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H0022........................................................by MR. SPEAKER
Requested by Public Employees Retirement System
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law relating to the
Public Employee Retirement System to clarify the definitions of
"disability" and "disabled service."
01/11 House intro - 1st rdg - to printing
01/11 Rpt prt - to Comm/HuRes
02/02 Rpt out - rec d/p - to 2nd rdg
02/03 2nd rdg - to 3rd rdg
02/04 3rd rdg - FAILED - 13-56-0
AYES -- Bell, Clark, Crow, Hadley, Hornbeck, Jones, Lake, McKague,
Montgomery, Mortensen, Pischner, Ridinger, Williams
NAYS -- Alltus, Barraclough, Barrett, Black, Boe, Bruneel, Callister,
Campbell, Chase, Cuddy, Deal, Denney, Ellsworth, Field(13),
Field(20), Gagner, Geddes, Gould, Hammond, Hansen(23), Hansen(29),
Henbest, Jaquet, Judd, Kellogg, Kempton, Kendell, Kjellander, Kunz,
Limbaugh, Linford, Loertscher, Mader, Marley, Meyer, Moyle, Pomeroy,
Reynolds, Ringo, Robison, Sali, Schaefer, Sellman, Smith, Stevenson,
Stoicheff, Stone, Taylor, Tilman, Tippets, Trail, Watson, Wheeler,
Wood, Zimmermann, Mr Speaker
Absent and excused -- None
Dist. 19, Seat A, Vacant
Floor Sponsor - Lake
Filed with Chief Clerk
H0022|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 22 BY MR. SPEAKER Requested by: Public Employees Retirement System 1 AN ACT 2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1302, 3 IDAHO CODE, TO CLARIFY THE DEFINITION OF "DISABILITY" AND TO CLARIFY THE 4 DEFINITION OF "DISABLED SERVICE." 5 Be It Enacted by the Legislature of the State of Idaho: 6 SECTION 1. That Section 59-1302, Idaho Code, be, and the same is hereby 7 amended to read as follows: 8 59-1302. DEFINITIONS. (1) As used in this chapter, each of the terms 9 defined in this section shall have the meaning given in this section unless a 10 different meaning is clearly required by the context. 11 (2) "Active member" means any employee who is not establishing the right 12 to receive benefits through his or her employer's participation in any other 13 retirement system established for Idaho public employees, if such participa- 14 tion is mandated by applicable Idaho statutes other than this chapter. In no 15 case will an employee be entitled to any benefit under this chapter for public 16 service if such employee is establishing retirement benefit entitlements by 17 other Idaho statutes or federal statutes other than military service or social 18 security for that same service. 19 (3) "Accumulated contributions" means the sum of amounts contributed by a 20 member of the system, together with regular interest credit thereon. 21 (4) "Actuarial equivalent" means a benefit equal in value to another ben- 22 efit, when computed upon the basis of the actuarial tables in use by the sys- 23 tem. 24 (5) "Actuarial tables" means such tables as shall have been adopted by 25 the board in accordance with recommendations of the actuary. 26 (5A) "Alternate payee" means a spouse or former spouse of a member who is 27 recognized by an approved domestic retirement order as having a right to all 28 or a portion of the accrued benefits in the retirement system with respect to 29 such member. 30 (5B) "Approved domestic retirement order" means a domestic retirement 31 order which creates or recognizes the existence of an alternate payee's right 32 or assigns to an alternate payee the right to all or a portion of the accrued 33 benefits of a member under the retirement system, which directs the system to 34 establish a segregated account or disburse benefits to an alternate payee, and 35 which the executive director of the retirement system has determined meets the 36 requirements of sections 59-1319 and 59-1320, Idaho Code. 37 (5C) "Average monthly salary" means the member's average salary during 38 the base period as calculated pursuant to rules adopted by the retirement 39 board. 40 (5D) (a) "Base period" means the period of fifty-four (54) consecutive 41 calendar months during which the member earned: 42 (i) The highest average salary; and 43 (ii) Membership service of at least one-half (1/2) the number of 2 1 months in the period, excluding months of service attributable to: 2 A. Military service; 3 B. Service qualifying as minimum benefit pursuant to section 4 59-1342(5), Idaho Code; and 5 C. Worker's compensation income benefits. 6 (b) Effective October 1, 1993, the consecutive calendar months shall be 7 forty-eight (48). Effective October 1, 1994, the consecutive calendar 8 months shall be forty-two (42). 9 (c) Entitlement to a base period shall not vest until the effective date 10 of that base period. The retirement benefits shall be calculated on the 11 amounts, terms and conditions in effect at the date of the final contribu- 12 tion by the member. 13 (d) If no base period exists for a member, the member's average monthly 14 salary shall be determined by the board, using standards not inconsistent 15 with those established in this subsection. 