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H0726aa....................................................by STATE AFFAIRS
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law relating to the
Public Employee Retirement System to provide circumstances when the
alternate payee is the member's named contingent annuitant and is waiving
all survivor benefits as the named contingent annuitant; to provide for
adjustment of a member's benefit if an alternate payee waives all survivor
benefits otherwise payable as a contingent annuitant; and to provide for
the payment of benefits when survivor benefits are waived pursuant to a
domestic retirement order.
02/18 House intro - 1st rdg - to printing
02/19 Rpt prt - to Com/HuRes
02/24 Rpt out - to Gen Ord
02/26 Rpt out amen - to engros
02/27 Rpt engros - 1st rdg - to 2nd rdg as amen
03/01 2nd rdg - to 3rd rdg as amen
03/04 3rd rdg as amen - PASSED - 67-2-1
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
Jaquet, Jones, Kellogg, Lake, Langford, Langhorst, Martinez,
McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato,
Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo, Roberts,
Robison, Rydalch, Sayler, Schaefer, Shepherd, Shirley, Skippen,
Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail(Bennett),
Wood, Mr. Speaker
NAYS -- Kulczyk, Sali
Absent and excused -- Wills
Floor Sponsors - Harwood & Naccarato
Title apvd - to Senate
03/05 Senate intro - 1st rdg - to Com/HuRes
03/10 Rpt out - rec d/p - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/19 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Maxand),
Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Goedde
Title apvd - to House
03/20 To enrol - Rpt enrol - Sp signed - Pres signed
03/22 To Governor
03/24 Governor signed
Session Law Chapter 328
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 726
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1319,
3 IDAHO CODE, TO PROVIDE CIRCUMSTANCES WHEN THE ALTERNATE PAYEE IS THE
4 MEMBER'S NAMED CONTINGENT ANNUITANT AND IS WAIVING ALL SURVIVOR BENEFITS
5 AS THE NAMED CONTINGENT ANNUITANT; AMENDING SECTION 59-1320, IDAHO CODE,
6 TO PROVIDE FOR ADJUSTMENT OF A MEMBER'S BENEFIT IF AN ALTERNATE PAYEE
7 WAIVES ALL SURVIVOR BENEFITS OTHERWISE PAYABLE AS A CONTINGENT ANNUITANT;
8 AND AMENDING SECTION 59-1351, IDAHO CODE, TO PROVIDE FOR THE PAYMENT OF
9 BENEFITS WHEN SURVIVOR BENEFITS ARE WAIVED PURSUANT TO A DOMESTIC RETIRE-
10 MENT ORDER.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 59-1319, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 59-1319. APPROVED DOMESTIC RETIREMENT ORDERS -- REQUIREMENTS. (1) An
15 approved domestic retirement order must meet the following requirements:
16 (a) Clearly specify that such order applies to the retirement system;
17 (b) Clearly specify the effective date of the order, which is the date of
18 divorce or the date of an earlier property settlement agreement incorpo-
19 rated into the initial divorce decree, the name, social security number,
20 date of birth, sex, and last known mailing address of the member and the
21 name, social security number, date of birth, sex, and last known mailing
22 address of the alternate payee covered by the order;
23 (c) Provide for a proportional reduction of the amount awarded to an
24 alternate payee in the event that benefits available to the member are
25 reduced by law;
26 (d) For benefits as defined in chapter 13, title 59, Idaho Code, for mem-
27 bers who are not retired members: (i) clearly specify the amount or per-
28 centage of the member's taxed and tax deferred accumulated contributions
29 which are to be credited to the segregated account or the manner in which
30 such amount or percentage is to be determined, and (ii) clearly specify
31 the member's months of credited service, either by specific amount or per-
32 centage, to be transferred by the retirement system to the segregated
33 account or the manner in which such amount or percentage is to be deter-
34 mined. The months of credited service transferred to the alternate payee
35 shall be proportional to the accumulated contributions attributable to
36 such months of credited service. Months of credited service transferred
37 shall be whole months and not partial months;
38 (e) For benefits as defined in chapter 13, title 59, Idaho Code, for
39 retired members, clearly specify the amount or percentage of the member's
40 benefit being paid that the retirement system is to pay to the alternate
41 payee, or the manner in which such amount or percentage is to be deter-
42 mined, and if the alternate payee is the member's named contingent annu-
43 itant and is waiving all survivor benefits as the named contingent annu-
2
1 itant, clearly specify such waiver pursuant to this subsection; and
2 (f) For benefits as defined in chapter 14, title 72, Idaho Code, clearly
3 specify the amount or percentage of the member's benefit paid at the time
4 of retirement which the retirement system is to pay to the alternate
5 payee, or the manner in which such percentage is to be determined.
