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H0401........................................................by MR. SPEAKER
Requested by: Public Employee Retirement System of Idaho
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to authorize
disclosure of the identity of a deceased member's beneficiary to specified
person; to delete the July 1, 2000, deadline to amend domestic retirement
orders issued prior to July 1, 1998; and to include August 31 in the year's
period used to determine average annual paid salaries of paid firefighters.
01/17 House intro - 1st rdg - to printing
Rpt prt - to Com/HuRes
02/01 Rpt out - rec d/p - to 2nd rdg
02/02 2nd rdg - to 3rd rdg
02/03 3rd rdg - PASSED - 68-0-2
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Black, Boe,
Bruneel, Callister, Campbell, Chase, Cheirrett, Clark, Cuddy, Deal,
Denney, Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould,
Hadley, Hammond, Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet,
Jones, Judd, Kellogg, Kempton, Kendell, Kunz, Lake, Linford,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moss, Moyle, Pearce, Pischner, Pomeroy, Reynolds, Ridinger, Ringo,
Robison, Sali, Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson,
Stoicheff, Stone, Taylor, Tilman, Trail(Miller), Wheeler, Zimmermann,
Mr Speaker
NAYS -- None
Absent and excused -- Crow, Wood
Floor Sponsor - Ridinger
Title apvd - to Senate
02/04 Senate intro - 1st rdg - to Com/HuRes
02/09 Rpt out - rec d/p - to 2nd rdg
02/10 2nd rdg - to 3rd rdg
02/24 3rd rdg - PASSED - 30-0-5
AYES--Andreason, Boatright, Bunderson, Burtenshaw, Cameron, Crow,
Darrington, Deide, Frasure, Geddes, Hawkins, Ingram, Ipsen, Keough,
King-Barrutia, McLaughlin, Noh, Parry, Riggs, Risch, Sandy,
Schroeder, Sorensen, Stegner, Stennett, Thorne, Walton, Wheeler,
Whitworth, Williams
NAYS--None
Absent and excused--Danielson, Davis, Dunklin, Lee, Richardson
Floor Sponsor - Stegner
Title apvd - to House
02/25 To enrol
02/28 Rpt enrol - Sp signed
02/29 Pres signed
03/01 To Governor
03/03 Governor signed
Session Law Chapter 13
Effective: 07/01/00
H0401|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature Second Regular Session - 2000IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 401 BY MR. SPEAKER Requested by: Public Employee Retirement System of Idaho 1 AN ACT 2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM AND THE FIREMEN'S RETIREMENT 3 FUND; AMENDING SECTION 59-1301, IDAHO CODE, TO REPLACE THE TERM "PRUDENT 4 MAN" WITH THE TERM "PRUDENT PERSON"; AMENDING SECTION 59-1316, IDAHO CODE, 5 TO MAKE THE SECTION CONSISTENT WITH DISCLOSURE UNDER THE PUBLIC RECORDS 6 ACT AND TO AUTHORIZE DISCLOSURE OF THE IDENTITY OF A DECEASED MEMBER'S 7 BENEFICIARY TO THE MEMBER'S SPOUSE AND CHILDREN AND TO THE COURT-APPOINTED 8 ADMINISTRATOR OF THE MEMBER'S ESTATE; AMENDING SECTION 59-1319, IDAHO 9 CODE, TO DELETE THE DEADLINE OF JULY 1, 2000, FOR AMENDING DOMESTIC 10 RETIREMENT ORDERS ISSUED PRIOR TO JULY 1, 1998; AMENDING SECTION 72-1432, 11 IDAHO CODE, TO INCLUDE AUGUST 31 IN THE TWELVE-MONTH PERIOD USED FOR 12 DETERMINING THE AVERAGE ANNUAL PAID SALARIES OF PAID FIREFIGHTERS AND TO 13 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 72-1442, IDAHO CODE, TO BE 14 CONSISTENT WITH SECTION 72-1447, IDAHO CODE, IN SETTING FORTH MAXIMUM BEN- 15 EFITS; AND PROVIDING AN EFFECTIVE DATE. 16 Be It Enacted by the Legislature of the State of Idaho: 17 SECTION 1. That Section 59-1301, Idaho Code, be, and the same is hereby 18 amended to read as follows: 19 59-1301. PUBLIC EMPLOYEE RETIREMENT SYSTEM CREATED -- PURPOSE -- DUTIES 20 OF FIDUCIARIES OF RETIREMENT FUND. (1) A retirement and disability benefit 21 system is created and placed under the management of a retirement board for 22 the purpose of providing a retirement system and other benefits for public 23 employees in the state of Idaho under this chapter. The retirement system 24 shall be known as the "Public Employee Retirement System of Idaho." 25 (2) The purpose of such system is to provide an orderly means whereby 26 public employees in the state of Idaho who become superannuated or otherwise 27 incapacitated as the result of age or disability, may be retired from active 28 service without prejudice and without inflicting a hardship upon the employees 29 retired, and to enable such employees to accumulate pension credits to provide 30 for old-age, disability, death and termination of employment, thus effecting 31 economy and efficiency in the administration of the state, county and local 32 government. The legislature, therefore, declares that, in its considered judg- 33 ment, the public good, and the general welfare of the citizens of this state 34 required the enactment of this measure, under the police powers of the state. 