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H0511.......................................by COMMERCE AND HUMAN RESOURCES
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to adjust the
percentage of average monthly salary to be used in the computation of
service retirement allowances.
02/04 House intro - 1st rdg - to printing
02/07 Rpt prt - to Com/HuRes
02/10 Rpt out - rec d/p - to 2nd rdg
02/11 2nd rdg - to 3rd rdg
02/15 3rd rdg - PASSED - 40-28-2
AYES -- Alltus, Bieter, Boe, Bruneel, Callister, Campbell, Chase,
Crow, Cuddy, Deal, Ellsworth, Field(13), Gould, Hadley, Hansen(23),
Hansen(29), Henbest, Jaquet, Jones, Judd, Kempton, Kunz, Mader,
Marley, Meyer, Mortensen, Pischner, Pomeroy, Reynolds, Ridinger,
Ringo, Robison, Sellman, Shepherd, Smith, Smylie, Stoicheff, Stone,
Trail(Miller), Zimmermann
NAYS -- Barraclough, Barrett, Bell, Cheirrett, Clark, Denney,
Field(20), Gagner, Geddes, Hammond, Kellogg, Kendell, Lake, Linford,
Loertscher, McKague, Montgomery, Moss, Moyle, Pearce, Sali, Schaefer,
Stevenson, Taylor, Tilman, Wheeler, Wood, Mr Speaker
Absent and excused -- Black, Hornbeck
Floor Sponsors - Marley, Trail
Title apvd - to Senate
02/16 Senate intro - 1st rdg - to Com/HuRes
03/08 Rpt out - rec d/p - to 2nd rdg
03/09 2nd rdg - to 3rd rdg
03/28 3rd rdg - PASSED - 26-9-0
AYES--Andreason, Boatright, Cameron, Crow, Danielson, Darrington,
Davis, Deide, Dunklin, Frasure, Geddes, Ingram, Keough,
King-Barrutia, Lee, McLaughlin, Noh, Riggs, Risch, Sandy, Schroeder,
Sorensen, Stegner, Stennett, Wheeler, Whitworth
NAYS--Branch, Bunderson, Burtenshaw, Hawkins, Ipsen, Parry,
Richardson, Thorne, Williams
Absent and excused--None
Floor Sponsor - Cameron
Title apvd - to House
03/29 To enrol
03/30 Rpt enrol - Sp signed - Pres signed
03/31 To Governor
04/05 Governor signed
Session Law Chapter 209
Effective: 07/01/00
H0511
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 511
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1342,
3 IDAHO CODE, TO PROVIDE AN ADJUSTMENT IN THE PERCENTAGE OF AVERAGE MONTHLY
4 SALARY TO BE USED IN THE COMPUTATION OF SERVICE RETIREMENT ALLOWANCES AND
5 TO MAKE TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE DATE.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 59-1342, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 59-1342. COMPUTATION OF SERVICE RETIREMENT ALLOWANCES -- MINIMUM BENE-
10 FITS. (1) The annual amount of accrued retirement allowance for each month of
11 credited service for which a member was not classified as a police member or
12 firefighter shall equal one and two-thirds per cent percent (1 2/3%) of the
13 member's average monthly salary. Effective October 1, 1992, the annual amount
14 of accrued retirement allowance for all service for which a member was not
15 classified as a police member or firefighter shall equal one and seventy-five
16 hundredths per cent percent (1.75%) of the member's average monthly salary;
17 effective October 1, 1993, the annual amount of accrued retirement allowance
18 shall equal one and eight hundred thirty-three thousandths per cent percent
19 (1.833%) of the member's average monthly salary; and effective October 1,
20 1994, the annual amount of accrued retirement allowance shall equal one and
21 nine hundred seventeen thousandths per cent percent (1.917%); and effective
22 June 30, 2000, the annual amount of accrued retirement allowance shall equal
23 two percent (2%) of the member's average monthly salary. Entitlement to an
24 annual amount of accrued retirement allowance shall not vest until the effec-
25 tive date of that annual amount of accrued retirement allowance. The retire-
26 ment benefits shall be calculated on the amounts, terms and conditions in
27 effect on the date of the final contribution by the member. The annual amount
28 of initial service retirement allowance of such a member shall equal (a) or
29 (b), whichever is greater:
30 (a) the member's accrued retirement allowance; or
31 (b) five dollars ($5.00) multiplied by the number of months of credited
32 service and by the bridging factor, as provided in section 59-1355, Idaho
33 Code, between July 1, 1974 and the first of the month following the
34 member's final contribution.