6 (2) An approved domestic retirement order cannot:
7 (a) Require the retirement system to provide any type or form of benefit
8 or any option not otherwise provided under the retirement system;
9 (b) Require the retirement system to provide increased benefits deter-
10 mined on the basis of actuarial value;
11 (c) Require the payment of benefits to an alternate payee which are
12 required to be paid to another alternate payee under another order previ-
13 ously determined to be an approved domestic retirement order or a court
14 order entered prior to July 1, 1998;
15 (d) Require any action on the part of the retirement system contrary to
16 its governing statutes or rules other than the direct payment of the bene-
17 fit awarded to an alternate payee;
18 (e) Segregate or attempt to segregate the right to reinstate previous
19 credited service as provided in section 59-1360, Idaho Code, unless such
20 credited service has been fully reinstated by full payment of contribu-
21 tions and interest as provided in section 59-1360, Idaho Code;
22 (f) Purport to award to the alternate payee any future benefit increases
23 that are provided or required by the legislature, except as provided in
24 subsections (6) and (7) of section 59-1320, Idaho Code; or
25 (g) Require the payment of benefits to an alternate payee before the date
26 on which the alternate payee attains the earliest retirement age under the
27 retirement system. However, an alternate payee may take a lump sum distri-
28 bution any time prior to receiving a lifetime annuity payment.
29 (3) In no event shall an approved domestic retirement order cause the
30 retirement system to pay any benefit or any amount of benefit greater than
31 would have been paid had the member's account not been segregated.
32 (4) A party to any domestic retirement order issued prior to July 1,
33 1998, which distributes benefits defined in either chapter 13, title 59, Idaho
34 Code, or chapter 14, title 72, Idaho Code, may move the court to modify such
35 order to comply with the requirements of this section and section 59-1320,
36 Idaho Code, provided that modifications be limited to issues related to the
37 distribution of benefits defined in either chapter 13, title 59, Idaho Code,
38 or chapter 14, title 72, Idaho Code, and that the value of the distribution is
39 not materially changed.
40 SECTION 2. That Section 59-1320, Idaho Code, be, and the same is hereby
41 amended to read as follows:
42 59-1320. APPROVED DOMESTIC RETIREMENT ORDERS -- APPLICATION AND EFFECT.
43 (1) The executive director of the public employee retirement system or his
44 designee upon receipt of a copy of a domestic retirement order, shall deter-
45 mine whether the order is an approved domestic retirement order and shall
46 notify the member and the alternate payee of the determination within ninety
47 (90) days. Orders shall be applied prospectively only from the first day of
48 the month following the order being determined to be an approved domestic
49 retirement order. The retirement system shall then pay benefits or establish a
50 segregated account in accordance with the order. When established, the segre-
51 gated account will consist of accumulated contributions identified in the
52 approved domestic retirement order together with accrued interest on that
53 amount from the effective date to the date of segregation.
3
1 (2) If the order is determined not to be an approved domestic retirement
2 order, or if no determination is issued within ninety (90) days, the member or
3 the alternate payee named in the order may move the court which issued the
4 order to amend the order so that it will be approved. The court that issued
5 the order or which would otherwise have jurisdiction over the matter has
6 jurisdiction to amend the order so that it will be qualified even though all
7 other matters incident to the action or proceeding have been fully and finally
8 adjudicated.
9 (3) The executive director of the retirement system to which a domestic
10 retirement order is submitted or his designee has exclusive authority to
11 determine whether a domestic retirement order is an approved domestic retire-
12 ment order. If it is determined that a domestic retirement order does not meet
13 the requirements for an approved domestic retirement order, both the issuing
14 court and the parties to the order shall be notified so action may be taken to
15 amend the order.