16 (e) To assure equitable treatment for all members, salary increments 17 inconsistent with usual compensation patterns may be disallowed by the 18 board in determining average monthly salary and base period. 19 (6) "Beneficiary" means the person who is nominated by the written desig- 20 nation of a member, duly executed and filed with the board, to receive the 21 death benefit. 22 (7) "Calendar year" means twelve (12) calendar months commencing on the 23 first day of January. 24 (8) "Credited service" means the aggregate of membership service, prior 25 service and disabled service. 26 (9) "Date of establishment" means July 1, 1965, or a later date estab- 27 lished by the board or statute. 28 (10) "Death benefit" means the amount, if any, payable upon the death of a 29 member. 30 (11) "Disability retirement allowance" means the periodic payment becoming 31 payable upon an active member's ceasing to be an employee while eligible for 32 disability retirement. 33 (12) "Disabled" means: 34 (a) That the member is prevented from engaging in any occupation or 35 employment for remuneration or profit as a result of bodily injury or dis- 36 ease, either occupational or nonoccupational in cause, but excluding dis- 37 abilities resulting from service in the armed forces of any country, or 38 from an intentionally self-inflicted injury; and 39 (b) That the member will likely remain so disabled permanently and con- 40 tinuously during the remainder of the member's life. 41It is not necessary that a person be absolutely helpless or entirely42unable to do anything worthy of compensation to be considered disabled. If the43person is so disabled that substantially all the avenues of employment are44reasonably closed to the person, that condition is within the meaning of45"disabled."In evaluating whether a person is disabled, medical factors 46 and nonmedical factors including, but not limited to, education, economic and 47 social environment, training and usable skills may be considered. 48 Refusal to submit to a medical examination ordered by the board before the 49 commencement of a disability retirement allowance or at any reasonable time 50 thereafter shall constitute proof that the member is not disabled. The board 51 shall be empowered to select for such medical examination one (1) or more phy- 52 sicians or surgeons who are licensed to practice medicine and perform surgery. 53 The fees and expenses of such examination shall be paid from the administra- 54 tion account of the fund. No member shall be required to undergo such examina- 55 tion more often than once each year after he has received a disability retire- 3 1 ment allowance continuously for two (2) years. 2 (12A) "Disabled service" means the total number of monthselapsing3frombeginning the first dayof the month next suc-4ceedingafter the final contribution of a member prior to 5 receiving a disability retirement allowancetoand ending 6 the first day of the month following the date of termination of such 7 disability retirement allowance. During such period, the member shall remain 8 classified in the membership category held during the month of final contribu- 9 tion. The total number of months of disabled service credited for a person 10 first becoming disabled after the effective date of this chapter shall not 11 exceed the excess, if any, of three hundred sixty (360) over the total number 12 of months of prior service and membership service. 13 (12B) "Domestic retirement order" means any judgment, decree, or order, 14 including approval of a property settlement agreement which relates to the 15 provision of marital property rights to a spouse or former spouse of a member, 16 and is made pursuant to a domestic relations law, including the community 17 property law of the state of Idaho or of another state. 18 (13) "Early retirement allowance" means the periodic payment becoming pay- 19 able upon an active member's ceasing to be an employee while eligible for 20 early retirement. 21 (14) (A) "Employee" means: 22 (a) Any person who normally works twenty (20) hours or more per week for 23 an employer or a school teacher who works half-time or more for an 24 employer and who receives salary for services rendered for such employer; 25 or 26 (b) Elected officials or appointed officials of an employer who receive a 27 salary; or 28 (c) A person who is separated from service with less than five (5) con- 29 secutive months of employment and who is reemployed or reinstated by the 30 same employer within thirty (30) days. 31 (B) "Employee" does not include employment as: 32 (a) A person rendering service to an employer in the capacity of an inde- 33 pendent business, trade or profession; or 34 (b) A person whose employment with any employer does not total five (5) 35 consecutive months; or 36 (c) A person provided sheltered employment or made-work by a public 37 employer in an employment or industries program maintained for the benefit 38 of such person; or 39 (d) An inmate of a state institution, whether or not