1999 Legislation
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HOUSE BILL NO. 45 – PERSI, vested member defined


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H0045........................................................by MR. SPEAKER
              Requested by Public Employees Retirement System
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends and repeals existing law
relating to the Public Employee Retirement System to provide a definition
for "vested member" and to eliminate references to "vested retirement."

01/11    House intro - 1st rdg - to printing
01/11    Rpt prt - to Comm/HuRes
02/04    Rpt out - rec d/p - to 2nd rdg
02/05    2nd rdg - to 3rd rdg
02/09    3rd rdg - PASSED - 65-0-5
      AYES -- Alltus, Barraclough, Barrett, Bieter, Black, Boe, Bruneel,
      Callister, Campbell, Chase, Clark, Crow, 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, Kjellander, Kunz, Lake, Limbaugh,
      Linford, Loertscher, Mader, Marley, McKague, Meyer, Montgomery,
      Mortensen, Moyle, Pischner, Pomeroy, Ridinger, Ringo, Robison, Sali,
      Schaefer, Sellman, Smith, Stevenson, Stoicheff, Stone, Tippets,
      Trail, Watson, Wheeler, Wood, Zimmermann, Mr Speaker
      NAYS -- None
      Absent and excused -- Bell, Reynolds, Taylor, Tilman, Williams
    Floor Sponsor - Ridinger
    Title apvd - to Senate
02/10    Senate intro - 1st rdg - to Com/HuRes
03/10    Rpt out - rec d/p - to 2nd rdg
03/11    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 32-0-3
      AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
      Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
      Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Richardson,
      Risch, Sandy, Schroeder, Sorensen, Stegner, Stennett, Thorne, Twiggs,
      Wheeler, Whitworth
      Absent and excused--Noh, Parry, Riggs
    Floor Sponsor - McLaughlin
    Title apvd - to House
03/17    To enrol
03/18    Rpt enrol - Sp signed - Pres signed
03/19    To Governor
03/23    Governor signed
         Session Law Chapter 199
         Effective: 07/01/99

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fifth Legislature                 First Regular Session - 1999

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 45

                                      BY MR. SPEAKER
                     Requested by: Public Employees Retirement System

 1                                        AN ACT
 4        NITION FOR "VESTED MEMBER"; AMENDING SECTIONS 59-1341,  59-1345,  59-1350,
 5        59-1351,  59-1359  AND 59-1361, IDAHO CODE, TO DELETE OBSOLETE LANGUAGE IN
 7        59-1348 AND 59-1349, IDAHO CODE.

 8    Be It Enacted by the Legislature of the State of Idaho:

 9        SECTION  1.  That  Section 59-1302, Idaho Code, be, and the same is hereby
10    amended to read as follows:

11        59-1302.  DEFINITIONS. (1) As used in this  chapter,  each  of  the  terms
12    defined  in this section shall have the meaning given in this section unless a
13    different meaning is clearly required by the context.
14        (2)  "Active member" means any employee who is not establishing the  right
15    to  receive  benefits through his or her employer's participation in any other
16    retirement system established for Idaho public employees, if  such  participa-
17    tion  is  mandated by applicable Idaho statutes other than this chapter. In no
18    case will an employee be entitled to any benefit under this chapter for public
19    service if such employee is establishing retirement  benefit  entitlements  by
20    other Idaho statutes or federal statutes other than military service or social
21    security for that same service.
22        (3)  "Accumulated contributions" means the sum of amounts contributed by a
23    member of the system, together with regular interest credit thereon.
24        (4)  "Actuarial equivalent" means a benefit equal in value to another ben-
25    efit,  when computed upon the basis of the actuarial tables in use by the sys-
26    tem.
27        (5)  "Actuarial tables" means such tables as shall have  been  adopted  by
28    the board in accordance with recommendations of the actuary.
29        (5A)  "Alternate payee" means a spouse or former spouse of a member who is
30    recognized  by  an approved domestic retirement order as having a right to all
31    or a portion of the accrued benefits in the retirement system with respect  to
32    such member.
33        (5B)  "Approved  domestic  retirement  order"  means a domestic retirement
34    order which creates or recognizes the existence of an alternate payee's  right
35    or  assigns to an alternate payee the right to all or a portion of the accrued
36    benefits of a member under the retirement system, which directs the system  to
37    establish a segregated account or disburse benefits to an alternate payee, and
38    which the executive director of the retirement system has determined meets the
39    requirements of sections 59-1319 and 59-1320, Idaho Code.
40        (5C)  "Average  monthly  salary"  means the member's average salary during
41    the base period as calculated pursuant to  rules  adopted  by  the  retirement
42    board.
43        (5D)  (a)  "Base  period"  means the period of fifty-four (54) consecutive


