
Each participating employer shall:
(a)
maintain a list of employee exemptions; and
(b)
update an employee exemption in the event of any change.
(5)
Beginning on the effective date of the exemption for an employee who elects to be 
exempt in accordance with Subsection 
(1)
:
(a)
for a member of the Tier II defined contribution plan:
(i)
the participating employer shall contribute the nonelective contribution and the 
amortization rate described in Section 
49-22-401
, except that the nonelective 
contribution is exempt from the vesting requirements of Subsection 
49-22-401(3)(a)
;
(ii)
the member may make voluntary deferrals as provided in Section 
49-22-401
; and
(iii)
the member is not eligible for additional service credit in the plan for the period 
of exempt employment; and
(b)
for a member of the Tier II hybrid retirement system:
(i)
the participating employer shall contribute the nonelective contribution and the 
amortization rate described in Section 
49-22-401
, except that the contribution is 
exempt from the vesting requirements of Subsection 
49-22-401(3)(a)
;
(ii)
the member may make voluntary deferrals as provided in Section 
49-22-401
; and
(iii)
the member is not eligible for additional service credit in the system for the 
period of exempt employment.
(6)
If an employee who is a member of the Tier II hybrid retirement system subsequently 
revokes the election of exemption made under Subsection 
(1)
, the provisions described 
in Subsection 
(5)(b)
 shall no longer be applicable and the coverage for the employee 
shall be effective prospectively as provided in 
Part 3, Tier II Hybrid Retirement System
.
(7)
(a)
All employer contributions made on behalf of an employee shall be invested in 
accordance with Subsection 
49-22-303(3)(a)
 or 
49-22-401(4)(a)
 until the one-year 
election period under Subsection 
49-22-201(2)(c)
 is expired if the employee:
(i)
elects to be exempt in accordance with Subsection 
(1)
; and
(ii)
continues employment with the participating employer through the one-year 
election period under Subsection 
49-22-201(2)(c)
.
(b)
An employee is entitled to receive a distribution of the employer contributions made 
on behalf of the employee and all associated investment gains and losses if the 
employee:
(i)
elects to be exempt in accordance with Subsection 
(1)
; and
(ii)
terminates employment prior to the one-year election period under Subsection 
49-22-201(2)(c)
.
(8)
(a)
The office shall make rules to implement this section.
(b)
The rules made under this Subsection 
(8)
 shall include provisions to allow the 
exemption provided under Subsection 
(1)
 to apply to all contributions made 
beginning on or after July 1, 2011, on behalf of an exempted employee who began 
the employment before May 8, 2012.
(9)
An employee's exemption, participation, or election described in this section:
(a)
shall be made in accordance with this section; and
(b)
is subject to requirements under federal law and rules made by the board.
Section 4, Section 
49-22-303
 is amended to read:
49-22-303
. Defined contribution benefit established -- Contribution by employer 
and employee -- Vesting of contributions -- Plans to be separate -- Tax-qualified status of 
plans.
(1)
(a)
A participating employer shall make a nonelective contribution on behalf of each 
regular full-time employee who is a member of this system in an amount equal to 
10% minus the contribution rate paid by the employer under Subsection 
49-22-301(2)(a)
 of the member's compensation to a defined contribution plan 
qualified under Section 401(k) of the Internal Revenue Code which:
(i)
is sponsored by the board; and
(ii)
has been grandfathered under Section 1116 of the Federal Tax Reform Act of 
1986.
(b)
The member may make voluntary deferrals to:
(i)
the qualified 401(k) plan which receives the employer contribution described in 
this Subsection 
(1)
; or
(ii)
at the member's option, another defined contribution plan established by the 
participating employer.
(2)
(a)
The
Except as provided in Sections 
49-22-503
 and 
49-23-504
, the
 total amount 
contributed by the participating employer under Subsection 
(1)(a)
, including 
associated investment gains and losses, vests to the member upon accruing four years 
of service credit under this title.
(b)
The total amount contributed by the member under Subsection 
(1)(b)
 vests to the 
member's benefit immediately and is nonforfeitable.
(c)
(i)
Years of service credit under Subsection 
(2)(a)
 includes any fraction of a year 
to which the member may be entitled.