35 With respect to the retirement fund created in this chapter, the fiducia- 36 ries of the fund shall discharge their duties with respect to the fund solely 37 in the interest of the members and their beneficiaries 38 (a) for the exclusive purpose of: 39 (i) providing benefits to members and their beneficiaries; and 40 (ii) defraying reasonable expenses of administering the system; 41 (b) with the care, skill, prudence and diligence under the circumstances 42 then prevailing that a prudentmanperson acting in a like capacity and 43 familiar with such matters would use in the conduct of an enterprise of a 2 1 like character and with like aims; 2 (c) by diversifying the investments of the fund so as to minimize the 3 risk of large losses, unless under the circumstances it is clearly prudent 4 not to do so; and 5 (d) in accordance with the provisions of the Idaho Code governing the 6 system. 7 SECTION 2. That Section 59-1316, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 59-1316. MEMBER'S RETIREMENT RECORDS CONFIDENTIAL. Each member shall fur- 10 nish the board with such information as the board shall deem necessary for the 11 proper operation of the system.Except as specificallyAs providedby lawin 12 section 9-340C, Idaho Code, information contained in the retirement system 13 mortgage portfolio loan documents and in each member's retirement system 14 records issubject to disclosure according to chapter 3, title 9, Idaho Code,15 confidential and may not be divulged except as ordered by a court; or except 16 as may be required by the employer member or by the retirement board and its 17 staff in order to carry into effect the purposes of this chapter. A member may 18 by his written authorization release specific information from his own retire- 19 ment system records to a stated designee. If the member is deceased, the 20 member's contingent annuitant or beneficiary may, by written authorization, 21 release specific information from the member's retirement system records to a 22 stated designee. The retirement system may also disclose the identity of a 23 deceased member's beneficiary to the member's spouse, children, and to the 24 court-appointed administrator of the member's estate. Should a court order 25 direct distribution or partial distribution of a member's benefit as defined 26 in either chapter 13, title 59, Idaho Code, or chapter 14, title 72, Idaho 27 Code, to the member's spouse or former spouse, the system may release to the 28 spouse, former spouse, or the court issuing the order, information pertaining 29 to the member's retirement account only with regard to the calculation, divi- 30 sion and distribution of the spouse's or former spouse's community property 31 portion of the account or benefit. 32 SECTION 3. That Section 59-1319, Idaho Code, be, and the same is hereby 33 amended to read as follows: 34 59-1319. APPROVED DOMESTIC RETIREMENT ORDERS -- REQUIREMENTS. (1) An 35 approved domestic retirement order must meet the following requirements: 36 (a) Clearly specify that such order applies to the retirement system; 37 (b) Clearly specify the effective date of the order, which is the date of 38 divorce or the date of an earlier property settlement agreement incorpo- 39 rated into the initial divorce decree, the name, social security number, 40 date of birth, sex, and last known mailing address of the member and the 41 name, social security number, date of birth, sex, and last known mailing 42 address of the alternate payee covered by the order; 43 (c) Provide for a proportional reduction of the amount awarded to an 44 alternate payee in the event that benefits available to the member are 45 reduced by law; 46 (d) For benefits as defined in chapter 13, title 59, Idaho Code, for mem- 47 bers who are not retired members: (i) clearly specify the amount or per- 48 centage of the member's taxed and tax deferred accumulated contributions 49 which are to be credited to the segregated account or the manner in which 50 such amount or percentage is to be determined, and (ii) clearly specify 51 the member's months of credited service, either by specific amount or per- 3 1 centage, to be transferred by the retirement system to the segregated 2 account or the manner in which such amount or percentage is to be deter- 3 mined. The months of credited service transferred to the alternate payee 4 shall be proportional to the accumulated contributions attributable to 5 such months of credited service. Months of credited service transferred 6 shall be whole months and not partial months; 7 (e) For benefits as defined in chapter 13, title 59, Idaho Code, for 8 retired members, clearly specify the amount or percentage of the member's 9 benefit being paid that the retirement system is to pay to the alternate 10 payee, or the manner in which such amount or percentage is to be deter- 11 mined; and 12 (f) For benefits as defined in chapter 14, title 72, Idaho Code, clearly 13 specify the amount or percentage of the member's benefit paid at the time 14 of retirement which the retirement system is to pay to the alternate 15 payee, or the manner in which such percentage is to be determined. 