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HOUSE BILL NO. 45
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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,
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
|||| 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
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1302,
3 IDAHO CODE, TO REPLACE THE DEFINITION OF "VESTED RETIREMENT" WITH A DEFI-
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
6 CONFORMITY WITH THE DEFINITIONAL CHANGE; AND REPEALING SECTIONS 59-1347,
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-
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
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
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;
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
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
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
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
21 is vested without regard to the length of credited service .
22 (37) The masculine pronoun, wherever used, shall include the feminine pro-
24 SECTION 2. That Section 59-1341, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 59-1341. CONDITIONS OF ELIGIBILITY FOR SERVICE RETIREMENT.
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-
13 SECTION 5. That Section 59-1351, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 59-1351. CONVERSION OF SERVICE RETIREMENT OR EARLY RETIREMENT OR
16 VESTED RETIREMENT ALLOWANCES INTO OPTIONAL RETIREMENT ALLOWANCES --
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:
2 59-1361. COMPUTATION OF DEATH BENEFITS -- METHOD OF PAYMENT -- OPTIONAL
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
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.
Name: Alan Winkle
Agency: Public Employee Retirement System
Statement of Purpose/Fiscal Impact H 4