2001 Legislation
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HOUSE BILL NO. 41 – PERSI, employee contributn refund

HOUSE BILL NO. 41

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Daily Data Tracking History



H0041........................................................by MR. SPEAKER
         Requested by: Public Employee Retirement System of Idaho
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law to provide that
erroneous employee contributions may be refunded upon a distributable
event; to authorize the Public Employee Retirement Board to determine by
rule the appropriate benefit level subject to commutation; and to clarify
the scope of in-service disability retirement for general members.
                                                                        
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
02/09    3rd rdg - PASSED - 68-1-1
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
      Bradford, Bruneel, Callister, Campbell, Chase, Collins, Crow, Cuddy,
      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, Young, Mr. Speaker
      NAYS -- Clark
      Absent and excused -- Wood
    Floor Sponsor -- Ridinger
    Title apvd - to Senate
02/12    Senate intro - 1st rdg - to Com/HuRes
03/07    Rpt out - rec d/p - to 2nd rdg
03/08    2nd rdg - to 3rd rdg
03/20    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Boatright, Branch, 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, Williams,
      NAYS -- None
      Absent and excused -- None
    Floor Sponsors -- Bunderson & Goedde
    Title apvd - to House
03/21    To enrol
03/22    Rpt enrol - Sp signed - Pres signed - to Gov
03/23    Governor signed
         Session Law Chapter 138
         Effective: 07/01/01

Bill Text


                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 41
                                                                        
                                       BY MR. SPEAKER
                  Requested by: Public Employee Retirement System of Idaho
                                                                        
  1                                        AN ACT
  2    RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING  SECTION  59-1331,
  3        IDAHO  CODE,  TO  PROVIDE  THAT  ERRONEOUS  EMPLOYEE  CONTRIBUTIONS MAY BE
  4        REFUNDED UPON A DISTRIBUTABLE EVENT; AMENDING SECTION 59-1343, IDAHO CODE,
  5        TO AUTHORIZE THE RETIREMENT BOARD TO DETERMINE  BY  RULE  THE  APPROPRIATE
  6        BENEFIT  LEVEL  SUBJECT  TO  COMMUTATION;  AMENDING SECTION 59-1352, IDAHO
  7        CODE, TO REVISE PUNCTUATION TO CLARIFY THE SCOPE OF IN-SERVICE  DISABILITY
  8        RETIREMENT  FOR GENERAL MEMBERS; AND AMENDING SECTION 59-1396, IDAHO CODE,
  9        TO PROVIDE CORRECT CODE CITATIONS.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION 1.  That Section 59-1331, Idaho Code, be, and the same  is  hereby
 12    amended to read as follows:
                                                                        
 13        59-1331.  CONTRIBUTIONS.  (1)  Beginning on or after the later of the date
 14    of establishment or employment, each active member shall contribute toward the
 15    cost of the benefits provided under this chapter. This contribution  shall  be
 16    made  in the form of a deduction from salary to be transmitted to the board in
 17    accordance with section 59-1325, Idaho Code.
 18        (2)  Any person who was prevented from being an active member  during  his
 19    first  twelve  (12)  months  of employment due to the restriction contained in
 20    subsection (2) of section 59-1302, Idaho Code,  may,  prior  to  December  31,
 21    1975,  pay the board the contributions he would have made absent said restric-
 22    tion and be credited with membership service for such period of time. The time
 23    for payment shall be extended provided such payment includes regular  interest
 24    from December 31, 1975.
 25        (3)  Employee contributions received by the board in error may be refunded
 26    upon a distributable event with regular interest.
                                                                        
 27        SECTION  2.  That  Section 59-1343, Idaho Code, be, and the same is hereby
 28    amended to read as follows:
                                                                        
 29        59-1343.  CONVERSION AND  COMMUTATION  OF  CERTAIN  PAYMENTS.  Unless  the
 30    retirement  board  establishes a different level by rule, benefit pPayments of
 31    less than twenty dollars ($20.00) per month shall be commuted into an actuari-
 32    ally equivalent single sum.
                                                                        
