1999 Legislation
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HOUSE BILL NO. 47 – PERSI/unfunded actuarial liab/univ


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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
      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

Bill Text


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

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 47

                                      BY MR. SPEAKER
                     Requested by: Public Employees Retirement System

 1                                        AN ACT

 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:

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:


 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-
13        pants in the optional retirement program as defined  in  section  33-107A,
14        Idaho 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 / Fiscal Impact

                      STATEMENT  OF  PURPOSE
     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

                         FISCAL  IMPACT

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

Statement of Purpose/Fiscal Impact                             H 4