(ii)
At the time of vesting, if a member's years of service credit is within one-tenth of 
one year of the total years required for vesting, the member shall be considered to 
have the total years of service credit required for vesting.
(3)
(a)
Contributions made by a participating employer under Subsection 
(1)(a)
 shall be 
invested in a default option selected by the board until the member is vested in 
accordance with Subsection 
(2)(a)
.
(b)
A member may direct the investment of contributions made by a participating 
employer under Subsection 
(1)(a)
 only after the contributions have vested in 
accordance with Subsection 
(2)(a)
.
(c)
A member may direct the investment of contributions made by the member under 
Subsection 
(1)(b)
.
(4)
No loans shall be available from contributions made by a participating employer under 
Subsection 
(1)(a)
.
(5)
No hardship distributions shall be available from contributions made by a participating 
employer under Subsection 
(1)(a)
.
(6)
(a)
Except as provided in Subsection 
(6)(b)
 and Section 
49-22-205
, if a member 
terminates employment with a participating employer prior to the vesting period 
described in Subsection 
(2)(a)
, all contributions, including associated investment 
gains and losses, made by a participating employer on behalf of the member under 
Subsection 
(1)(a)
 are subject to forfeiture.
(b)
If a member who terminates employment with a participating employer prior to the 
vesting period described in Subsection 
(2)(a)
 subsequently enters employment with 
the same or another participating employer within 10 years of the termination date of 
the previous employment:
(i)
all contributions made by the previous participating employer on behalf of the 
member, including associated investment gains and losses, shall be reinstated 
upon employment as a regular full-time employee; and
(ii)
the length of time that the member worked with the previous employer shall be 
included in determining whether the member has completed the vesting period 
under Subsection 
(2)(a)
.
(c)
The office shall establish a forfeiture account and shall specify the uses of the 
forfeiture account, which may include an offset against administrative costs or 
employer contributions made under this section.
(7)
The office may request from any other qualified 401(k) plan under Subsection 
(1)
 or 
(2)
any relevant information pertaining to the maintenance of its tax qualification under the 
Internal Revenue Code.
(8)
The office may take any action which in its judgment is necessary to maintain the 
tax-qualified status of its 401(k) defined contribution plan under federal law.
Section 5, Section 
49-22-401
 is amended to read:
49-22-401
. Contributions -- Rates.
(1)
Up to the amount allowed by federal law, the participating employer shall make a 
nonelective contribution of 10% of the participant's compensation to a defined 
contribution plan.
(2)
(a)
The participating employer shall contribute the 10% nonelective contribution 
described in Subsection 
(1)
 to a defined contribution plan qualified under Section 
401(k) of the Internal Revenue Code that:
(i)
is sponsored by the board; and
(ii)
has been grandfathered under Section 1116 of the Federal Tax Reform Act of 
1986.
(b)
The member may make voluntary deferrals to:
(i)
the qualified 401(k) plan that receives the employer contribution described in this 
Subsection 
(2)
; or
(ii)
at the member's option, another defined contribution plan established by the 
participating employer.
(c)
In addition to the percent specified under Subsection 
(2)(a)
, the participating 
employer shall pay the corresponding Tier I system amortization rate of the 
employee's compensation to the office to be applied to the employer's corresponding 
Tier I system liability.
(3)
(a)
Except as provided under 
Sections 
49-22-503
 and 
49-23-504
 and 
Subsection 
(3)(c)
, 
the total amount contributed by the participating employer under Subsection 
(2)(a)
vests to the member upon accruing four years of employment as a regular full-time 
employee under this title.
(b)
The total amount contributed by the member under Subsection 
(2)(b)
 vests to the 
member's benefit immediately and is nonforfeitable.
(c)
(i)
Upon filing a written request for exemption with the office, an eligible 
employee is exempt from the vesting requirements of Subsection 
(3)(a)
 in 
accordance with Section 
49-22-205
.
(ii)
An employee who is exempt under this Subsection 
(3)(c)
 is not eligible for 
additional service credit in the plan for the period of exempt employment.
(d)
(i)
Years of employment under Subsection 
(3)(a)
 includes any fraction of a year to 
which the member may be entitled.
(ii)
At the time of vesting, if a member's years of service credit is within one-tenth of 
one year of the total years required for vesting, the member shall be considered to 
have the total years of employment required for vesting.