35 (2) The annual amount of accrued retirement allowance for each month of
36 credited service for which a member was classified as a police member or fire-
37 fighter shall equal two per cent percent (2%) of the member's average monthly
38 salary. Effective October 1, 1992, the annual amount of accrued retirement
39 allowance for all service for which a member was classified as a police member
40 or firefighter shall equal two and seventy-five thousandths per cent percent
41 (2.075%) of the member's average monthly salary; effective October 1, 1993,
42 the annual amount of accrued retirement allowance shall equal two and fifteen
43 hundredths per cent percent (2.15%) of the member's average monthly salary;
2
1 and effective October 1, 1994, the annual amount of accrued retirement allow-
2 ance shall equal two and two hundred twenty-five thousandths per cent percent
3 (2.225%); and effective June 30, 2000, the annual amount of accrued retirement
4 allowance shall equal two and three-tenths percent (2.3%) of the member's
5 average monthly salary. Entitlement to an annual amount of accrued retirement
6 allowance shall not vest until the effective date of that annual amount of
7 accrued retirement allowance. The retirement benefits shall be calculated on
8 the amounts, terms and conditions in effect on the date of the final contribu-
9 tion by the member. The annual amount of initial service retirement allowance
10 of such a member shall equal (a) or (b), whichever is greater:
11 (a) the member's accrued retirement allowance; or
12 (b) six dollars ($6.00) multiplied by the number of months of credited
13 service and by the bridging factor, as provided in section 59-1355, Idaho
14 Code, between July 1, 1974 and the first of the month following the
15 member's final contribution.
16 (3) Provisions of this section shall be applicable to members and contin-
17 gent annuitants of the retirement system and to members, annuitants and bene-
18 ficiaries of the teachers and city systems. In any recomputation of an initial
19 retirement allowance for a person not making a final contribution subsequent
20 to 1974, the bridging factor referred to in subsections (1) and (2) shall be
21 1.000. Any recomputed retirement allowance shall be payable only prospectively
22 from July 1, 1974.
23 (4) Benefits payable to a person who became a member prior to July 1,
24 1974, or to the member's beneficiaries shall never be less than they would
25 have received under this chapter as in effect on June 30, 1974; provided, how-
26 ever, that the member shall have accrued the amount of accumulated contribu-
27 tions required thereby prior to payment of an initial retirement allowance.
28 (5) If the majority of a member's credited service is as an elected offi-
29 cial or as an appointed official, except as a member of the Idaho legislature,
30 and that official was normally in the administrative offices of the employer
31 less than twenty (20) hours per week during the term of office, or was nor-
32 mally not required to be present at any particular work station for the
33 employer twenty (20) hours per week or more during the term of office, and
34 that member's initial service retirement allowance for service credited only
35 during that period would be computed under subsection (1)(b) and/or (2)(b) of
36 this section, without consideration of any other credited service, then it
37 will be so computed for that period of service. If that member has credited
38 service from any other employment, the accrued service retirement allowance
39 for the credited service from such other employment shall be computed from an
40 average monthly salary for salary received during the period of such other
41 employment. The initial service retirement allowance of members of the Idaho
42 legislature will be computed under subsection (1) and/or (2) of this section,
43 on the basis of their total months of credited service.