 1        calendar months during which the member earned:
 2             (i)   The highest average salary; and
 3             (ii)  Membership service of at least one-half  (1/2)  the  number  of
 4             months in the period, excluding months of service attributable to:
 5                  A.  Military service;
 6                  B.  Service  qualifying  as  minimum benefit pursuant to section
 7                  59-1342(5), Idaho Code; and
 8                  C.  Worker's compensation income benefits.
 9        (b)  Effective October 1, 1993, the consecutive calendar months  shall  be
10        forty-eight  (48).  Effective  October  1,  1994, the consecutive calendar
11        months shall be forty-two (42).
12        (c)  Entitlement to a base period shall not vest until the effective  date
13        of  that  base  period. The retirement benefits shall be calculated on the
14        amounts, terms and conditions in effect at the date of the final contribu-
15        tion by the member.
16        (d)  If no base period exists for a member, the member's  average  monthly
17        salary  shall be determined by the board, using standards not inconsistent
18        with those established in this subsection.
19        (e)  To assure equitable treatment  for  all  members,  salary  increments
20        inconsistent  with  usual  compensation  patterns may be disallowed by the
21        board in determining average monthly salary and base period.
22        (6)  "Beneficiary" means the person who is nominated by the written desig-
23    nation of a member, duly executed and filed with the  board,  to  receive  the
24    death benefit.
25        (7)  "Calendar  year"  means twelve (12) calendar months commencing on the
26    first day of January.
27        (8)  "Credited service" means the aggregate of membership  service,  prior
28    service and disabled service.
29        (9)  "Date  of  establishment"  means July 1, 1965, or a later date estab-
30    lished by the board or statute.
31        (10) "Death benefit" means the amount, if any, payable upon the death of a
32    member.
33        (11) "Disability retirement allowance" means the periodic payment becoming
34    payable upon an active member's ceasing to be an employee while  eligible  for
35    disability retirement.
36        (12) "Disabled" means:
37        (a)  That  the  member  is  prevented  from  engaging in any occupation or
38        employment for remuneration or profit as a result of bodily injury or dis-
39        ease, either occupational or nonoccupational in cause, but excluding  dis-
40        abilities  resulting  from  service in the armed forces of any country, or
41        from an intentionally self-inflicted injury; and
42        (b)  That the member will likely remain so disabled permanently  and  con-
43        tinuously during the remainder of the member's life.
44    It is not necessary that a person be absolutely helpless or entirely unable to
45    do anything worthy of compensation to be considered disabled. If the person is
46    so  disabled  that  substantially all the avenues of employment are reasonably
47    closed to the person, that condition is within the meaning of  "disabled."  In
48    evaluating  whether  a person is disabled, medical factors and nonmedical fac-
49    tors including, but not limited to, education, economic  and  social  environ-
50    ment, training and usable skills may be considered.
51        Refusal to submit to a medical examination ordered by the board before the
52    commencement  of  a  disability retirement allowance or at any reasonable time
53    thereafter shall constitute proof that the member is not disabled.  The  board
54    shall be empowered to select for such medical examination one (1) or more phy-
55    sicians or surgeons who are licensed to practice medicine and perform surgery.


