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H0047........................................................by MR. SPEAKER
Requested by Public Employees Retirement System
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to clarify the
effect of contributions required in conjunction with optional retirement
programs for institutions of higher learning on the Public Employee
Retirement System's unfunded actuarial liability.
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 - Trail
Title apvd - to Senate
02/10 Senate intro - 1st rdg - to Com/HuRes
03/12 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/17 3rd rdg - PASSED - 34-0-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner,
Stennett, Thorne, Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Parry
Floor Sponsor - McLaughlin
Title apvd - to House
03/18 To enrol
03/19 Rpt enrol - Sp signed - Pres signed
03/23 To Governor
03/24 Governor signed
Session Law Chapter 271
Effective: 07/01/99
H0047|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 47 BY MR. SPEAKER Requested by: Public Employees Retirement System 1 AN ACT 2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1322, 3 IDAHO CODE, TO CLARIFY THE EFFECT OF CONTRIBUTIONS REQUIRED UNDER SECTIONS 4 33-107A AND 33-107B, IDAHO CODE, ON THE UNFUNDED ACTUARIAL LIABILITY AND 5 TO MAKE A TECHNICAL CORRECTION. 6 Be It Enacted by the Legislature of the State of Idaho: 7 SECTION 1. That Section 59-1322, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 59-1322. EMPLOYER CONTRIBUTIONS -- AMOUNTS -- RATES -- AMORTIZATION. (1) 10 Each employer shall contribute to the cost of the system. The amount of the 11 employer contributions shall consist of the sum of a percentage of the sala- 12 ries of members to be known as the "normal cost" and a percentage of such sal- 13 aries to be known as the "amortization payment." The rates of such contribu- 14 tions shall be determined by the board on the basis of assets and liabilities 15 as shown by actuarial valuation, and such rates shall become effective no 16 later than January 1 of the second year following the year of the most recent 17 actuarial valuation, and shall remain effective until next determined by the 18 board. 19 (2) The normal cost rate shall be computed to be sufficient, when applied 20 to the actuarial present value of the future salary of the average new member 21 entering the system, to provide for the payment of all prospective benefits in 22 respect to such member which are not provided by the member's own contribu- 23 tion. 24 (3) The amortization rate shall not be less than the minimum amortization 25 rate computed pursuant to subsection (5) of this section, unless a one (1) 26 year grace period has been made effective by the board. During a grace period, 27 the amortization rate shall be no less than the rate in effect during the 28 immediately preceding year. A grace period may not be made effective if more 29 than one (1) other grace period has been effective in the immediately preced- 30 ing four (4) year period. 31 (4) Each of the following terms used in this subsection and in subsection 32 (5) of this section shall have the following meanings: 33 (a) "Valuation" means the most recent actuarial valuation. 34 (b) "Valuation date" means the date of such valuation. 35 (c) "Effective date" means the date the rates of contributions based on 36 the valuation become effective pursuant to subsection (1) of this section. 37 (d) "End date" means the date thirty (30) years after the valuation date 38 until July 1, 1993. On and after July 1, 1993, "end date" means twenty- 39 five (25) years after the valuation date. 40 (e) "Unfunded actuarial liability" means the excess of the actuarial 41 present value of (i) over the sum of the actuarial present values of (ii), 42 (iii),and(iv) and (v) as follows, all deter- 43 mined by the valuation as of the valuation date: 2 1 (i) all future benefits payable to all members and contingent annu- 2 itants; 3 (ii) the assets then held by the funding agent for the payment of 4 benefits under this chapter; 5 (iii) the future normal costs payable in respect of all then active 6 members; 7 (iv) the future contributions payable under sections 59-1331 through 8 59-1334, Idaho Code, by all current active members ; 9 (v) the future contributions payable to the retirement system under 10 sections 33-107A and 33-107B, Idaho Code . 11 (f) "Projected salaries" mean s the sum of the annual sala- 12 ries of all members in the system .and of all partici-13pants in the optional retirement program as defined in section 33-107A,14Idaho Code.15 (g) "Scheduled amortization amount" means the actuarial present value of 16 future contributions payable as amortization payment from the valuation 17 date until the effective date. 18 (5) The minimum amortization payment rate shall be that percentage, cal- 19 culated as of the valuation date, of the then actuarial present value of the 20 projected salaries from the effective date to the end date which is equivalent 21 to the excess of the unfunded actuarial liability over the scheduled amortiza- 22 tion amount.
STATEMENT OF PURPOSE
RS08374
This bill relates to the calculation of unfunded actuarial
liability under the PERSI plan. In sections 33-107A and 33-107B,
Idaho Code, the legislature provided, in conjunction with optional
retirement programs for institutions of higher learning, that
institutions make certain percentage of salary payments to PERSI in
lieu of amortization payments and withdrawal contributions.
Although these payments affect the unfunded actuarial liability of
the PERSI plan, the statutory definition of "unfunded actuarial
liability" was not modified to reflect the payments required under
these sections. This bill amends the definition of "unfunded
actuarial liability" to reflect the actuarial effect of these
payments.
FISCAL IMPACT
None.
CONTACT
Name: Alan Winkle
Agency: Public Employee Retirement System
Phone: 334-2455
Statement of Purpose/Fiscal Impact H 4