16 (4) Because an approved domestic retirement order cannot cause the
17 retirement system to pay any benefit or any amount of benefit greater than
18 would have been paid had the member's account not been segregated, disputes
19 related to benefits paid under an approved domestic retirement order shall be
20 resolved between the parties to the order by the court issuing that order. The
21 retirement system shall not be made a party to the action. Any cost, including
22 attorney's fees, incurred by the retirement system as a result of such actions
23 shall be distributed by the court among the parties and included in any
24 amended order issued.
25 (5) Unless the approved domestic retirement order specifies differently,
26 if the member has a right to a vested benefit as of the effective date of the
27 order, then both the member and the alternate payee shall have a right to a
28 vested benefit after the transfer of months of service even if the member or
29 the alternate payee has less than sixty (60) months of membership service.
30 (6) For benefits under chapter 13, title 59, Idaho Code, for members
31 other than retired members, if the domestic retirement order awards to the
32 alternate payee a portion of the member's accumulated contributions the alter-
33 nate payee shall be entitled to all the same benefits and rights an inactive
34 member has under chapter 13, title 59, Idaho Code. The alternate payee's bene-
35 fit calculation for a lifetime annuity shall use the member's average monthly
36 salary and base period as of the effective date of the order and the months of
37 credited service transferred to the alternate payee's segregated account. The
38 benefit calculation shall use the alternate payee's age with the appropriate
39 reduction factors based on the alternate payee's age at the time of payment of
40 the lifetime annuity. For the purpose of the lifetime annuity, the bridging
41 factor, as specified in section 59-1355, Idaho Code, shall be the bridging
42 factor between the effective date of the order or the last day of contribu-
43 tions by the member prior to the effective date of the order, whichever is
44 earliest, and the date of the first lifetime annuity payment to the alternate
45 payee. The alternate payee shall have the right to select any of the optional
46 retirement allowances provided in section 59-1351, Idaho Code. The alternate
47 payee shall have the right to name a beneficiary.
48 (7) For benefits defined under chapter 13, title 59, Idaho Code, for
49 retired members, and for benefits under chapter 14, title 72, Idaho Code, the
50 retirement system shall include in the alternate payee's amount or percentage
51 of the benefit, on a proportional basis, all future adjustments, including
52 postretirement increases that are granted by the retirement system, and any
53 death benefit. Furthermore, upon the death of the alternate payee, his/her
54 percentage of the benefit will revert to the person or persons, including the
55 member, who are entitled to the benefit under the system at the time of the
4
1 alternate payee's death.
2 (8) For benefits under chapter 13, title 59, Idaho Code, for retired mem-
3 bers, the form of payment previously elected by the member under section
4 59-1351, Idaho Code, cannot be changed by a domestic retirement order, except
5 that a member's benefit may be adjusted as provided in section 59-1351(2),
6 Idaho Code, if an alternate payee waives all survivor benefits otherwise pay-
7 able as a contingent annuitant as provided in section 59-1319(1)(e), Idaho
8 Code. Furthermore, no segregated account will be established by the retirement
9 system for the alternate payee.
10 (9) For benefits defined under chapter 14, title 72, Idaho Code, the ben-
11 efit paid to the alternate payee shall start when the retirement system begins
12 paying benefits to the member, surviving spouse, or surviving children. Unless
13 otherwise ordered, in the event the member dies and leaves a surviving spouse,
14 during the surviving spouse's lifetime, the alternate payee shall be paid
15 his/her designated amount or percentage of the benefit. Unless otherwise
16 ordered, if there is no surviving spouse or the surviving spouse dies and
17 there is a surviving child or children of the member who are under eighteen
18 (18) years of age and unmarried, then the alternate payee shall be paid
19 his/her designated amount or percentage of the benefit until the child or
20 children reach the age of eighteen (18) years or marries, whichever occurs
21 first.
22 (10) The retirement system shall be authorized to issue any and all appro-
23 priate tax forms or reports for any payments made to the alternate payee.
