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SENATE BILL NO. 1057
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S1057.......................................by COMMERCE AND HUMAN RESOURCES
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to increase the
value of the lump sum death benefit payable to the beneficiaries of vested
members to an amount comparable to the optional spousal annuity.
01/27 Senate intro - 1st rdg - to printing
01/28 Rpt prt - to Com/HuRes
02/24 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
03/02 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, Noh, Riggs,
Risch, Sandy, Schroeder, Sorensen, Stegner, Stennett, Thorne,
Absent and excused--Parry, Richardson, Twiggs
Floor Sponsor - McLaughlin
Title apvd - to House
03/03 House intro - 1st rdg - to Comm/Hu Res
03/10 Rpt out - rec d/p - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 53-0-17
AYES -- Alltus, Barrett, Boe, Bruneel, Callister, Campbell, Chase,
Clark, Crow, Cuddy, Deal, Ellsworth, Field(13), Field(20), Gagner,
Gould, Hadley, Hansen(23), Hansen(29), Henbest, Hornbeck, Jaquet,
Judd, Kellogg, Kempton, Kendell, Kunz, Lake, Linford, Loertscher,
Mader, Marley, McKague, Meyer(Duncan), Moyle, Pischner, Pomeroy,
Reynolds, Ridinger, Ringo, Robison, Sali, Smith, Stevenson,
Stoicheff, Stone, Taylor, Tilman, Tippets, Watson, Wheeler, Williams,
NAYS -- None
Absent and excused -- Barraclough, Bell, Bieter, Black, Denney,
Geddes, Hammond, Jones, Limbaugh, Montgomery, Mortensen, Schaefer,
Sellman, Smylie, Trail, Zimmermann, Mr Speaker
Floor Sponsor - Ridinger
Title apvd - to Senate
03/17 To enrol - rpt enrol - Pres signed
03/18 Sp signed
03/19 To Governor
03/23 Governor signed
Session Law Chapter 160
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature First Regular Session - 1999
IN THE SENATE
SENATE BILL NO. 1057
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1361,
3 IDAHO CODE, TO INCREASE THE VALUE OF THE LUMP SUM DEATH BENEFIT PAYABLE TO
4 THE BENEFICIARIES OF VESTED MEMBERS TO AN AMOUNT COMPARABLE TO THE
5 OPTIONAL SPOUSAL ANNUITY; AND AMENDING SECTION 59-1351, IDAHO CODE, TO
6 PROVIDE A CORRECT CITATION AND TO MAKE TECHNICAL CORRECTIONS.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 59-1361, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 59-1361. COMPUTATION OF DEATH BENEFITS -- METHOD OF PAYMENT -- OPTIONAL
11 DEATH BENEFIT. (1) The death benefit of an active or inactive member not
12 vested at time of death shall equal the excess, if any, of the member's
13 accumulated contributions at the time the benefit becomes payable over the
14 aggregate of all retirement allowance benefit pay-
15 ments ever made to the deceased member . upon
16 the death of the member, the contingent annuitant, and the optional death ben-
17 efit recipient, if any.
18 (2) The death benefit of a n early or service
19 retired member shall equal the excess, if any, of the member's accumulated
20 contributions at the time the member retired over the aggregate of all retire-
21 ment allowance payments ever made to the deceased member, the
22 member's named contingent annuitant, and the optional death benefit recipient,
23 if any.
24 (3) The death benefit of a vested member who, at the time of death
25 is either active, inactive, or a disability retiree, shall equal the excess,
26 if any, of two hundred percent (200%) of the member's accumulated contribu-
27 tions at the time of death over the aggregate of all benefit payments ever
28 made to the member and the optional death benefit recipient, if any.
29 ( 2 4 ) The death benefit, if any, will be paid to
30 the member's designated beneficiary who is surviving the member at the time
31 the benefit becomes payable ; otherwise, it . If no benefi-
32 ciary has been designated or the designated beneficiary has predeceased the
33 member, the death benefit will be paid to the surviving spouse, and if
34 there is no surviving spouse it will be paid in accordance with the laws of
35 descent and distribution of the state of Idaho as they may then be in effect.
36 The beneficiary may waive any death benefit otherwise payable and have it paid
37 to the member's surviving spouse.
38 ( 3 5 ) Upon the death When the
39 surviving spouse of a vested member who has at least
40 five (5) years of credited service and is: (a) active; (b) inactive; or (c) a
41 disability retired member; his beneficiary may waive any death benefit other-
42 wise payable and have it paid to the member's surviving spouse, whereupon
43 is entitled to a death benefit under subsection (3) of this sec-
1 tion, the surviving spouse may elect either an allowance as provided in
2 option 1 under section 59-1351, Idaho Code, or a one (1) time lump sum death
3 benefit payment as provided in subsection ( 1 3 ) of
4 this section. The initial retirement allowance upon which such optional
5 retirement allowance is based shall be calculated as if the member had retired
6 immediately before his death. If the member is not then eligible to receive a
7 service or early retirement allowance, such initial retirement allowance shall
8 equal the actuarial equivalent of the retirement allowance payable when the
9 member would first be eligible for vested early
10 retirement, calculated as if he had separated from service immediately before
11 his death.