 1    The  fees  and expenses of such examination shall be paid from the administra-
 2    tion account of the fund. No member shall be required to undergo such examina-
 3    tion more often than once each year after he has received a disability retire-
 4    ment allowance continuously for two (2) years.
 5        (12A) "Disabled service" means the total number of  months  elapsing  from
 6    the  first day of the month next succeeding the final contribution of a member
 7    prior to receiving a disability retirement allowance to the first day  of  the
 8    month  following  the date of termination of such disability retirement allow-
 9    ance. During such period, the member shall remain classified in the membership
10    category held during the month of final  contribution.  The  total  number  of
11    months of disabled service credited for a person first becoming disabled after
12    the  effective  date  of  this chapter shall not exceed the excess, if any, of
13    three hundred sixty (360) over the total number of months of prior service and
14    membership service.
15        (12B) "Domestic retirement order" means any judgment,  decree,  or  order,
16    including  approval  of  a  property settlement agreement which relates to the
17    provision of marital property rights to a spouse or former spouse of a member,
18    and is made pursuant to a domestic  relations  law,  including  the  community
19    property law of the state of Idaho or of another state.
20        (13) "Early retirement allowance" means the periodic payment becoming pay-
21    able  upon  an  active  member's  ceasing to be an employee while eligible for
22    early retirement.
23        (14) (A)  "Employee" means:
24        (a)  Any person who normally works twenty (20) hours or more per week  for
25        an  employer  or  a  school  teacher  who  works  half-time or more for an
26        employer and who receives salary for services rendered for such  employer;
27        or
28        (b)  Elected officials or appointed officials of an employer who receive a
29        salary; or
30        (c)  A  person  who is separated from service with less than five (5) con-
31        secutive months of employment and who is reemployed or reinstated  by  the
32        same employer within thirty (30) days.
33        (B)  "Employee" does not include employment as:
34        (a)  A person rendering service to an employer in the capacity of an inde-
35        pendent business, trade or profession; or
36        (b)  A  person  whose employment with any employer does not total five (5)
37        consecutive months; or
38        (c)  A person provided sheltered  employment  or  made-work  by  a  public
39        employer in an employment or industries program maintained for the benefit
40        of such person; or
41        (d)  An  inmate of a state institution, whether or not receiving compensa-
42        tion for services performed for the institution; or
43        (e)  A student enrolled in  an  undergraduate,  graduate,  or  vocational-
44        technical  program  at and employed by a state college, university, commu-
45        nity college or vocational-technical center when such employment is predi-
46        cated on student status; or
47        (f)  A person making contributions to the United States civil service com-
48        mission under the United States Civil Service System Retirement Act except
49        that a person who receives separate remuneration for work  currently  per-
50        formed  for an employer and the United States government may elect to be a
51        member of the retirement system in accordance with rules of the board; or
52        (g)  A person occupying a position that does not exceed eight (8) consecu-
53        tive months in a calendar year with a city or  county  when  the  city  or
54        county  has  certified, in writing to the system, the position is (i) sea-
55        sonal or casual; and (ii) affected by  weather  and  the  growing  season,


 1        including parks and golf course positions.
 2        (15) "Employer"  means the state of Idaho, or any political subdivision or
 3    governmental entity, provided such subdivision or entity has elected  to  come
 4    into  the system. Governmental entity means any organization composed of units
 5    of government of Idaho or organizations funded only by government or  employee
 6    contributions  or organizations who discharge governmental responsibilities or
 7    proprietary responsibilities that would otherwise be performed by  government.
 8    All governmental entities are deemed to be political subdivisions for the pur-
 9    pose of this chapter.
10        (15A) "Final  contribution"  means the final contribution made by a member
11    pursuant to sections 59-1331 through 59-1334, Idaho Code.
12        (16) "Firefighter" means an employee, including paid firefighters hired on
13    or after October 1, 1980, whose primary occupation is that of  preventing  and
14    extinguishing fires as determined by the rules of the board.
15        (17) "Fiscal  year"  means  the period beginning on July 1 in any year and
16    ending on June 30 of the next succeeding year.
17        (18) "Fund" means the public employee retirement fund established by  this
18    chapter.
19        (19) "Funding  agent" means any bank or banks, trust company or trust com-
20    panies, legal reserve life insurance company or legal reserve  life  insurance
21    companies,  or combinations thereof, any thrift institution or credit union or
22    any  investment management firm or individual investment manager  selected  by
23    the  board to hold and/or invest the employers' and members' contributions and
24    pay certain benefits granted under this chapter.
25        (20) "Inactive member" means a former active member who is not an employee
26    and is not receiving any form of retirement allowance, but for whom a  separa-
27    tion benefit has not become payable.
28        (20A) "Lifetime  annuity" means periodic monthly payments of income by the
29    retirement system to an alternate payee.
30        (20B) "Lump sum distribution" means a payment by the retirement system  of
31    the  entire balance in the alternate payee's segregated account, together with
32    regular interest credited thereon.
33        (21) "Member" means an active member, inactive member or a retired member.
34        (22) "Membership service" means military service which  occurs  after  the
35    commencement  of contributions payable under sections 59-1331 through 59-1334,
36    Idaho Code, and service with respect to which contributions are payable  under
37    sections 59-1331 through 59-1334, Idaho Code, which, except for benefit calcu-
38    lations  described  in sections 59-1342 and 59-1353, Idaho Code, includes ser-
39    vice transferred to a segregated account under an approved domestic retirement
40    order.
41        (23) "Military service" means active duty service in the armed  forces  of
42    the  United States including the national guard and reserves, under the provi-
43    sions of title 10, title 32, and title 37, United States code. Provided,  how-
44    ever, for the purposes of this chapter, military service SHALL NOT include:
45        (a)  Any  period  ended by dishonorable discharge or during which termina-
46        tion of such service is available but not accepted;
47        (b)  Any period which commences more than ninety (90) days after the  per-
48        son ceases to be an employee or ends more than ninety (90) days before the
49        person  again becomes an employee unless such ninety (90) day requirements
50        are waived by the board due to circumstances beyond  the  employee's  con-
51        trol; or
52        (c)  Any  active duty service in excess of five (5) years if at the conve-
53        nience of the United States government, or in excess of four (4) years  if
54        not at the convenience of the United States government.
55        (24)  (a) "Police  officer" for retirement purposes shall be as defined in