receiving compensa- 40 tion for services performed for the institution; or 41 (e) A student enrolled in an undergraduate, graduate, or vocational- 42 technical program at and employed by a state college, university, commu- 43 nity college or vocational-technical center when such employment is predi- 44 cated on student status; or 45 (f) A person making contributions to the United States civil service com- 46 mission under the United States Civil Service System Retirement Act except 47 that a person who receives separate remuneration for work currently per- 48 formed for an employer and the United States government may elect to be a 49 member of the retirement system in accordance with rules of the board; or 50 (g) A person occupying a position that does not exceed eight (8) consecu- 51 tive months in a calendar year with a city or county when the city or 52 county has certified, in writing to the system, the position is (i) sea- 53 sonal or casual; and (ii) affected by weather and the growing season, 54 including parks and golf course positions. 55 (15) "Employer" means the state of Idaho, or any political subdivision or 4 1 governmental entity, provided such subdivision or entity has elected to come 2 into the system. Governmental entity means any organization composed of units 3 of government of Idaho or organizations funded only by government or employee 4 contributions or organizations who discharge governmental responsibilities or 5 proprietary responsibilities that would otherwise be performed by government. 6 All governmental entities are deemed to be political subdivisions for the pur- 7 pose of this chapter. 8 (15A) "Final contribution" means the final contribution made by a member 9 pursuant to sections 59-1331 through 59-1334, Idaho Code. 10 (16) "Firefighter" means an employee, including paid firefighters hired on 11 or after October 1, 1980, whose primary occupation is that of preventing and 12 extinguishing fires as determined by the rules of the board. 13 (17) "Fiscal year" means the period beginning on July 1 in any year and 14 ending on June 30 of the next succeeding year. 15 (18) "Fund" means the public employee retirement fund established by this 16 chapter. 17 (19) "Funding agent" means any bank or banks, trust company or trust com- 18 panies, legal reserve life insurance company or legal reserve life insurance 19 companies, or combinations thereof, any thrift institution or credit union or 20 any investment management firm or individual investment manager selected by 21 the board to hold and/or invest the employers' and members' contributions and 22 pay certain benefits granted under this chapter. 23 (20) "Inactive member" means a former active member who is not an employee 24 and is not receiving any form of retirement allowance, but for whom a separa- 25 tion benefit has not become payable. 26 (20A) "Lifetime annuity" means periodic monthly payments of income by the 27 retirement system to an alternate payee. 28 (20B) "Lump sum distribution" means a payment by the retirement system of 29 the entire balance in the alternate payee's segregated account, together with 30 regular interest credited thereon. 31 (21) "Member" means an active member, inactive member or a retired member. 32 (22) "Membership service" means military service which occurs after the 33 commencement of contributions payable under sections 59-1331 through 59-1334, 34 Idaho Code, and service with respect to which contributions are payable under 35 sections 59-1331 through 59-1334, Idaho Code, which, except for benefit calcu- 36 lations described in sections 59-1342 and 59-1353, Idaho Code, includes ser- 37 vice transferred to a segregated account under an approved domestic retirement 38 order. 39 (23) "Military service" means active duty service in the armed forces of 40 the United States including the national guard and reserves, under the provi- 41 sions of title 10, title 32, and title 37, United States code. Provided, how- 42 ever, for the purposes of this chapter, military service SHALL NOT include: 43 (a) Any period ended by dishonorable discharge or during which termina- 44 tion of such service is available but not accepted; 45 (b) Any period which commences more than ninety (90) days after the per- 46 son ceases to be an employee or ends more than ninety (90) days before the 47 person again becomes an employee unless such ninety (90) day requirements 48 are waived by the board due to circumstances beyond the employee's con- 49 trol; or 50 (c) Any active duty service in excess of five (5) years if at the conve- 51 nience of the United States government, or in excess of four (4) years if 52 not at the convenience of the United States government. 