Print Friendly SENATE BILL NO. 1356 – PERSI acct/divorce/alternate payee
SENATE BILL NO. 1356
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S1356.......................................by COMMERCE AND HUMAN RESOURCES
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends and adds to existing law
relating to the Public Employee Retirement System to provide for a domestic
retirement order and establishment of a separate account for alternate
payees named in the order.
01/28 Senate intro - 1st rdg - to printing
01/29 Rpt prt - to Com/HuRes
02/06 Rpt out - rec d/p - to 2nd rdg
02/09 2nd rdg - to 3rd rdg
02/12 3rd rdg - PASSED - 35-0-0
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hansen,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh, Parry,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stennett,
Sweeney, Thorne, Twiggs, Wheeler, Whitworth
Absent and excused--None
Floor Sponsor - King
Title apvd - to House
02/13 House intro - 1st rdg - to HuRes
02/24 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
02/27 3rd rdg - PASSED - 62-1-7
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Bivens,
Black(15), Black(23), Boe, Bruneel, Chase, Clark, Crane, Crow, Cuddy,
Denney, Ellsworth, Field(13), Field(20), Gagner, Gould, Hadley,
Hansen, Henbest, Jaquet, Jones(9), Jones(20), Judd, Kellogg, Kempton,
Kendell, Kjellander, Kunz, Lake, Linford, Loertscher, Mader, Marley,
McKague, Meyer, Miller, Newcomb, Pischner, Pomeroy, Reynolds,
Richman, Ridinger, Robison, Sali, Schaefer, Stevenson, Stoicheff,
Stone, Stubbs, Taylor, Tilman, Tippets, Trail, Watson, Wheeler, Wood,
NAYS -- Hornbeck
Absent and excused -- Callister, Campbell, Deal, Geddes, Jones(22),
Mortensen, Mr Speaker
Floor Sponsor - Bieter
Title apvd - to Senate
03/02 To enrol
03/03 Rpt enrol - Pres signed
03/04 Sp signed
03/05 To Governor
03/06 Governor signed
Session Law Chapter 22
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN THE SENATE
SENATE BILL NO. 1356
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1302,
3 IDAHO CODE, TO CLARIFY THE DEFINITION OF "CREDITED SERVICE" AND TO PROVIDE
4 ADDITIONAL DEFINITIONS RELATED TO APPROVED DOMESTIC RETIREMENT ORDERS;
5 AMENDING SECTION 59-1317, IDAHO CODE, TO AUTHORIZE THE PUBLIC EMPLOYEE
6 RETIREMENT SYSTEM TO ACCEPT DOMESTIC RETIREMENT ORDERS; AMENDING CHAPTER
7 13, TITLE 59, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 59-1319, IDAHO
8 CODE, TO SET FORTH THE REQUIREMENTS FOR APPROVED DOMESTIC RETIREMENT
9 ORDERS; AND AMENDING CHAPTER 13, TITLE 59, IDAHO CODE, BY THE ADDITION OF
10 A NEW SECTION 59-1320, IDAHO CODE, TO ADDRESS THE EFFECT OF APPROVED
11 DOMESTIC RETIREMENT ORDERS AND TO GIVE THE EXECUTIVE DIRECTOR OF THE PUB-
12 LIC EMPLOYEE RETIREMENT SYSTEM THE EXCLUSIVE AUTHORITY TO DETERMINE
13 WHETHER A DOMESTIC RETIREMENT ORDER IS AN APPROVED DOMESTIC RETIREMENT
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Section 59-1302, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 59-1302. DEFINITIONS. (1) As used in this chapter, each of the terms
19 defined in this section shall have the meaning given in this section unless a
20 different meaning is clearly required by the context.
21 (2) "Active member" means any employee who is not establishing the right
22 to receive benefits through his or her employer's participation in any other
23 retirement system established for Idaho public employees, if such participa-
24 tion is mandated by applicable Idaho statutes other than this chapter. In no
25 case will an employee be entitled to any benefit under this chapter for public
26 service if such employee is establishing retirement benefit entitlements by
27 other Idaho statutes or federal statutes other than military service or social
28 security for that same service.
29 (3) "Accumulated contributions" means the sum of amounts contributed by a
30 member of the system, together with regular interest credit thereon.