 1        section 59-1303, Idaho Code.
 2        (b)  "POST" means the Idaho peace officer standards and  training  council
 3        established in chapter 51, title 19, Idaho Code.
 4        (25) "Prior  service"  means any period prior to July 1, 1965, of military
 5    service or of employment for the state of Idaho or any  political  subdivision
 6    or other employer of each employee who is an active member or in military ser-
 7    vice  or  on leave of absence on the date of establishment, provided, however,
 8    an employee who was not an active member or in military service or on leave of
 9    absence on the date of establishment shall receive  credit  for  the  member's
10    service  prior  to July 1, 1965, on the basis of recognizing two (2) months of
11    such service for each month of membership service. For the purpose of  comput-
12    ing  such  service,  no  deduction  shall be made for any continuous period of
13    absence from service or military service of six (6) months or less.
14        (26) "Regular interest" means interest at the rate set from time  to  time
15    by the board.
16        (27) "Retired  member" means a former active member receiving a retirement
17    allowance.
18        (28) "Retirement" means the acceptance of  a  retirement  allowance  under
19    this chapter upon termination of employment.
20        (29) "Retirement  board"  or  "board" means the board provided for in sec-
21    tions 59-1304 and 59-1305, Idaho Code, to administer the retirement system.
22        (30) "Retirement system" or "system" means the public employee  retirement
23    system of Idaho.
24        (31) (A)  "Salary" means:
25        (a)  The  total  salary or wages paid to a person who meets the definition
26        of employee by an employer for  personal services performed  and  reported
27        by  the  employer for income tax purposes, including the cash value of all
28        remuneration in any medium other than cash.
29        (b)  The total amount of any voluntary reduction in salary  agreed  to  by
30        the member and employer where the reduction is used as an alternative form
31        of remuneration to the member.
32        (B)  Salary in excess of the compensation limitations set forth in section
33    401(a)(17)  of  the  Internal Revenue Code shall be disregarded for any person
34    who becomes a member of the system on or after July 1, 1996. The system had no
35    limitations on compensation in effect on July 1, 1993. The compensation  limi-
36    tations set forth in section 401(1)(17) of the Internal Revenue Code shall not
37    apply  for  an "eligible employee." For purposes of this subsection, "eligible
38    employee" is an individual who was a member of the system before July 1, 1996.
39        (C)  "Salary" does not include:
40        (a)  Contributions by employers to employee held medical savings accounts,
41        as those accounts are defined in section 63-3022K, Idaho Code.
42        (b)  Lump sum payments inconsistent with usual compensation patterns  made
43        by the employer to the employee only upon termination from service includ-
44        ing,  but  not  limited  to,  vacation  payoffs, sick leave payoffs, early
45        retirement incentive payments and bonuses.
46        (31A) "Segregated account" means the account established by the retirement
47    system for the alternate payee of a member who is not  a  retired  member.  It
48    shall  include  the  months  of credited service and accumulated contributions
49    transferred from the member's account.
50        (32) "Separation benefit" means the amount, if any, payable upon or subse-
51    quent to separation from service.
52        (33) "Service" means being shown on an employer's payroll as  an  employee
53    receiving  a  salary. Service of fifteen (15) days or more during any calendar
54    month shall be credited as one (1) month of service. Service of fourteen  (14)
55    days or less during any calendar month shall not be credited. No more than one