16 (2) An approved domestic retirement order cannot: 17 (a) Require the retirement system to provide any type or form of benefit 18 or any option not otherwise provided under the retirement system; 19 (b) Require the retirement system to provide increased benefits deter- 20 mined on the basis of actuarial value; 21 (c) Require the payment of benefits to an alternate payee which are 22 required to be paid to another alternate payee under another order previ- 23 ously determined to be an approved domestic retirement order or a court 24 order entered prior to July 1, 1998; 25 (d) Require any action on the part of the retirement system contrary to 26 its governing statutes or rules other than the direct payment of the bene- 27 fit awarded to an alternate payee; 28 (e) Segregate or attempt to segregate the right to reinstate previous 29 credited service as provided in section 59-1360, Idaho Code, unless such 30 credited service has been fully reinstated by full payment of contribu- 31 tions and interest as provided in section 59-1360, Idaho Code; 32 (f) Purport to award to the alternate payee any future benefit increases 33 that are provided or required by the legislature, except as provided in 34 subsections (6) and (7) of section 59-1320, Idaho Code; or 35 (g) Require the payment of benefits to an alternate payee before the date 36 on which the alternate payee attains the earliest retirement age under the 37 retirement system. However, an alternate payee may take a lump sum distri- 38 bution any time prior to receiving a lifetime annuity payment. 39 (3) In no event shall an approved domestic retirement order cause the 40 retirement system to pay any benefit or any amount of benefit greater than 41 would have been paid had the member's account not been segregated. 42 (4) A party to any domestic retirement order issued prior to July 1, 43 1998, which distributes benefits defined in either chapter 13, title 59, Idaho 44 Code, or chapter 14, title 72, Idaho Code, may move the court to modify such 45 order to comply with the requirements of this section and section 59-1320, 46 Idaho Code, provided that modifications be limited to issues related to the 47 distribution of benefits defined in either chapter 13, title 59, Idaho Code, 48 or chapter 14, title 72, Idaho Code, and that the value of the distribution is 49 not materially changed.and that such modified order be submitted and become50an approved domestic retirement order before July 1, 2000.51 SECTION 4. That Section 72-1432, Idaho Code, be, and the same is hereby 52 amended to read as follows: 53 72-1432. PENSION FUND CONTRIBUTIONS BY CITIES AND FIRE DISTRICTS -- 4 1 REMITTANCES. Beginning October 1, 1978, it shall also be the duty of the cit- 2 ies and fire districts of this state employing paid firefighters who are 3 establishing the right to benefits under the provisions of chapter 14, title 4 72, Idaho Code, and of the boards and officers having authority therein, to 5 cause to be remitted to the public employee retirement system board, as an 6 incident to and part of the current expenses of such cities and fire dis- 7 tricts, a sum equivalent to the total contribution rate and tax percentage 8 paid into the Idaho public employee retirement system and the Social Security 9 Act on other public employees plus one percent (1%) thereafter of the annual 10 average paid firefighter's salary or wage in the state of Idaho or the monthly 11 gross salary or wage of each individual firefighter, to be computed according 12 to the classification of each firefighter under Option I or Option II as 13 defined under section 72-1434, Idaho Code, for each paid firefighter 14 employed by said cities or fire districts; which said sum shall be measured 15 and determined by the actual expenditures for such purpose during the preced- 16 ing year from September 1 to August 301, and remitted by the end of the suc- 17 ceeding payroll period as herein provided for remittances for individual fire- 18 fighters as set forth inthissection 72-1431, Idaho Code. 19 SECTION 5. That Section 72-1442, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 72-1442. PENSION PAYMENT -- MAXIMUM. (1) No paid firefighter, retiring 22 under the provisions of chapter 14, title 72, Idaho Code, shall receive more 23 than one hundred percent (100%) ofhis last year's monthly average salary or24wagethe firefighter's average compensation for the three (3) consecutive 25 years which produce the greatest aggregate compensation, which said monthly 26 sum shall vary annually according to the determination of the "cost of living 27 adjustment" as set forth in section 72-1471, Idaho Code. 28 (2) As the amount, terms and conditions of benefits under this chapter 29 may be revised from time to time, the application of such revisions shall be 30 prospective only and not retrospective or retroactive unless otherwise pro- 31 vided by law. 32 SECTION 6. This act shall be in full force and effect on and after July 33 1, 2000.
