Print Friendly HOUSE BILL NO. 38 – PERSI/supplemental plan/contribute
HOUSE BILL NO. 38
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H0038........................................................by MR. SPEAKER
Requested by: Public Employee Retirement System of Idaho
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to permit any
member of the Public Employee Retirement System to initiate voluntary
contributions into the supplemental plan immediately upon employment.
01/08 House intro - 1st rdg - to printing
Rpt prt - to St Aff
01/11 Rpt out - to Com/HuRes
02/02 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 66-0-4
AYES -- Barraclough, Barrett, Bedke, Bell, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner,
Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck, Jaquet,
Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader,
Marley, McKague, Meyer, Montgomery, Mortensen, Moss, Moyle, Pearce,
Pischner, Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali,
Schaefer, Sellman, Shepherd, Smith, Smylie, Stevenson, Stone, Swan,
Tilman, Trail, Wheeler, Wood, Young
NAYS -- None
Absent and excused -- Bieter, Crow, Cuddy, Mr. Speaker
Floor Sponsor -- Lake
Title apvd - to Senate
02/08 Senate intro - 1st rdg - to Com/HuRes
03/07 Rpt out - rec d/p - to 2nd rdg
03/08 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
Burtenshaw, Cameron, Danielson, Darrington, Davis, Deide, Dunklin,
Frasure, Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough,
King-Barrutia, Lee, Lodge, Noh, Richardson, Risch, Sandy, Schroeder,
Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler, Whitworth
NAYS -- None
Absent and excused -- Williams
Floor Sponsors -- Bunderson & Lodge
Title apvd - to House
03/19 To enrol
03/20 Rpt enrol - Sp signed
03/21 Pres signed - to Governor
03/22 Governor signed
Session Law Chapter 89
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 38
BY MR. SPEAKER
Requested by: Public Employee Retirement System of Idaho
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1308,
3 IDAHO CODE, TO PERMIT ANY MEMBER OF THE PUBLIC EMPLOYEE RETIREMENT SYSTEM
4 TO INITIATE VOLUNTARY CONTRIBUTIONS INTO THE SUPPLEMENTAL PLAN IMMEDIATELY
5 UPON EMPLOYMENT AND TO MAKE A TECHNICAL CORRECTION; AND DECLARING AN EMER-
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 59-1308, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 59-1308. SUPPLEMENTAL BENEFIT PLAN -- CONTRIBUTIONS AND EXPENSES OF THE
11 SUPPLEMENTAL BENEFIT PLAN -- INDEMNIFICATION. (1) The state shall sponsor and
12 the board shall administer one (1) or more supplemental benefit plans to be
13 used for allocation of extraordinary gains as provided in section 59-1309,
14 Idaho Code, and for voluntary contributions of active members. The supplemen-
15 tal plans may be established under the qualified requirements of section
16 401(a) of the Internal Revenue Service Code and with the qualified cash or
17 deferred arrangements under section 401(k) of the Internal Revenue Service
18 Code or any other tax-deferred plan permitted by law, as determined by the
19 retirement board. The board is authorized to secure such qualified staff and
20 consultants as it determines necessary to establish and administer such plans.
21 Employee and employer contributions shall be permitted according to the provi-
22 sions of these plans as established by the board. For purposes of this section
23 "employee" shall mean a participant as defined in the supplemental benefit
24 plan documents or board rules.
25 (2) The board is authorized, but not required, to establish separate
26 trust funds to hold the assets of the supplemental benefit plans created under
27 this section. The investment options available under supplemental benefit
28 plans shall be determined by the board, and may include, but are not limited
29 to, investment in all or part of the public employee retirement fund and use
30 of private vendor options.
31 (3) Supplemental benefit plans shall be available to all active members
32 and shall be in addition to any other retirement or tax-deferred compensation
33 system established by the employer. The board may provide educational opportu-
34 nities related to supplemental benefit plans and retirement savings, as deter-
35 mined by the board.
36 (4) Accounts shall be established in supplemental benefit plans for all
37 active members eligible for an extraordinary gains transfer under section
38 59-1309, Idaho Code. After receiving an the initial transfer of extraordinary
39 gains, transfer, any active member may make additional voluntary contributions
40 to his/her account, subject to applicable limitations, by authorizing his/her
41 employer to contribute an amount by payroll deduction to the supplemental ben-
42 efit plan in lieu of receiving such amount as salary. The amount of such con-
43 tributions shall be subject to any limitations established by the board, state
1 or federal law. The employer shall provide coordination of contributions
2 between multiple plans to assure that contribution limits are not exceeded.