24 (11) The retirement system, the retirement board, and officers and employ-
25 ees of the retirement system shall not be liable to any person for making pay-
26 ments of any benefits in accordance with an approved domestic retirement
27 order.
28 SECTION 3. That Section 59-1351, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 59-1351. CONVERSION OF SERVICE RETIREMENT OR EARLY RETIREMENT ALLOWANCES
31 INTO OPTIONAL RETIREMENT ALLOWANCES -- FORM OF OPTIONAL RETIREMENT. (1) The
32 service retirement allowance, or the early retirement allowance of a member
33 who, at time of retirement, so elects shall be converted into an optional
34 retirement allowance which is the actuarial equivalent of such other allow-
35 ance. The optional retirement allowance may take one (1) of the forms listed
36 below and shall be in lieu of all other benefits under this chapter except
37 that the provisions of section 59-1361(2), Idaho Code, shall be applicable:
38 (a) Option 1 provides a reduced retirement allowance payable during the
39 lifetime of the retired member, and a continuation thereafter of such
40 reduced retirement allowance during the lifetime of the member's named
41 contingent annuitant.
42 (b) Option 2 provides a reduced retirement allowance payable during the
43 lifetime of the retired member, and a continuation thereafter of one-half
44 (1/2) of such reduced retirement allowance during the lifetime of the
45 member's named contingent annuitant.
46 (c) Option 3, which is available only if the member retires before the
47 date of the social security normal retirement age for that member, pro-
48 vides an increased retirement allowance until such date and a reduced
49 retirement allowance thereafter, the difference between the two (2)
50 amounts approximately equaling the governmental old-age benefit becoming
51 payable at such date as estimated by the board.
52 (d) Option 4, which is available only if the member retires before the
53 date of the social security normal retirement age for that member, pro-
5
1 vides either an adjusted option 1 (option 4A) or option 2 (option 4B)
2 retirement allowance until such date and a reduced retirement allowance
3 thereafter, the difference between the two (2) amounts approximately
4 equaling the governmental old-age benefit becoming payable at such date as
5 estimated by the board. The adjusted retirement allowance shall be paid to
6 the retired member during the member's lifetime and the appropriate con-
7 tinuation amount of the adjusted allowance to the member's named contin-
8 gent annuitant for life thereafter.
9 (2) Should the named contingent annuitant under option 1 or option 2
10 either predecease a member retiring on or after October 1, 1992, or waive all
11 survivor benefits pursuant to a domestic retirement order approved under sec-
12 tion 59-1320, Idaho Code, upon notification to the board, the member's benefit
13 on the first day of the month following the death of the contingent annuitant
14 or approval of the domestic retirement order, as applicable, will thereafter
15 become an allowance calculated pursuant to section 59-1342 or 59-1346, Idaho
16 Code, whichever was applicable on the date of retirement, in addition to any
17 postretirement allowance adjustments which may have accrued from that time.
18 Should the named contingent annuitant predecease the member, under option 4,
19 or waive all survivor benefits pursuant to a domestic retirement order
20 approved under section 59-1320, Idaho Code, upon notification to the board,
21 the member's benefit on the first day of the month following the contingent
22 annuitant's death or approval of the domestic retirement order, as applicable
23 will thereafter become the option 3 allowance to which the member would have
24 been entitled as of the date of the annuitant's death, or approval of the
25 domestic retirement order, as applicable. The benefit changes under this sub-
26 section shall be available only to members whose last contribution was made
27 after the effective date of this act June 30, 1992.
28 (3) Option 1 or 2 may not be chosen if initial payments of less than
29 twenty dollars ($20.00) per month would result.
30 (4) Application for any optional retirement allowance shall be in writ-
31 ing, duly executed and filed with the board. Such application shall contain
32 all information required by the board, including such proofs of age as are
33 deemed necessary by the board.
34 (5) A retirement option elected at the time of retirement as provided for
35 in this section may not be changed except by written notice to the retirement
36 board no later than five (5) business days after the receipt of the first
37 retirement allowance.