31 (4) "Actuarial equivalent" means a benefit equal in value to another ben-
32 efit, when computed upon the basis of the actuarial tables in use by the sys-
34 (5) "Actuarial tables" means such tables as shall have been adopted by
35 the board in accordance with recommendations of the actuary.
36 (5A) "Alternate payee" means a spouse or former spouse of a member
37 who is recognized by an approved domestic retirement order as having a right
38 to all or a portion of the accrued benefits in the retirement system with
39 respect to such member.
40 (5B) "Approved domestic retirement order" means a domestic retirement
41 order which creates or recognizes the existence of an alternate payee's right
42 or assigns to an alternate payee the right to all or a portion of the accrued
43 benefits of a member under the retirement system, which directs the system to
1 establish a segregated account or disburse benefits to an alternate payee, and
2 which the executive director of the retirement system has determined meets the
3 requirements of sections 59-1319 and 59-1320, Idaho Code.
4 (5C) "Average monthly salary" means the member's average
5 salary during the base period as calculated pursuant to rules adopted by the
6 retirement board.
7 (5 B D ) (a) "Base period" means the period of
8 fifty-four (54) consecutive calendar months during which the member
10 (i) The highest average salary; and
11 (ii) Membership service of at least one-half (1/2) the number of
12 months in the period, excluding months of service attributable to:
13 A. Military service;
14 B. Service qualifying as minimum benefit pursuant to section
15 59-1342(5), Idaho Code; and
16 C. Worker's compensation income benefits.
17 (b) Effective October 1, 1993, the consecutive calendar months shall be
18 forty-eight (48). Effective October 1, 1994, the consecutive calendar
19 months shall be forty-two (42).
20 (c) Entitlement to a base period shall not vest until the effective date
21 of that base period. The retirement benefits shall be calculated on the
22 amounts, terms and conditions in effect at the date of the final contribu-
23 tion by the member.
24 (d) If no base period exists for a member, the member's average monthly
25 salary shall be determined by the board, using standards not inconsistent
26 with those established in this subsection.
27 (e) To assure equitable treatment for all members, salary increments
28 inconsistent with usual compensation patterns may be disallowed by the
29 board in determining average monthly salary and base period.
30 (6) "Beneficiary" means the person who is nominated by the written desig-
31 nation of a member, duly executed and filed with the board, to receive the
32 death benefit.
33 (7) "Calendar year" means twelve (12) calendar months commencing on the
34 first day of January.
35 (8) "Credited service" means the aggregate of membership service, prior
36 service and disabled service.
37 (9) "Date of establishment" means July 1, 1965, or a later date estab-
38 lished by the board or statute.
39 (10) "Death benefit" means the amount, if any, payable upon the death of a
41 (11) "Disability retirement allowance" means the periodic payment becoming
42 payable upon an active member's ceasing to be an employee while eligible for
43 disability retirement.
44 (12) "Disabled" means:
45 (a) That the member is prevented from engaging in any occupation or
46 employment for remuneration or profit as a result of bodily injury or dis-
47 ease, either occupational or nonoccupational in cause, but excluding dis-
48 abilities resulting from service in the armed forces of any country, or
49 from an intentionally self-inflicted injury; and
50 (b) That the member will likely remain so disabled permanently and con-
51 tinuously during the remainder of the member's life.
52 It is not necessary that a person be absolutely helpless or entirely unable to
53 do anything worthy of compensation to be considered disabled. If the person is
54 so disabled that substantially all the avenues of employment are reasonably
55 closed to the person, that condition is within the meaning of "disabled." In
1 evaluating whether a person is disabled, medical factors and nonmedical fac-
2 tors including, but not limited to, education, economic and social environ-
3 ment, training and usable skills may be considered.
4 Refusal to submit to a medical examination ordered by the board before the
5 commencement of a disability retirement allowance or at any reasonable time
6 thereafter shall constitute proof that the member is not disabled. The board
7 shall be empowered to select for such medical examination one (1) or more phy-
8 sicians or surgeons who are licensed to practice medicine and perform surgery.
9 The fees and expenses of such examination shall be paid from the administra-
10 tion account of the fund. No member shall be required to undergo such examina-
11 tion more often than once each year after he has received a disability retire-
12 ment allowance continuously for two (2) years.