3 Should aggregate contributions to multiple plans exceed applicable limits,
4 excess contributions shall be deemed to apply exclusively to plans not cre-
5 ated by this chapter. In the event a preexisting plan is used as a supplemen-
6 tal plan, voluntary contributions may continue to be made to that plan despite
7 the absence of extraordinary gains transfers.
8 (5) For purposes of this section the employer is authorized to make such
9 deductions from salary for any employee who has authorized such deductions in
10 writing. The employer shall forward all contributions under this section to
11 the board by the fifth working day after each payroll, in addition to reports
12 as directed by the board. Any costs incurred by the board, whether direct or
13 indirect, due to an employer's failure to properly withhold, transfer, limit
14 and report contributions, shall be the responsibility of the employer and
15 shall be immediately due and payable upon notice from the board. This
16 includes, but is not limited to, costs associated with plan corrections. Such
17 costs shall be treated as delinquent contributions under section 59-1325,
18 Idaho Code.
19 (6) The board may enter into agreements with employers or require partic-
20 ipation to implement the supplemental benefit plans and the board may desig-
21 nate administrative agents to execute all necessary agreements pertaining to
22 the supplemental benefit plans.
23 (7) All contributions received from participants in the supplemental ben-
24 efit plans shall be deposited with a trustee designated by the board. All such
25 funds are hereby perpetually appropriated to the board, shall not be included
26 in the department's budget, and may be invested or used to pay for investment
27 and administrative expenses of the supplemental benefit plans. Inactive mem-
28 bers may be required to transfer supplemental benefit plan account balances as
29 determined by the board.
30 (8) The board may establish rules to implement and administer supplemen-
31 tal benefit plans. Costs of administration shall be appropriated by the legis-
32 lature and may be paid from the interest earnings of the funds accrued as a
33 result of the deposits or as an assessment against each account, to be decided
34 by the board. Investment related expenses are exempt from appropriation.
35 (9) Contributions and investment earnings under the supplemental benefit
36 plans shall be exempt from federal and state income taxes until the ultimate
37 distribution of such contributions. Distributions of funds held in supplemen-
38 tal benefit plan accounts are subject to federal law limitations. The board
39 may provide for retirement disbursement options other than lump sum payments.
40 (10) All additional contributions made by the employee under this section
41 shall continue to be included as regular compensation for the purpose of com-
42 puting the employer and employee retirement contributions and pension benefits
43 earned by an employee under this chapter, but such sum shall not be included
44 in the computation of any income taxes withheld on behalf of any employee.
45 However, funds accrued in a supplemental benefit plan account shall not be
46 considered in determining any other benefits under this chapter.
47 (11) The provisions of sections 59-1316 and 59-1317(1), (2) and (5), Idaho
48 Code, shall also apply to the supplemental benefit plans created under this
49 section. Should a court order that an assignment be made to a participant's
50 spouse or former spouse of all or part of an account created under this sec-
51 tion, the assignment shall be separate and distinct from any approved domes-
52 tic retirement order required by section 59-1317(4), Idaho Code. Requirements
53 for assignments of supplemental accounts may be set forth in rule or other
54 plan documents.
55 (12) Members of the retirement board or retirement system staff, jointly
1 or individually, shall be indemnified from all claims, demands, judgments,
2 costs, charges and expenses, including court costs and attorney's fees, and
3 against all liability losses and damages of any nature whatsoever that the
4 retirement board or retirement system staff shall or may at any time sustain
5 by reason of any decision made in the scope or performance of their duties
6 pursuant to the provisions of this section, except as may result from their
7 willful and intentional malfeasance. The venue of all actions in which the
8 retirement board or retirement staff is a party shall be in Ada county, Idaho.
9 SECTION 2. An emergency existing therefor, which emergency is hereby
10 declared to exist, this act shall be in full force and effect on and after its
11 passage and approval.
STATEMENT OF PURPOSE
In 2000, section 59-1308, Idaho Code, was amended to
accommodate gain-sharing allocations from the defined
benefit plan. At that time, it was thought that the
expense of creating and maintaining a supplemental plan
account for voluntary contributions alone would be too
expensive. As a result, subsection (4) provided for
voluntary contributions only after a member had received
a gain sharing transfer.
As the plan has developed it has been determined that once
the initial transfer of gain sharing takes place, providing
members the option to make voluntary contributions immediately
upon employment regardless of whether they personally received
a gain sharing allocation, would be beneficial to members.
This bill amends section 59-1308, Idaho Code, to eliminate the
requirement that voluntary contributions cannot be initiated
until a member has received a gain sharing transfer.
In order to avoid any unnecessary delay in permitting members to
make voluntary contributions, an emergency clause is included in
There would be an incremental cost for record keeping services for
each participant. We estimate the total additional cost to be
Name: Alan Winkle, PERSI
STATEMENT OF PURPOSE/FISCAL NOTE H38