 33        SECTION 3.  That Section 59-1352, Idaho Code, be, and the same  is  hereby
 34    amended to read as follows:
                                                                        
 35        59-1352.  ELIGIBILITY  FOR  DISABILITY RETIREMENT. (1) An active member is
 36    eligible for disability retirement if the member  becomes  disabled  after  at
 37    least five (5) years of membership service.
 38        (2)  A  police officer member, general member, or a paid firefighter hired
 39    on or after July 1, 1993, who is not eligible for service retirement is eligi-
                                                                        
                                           2
                                                                        
  1    ble for disability retirement if the member becomes disabled, as  provided  in
  2    section  59-1302(12), Idaho Code, on or after the first day of employment as a
  3    result of bodily injury or disease from an occupational cause.
                                                                        
  4        SECTION 4.  That Section 59-1396, Idaho Code, be, and the same  is  hereby
  5    amended to read as follows:
                                                                        
  6        59-1396.  LIMIT  ON  SEPARATION BENEFIT. (1) When a firefighter member who
  7    was employed prior to October 1, 1980, terminates employment and seeks  return
  8    of  his or her accumulated contributions, such contributions shall be returned
  9    as provided under the provisions of section 72-14454, Idaho Code.
 10        (2) When a paid firefighter whose employment began on or after October  1,
 11    1980, terminates employment and seeks return of his or her accumulated contri-
 12    butions,  such contributions shall be returned as provided by sections 59-1358
 13    and 59-1359, Idaho Code.

Statement of Purpose / Fiscal Impact


                   STATEMENT OF PURPOSE
                       RS 10518

This bill makes technical corrections to four provisions 
governing the PERSI fund, and/or the Firemen's Retirement 
Fund (FRF).

The first is an amendment to section 59-1331, Idaho Code, 
intended to clarify that although erroneous employee 
contributions will be refunded together with regular interest, 
the refund will not be made until a distributable event occurs.  
This is consistent with IRS requirements that generally prohibit 
payment of qualified retirement trust funds except upon termination 
of employment, death, or retirement.

The second is an amendment to section 59-1343, Idaho Code, giving 
the retirement board more authority to determine when it is 
appropriate to commute monthly benefits.  Currently, the section 
requires that the retirement board commute any monthly benefit of 
less than twenty dollars ($20) to an actuarially equivalent one-time 
lump-sum payment. Maintaining accounts that pay relatively 
insignificant monthly benefits is becoming increasingly expensive.  
Additionally, a lump sum commuted benefit would likely be more 
meaningful to a participant than small monthly payments. This 
amendment to section 59-1343, Idaho Code authorizes the board to 
set thresholds for commutation of benefits by rule.  

Third is an amendment to section 59-1352, Idaho Code.  Since 1993, 
this section has provided immediate eligibility for disability 
retirement benefits to police officers, and to paid firefighters 
hired on or after July 1, 1993, when the disability is the result 
of occupational causes (in-service disability).  In 2000, SB 1404 
was passed, which amended section 59-1352, Idaho Code, to include 
general members.  However, a comma was inadvertently omitted 
making general members subject to the same limitation as firefighters, 
that is, hired on or after July 1, 1993.  This limitation is 
specific to firefighters and was not intended to apply to general 
members.  By inserting the missing comma, it will be clear that 
all general members are eligible for immediate in-service disability, 
not just those hired after July 1, 1993.

Fourth is an amendment to section 59-1396, Idaho Code.  This section 
refers to one section in title 72, chapter 14, Idaho Code, addressing 
separation benefits under the Firemen's Retirement Fund (FRF) plan, 
and one section in title 59, chapter 13, Idaho Code, addressing 
separation benefits under the PERSI plan. However, the citations to 
those sections are either incorrect or incomplete.  This bill changes 
those citations to the correct sections.

                      FISCAL IMPACT

None. 

Contact 
Name:  Alan Winkle
Agency: PERSI
Phone: 334-3365

STATEMENT OF PURPOSE/FISCAL NOTE                Bill No. H41