13 (12A) "Disabled service" means the total number of months elapsing from
14 the first day of the month next succeeding the final contribution of a member
15 prior to receiving a disability retirement allowance to the first day of the
16 month following the date of termination of such disability retirement allow-
17 ance. During such period, the member shall remain classified in the membership
18 category held during the month of final contribution. The total number of
19 months of disabled service credited for a person first becoming disabled after
20 the effective date of this chapter shall not exceed the excess, if any, of
21 three hundred sixty (360) over the total number of months of prior service and
22 membership service.
23 (12B) "Domestic retirement order" means any judgment, decree, or
24 order, including approval of a property settlement agreement which relates to
25 the provision of marital property rights to a spouse or former spouse of a
26 member, and is made pursuant to a domestic relations law, including the commu-
27 nity property law of the state of Idaho or of another state.
28 (13) "Early retirement allowance" means the periodic payment becoming pay-
29 able upon an active member's ceasing to be an employee while eligible for
30 early retirement.
31 (14) (A) "Employee" means:
32 (a) Any person who normally works twenty (20) hours or more per week for
33 an employer or a school teacher who works half-time or more for an
34 employer and who receives salary for services rendered for such employer;
36 (b) Elected officials or appointed officials of an employer who receive a
37 salary; or
38 (c) A person who is separated from service with less than five (5) con-
39 secutive months of employment and who is reemployed or reinstated by the
40 same employer within thirty (30) days.
41 (B) "Employee" does not include employment as:
42 (a) A person rendering service to an employer in the capacity of an inde-
43 pendent business, trade or profession; or
44 (b) A person whose employment with any employer does not total five (5)
45 consecutive months; or
46 (c) A person provided sheltered employment or made-work by a public
47 employer in an employment or industries program maintained for the benefit
48 of such person; or
49 (d) An inmate of a state institution, whether or not receiving compensa-
50 tion for services performed for the institution; or
51 (e) A student enrolled in an undergraduate, graduate, or vocational-
52 technical program at and employed by a state college, university, commu-
53 nity college or vocational-technical center when such employment is predi-
54 cated on student status; or
55 (f) A person making contributions to the United States civil service com-
1 mission under the United States Civil Service System Retirement Act except
2 that a person who receives separate remuneration for work currently per-
3 formed for an employer and the United States government may elect to be a
4 member of the retirement system in accordance with rules of the board; or
5 (g) A person occupying a position that does not exceed eight (8) consecu-
6 tive months in a calendar year with a city or county when the city or
7 county has certified, in writing to the system, the position is (i) sea-
8 sonal or casual; and (ii) affected by weather and the growing season,
9 including parks and golf course positions.
10 (15) "Employer" means the state of Idaho, or any political subdivision or
11 governmental entity, provided such subdivision or entity has elected to come
12 into the system. Governmental entity means any organization composed of units
13 of government of Idaho or organizations funded only by government or employee
14 contributions or organizations who discharge governmental responsibilities or
15 proprietary responsibilities that would otherwise be performed by government.
16 All governmental entities are deemed to be political subdivisions for the pur-
17 pose of this chapter.
18 (15A) "Final contribution" means the final contribution made by a member
19 pursuant to sections 59-1331 through 59-1334, Idaho Code.
20 (16) "Firefighter" means an employee, including paid firefighters hired on
21 or after October 1, 1980, whose primary occupation is that of preventing and
22 extinguishing fires as determined by the rules of the board.
23 (17) "Fiscal year" means the period beginning on July 1 in any year and
24 ending on June 30 of the next succeeding year.
25 (18) "Fund" means the public employee retirement fund established by this
27 (19) "Funding agent" means any bank or banks, trust company or trust com-
28 panies, legal reserve life insurance company or legal reserve life insurance
29 companies, or combinations thereof, any thrift institution or credit union or
30 any investment management firm or individual investment manager selected by
31 the board to hold and/or invest the employers' and members' contributions and
32 pay certain benefits granted under this chapter.
33 (20) "Inactive member" means a former active member who is not an employee
34 and is not receiving any form of retirement allowance, but for whom a separa-
35 tion benefit has not become payable.
36 (20A) "Lifetime annuity" means periodic monthly payments of income
37 by the retirement system to an alternate payee.
38 (20B) "Lump sum distribution" means a payment by the retirement system of
39 the entire balance in the alternate payee's segregated account, together with
40 regular interest credited thereon.