(4)
(a)
Contributions made by a participating employer under Subsection 
(2)(a)
 shall be 
invested in a default option selected by the board until the member is vested in 
accordance with Subsection 
(3)(a)
.
(b)
A member may direct the investment of contributions including associated 
investment gains and losses made by a participating employer under Subsection 
(2)(a)
only after the contributions have vested in accordance with Subsection 
(3)(a)
.
(c)
A member may direct the investment of contributions made by the member under 
Subsection 
(3)(b)
.
(5)
No loans shall be available from contributions made by a participating employer under 
Subsection 
(2)(a)
.
(6)
No hardship distributions shall be available from contributions made by a participating 
employer under Subsection 
(2)(a)
.
(7)
(a)
Except as provided in Subsection 
(7)(b)
, if a member terminates employment with 
a participating employer prior to the vesting period described in Subsection 
(3)(a)
, all 
contributions made by a participating employer on behalf of the member including 
associated investment gains and losses under Subsection 
(2)(a)
 are subject to 
forfeiture.
(b)
If a member who terminates employment with a participating employer prior to the 
vesting period described in Subsection 
(3)(a)
 subsequently enters employment with 
the same or another participating employer within 10 years of the termination date of 
the previous employment:
(i)
all contributions made by the previous participating employer on behalf of the 
member including associated investment gains and losses shall be reinstated upon 
the member's employment as a regular full-time employee; and
(ii)
the length of time that the member worked with the previous employer shall be 
included in determining whether the member has completed the vesting period 
under Subsection 
(3)(a)
.
(c)
The office shall establish a forfeiture account and shall specify the uses of the 
forfeiture account, which may include an offset against administrative costs or 
employer contributions made under this section.
(8)
The office may request from any other plan under Subsection 
(2)
(b)(ii) any relevant 
information pertaining to the maintenance of the plan's tax qualification under the 
Internal Revenue Code.
(9)
The office may take any action that in the office's judgment is necessary to maintain the 
tax-qualified status of the office's 401(k) defined contribution plan under federal law.
Section 6, Section 
49-22-504
 is enacted to read:
49-22-504
. Exemption from vesting requirements for military service members 
and spouses with orders outside the state.
(1)
As used in this section, "service member" means the same as that term is defined in 
Section 
71A-1-101
.
(2)
Employer nonelective contributions made on a member's behalf to a defined 
contribution plan under Section 
49-22-303
 or 
49-22-401
 are exempt from the vesting 
requirements of Subsections 
49-22-303(2)(a)
 and 
49-22-401(3)(a)
 if:
(a)
the member or the member's lawful spouse is a service member;
(b)
before the employer nonelective contributions vest in accordance with Subsection 
49-22-303(2)(a)
 or 
49-22-401(3)(a)
, the member or the member's spouse receives 
permanent change of station or relocation orders outside the state;
(c)
the member has a bona fide termination of employment with all participating 
employers; and
(d)
the member applies in writing to the office requesting an exemption under this 
section.
(3)
After the office receives a written application under this section and determines the 
member satisfies the conditions described in Subsection 
(2)
, the total amount of 
employer nonelective contributions made on a member's behalf vest to the member.
Section 7, Section 
49-23-302
 is amended to read:
49-23-302
. Defined contribution benefit established -- Contribution by employer 
and employee -- Vesting of contributions -- Plans to be separate -- Tax-qualified status of 
plans.
(1)
(a)
A participating employer shall make a nonelective contribution on behalf of each 
public safety service employee or firefighter service employee who is a member of 
this system in an amount equal to 14% minus the contribution rate paid by the 
employer under Subsection 
49-23-301(2)(a)
 of the member's compensation to a 
defined contribution plan qualified under Section 401(k) of the Internal Revenue 
Code which:
(i)
is sponsored by the board; and
(ii)
has been grandfathered under Section 1116 of the Federal Tax Reform Act of 
1986.
(b)
The member may make voluntary deferrals to:
(i)
the qualified 401(k) plan which receives the employer contribution described in 
this Subsection 
(1)
; or
(ii)
at the member's option, another defined contribution plan established by the 
participating employer.
(2)
(a)
The
Except as provided in Sections 
49-22-504
 and 
49-23-505
, the
 total amount 
contributed by the participating employer under Subsection 
(1)(a)
, including 
associated investment gains and losses, vests to the member upon accruing four years 
of service credit under this title.