12 SECTION 2. That Section 59-1351, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 59-1351. CONVERSION OF SERVICE RETIREMENT OR EARLY RETIREMENT OR VESTED
15 RETIREMENT ALLOWANCES INTO OPTIONAL RETIREMENT ALLOWANCES -- FORM OF OPTIONAL
16 RETIREMENT. (1) The service retirement allowance, the early retirement allow-
17 ance or the vested retirement allowance of a member who, at time of retire-
18 ment, so elects shall be converted into an optional retirement allowance which
19 is the actuarial equivalent of such other allowance. The optional retirement
20 allowance may take one (1) of the forms listed below and shall be
21 in lieu of all other benefits under this chapter except that the provisions of
22 section 59-1361( 1 2 ), Idaho Code, shall be applica-
24 (a) Option 1 provides a reduced retirement allowance payable during the
25 lifetime of the retired member, and a continuation thereafter of such
26 reduced retirement allowance during the lifetime of the member's named
27 contingent annuitant.
28 (b) Option 2 provides a reduced retirement allowance payable during the
29 lifetime of the retired member, and a continuation thereafter of one-half
30 (1/2) of such reduced retirement allowance during the lifetime of the
31 member's named contingent annuitant.
32 (c) Option 3, which is available only if the member retires before the
33 date of the social security normal retirement age for that member, pro-
34 vides an increased retirement allowance until such date and a reduced
35 retirement allowance thereafter, the difference between the two (2)
36 amounts approximately equaling the governmental old-age benefit becoming
37 payable at such date as estimated by the board.
38 (d) Option 4, which is available only if the member retires before the
39 date of the social security normal retirement age for that member, pro-
40 vides either an adjusted option 1 (option 4A) or option 2 (option 4B)
41 retirement allowance until such date and a reduced retirement allowance
42 thereafter, the difference between the two (2) amounts approximately
43 equaling the governmental old-age benefit becoming payable at such date as
44 estimated by the board. The adjusted retirement allowance shall be paid to
45 the retired member during the member's lifetime and the appropriate con-
46 tinuation amount of the adjusted allowance to the member's named contin-
47 gent annuitant for life thereafter.
48 (2) Should the named contingent annuitant under option 1 or option 2 pre-
49 decease a member retiring on or after October 1, 1992, upon notification to
50 the board the member's benefit on the first day of the month following the
51 death of the contingent annuitant will thereafter become an allowance calcu-
52 lated pursuant to section 59-1342 or 59-1346, Idaho Code, whichever was appli-
53 cable on the date of retirement, in addition to any post retirement
1 postretirement allowance adjustments which may have
2 accrued from that time. Should the named contingent annuitant predecease the
3 member under option 4, upon notification to the board, the member's benefit on
4 the first day of the month following the contingent annuitant's death will
5 thereafter become the option 3 allowance to which the member would have been
6 entitled as of the date of the annuitant's death. The benefit changes under
7 this subsection shall be available only to members whose last contribution was
8 made after the effective date of this act.
9 (3) Option 1 or 2 may not be chosen if initial payments of less than
10 twenty dollars ($20.00) per month would result.
11 (4) Application for any optional retirement allowance shall be in writ-
12 ing, duly executed and filed with the board. Such application shall contain
13 all information required by the board, including such proofs of age as are
14 deemed necessary by the board.
15 (5) A retirement option elected at the time of retirement as provided for
16 in this section may not be changed except by written notice to the retirement
17 board no later than five (5) business days after the receipt of the first
18 retirement allowance.
19 (6) Not later than one (1) year after the marriage of a retired member,
20 the member may elect option 1, 2 or 4 to become effective one (1) year after
21 the date of such election, provided the member's spouse is named as a contin-
22 gent annuitant, and either:
23 (a) The member was not married at the time of the member's retirement; or
24 (b) The member earlier elected option 1, 2, 4A or 4B, having named the
25 member's spouse as contingent annuitant, and said spouse has died. The
26 retirement allowance to be converted in such a case is that currently
27 being paid.
STATE MENT OF PURPOSE
Idaho Code Section 59-1361 currently provides a lump sum death
benefit for all PERSI members in an amount equal to one hundred
percent (100~) of the member's contributions, plus interest.
However, where the death benefit is payable to the surviving
spouse of a vested member, the spouse may elect an optional
death benefit annuity in lieu of the standard lump sum benefit.
The actuarial value of the spousal annuity is approximately
double the value of the lump sum benefit or two hundred percent
(2001) of the member~s accumulated contributions. This bill is
intended to extend the value of the spousal annuity benefit to
the beneficiaries of all vested members, not just to spouses.
While all beneficiaries of vested members would be entitled to
an increased lump sum benefit of two hundred percent (2001) of
the member's accumulated contributions, the optional death
benefit annuity will continue to be available only to spouses.
The increased benefit does not apply to the death benefits of
nonvested or retired members.
This will-slightly increase the amount paid out of the fund for
death benefits. Because actuarial assumptions are currently
based on all death benefits of vested members being paid as an
optional spousal annuity, there is no actuarial cost.
Name: Alan Winkle
Agency: Public Employee Retirement System of Idaho
Statement of Purpose/Fiscal Impact S1057