41 (21) "Member" means an active member, inactive member or a retired member.
42 (22) "Membership service" means military service which occurs after
43 the commencement of contributions payable under sections 59-1331 through
44 59-1334, Idaho Code, and service with respect to which contributions
45 are payable under sections 59-1331 through 59-1334, Idaho Code, and mil-
46 itary service which occurs after the commencement of such contributions
47 which, except for benefit calculations described in sections 59-1342 and
48 59-1353, Idaho Code, includes service transferred to a segregated account
49 under an approved domestic retirement order .
50 (23) "Military service" means active duty service in the armed forces of
51 the United States including the national guard and reserves, under the provi-
52 sions of title 10, title 32, and title 37, United States code. Provided, how-
53 ever, for the purposes of this chapter, military service SHALL NOT include:
54 (a) Any period ended by dishonorable discharge or during which termina-
55 tion of such service is available but not accepted;
1 (b) Any period which commences more than ninety (90) days after the per-
2 son ceases to be an employee or ends more than ninety (90) days before the
3 person again becomes an employee unless such ninety (90) day requirements
4 are waived by the board due to circumstances beyond the employee's con-
5 trol; or
6 (c) Any active duty service in excess of five (5) years if at the conve-
7 nience of the United States government, or in excess of four (4) years if
8 not at the convenience of the United States government.
9 (24) (a) "Police officer" for retirement purposes shall be as defined in
10 section 59-1303, Idaho Code.
11 (b) "POST" means the Idaho peace officer standards and training council
12 established in chapter 51, title 19, Idaho Code.
13 (25) "Prior service" means any period prior to July 1, 1965, of military
14 service or of employment for the state of Idaho or any political subdivision
15 or other employer of each employee who is an active member or in military ser-
16 vice or on leave of absence on the date of establishment, provided, however,
17 an employee who was not an active member or in military service or on leave of
18 absence on the date of establishment shall receive credit for the member's
19 service prior to July 1, 1965, on the basis of recognizing two (2) months of
20 such service for each month of membership service. For the purpose of comput-
21 ing such service, no deduction shall be made for any continuous period of
22 absence from service or military service of six (6) months or less.
23 (26) "Regular interest" means interest at the rate set from time to time
24 by the board.
25 (27) "Retired member" means a former active member receiving a retirement
27 (28) "Retirement" means the acceptance of a retirement allowance under
28 this chapter upon termination of employment.
29 (29) "Retirement board" or "board" means the board provided for in sec-
30 tions 59-1304 and 59-1305, Idaho Code, to administer the retirement system.
31 (30) "Retirement system" or "system" means the public employee retirement
32 system of Idaho.
33 (31) (A) "Salary" means:
34 (a) The total salary or wages paid to a person who meets the definition
35 of employee by an employer for personal services performed and reported
36 by the employer for income tax purposes, including the cash value of all
37 remuneration in any medium other than cash.
38 (b) The total amount of any voluntary reduction in salary agreed to by
39 the member and employer where the reduction is used as an alternative form
40 of remuneration to the member.
41 (B) Salary in excess of the compensation limitations set forth in section
42 401(a)(17) of the Internal Revenue Code shall be disregarded for any person
43 who becomes a member of the system on or after July 1, 1996. The system had no
44 limitations on compensation in effect on July 1, 1993. The compensation limi-
45 tations set forth in section 401(1)(17) of the Internal Revenue Code shall not
46 apply for an "eligible employee." For purposes of this subsection, "eligible
47 employee" is an individual who was a member of the system before July 1, 1996.
48 (C) "Salary" does not include:
49 (a) Contributions by employers to employee held medical savings accounts,
50 as those accounts are defined in section 63-3022K, Idaho Code.
51 (b) Lump sum payments inconsistent with usual compensation patterns made
52 by the employer to the employee only upon termination from service includ-
53 ing, but not limited to, vacation payoffs, sick leave payoffs, early
54 retirement incentive payments and bonuses.
55 (31A) "Segregated account" means the account established by the
1 retirement system for the alternate payee of a member who is not a retired
2 member. It shall include the months of credited service and accumulated con-
3 tributions transferred from the member's account.
4 (32) "Separation benefit" means the amount, if any, payable upon or subse-
5 quent to separation from service.