38 (6) Not later than one (1) year after the marriage of a retired member,
39 the member may elect option 1, 2 or 4 to become effective one (1) year after
40 the date of such election, provided the member's spouse is named as a contin-
41 gent annuitant, and either:
42 (a) The member was not married at the time of the member's retirement; or
43 (b) The member earlier elected option 1, 2, 4A or 4B, having named the
44 member's spouse as contingent annuitant, and said spouse has died or has
45 waived all survivor benefits as provided in subsection (2) of this
46 section. The retirement allowance to be converted in such a case is that
47 currently being paid.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
Moved by Harwood
Seconded by Naccarato
IN THE HOUSE OF REPRESENTATIVES
HOUSE AMENDMENT TO H.B. NO. 726
1 AMENDMENT TO SECTION 3
2 On page 5 of the printed bill, in line 18, following "annuitant" insert:
3 "under option 4 either".
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 726, As Amended
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1319,
3 IDAHO CODE, TO PROVIDE CIRCUMSTANCES WHEN THE ALTERNATE PAYEE IS THE
4 MEMBER'S NAMED CONTINGENT ANNUITANT AND IS WAIVING ALL SURVIVOR BENEFITS
5 AS THE NAMED CONTINGENT ANNUITANT; AMENDING SECTION 59-1320, IDAHO CODE,
6 TO PROVIDE FOR ADJUSTMENT OF A MEMBER'S BENEFIT IF AN ALTERNATE PAYEE
7 WAIVES ALL SURVIVOR BENEFITS OTHERWISE PAYABLE AS A CONTINGENT ANNUITANT;
8 AND AMENDING SECTION 59-1351, IDAHO CODE, TO PROVIDE FOR THE PAYMENT OF
9 BENEFITS WHEN SURVIVOR BENEFITS ARE WAIVED PURSUANT TO A DOMESTIC RETIRE-
10 MENT ORDER.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 59-1319, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 59-1319. APPROVED DOMESTIC RETIREMENT ORDERS -- REQUIREMENTS. (1) An
15 approved domestic retirement order must meet the following requirements:
16 (a) Clearly specify that such order applies to the retirement system;
17 (b) Clearly specify the effective date of the order, which is the date of
18 divorce or the date of an earlier property settlement agreement incorpo-
19 rated into the initial divorce decree, the name, social security number,
20 date of birth, sex, and last known mailing address of the member and the
21 name, social security number, date of birth, sex, and last known mailing
22 address of the alternate payee covered by the order;
23 (c) Provide for a proportional reduction of the amount awarded to an
24 alternate payee in the event that benefits available to the member are
25 reduced by law;
26 (d) For benefits as defined in chapter 13, title 59, Idaho Code, for mem-
27 bers who are not retired members: (i) clearly specify the amount or per-
28 centage of the member's taxed and tax deferred accumulated contributions
29 which are to be credited to the segregated account or the manner in which
30 such amount or percentage is to be determined, and (ii) clearly specify
31 the member's months of credited service, either by specific amount or per-
32 centage, to be transferred by the retirement system to the segregated
33 account or the manner in which such amount or percentage is to be deter-
34 mined. The months of credited service transferred to the alternate payee
35 shall be proportional to the accumulated contributions attributable to
36 such months of credited service. Months of credited service transferred
37 shall be whole months and not partial months;
38 (e) For benefits as defined in chapter 13, title 59, Idaho Code, for
39 retired members, clearly specify the amount or percentage of the member's
40 benefit being paid that the retirement system is to pay to the alternate
41 payee, or the manner in which such amount or percentage is to be deter-
42 mined, and if the alternate payee is the member's named contingent annu-
43 itant and is waiving all survivor benefits as the named contingent annu-
2
1 itant, clearly specify such waiver pursuant to this subsection; and
2 (f) For benefits as defined in chapter 14, title 72, Idaho Code, clearly
3 specify the amount or percentage of the member's benefit paid at the time
4 of retirement which the retirement system is to pay to the alternate
5 payee, or the manner in which such percentage is to be determined.