 1    (1) month of service shall be credited for all service in any month.
 2        (34) "Service  retirement  allowance"  means the periodic payment becoming
 3    payable upon an active member's ceasing to be an employee while  eligible  for
 4    service retirement.
 5        (35) "State" means the state of Idaho.
 6        (36) "Vested   retirement allowance   member " means
 7     the periodic payment becoming payable upon an inactive member's becoming
 8    eligible for vested retirement   an active or inactive  member  who
 9    has  at least five (5) years of credited service, except that a member, who at
10    the time of his separation from service:
11        (a)  Held an office to which he had been elected by popular vote or having
12        a term fixed by the constitution, statute or charter or was  appointed  to
13        such office by an elected official; or
14        (b)  Was the head or director of a department, division, agency, statutory
15        section or bureau of the state; or
16        (c)  Was  employed on or after July 1, 1965, by an elected official of the
17        state of Idaho and occupied a position exempt from the provisions of chap-
18        ter 53, title 67, Idaho Code; and
19        (d)  Was not covered by a merit system  for  employees  of  the  state  of
20        Idaho,
21    is vested without regard to the length of credited service .
22        (37) The masculine pronoun, wherever used, shall include the feminine pro-
23    noun.

24        SECTION  2.  That  Section 59-1341, Idaho Code, be, and the same is hereby
25    amended to read as follows:

27      An  active   A vested  member  with at least five
28    (5) years of credited service including six (6) months of  membership  service
29      is  eligible for service retirement as indicated below, based upon his
30    service retirement ratio.  A  member's  service  retirement  ratio  shall,  at
31    retirement, be equal to the ratio of (1) to (2) as follows:
32        (1)  The  number  of  years  of  credited service for which the member was
33    classified as a police officer or firefighter:
34        (2)  The member's total number of years of credited service.
35        For service retirement ratio:      Service retirement eligibility age is:
36             0.000 to 0.100                               65
37             0.101 to 0.300                               64
38             0.301 to 0.500                               63
39             0.501 to 0.700                               62
40             0.701 to 0.900                               61
41             0.901 to 1.000                               60
42    A person who was an active member on June 30, 1985 shall be deemed to  have  a
43    service retirement ratio of 1.000 either if the member was a police officer or
44    firefighter  on  that  date and continuously thereafter to retirement or if at
45    the time of retirement the majority of the member's credited service has  been
46    that of a police officer or firefighter.

47        SECTION  3.  That  Section 59-1345, Idaho Code, be, and the same is hereby
48    amended to read as follows:

49        59-1345.   ACTIVE    VESTED    MEMBER  ELIGIBLE  FOR
50    EARLY  RETIREMENT.   An active   A vested  member who is
51    not eligible for either service retirement or disability retirement is  eligi-


 1    ble  for  early retirement if he  has at least five (5) years of credited
 2    service including six (6) months of membership service and    is  within
 3    ten  (10)  years of being eligible for service retirement. Additionally, 
 4    an active   a vested  member is eligible for early retirement
 5    on termination of disability retirement as  provided  by  section  59-1354(2),
 6    Idaho Code.

 7        SECTION  4.  That  Section 59-1350, Idaho Code, be, and the same is hereby
 8    amended to read as follows:

 9        59-1350.  DEFERRAL OF EARLY  OR VESTED  RETIREMENT. Early 
10    or vested  retirement may be deferred by a  member  until  the  date  he
11    would have been eligible for service retirement had he remained an active mem-
12    ber.