STATEMENT OF PURPOSE
RS09372
This bill makes technical corrections to five provisions governing the
PERSI fund, and/or the Firemen's Retirement Fund (FRF).
The first is an amendment to section 59-1301, Idaho Code, replacing the
term "prudent man" with the term "prudent person" for purposes of making
the provision gender neutral.
The second is an amendment to section 59-1316, Idaho Code, intended to
clarify that although certain PERSI records are confidential, the
disclosure of all records is governed by the Idaho Public Records Act.
It also provides that PERSI may disclose the identity of a deceased
member's beneficiary to the member's spouse, children, and to the court
appointed administrator of the member's estate, even though such
information may be exempt from disclosure under the Idaho Public Records
Act. Because these individuals could potentially have a claim to death
benefit proceeds they should be able to identify the beneficiary, who is
the primary claimant. Absent specific authority to make such a
disclosure, these individuals may be required to seek a court order to
obtain this information.
Third is an amendment to section 59-1319, Idaho Code. In 1998 SB 1356 was passed,
which permitted the division of PERSI assets at the time of divorce if certain
requirements were met. However, it applies only to decrees issued on or after July
1, 1998. For decrees issued prior to July 1, 1998, divided benefits are still sent
to the court for distribution unless the decrees are amended during a window, which
closes June 30, 2000.
Since the passage of the new law about one-half of the domestic retirement
orders sent to PERSI are pre-July 1, 1998 orders that have been amended to
comply with the new law. This bill will effectively extend the window
indefinitely, allowing pre-July 1, 1998 decrees to continue being amended
for purposes of obtaining an Approved Domestic Retirement Order. This will
permit courts to continued transferring to PERSI the responsibility for the
distribution of divided PERSI benefits related to pre-July 1, 1998 decrees.
Fourth is an amendment to section 72-1432, Idaho Code, which sets forth
requirements for employer remittances under the Firemen's Retirement Fund
(FRF) plan, based on actual salary expense during the previous twelve (12)
month period. The section defines that period as September 1 to August 30,
having incorrectly identified the last day of August as the thirtieth (30).
This failure to include August 31 in the (12) month period could result in
the underreporting of actual salary expense and inadequate funding of the
FRF plan. This bill will amend the section to correctly identify the twelve
(12) month period from September 1 through August 31.
Fifth is an amendment to section 72-1442, Idaho Code, which sets forth a
maximum benefit under the Firefighter's Retirement Fund (FRF) of no more
than 100% of a member's monthly average salary for his final year of
employment, adjusted for inflation. This provision directly conflicts with
section 72-1447, Idaho Code, which provides that in no case will a benefit
exceed 100% of the member's average compensation for the three (3)
consecutive years of employment which produce the greatest compensation.
The three (3) year requirement in section 72-1447, Idaho Code, was adopted
in 1990 to comply with limits imposed by section 415 of the Internal Revenue
Code that remain applicable.
FISCAL IMPACT
None.
Contact
Name: Alan Winkle
Agency: Public Employee Retirement System of Idaho (PERSI)
Phone: 334-3365
Statement of Purpose/Fiscal Impact H0401