6 (2) An approved domestic retirement order cannot:
7 (a) Require the retirement system to provide any type or form of benefit
8 or any option not otherwise provided under the retirement system;
9 (b) Require the retirement system to provide increased benefits deter-
10 mined on the basis of actuarial value;
11 (c) Require the payment of benefits to an alternate payee which are
12 required to be paid to another alternate payee under another order previ-
13 ously determined to be an approved domestic retirement order or a court
14 order entered prior to July 1, 1998;
15 (d) Require any action on the part of the retirement system contrary to
16 its governing statutes or rules other than the direct payment of the bene-
17 fit awarded to an alternate payee;
18 (e) Segregate or attempt to segregate the right to reinstate previous
19 credited service as provided in section 59-1360, Idaho Code, unless such
20 credited service has been fully reinstated by full payment of contribu-
21 tions and interest as provided in section 59-1360, Idaho Code;
22 (f) Purport to award to the alternate payee any future benefit increases
23 that are provided or required by the legislature, except as provided in
24 subsections (6) and (7) of section 59-1320, Idaho Code; or
25 (g) Require the payment of benefits to an alternate payee before the date
26 on which the alternate payee attains the earliest retirement age under the
27 retirement system. However, an alternate payee may take a lump sum distri-
28 bution any time prior to receiving a lifetime annuity payment.
29 (3) In no event shall an approved domestic retirement order cause the
30 retirement system to pay any benefit or any amount of benefit greater than
31 would have been paid had the member's account not been segregated.
32 (4) A party to any domestic retirement order issued prior to July 1,
33 1998, which distributes benefits defined in either chapter 13, title 59, Idaho
34 Code, or chapter 14, title 72, Idaho Code, may move the court to modify such
35 order to comply with the requirements of this section and section 59-1320,
36 Idaho Code, provided that modifications be limited to issues related to the
37 distribution of benefits defined in either chapter 13, title 59, Idaho Code,
38 or chapter 14, title 72, Idaho Code, and that the value of the distribution is
39 not materially changed.
40 SECTION 2. That Section 59-1320, Idaho Code, be, and the same is hereby
41 amended to read as follows:
42 59-1320. APPROVED DOMESTIC RETIREMENT ORDERS -- APPLICATION AND EFFECT.
43 (1) The executive director of the public employee retirement system or his
44 designee upon receipt of a copy of a domestic retirement order, shall deter-
45 mine whether the order is an approved domestic retirement order and shall
46 notify the member and the alternate payee of the determination within ninety
47 (90) days. Orders shall be applied prospectively only from the first day of
48 the month following the order being determined to be an approved domestic
49 retirement order. The retirement system shall then pay benefits or establish a
50 segregated account in accordance with the order. When established, the segre-
51 gated account will consist of accumulated contributions identified in the
52 approved domestic retirement order together with accrued interest on that
53 amount from the effective date to the date of segregation.
3
1 (2) If the order is determined not to be an approved domestic retirement
2 order, or if no determination is issued within ninety (90) days, the member or
3 the alternate payee named in the order may move the court which issued the
4 order to amend the order so that it will be approved. The court that issued
5 the order or which would otherwise have jurisdiction over the matter has
6 jurisdiction to amend the order so that it will be qualified even though all
7 other matters incident to the action or proceeding have been fully and finally
8 adjudicated.
9 (3) The executive director of the retirement system to which a domestic
10 retirement order is submitted or his designee has exclusive authority to
11 determine whether a domestic retirement order is an approved domestic retire-
12 ment order. If it is determined that a domestic retirement order does not meet
13 the requirements for an approved domestic retirement order, both the issuing
14 court and the parties to the order shall be notified so action may be taken to
15 amend the order.
16 (4) Because an approved domestic retirement order cannot cause the
17 retirement system to pay any benefit or any amount of benefit greater than
18 would have been paid had the member's account not been segregated, disputes
19 related to benefits paid under an approved domestic retirement order shall be
20 resolved between the parties to the order by the court issuing that order. The
21 retirement system shall not be made a party to the action. Any cost, including
22 attorney's fees, incurred by the retirement system as a result of such actions
23 shall be distributed by the court among the parties and included in any
24 amended order issued.