13        SECTION  5.  That  Section 59-1351, Idaho Code, be, and the same is hereby
14    amended to read as follows:

17    FORM OF OPTIONAL RETIREMENT. (1) The service retirement  allowance,    or
18     the early retirement allowance  or the vested retirement allowance
19      of  a  member who, at time of retirement, so elects shall be converted
20    into an optional retirement allowance which is  the  actuarial  equivalent  of
21    such other allowance. The optional retirement allowance may take one  (1)
22      of  the  forms listed below and shall be in lieu of all other benefits
23    under this chapter except that the provisions  of  section  59-1361(1),  Idaho
24    Code, shall be applicable:
25        (a)  Option  1  provides a reduced retirement allowance payable during the
26        lifetime of the retired member, and  a  continuation  thereafter  of  such
27        reduced  retirement  allowance  during  the lifetime of the member's named
28        contingent annuitant.
29        (b)  Option 2 provides a reduced retirement allowance payable  during  the
30        lifetime  of the retired member, and a continuation thereafter of one-half
31        (1/2) of such reduced retirement allowance  during  the  lifetime  of  the
32        member's named contingent annuitant.
33        (c)  Option  3,  which  is available only if the member retires before the
34        date of the social security normal retirement age for  that  member,  pro-
35        vides  an  increased  retirement  allowance  until such date and a reduced
36        retirement allowance  thereafter,  the  difference  between  the  two  (2)
37        amounts  approximately  equaling the governmental old-age benefit becoming
38        payable at such date as estimated by the board.
39        (d)  Option 4, which is available only if the member  retires  before  the
40        date  of  the  social security normal retirement age for that member, pro-
41        vides either an adjusted option 1 (option 4A)  or  option  2  (option  4B)
42        retirement  allowance  until  such date and a reduced retirement allowance
43        thereafter, the difference  between  the  two  (2)  amounts  approximately
44        equaling the governmental old-age benefit becoming payable at such date as
45        estimated by the board. The adjusted retirement allowance shall be paid to
46        the  retired  member during the member's lifetime and the appropriate con-
47        tinuation amount of the adjusted allowance to the member's  named  contin-
48        gent annuitant for life thereafter.
49        (2)  Should the named contingent annuitant under option 1 or option 2 pre-
50    decease  a  member  retiring on or after October 1, 1992, upon notification to
51    the board the member's benefit on the first day of  the  month  following  the


 1    death  of  the contingent annuitant will thereafter become an allowance calcu-
 2    lated pursuant to section 59-1342 or 59-1346, Idaho Code, whichever was appli-
 3    cable on the date of retirement, in addition  to  any    post  retirement
 4        postretirement    allowance  adjustments  which  may have
 5    accrued from that time. Should the named contingent annuitant  predecease  the
 6    member under option 4, upon notification to the board, the member's benefit on
 7    the  first  day  of  the month following the contingent annuitant's death will
 8    thereafter become the option 3 allowance to which the member would  have  been
 9    entitled  as  of  the date of the annuitant's death. The benefit changes under
10    this subsection shall be available only to members whose last contribution was
11    made after the effective date of this act.
12        (3)  Option 1 or 2 may not be chosen if  initial  payments  of  less  than
13    twenty dollars ($20.00) per month would result.
14        (4)  Application  for  any optional retirement allowance shall be in writ-
15    ing, duly executed and filed with the board. Such  application  shall  contain
16    all  information  required  by  the board, including such proofs of age as are
17    deemed necessary by the board.
18        (5)  A retirement option elected at the time of retirement as provided for
19    in this section may not be changed except by written notice to the  retirement
20    board  no  later  than  five  (5) business days after the receipt of the first
21    retirement allowance.
22        (6)  Not later than one (1) year after the marriage of a  retired  member,
23    the  member  may elect option 1, 2 or 4 to become effective one (1) year after
24    the date of such election, provided the member's spouse is named as a  contin-
25    gent annuitant, and either:
26        (a)  The member was not married at the time of the member's retirement; or
27        (b)  The  member  earlier  elected option 1, 2, 4A or 4B, having named the
28        member's spouse as contingent annuitant, and said  spouse  has  died.  The
29        retirement  allowance  to  be  converted  in such a case is that currently
30        being paid.