(b)
The total amount contributed by the member under Subsection 
(1)(b)
 vests to the 
member's benefit immediately and is nonforfeitable.
(c)
(i)
Years of service credit under Subsection 
(2)(a)
 includes any fraction of a year 
to which the member may be entitled.
(ii)
At the time of vesting, if a member's years of service credit is within one-tenth of 
one year of the total years required for vesting, the member shall be considered to 
have the total years of service credit required for vesting.
(3)
(a)
Contributions made by a participating employer under Subsection 
(1)(a)
 shall be 
invested in a default option selected by the board until the member is vested in 
accordance with Subsection 
(2)(a)
.
(b)
A member may direct the investment of contributions made by a participating 
employer under Subsection 
(1)(a)
 only after the contributions have vested in 
accordance with Subsection 
(2)(a)
.
(c)
A member may direct the investment of contributions made by the member under 
Subsection 
(1)(b)
.
(4)
No loans shall be available from contributions made by a participating employer under 
Subsection 
(1)(a)
.
(5)
No hardship distributions shall be available from contributions made by a participating 
employer under Subsection 
(1)(a)
.
(6)
(a)
Except as provided in Subsection 
(6)(b)
, if a member terminates employment with 
a participating employer prior to the vesting period described in Subsection 
(2)(a)
, all 
contributions, including associated investment gains and losses, made by a 
participating employer on behalf of the member under Subsection 
(1)(a)
 are subject 
to forfeiture.
(b)
If a member who terminates employment with a participating employer prior to the 
vesting period described in Subsection 
(2)(a)
 subsequently enters employment with 
the same or another participating employer within 10 years of the termination date of 
the previous employment:
(i)
all contributions made by the previous participating employer on behalf of the 
member, including associated investment gains and losses, shall be reinstated 
upon the member's employment as a regular full-time employee; and
(ii)
the length of time that the member worked with the previous employer shall be 
included in determining whether the member has completed the vesting period 
under Subsection 
(2)(a)
.
(c)
The office shall establish a forfeiture account and shall specify the uses of the 
forfeiture account, which may include an offset against administrative costs or 
employer contributions made under this section.
(7)
The office may request from any other qualified 401(k) plan under Subsection 
(1)
 or 
(2)
any relevant information pertaining to the maintenance of its tax qualification under the 
Internal Revenue Code.
(8)
The office may take any action which in its judgment is necessary to maintain the 
tax-qualified status of its 401(k) defined contribution plan under federal law.
Section 8, Section 
49-23-401
 is amended to read:
49-23-401
. Contributions -- Rates.
(1)
(a)
Up to the amount allowed by federal law, the participating employer shall make a 
nonelective contribution of 14% of the participant's compensation to a defined 
contribution plan.
(b)
In addition to the nonelective contribution described in Subsection 
(1)(a)
, if a 
participating employer elects under Subsection 
49-23-301(2)(c)
 to pay all or part of 
the required member contribution on behalf of the participating employer's 
employees that are members covered under 
Part 3, Tier II Hybrid Retirement System
, 
the participating employer shall make an additional nonelective contribution to an 
employee that is a member covered under this part at the same percentage rate of the 
participant's compensation as the participating employer's election to pay required 
member contributions on behalf of the participating employer's employees that are 
members covered under 
Part 3, Tier II Hybrid Retirement System
.
(2)
(a)
The participating employer shall contribute the contributions described in 
Subsection 
(1)
 to a defined contribution plan qualified under Section 401(k) of the 
Internal Revenue Code that:
(i)
is sponsored by the board; and
(ii)
has been grandfathered under Section 1116 of the Federal Tax Reform Act of 
1986.
(b)
The member may make voluntary deferrals to:
(i)
the qualified 401(k) plan that receives the employer contribution described in this 
Subsection 
(2)
; or
(ii)
at the member's option, another defined contribution plan established by the 
participating employer.
(c)
In addition to the contributions specified under Subsection 
(2)(a)
, the participating 
employer shall pay the corresponding Tier I system amortization rate of the 
employee's compensation to the office to be applied to the employer's corresponding 
Tier I system liability.