25 (5) Unless the approved domestic retirement order specifies differently,
26 if the member has a right to a vested benefit as of the effective date of the
27 order, then both the member and the alternate payee shall have a right to a
28 vested benefit after the transfer of months of service even if the member or
29 the alternate payee has less than sixty (60) months of membership service.
30 (6) For benefits under chapter 13, title 59, Idaho Code, for members
31 other than retired members, if the domestic retirement order awards to the
32 alternate payee a portion of the member's accumulated contributions the alter-
33 nate payee shall be entitled to all the same benefits and rights an inactive
34 member has under chapter 13, title 59, Idaho Code. The alternate payee's bene-
35 fit calculation for a lifetime annuity shall use the member's average monthly
36 salary and base period as of the effective date of the order and the months of
37 credited service transferred to the alternate payee's segregated account. The
38 benefit calculation shall use the alternate payee's age with the appropriate
39 reduction factors based on the alternate payee's age at the time of payment of
40 the lifetime annuity. For the purpose of the lifetime annuity, the bridging
41 factor, as specified in section 59-1355, Idaho Code, shall be the bridging
42 factor between the effective date of the order or the last day of contribu-
43 tions by the member prior to the effective date of the order, whichever is
44 earliest, and the date of the first lifetime annuity payment to the alternate
45 payee. The alternate payee shall have the right to select any of the optional
46 retirement allowances provided in section 59-1351, Idaho Code. The alternate
47 payee shall have the right to name a beneficiary.
48 (7) For benefits defined under chapter 13, title 59, Idaho Code, for
49 retired members, and for benefits under chapter 14, title 72, Idaho Code, the
50 retirement system shall include in the alternate payee's amount or percentage
51 of the benefit, on a proportional basis, all future adjustments, including
52 postretirement increases that are granted by the retirement system, and any
53 death benefit. Furthermore, upon the death of the alternate payee, his/her
54 percentage of the benefit will revert to the person or persons, including the
55 member, who are entitled to the benefit under the system at the time of the
4
1 alternate payee's death.
2 (8) For benefits under chapter 13, title 59, Idaho Code, for retired mem-
3 bers, the form of payment previously elected by the member under section
4 59-1351, Idaho Code, cannot be changed by a domestic retirement order, except
5 that a member's benefit may be adjusted as provided in section 59-1351(2),
6 Idaho Code, if an alternate payee waives all survivor benefits otherwise pay-
7 able as a contingent annuitant as provided in section 59-1319(1)(e), Idaho
8 Code. Furthermore, no segregated account will be established by the retirement
9 system for the alternate payee.
10 (9) For benefits defined under chapter 14, title 72, Idaho Code, the ben-
11 efit paid to the alternate payee shall start when the retirement system begins
12 paying benefits to the member, surviving spouse, or surviving children. Unless
13 otherwise ordered, in the event the member dies and leaves a surviving spouse,
14 during the surviving spouse's lifetime, the alternate payee shall be paid
15 his/her designated amount or percentage of the benefit. Unless otherwise
16 ordered, if there is no surviving spouse or the surviving spouse dies and
17 there is a surviving child or children of the member who are under eighteen
18 (18) years of age and unmarried, then the alternate payee shall be paid
19 his/her designated amount or percentage of the benefit until the child or
20 children reach the age of eighteen (18) years or marries, whichever occurs
21 first.
22 (10) The retirement system shall be authorized to issue any and all appro-
23 priate tax forms or reports for any payments made to the alternate payee.
24 (11) The retirement system, the retirement board, and officers and employ-
25 ees of the retirement system shall not be liable to any person for making pay-
26 ments of any benefits in accordance with an approved domestic retirement
27 order.
28 SECTION 3. That Section 59-1351, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 59-1351. CONVERSION OF SERVICE RETIREMENT OR EARLY RETIREMENT ALLOWANCES
31 INTO OPTIONAL RETIREMENT ALLOWANCES -- FORM OF OPTIONAL RETIREMENT. (1) The
32 service retirement allowance, or the early retirement allowance of a member
33 who, at time of retirement, so elects shall be converted into an optional
34 retirement allowance which is the actuarial equivalent of such other allow-
35 ance. The optional retirement allowance may take one (1) of the forms listed
36 below and shall be in lieu of all other benefits under this chapter except
37 that the provisions of section 59-1361(2), Idaho Code, shall be applicable:
38 (a) Option 1 provides a reduced retirement allowance payable during the
39 lifetime of the retired member, and a continuation thereafter of such
40 reduced retirement allowance during the lifetime of the member's named
41 contingent annuitant.