31        SECTION 6.  That Section 59-1359, Idaho Code, be, and the same  is  hereby
32    amended to read as follows:

33        59-1359.  SEPARATION  BENEFITS.  (a) The separation benefit, if any, shall
34    become payable upon the written request of an inactive  member  who  has  been
35    separated  from employment. If the person who received a separation benefit is
36    reemployed or reinstated by the same employer within ninety (90)  days  or  is
37    guaranteed  a right to employment or reinstatement with the same employer, the
38    person shall repay to the system any separation benefit paid.
39        (b)  A separation benefit shall automatically be payable three  (3)  years
40    after  the  person becomes an inactive member if the inactive member  has
41    less than five (5) years of membership service,  is not    eligible
42    for  a vested  retirement allowance   member , and
43    has  been separated from employment and is not reemployed or reinstated by the
44    same employer within ninety (90) days.
45        (c)  For purposes of this section, "separated from employment"  means  the
46    inactive  member  terminated all employment with the employer. For purposes of
47    this section, "same employer" means the employer for  which  the  person  last
48    worked prior to being separated from employment.
49        (d)  Any  member  may  elect  to have eligible rollover distributions paid
50    directly to a specified eligible retirement plan as required by 26 U.S.C. sec-
51    tion 401(a)(31).

52        SECTION 7.  That Section 59-1361, Idaho Code, be, and the same  is  hereby


 1    amended to read as follows:

 3    DEATH BENEFIT. (1) The death benefit of an active  or  inactive  member  shall
 4    equal  the  excess,  if  any, of the member's accumulated contributions at the
 5    time the benefit becomes payable over the aggregate of all  retirement  allow-
 6    ance  payments  ever made to the deceased member upon the death of the member,
 7    the contingent annuitant, and the optional death benefit  recipient,  if  any.
 8    The  death  benefit of a retired member shall equal the excess, if any, of the
 9    member's accumulated contributions at the time the  member  retired  over  the
10    aggregate  of all retirement allowance payments ever made to the deceased mem-
11    ber, the member's named contingent annuitant, and the optional  death  benefit
12    recipient, if any.
13        (2)  The  death  benefit,  if any, will be paid to the member's designated
14    beneficiary who is surviving the member at the time the benefit  becomes  pay-
15    able;  otherwise,  it will be paid to the surviving spouse, and if there is no
16    surviving spouse it will be paid in accordance with the laws  of  descent  and
17    distribution  of the state of Idaho as they may then be in effect. The benefi-
18    ciary may waive any death benefit otherwise payable and have it  paid  to  the
19    member's surviving spouse.
20        (3)  Upon the death of a  vested  member who  has at least
21    five (5) years of credited service and  is: (a) active; (b) inactive; or
22    (c)  a  disability retired member; his beneficiary may waive any death benefit
23    otherwise payable and have it paid to the member's surviving spouse, whereupon
24    the surviving spouse may elect either an allowance as  provided  in  option  1
25    under  section  59-1351,  Idaho Code, or a one (1) time lump sum death benefit
26    payment as provided in subsection (1) of this section. The initial  retirement
27    allowance upon which such optional retirement allowance is based shall be cal-
28    culated as if the member had retired immediately before his death. If the mem-
29    ber  is  not then eligible to receive a service or early retirement allowance,
30    such initial retirement allowance shall equal the actuarial equivalent of  the
31    retirement allowance payable when the member would first be eligible for 
32    vested      service or early  retirement, calculated as if he
33    had separated from service immediately before his death.

34        SECTION 8.  That Sections 59-1347, 59-1348 and 59-1349,  Idaho  Code,  be,
35    and the same are hereby repealed.

Statement of Purpose / Fiscal Impact

                      STATEMENT  OF  PURPOSE
     This bill relates to the terminology used in referring to
eligibility for retirement benefits under the PERSI defined benefit
plan.  The plan currently provides for three different types of
retirement in addition to disability retirement - early retirement
and service retirement, which are applicable to active members, and
vested retirement, which is applicable to inactive members.  This
bill eliminates the concept of vested retirement but preserves the
current requirements for "vesting" or eligibility for retirement
benefits.  Inactive members would simply be eligible for early or
service retirement if vested, rather than vested retirement.  This
is intended to simplify the plan by eliminating the unnecessary
concept of vested retirement. It unifies eligibility for a
retirement benefit but does not change the amount of any benefit. 
                         FISCAL  IMPACT

Name:     Alan Winkle
Agency:   Public Employee Retirement System
Phone:    334-2455

Statement of Purpose/Fiscal Impact                             H 4