6 (33) "Service" means being shown on an employer's payroll as an employee
7 receiving a salary. Service of fifteen (15) days or more during any calendar
8 month shall be credited as one (1) month of service. Service of fourteen (14)
9 days or less during any calendar month shall not be credited. No more than one
10 (1) month of service shall be credited for all service in any month.
11 (34) "Service retirement allowance" means the periodic payment becoming
12 payable upon an active member's ceasing to be an employee while eligible for
13 service retirement.
14 (35) "State" means the state of Idaho.
15 (36) "Vested retirement allowance" means the periodic payment becoming
16 payable upon an inactive member's becoming eligible for vested retirement.
17 (37) The masculine pronoun, wherever used, shall include the feminine pro-
19 SECTION 2. That Section 59-1317, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 59-1317. RIGHTS TO BENEFITS INALIENABLE. (1) The right of a
22 person to any benefits under this chapter and the money in any fund created by
23 this chapter shall not be assignable or subject to execution, garnishment or
24 attachment or to the operation of any bankruptcy or insolvency law .
25 , except that
26 (2) Notwithstanding subsection (1) of this section, the ben-
27 efits of a member or alternate payee shall be subject to garnish-
28 ment, execution, or wage withholding under chapter 12, title 7, Idaho Code,
29 for the enforcement of an order for the support of a minor child.
30 (3) Notwithstanding subsection (1) of this section, prior to July
31 1, 1998, s S hould a court order direct distribution or par-
32 tial distribution of a member benefit defined in either chapter 13, title 59,
33 Idaho Code, or chapter 14, title 72, Idaho Code, be made to the member's
34 spouse or former spouse, that member's full benefit entitlement will be for-
35 warded to the court for distribution.
36 (4) Notwithstanding subsection (1) of this section, on or after
37 July 1, 1998, should a court order direct distribution or partial distribution
38 of a member's benefit defined in either chapter 13, title 59, Idaho Code, or
39 chapter 14, title 72, Idaho Code, be made to the member's spouse or former
40 spouse, the court order must be an approved domestic retirement order and
41 shall comply with the requirements of sections 59-1319 and 59-1320, Idaho
43 (5) Notwithstanding subsection (1) of this section, s S
44 hould a court order establish a trust pursuant to section 15-5-409,
45 Idaho Code, the full benefit entitlement will be forwarded to the trustee,
46 naming the trustee as payee.
47 SECTION 3. That Chapter 13, Title 59, Idaho Code, be, and the same is
48 hereby amended by the addition thereto of a NEW SECTION , to be
49 known and designated as Section 59-1319, Idaho Code, and to read as follows:
50 59-1319. APPROVED DOMESTIC RETIREMENT ORDERS -- REQUIREMENTS. (1) An
51 approved domestic retirement order must meet the following requirements:
1 (a) Clearly specify that such order applies to the retirement system;
2 (b) Clearly specify the effective date of the order, the name, social
3 security number, date of birth, sex, and last known mailing address of the
4 member and the name, social security number, date of birth, sex, and last
5 known mailing address of the alternate payee covered by the order;
6 (c) Provide for a proportional reduction of the amount awarded to an
7 alternate payee in the event that benefits available to the member are
8 reduced by law;
9 (d) For benefits as defined in chapter 13, title 59, Idaho Code, for mem-
10 bers who are not retired members: (i) clearly specify the amount or per-
11 centage of the member's taxed and tax deferred accumulated contributions
12 which are to be credited to the segregated account or the manner in which
13 such amount or percentage is to be determined, and (ii) clearly specify
14 the member's months of credited service, either by specific amount or per-
15 centage, to be transferred by the retirement system to the segregated
16 account or the manner in which such amount or percentage is to be deter-
17 mined. The months of credited service transferred to the alternate payee
18 shall be proportional to the accumulated contributions attributable to
19 such months of credited service. Months of credited service transferred
20 shall be whole months and not partial months;
21 (e) For benefits as defined in chapter 13, title 59, Idaho Code, for
22 retired members, clearly specify the amount or percentage of the member's
23 benefit being paid that the retirement system is to pay to the alternate
24 payee, or the manner in which such amount or percentage is to be deter-
25 mined; and
26 (f) For benefits as defined in chapter 14, title 72, Idaho Code, clearly
27 specify the amount or percentage of the member's benefit paid at the time
28 of retirement which the retirement system is to pay to the alternate
29 payee, or the manner in which such percentage is to be determined.