(3)
(a)
Except as provided under 
Sections 
49-22-504
 and 
49-23-505
 and 
Subsection 
(3)(c)
, 
the total amount contributed by the participating employer under Subsection 
(2)(a)
vests to the member upon accruing four years of service credit under this title.
(b)
The total amount contributed by the member under Subsection 
(2)(b)
 vests to the 
member's benefit immediately and is nonforfeitable.
(c)
(i)
Upon filing a written request for exemption with the office, an eligible 
employee is exempt from the vesting requirements of Subsection 
(3)(a)
 in 
accordance with Section 
49-23-203
.
(ii)
An employee who is exempt under this Subsection 
(3)(c)
 is not eligible for 
additional service credit in the plan for the period of exempt employment.
(d)
(i)
Years of service credit under Subsection 
(3)(a)
 includes any fraction of a year 
to which the member may be entitled.
(ii)
At the time of vesting, if a member's years of service credit is within one-tenth of 
one year of the total years required for vesting, the member shall be considered to 
have the total years of service credit required for vesting.
(4)
(a)
Contributions made by a participating employer under Subsection 
(2)(a)
 shall be 
invested in a default option selected by the board until the member is vested in 
accordance with Subsection 
(3)(a)
.
(b)
A member may direct the investment of contributions, including associated 
investment gains and losses, made by a participating employer under Subsection 
(2)(a)
 only after the contributions have vested in accordance with Subsection 
(3)(a)
.
(c)
A member may direct the investment of contributions made by the member under 
Subsection 
(3)(b)
.
(5)
No loans shall be available from contributions made by a participating employer under 
Subsection 
(2)(a)
.
(6)
No hardship distributions shall be available from contributions made by a participating 
employer under Subsection 
(2)(a)
.
(7)
(a)
Except as provided in Subsection 
(7)(b)
, if a member terminates employment with 
a participating employer prior to the vesting period described in Subsection 
(3)(a)
, all 
contributions made by a participating employer on behalf of the member under 
Subsection 
(2)(a)
, including associated investment gains and losses are subject to 
forfeiture.
(b)
If a member who terminates employment with a participating employer prior to the 
vesting period described in Subsection 
(3)(a)
 subsequently enters employment with 
the same or another participating employer within 10 years of the termination date of 
the previous employment:
(i)
all contributions made by the previous participating employer on behalf of the 
member, including associated investment gains and losses, shall be reinstated 
upon the member's employment as a regular full-time employee; and
(ii)
the length of time that the member worked with the previous employer shall be 
included in determining whether the member has completed the vesting period 
under Subsection 
(3)(a)
.
(c)
The office shall establish a forfeiture account and shall specify the uses of the 
forfeiture account, which may include an offset against administrative costs of 
employer contributions made under this section.
(8)
The office may request from any other plan under Subsection 
(2)
(b)(ii) any relevant 
information pertaining to the maintenance of the plan's tax qualification under the 
Internal Revenue Code.
(9)
The office may take any action that in the office's judgment is necessary to maintain the 
tax-qualified status of the office's 401(k) defined contribution plan under federal law.
Section 9, Section 
49-23-505
 is enacted to read:
49-23-505
. Exemption from vesting requirements for military service members 
and spouses with orders outside the state.
(1)
As used in this section, "service member" means the same as that term is defined in 
Section 
71A-1-101
.
(2)
Employer nonelective contributions made on a member's behalf to a defined 
contribution plan under Section 
49-22-303
 or 
49-22-401
 are exempt from the vesting 
requirements of Subsections 
49-22-303(2)(a)
 and 
49-22-401(3)(a)
 if:
(a)
the member or the member's lawful spouse is a service member;
(b)
before the employer nonelective contributions vest in accordance with Subsection 
49-22-303(2)(a)
 or 
49-22-401(3)(a)
, the member or the member's spouse receives 
permanent change of station or relocation orders outside the state;
(c)
the member has a bona fide termination of employment with all participating 
employers; and
(d)
the member applies in writing to the office requesting an exemption under this 
section.
(3)
After the office receives a written application under this section and determines the 
member satisfies the conditions described in Subsection (2), the total amount of 
employer nonelective contributions made on a member's behalf vest to the member.
Section 10. 
Effective date.
This bill takes effect on 
July 1, 2025
.
2-7-25 4:59 PM