53 (24) (a) "Police officer" for retirement purposes shall be as defined in 54 section 59-1303, Idaho Code. 55 (b) "POST" means the Idaho peace officer standards and training council 5 1 established in chapter 51, title 19, Idaho Code. 2 (25) "Prior service" means any period prior to July 1, 1965, of military 3 service or of employment for the state of Idaho or any political subdivision 4 or other employer of each employee who is an active member or in military ser- 5 vice or on leave of absence on the date of establishment, provided, however, 6 an employee who was not an active member or in military service or on leave of 7 absence on the date of establishment shall receive credit for the member's 8 service prior to July 1, 1965, on the basis of recognizing two (2) months of 9 such service for each month of membership service. For the purpose of comput- 10 ing such service, no deduction shall be made for any continuous period of 11 absence from service or military service of six (6) months or less. 12 (26) "Regular interest" means interest at the rate set from time to time 13 by the board. 14 (27) "Retired member" means a former active member receiving a retirement 15 allowance. 16 (28) "Retirement" means the acceptance of a retirement allowance under 17 this chapter upon termination of employment. 18 (29) "Retirement board" or "board" means the board provided for in sec- 19 tions 59-1304 and 59-1305, Idaho Code, to administer the retirement system. 20 (30) "Retirement system" or "system" means the public employee retirement 21 system of Idaho. 22 (31) (A) "Salary" means: 23 (a) The total salary or wages paid to a person who meets the definition 24 of employee by an employer for personal services performed and reported 25 by the employer for income tax purposes, including the cash value of all 26 remuneration in any medium other than cash. 27 (b) The total amount of any voluntary reduction in salary agreed to by 28 the member and employer where the reduction is used as an alternative form 29 of remuneration to the member. 30 (B) Salary in excess of the compensation limitations set forth in section 31 401(a)(17) of the Internal Revenue Code shall be disregarded for any person 32 who becomes a member of the system on or after July 1, 1996. The system had no 33 limitations on compensation in effect on July 1, 1993. The compensation limi- 34 tations set forth in section 401(1)(17) of the Internal Revenue Code shall not 35 apply for an "eligible employee." For purposes of this subsection, "eligible 36 employee" is an individual who was a member of the system before July 1, 1996. 37 (C) "Salary" does not include: 38 (a) Contributions by employers to employee held medical savings accounts, 39 as those accounts are defined in section 63-3022K, Idaho Code. 40 (b) Lump sum payments inconsistent with usual compensation patterns made 41 by the employer to the employee only upon termination from service includ- 42 ing, but not limited to, vacation payoffs, sick leave payoffs, early 43 retirement incentive payments and bonuses. 44 (31A) "Segregated account" means the account established by the retirement 45 system for the alternate payee of a member who is not a retired member. It 46 shall include the months of credited service and accumulated contributions 47 transferred from the member's account. 48 (32) "Separation benefit" means the amount, if any, payable upon or subse- 49 quent to separation from service. 50 (33) "Service" means being shown on an employer's payroll as an employee 51 receiving a salary. Service of fifteen (15) days or more during any calendar 52 month shall be credited as one (1) month of service. Service of fourteen (14) 53 days or less during any calendar month shall not be credited. No more than one 54 (1) month of service shall be credited for all service in any month. 55 (34) "Service retirement allowance" means the periodic payment becoming 6 1 payable upon an active member's ceasing to be an employee while eligible for 2 service retirement. 3 (35) "State" means the state of Idaho. 4 (36) "Vested retirement allowance" means the periodic payment becoming 5 payable upon an inactive member's becoming eligible for vested retirement. 6 (37) The masculine pronoun, wherever used, shall include the feminine pro- 7 noun.
STATEMENT OF PURPOSE
RS08370
This bill relates to disability retirement under PERSI. Until
1993, the PERSI disability standard set forth in section 59-1302(13), Idaho Code, clearly expressed a total and permanent
disability standard. In 1993, additional language was added to the
definition, not to change the standard, but to give the board more
flexibility in applying the standard. Unfortunately, this change
also unintentionally affected the standard and created ambiguity
about the level of disability required to be eligible for
disability retirement. This bill strikes language added in 1993
which created the ambiguity, clarifying that disability retirement
under the PERSI standard requires total and permanent disability.
It also clarifies the definition of "disabled service" to assure
that service is not lost between active service and disabled
service.
FISCAL IMPACT
None.
CONTACT
Name: Alan Winkle
Agency: Public Employee Retirement System of Idaho
Phone: 334-2455
Statement of Purpose/Fiscal Impact H 2