30 (2) An approved domestic retirement order cannot:
31 (a) Require the retirement system to provide any type or form of benefit
32 or any option not otherwise provided under the retirement system;
33 (b) Require the retirement system to provide increased benefits deter-
34 mined on the basis of actuarial value;
35 (c) Require the payment of benefits to an alternate payee which are
36 required to be paid to another alternate payee under another order previ-
37 ously determined to be an approved domestic retirement order or a court
38 order entered prior to July 1, 1998;
39 (d) Require any action on the part of the retirement system contrary to
40 its governing statutes or rules other than the direct payment of the bene-
41 fit awarded to an alternate payee;
42 (e) Segregate or attempt to segregate the right to reinstate previous
43 credited service as provided in section 59-1360, Idaho Code, unless such
44 credited service has been fully reinstated by full payment of contribu-
45 tions and interest as provided in section 59-1360, Idaho Code;
46 (f) Purport to award to the alternate payee any future benefit increases
47 that are provided or required by the legislature, except as provided in
48 subsections (6) and (7) of section 59-1320, Idaho Code; or
49 (g) Require the payment of benefits to an alternate payee before the date
50 on which the alternate payee attains the earliest retirement age under the
51 retirement system. However, an alternate payee may take a lump sum distri-
52 bution any time prior to receiving a lifetime annuity payment.
53 (3) In no event shall an approved domestic retirement order cause the
54 retirement system to pay any benefit or any amount of benefit greater than
55 would have been paid had the member's account not been segregated.
1 (4) A party to any domestic retirement order issued prior to July 1,
2 1998, which distributes benefits defined in either chapter 13, title 59, Idaho
3 Code, or chapter 14, title 72, Idaho Code, may move the court to modify such
4 order to comply with the requirements of this section and section 59-1320,
5 Idaho Code, provided that modifications be limited to issues related to the
6 distribution of benefits defined in either chapter 13, title 59, Idaho Code,
7 or chapter 14, title 72, Idaho Code, that the value of the distribution is not
8 materially changed and that such modified order be submitted and become an
9 approved domestic retirement order before July 1, 2000.
10 SECTION 4. That Chapter 13, Title 59, Idaho Code, be, and the same is
11 hereby amended by the addition thereto of a NEW SECTION , to be
12 known and designated as Section 59-1320, Idaho Code, and to read as follows:
13 59-1320. APPROVED DOMESTIC RETIREMENT ORDERS -- APPLICATION AND EFFECT.
14 (1) The executive director of the public employee retirement system or his
15 designee upon receipt of a copy of a domestic retirement order, shall deter-
16 mine whether the order is an approved domestic retirement order and shall
17 notify the member and the alternate payee of the determination within ninety
18 (90) days. Orders shall be applied prospectively only from the first day of
19 the month following the order being determined to be an approved domestic
20 retirement order. The retirement system shall then pay benefits or establish a
21 segregated account in accordance with the order.
22 (2) If the order is determined not to be an approved domestic retirement
23 order, or if no determination is issued within ninety (90) days, the member or
24 the alternate payee named in the order may move the court which issued the
25 order to amend the order so that it will be approved. The court that issued
26 the order or which would otherwise have jurisdiction over the matter has
27 jurisdiction to amend the order so that it will be qualified even though all
28 other matters incident to the action or proceeding have been fully and finally
30 (3) The executive director of the retirement system to which a domestic
31 retirement order is submitted or his designee has exclusive authority to
32 determine whether a domestic retirement order is an approved domestic retire-
33 ment order. If it is determined that a domestic retirement order does not meet
34 the requirements for an approved domestic retirement order, both the issuing
35 court and the parties to the order shall be notified so action may be taken to
36 amend the order.
37 (4) Because an approved domestic retirement order cannot cause the
38 retirement system to pay any benefit or any amount of benefit greater than
39 would have been paid had the member's account not been segregated, disputes
40 related to benefits paid under an approved domestic retirement order shall be
41 resolved between the parties to the order by the court issuing that order. The
42 retirement system shall not be made a party to the action. Any cost, including
43 attorney's fees, incurred by the retirement system as a result of such actions
44 shall be distributed by the court among the parties and included in any
45 amended order issued.