44 (6) In no case, however, will a member's initial service retirement bene-
45 fit be equal to more than the member's accrued benefit as of May 1, 1990, or
46 one hundred per cent percent (100%) of the member's average compensation for
47 the three (3) consecutive years of employment which produce the greatest
48 aggregate compensation, whichever is greater. If the benefit is calculated to
49 exceed one hundred per cent percent (100%) of the member's average compensa-
50 tion, the member shall be eligible for and may choose either:
51 (a) an annual service retirement allowance equal to the member's average
52 annual compensation for the three (3) consecutive years of employment
53 which produced the greatest aggregate compensation; or
54 (b) a separation benefit.
55 (7) The annual amount of initial service retirement allowance of a member
3
1 who is over age seventy (70) on the effective date of the member's retirement
2 shall be a percentage of the member's initial service retirement allowance.
3 Such percentage shall be one hundred per cent percent (100%) increased as
4 determined by the board to compensate for each month that the member's retire-
5 ment is deferred beyond age seventy (70).
6 (8) A member's accrued retirement allowance, as otherwise provided in
7 subsections (1), (2), (3), (4) and (5) of this section, shall not be less than
8 the minimum accrued retirement allowance provided in this subsection. The
9 determination of the initial service retirement allowance provided in subsec-
10 tions (1) and (2) of this section, and the application of the provisions in
11 subsections (6) and (7) of this section, will be made after the determination
12 of the minimum accrued retirement allowance provided in this subsection.
13 This subsection shall apply to members who have at least two (2) separate
14 periods of employment covered under this chapter where each separate period of
15 employment would otherwise be eligible for a separation benefit described in
16 section 59-1359, Idaho Code. For purposes of this subsection, if a separation
17 of employment occurs that does not exceed sixty (60) consecutive calendar
18 months then the member's period of employment shall be considered a continuous
19 period of employment. For purposes of this subsection, date of last contribu-
20 tion is the date of final contribution for each period or periods of employ-
21 ment.
22 For each separate period of employment considered under this subsection,
23 the member must not have received a separation benefit for that period, or if
24 he has received such a separation benefit under section 59-1359, Idaho Code,
25 he must have completed reinstatement of all previous credited service associ-
26 ated with all separation benefits for all periods of employment as permitted
27 under section 59-1360, Idaho Code.
28 The minimum accrued retirement allowance shall be equal to the largest
29 accrued retirement allowance calculated at each date of last contribution
30 based upon the benefit and eligibility provisions in effect as of the date of
31 the last contribution made during such separate period of employment. For pur-
32 poses of determining the accrued retirement allowance for each date of last
33 contribution:
34 (a) the member must have at least sixty (60) months of credited service
35 at the date of last contribution;
36 (b) the member's months of credited service and average monthly salary
37 are determined based soley solely on all periods of employment up to that
38 date of last contribution, ignoring later periods of employment; and
39 (c) the accrued retirement allowance computed for each period is multi-
40 plied by the bridging factor as provided in section 59-1355(3), Idaho
41 Code, between the date of the last contribution made during that separate
42 period of employment and the date of the member's final contribution made
43 during the last period of employment prior to retirement.
44 SECTION 2. This act shall be in full force and effect on and after July
45 1, 2000.
STATEMENT OF PURPOSE
RS09501
Retirement benefits under the Public Employee Retirement System
of Idaho (PERSI) are calculated on three factors:
1. A member's average annual salary over a base period (currently the
highest forty-two (42) consecutive months;
2. A member's months of credited service in the system; and
3. A statutory multiplier.
Currently the statutory multiplier is one point nine one seven percent (1.917) for
general members and two point two five percent (2.25%) for police and firefighter
members. This bill would increase the statutory multiplier effective June 30,
2000, to two percent (2%) for general members and two point three percent
(2.3%) for police and firefighter members.
FISCAL NOTE
There is no fiscal impact to the general fund. this bill would increase the normal
cost of the benefits by 0.56% of pay and decrease the fund surplus by $151.7
million. The funding required to amortize the potential unfunded liability would
be 0.53% of pay over 25 years. The total cost would be 1.09% of pay, which is
allocated 0.68% of pay by the employers and 0.41% of pay by the employees.
CONTACT: Representative Bert Marley
208/332-1165
STATEMENT OF PURPOSE/ FISCAL NOTE H 511