42 (b) Option 2 provides a reduced retirement allowance payable during the
43 lifetime of the retired member, and a continuation thereafter of one-half
44 (1/2) of such reduced retirement allowance during the lifetime of the
45 member's named contingent annuitant.
46 (c) Option 3, which is available only if the member retires before the
47 date of the social security normal retirement age for that member, pro-
48 vides an increased retirement allowance until such date and a reduced
49 retirement allowance thereafter, the difference between the two (2)
50 amounts approximately equaling the governmental old-age benefit becoming
51 payable at such date as estimated by the board.
52 (d) Option 4, which is available only if the member retires before the
53 date of the social security normal retirement age for that member, pro-
5
1 vides either an adjusted option 1 (option 4A) or option 2 (option 4B)
2 retirement allowance until such date and a reduced retirement allowance
3 thereafter, the difference between the two (2) amounts approximately
4 equaling the governmental old-age benefit becoming payable at such date as
5 estimated by the board. The adjusted retirement allowance shall be paid to
6 the retired member during the member's lifetime and the appropriate con-
7 tinuation amount of the adjusted allowance to the member's named contin-
8 gent annuitant for life thereafter.
9 (2) Should the named contingent annuitant under option 1 or option 2
10 either predecease a member retiring on or after October 1, 1992, or waive all
11 survivor benefits pursuant to a domestic retirement order approved under sec-
12 tion 59-1320, Idaho Code, upon notification to the board, the member's benefit
13 on the first day of the month following the death of the contingent annuitant
14 or approval of the domestic retirement order, as applicable, will thereafter
15 become an allowance calculated pursuant to section 59-1342 or 59-1346, Idaho
16 Code, whichever was applicable on the date of retirement, in addition to any
17 postretirement allowance adjustments which may have accrued from that time.
18 Should the named contingent annuitant under option 4 either predecease the
19 member, under option 4, or waive all survivor benefits pursuant to a domestic
20 retirement order approved under section 59-1320, Idaho Code, upon notification
21 to the board, the member's benefit on the first day of the month following the
22 contingent annuitant's death or approval of the domestic retirement order, as
23 applicable will thereafter become the option 3 allowance to which the member
24 would have been entitled as of the date of the annuitant's death, or approval
25 of the domestic retirement order, as applicable. The benefit changes under
26 this subsection shall be available only to members whose last contribution was
27 made after the effective date of this act June 30, 1992.
28 (3) Option 1 or 2 may not be chosen if initial payments of less than
29 twenty dollars ($20.00) per month would result.
30 (4) Application for any optional retirement allowance shall be in writ-
31 ing, duly executed and filed with the board. Such application shall contain
32 all information required by the board, including such proofs of age as are
33 deemed necessary by the board.
34 (5) A retirement option elected at the time of retirement as provided for
35 in this section may not be changed except by written notice to the retirement
36 board no later than five (5) business days after the receipt of the first
37 retirement allowance.
38 (6) Not later than one (1) year after the marriage of a retired member,
39 the member may elect option 1, 2 or 4 to become effective one (1) year after
40 the date of such election, provided the member's spouse is named as a contin-
41 gent annuitant, and either:
42 (a) The member was not married at the time of the member's retirement; or
43 (b) The member earlier elected option 1, 2, 4A or 4B, having named the
44 member's spouse as contingent annuitant, and said spouse has died or has
45 waived all survivor benefits as provided in subsection (2) of this
46 section. The retirement allowance to be converted in such a case is that
47 currently being paid.
STATEMENT OF PURPOSE
RS 14095C1
The purpose of this legislation is to add to existing law,
the opportunity to remove and/or change the beneficiary of a
PERSI retiree.
FISCAL IMPACT
NONE
Contact
Name: Representative Dick Harwood
Representative Mike Naccarato
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 726