46 (5) Unless the approved domestic retirement order specifies differently,
47 if the member has a right to a vested benefit as of the effective date of the
48 order, then both the member and the alternate payee shall have a right to a
49 vested benefit after the transfer of months of service even if the member or
50 the alternate payee has less than sixty (60) months of membership service.
51 (6) For benefits under chapter 13, title 59, Idaho Code, for members
52 other than retired members, if the domestic retirement order awards to the
53 alternate payee a portion of the member's accumulated contributions the alter-
1 nate payee shall be entitled to all the same benefits and rights an inactive
2 member has under chapter 13, title 59, Idaho Code. The alternate payee's bene-
3 fit calculation for a lifetime annuity shall use the member's average monthly
4 salary and base period as of the effective date of the order and the months of
5 credited service transferred to the alternate payee's segregated account. The
6 benefit calculation shall use the alternate payee's age with the appropriate
7 reduction factors based on the alternate payee's age at the time of payment of
8 the lifetime annuity. For the purpose of the lifetime annuity, the bridging
9 factor, as specified in section 59-1355, Idaho Code, shall be the bridging
10 factor between the effective date of the order or the last day of contribu-
11 tions by the member prior to the effective date of the order, whichever is
12 earliest, and the date of the first lifetime annuity payment to the alternate
13 payee. The alternate payee shall have the right to select any of the optional
14 retirement allowances provided in section 59-1351, Idaho Code. The alternate
15 payee shall have the right to name a beneficiary.
16 (7) For benefits defined under chapter 13, title 59, Idaho Code, for
17 retired members, and for benefits under chapter 14, title 72, Idaho Code, the
18 retirement system shall include in the alternate payee's amount or percentage
19 of the benefit, on a proportional basis, all future adjustments, including
20 postretirement increases that are granted by the retirement system, and any
21 death benefit. Furthermore, upon the death of the alternate payee, his/her
22 percentage of the benefit will revert to the person or persons, including the
23 member, who are entitled to the benefit under the system at the time of the
24 alternate payee's death.
25 (8) For benefits under chapter 13, title 59, Idaho Code, for retired mem-
26 bers, the form of payment previously elected by the member under section
27 59-1351, Idaho Code, cannot be changed by a domestic retirement order. Fur-
28 thermore, no segregated account will be established by the retirement system
29 for the alternate payee.
30 (9) For benefits defined under chapter 14, title 72, Idaho Code, the ben-
31 efit paid to the alternate payee shall start when the retirement system begins
32 paying benefits to the member, surviving spouse, or surviving children. Unless
33 otherwise ordered, in the event the member dies and leaves a surviving spouse,
34 during the surviving spouse's lifetime, the alternate payee shall be paid
35 his/her designated amount or percentage of the benefit. Unless otherwise
36 ordered, if there is no surviving spouse or the surviving spouse dies and
37 there is a surviving child or children of the member who are under eighteen
38 (18) years of age and unmarried, then the alternate payee shall be paid
39 his/her designated amount or percentage of the benefit until the child or
40 children reach the age of eighteen (18) years or marries, whichever occurs
42 (10) The retirement system shall be authorized to issue any and all appro-
43 priate tax forms or reports for any payments made to the alternate payee.
44 (11) The retirement system, the retirement board, and officers and employ-
45 ees of the retirement system shall not be liable to any person for making pay-
46 ments of any benefits in accordance with an approved domestic retirement
STATEMENT OF PURPOSE
This bill is intended to resolve many of the problems currently faced by courts, PERSI, and
members and their spouses in addressing retirement benefits upon divorce. Currently, PERSI
benefits cannot be divided until a distribution event occurs. The member spouse generally
has some control over that event, and the matter must be monitored by PERSI and the court,
sometimes for many years. The methodology adopted by this bill is similar to that used under
federal law for private retirement plans. If a domestic retirement order meets the requirements
to be an approved domestic retirement order, the member's retirement account is
segregated at the time of divorce, providing a separate account for the member's spouse.
The member's spouse then has control over that account, eliminating the need for continued
monitoring by the courts and PERSI, and eliminating uncertainty for the member and the
None. Segregated benefits cannot exceed the value of benefits prior to segregation.
Name: Alan Winkle
Agency: Public Employee Retirement System of Idaho
Statement of Purpose/Fiscal Impact