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H0831.....................................................by WAYS AND MEANS
PERSI - LEGISLATIVE SERVICE - Amends existing law relating to applications
of the public employee retirement system to govern the computation of
service retirement allowances for members whose service is accrued through
legislative service in combination with other covered employment.
03/09 House intro - 1st rdg - to printing
03/10 Rpt prt - to Com/HuRes
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 831
BY WAYS AND MEANS COMMITTEE
1 AN ACT
2 RELATING TO APPLICATIONS OF THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING
3 SECTION 59-1342, IDAHO CODE, TO GOVERN THE COMPUTATION OF SERVICE RETIRE-
4 MENT ALLOWANCES FOR MEMBERS WHOSE SERVICE IS ACCRUED THROUGH LEGISLATIVE
5 SERVICE IN COMBINATION WITH OTHER COVERED SERVICE; AND AMENDING SECTION
6 59-1346, IDAHO CODE, TO GOVERN COMPUTATION OF EARLY RETIREMENT ALLOWANCES
7 FOR MEMBERS WHOSE SERVICE IS ACCRUED THROUGH LEGISLATIVE SERVICE IN COMBI-
8 NATION WITH OTHER COVERED SERVICE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 59-1342, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 59-1342. COMPUTATION OF SERVICE RETIREMENT ALLOWANCES -- MINIMUM BENE-
13 FITS. (1) The annual amount of accrued retirement allowance for each month of
14 credited service for which a member was not classified as a police member or
15 firefighter shall equal one and two-thirds percent (1 2/3%) of the member's
16 average monthly salary. Effective October 1, 1992, the annual amount of
17 accrued retirement allowance for all service for which a member was not clas-
18 sified as a police member or firefighter shall equal one and seventy-five hun-
19 dredths percent (1.75%) of the member's average monthly salary; effective
20 October 1, 1993, the annual amount of accrued retirement allowance shall equal
21 one and eight hundred thirty-three thousandths percent (1.833%) of the
22 member's average monthly salary; effective October 1, 1994, the annual amount
23 of accrued retirement allowance shall equal one and nine hundred seventeen
24 thousandths percent (1.917%); and effective June 30, 2000, the annual amount
25 of accrued retirement allowance shall equal two percent (2%) of the member's
26 average monthly salary. Entitlement to an annual amount of accrued retirement
27 allowance shall not vest until the effective date of that annual amount of
28 accrued retirement allowance. The retirement benefits shall be calculated on
29 the amounts, terms and conditions in effect on the date of the final contribu-
30 tion by the member. The annual amount of initial service retirement allowance
31 of such a member shall equal (a) or (b), whichever is greater:
32 (a) the member's accrued retirement allowance; or
33 (b) five dollars ($5.00) multiplied by the number of months of credited
34 service and by the bridging factor, as provided in section 59-1355, Idaho
35 Code, between July 1, 1974 and the first of the month following the
36 member's final contribution.
37 (2) The annual amount of accrued retirement allowance for each month of
38 credited service for which a member was classified as a police member or fire-
39 fighter shall equal two percent (2%) of the member's average monthly salary.
40 Effective October 1, 1992, the annual amount of accrued retirement allowance
41 for all service for which a member was classified as a police member or fire-
42 fighter shall equal two and seventy-five thousandths percent (2.075%) of the
43 member's average monthly salary; effective October 1, 1993, the annual amount
2
1 of accrued retirement allowance shall equal two and fifteen hundredths percent
2 (2.15%) of the member's average monthly salary; effective October 1, 1994, the
3 annual amount of accrued retirement allowance shall equal two and two hundred
4 twenty-five thousandths percent (2.225%); and effective June 30, 2000, the
5 annual amount of accrued retirement allowance shall equal two and three-tenths
6 percent (2.3%) of the member's average monthly salary. Entitlement to an
7 annual amount of accrued retirement allowance shall not vest until the effec-
8 tive date of that annual amount of accrued retirement allowance. The retire-
9 ment benefits shall be calculated on the amounts, terms and conditions in
10 effect on the date of the final contribution by the member. The annual amount
11 of initial service retirement allowance of such a member shall equal (a) or
12 (b), whichever is greater:
13 (a) the member's accrued retirement allowance; or
14 (b) six dollars ($6.00) multiplied by the number of months of credited
15 service and by the bridging factor, as provided in section 59-1355, Idaho
16 Code, between July 1, 1974 and the first of the month following the
17 member's final contribution.
18 (3) Provisions of this section shall be applicable to members and contin-
19 gent annuitants of the retirement system and to members, annuitants and bene-
20 ficiaries of the teachers and city systems. In any recomputation of an initial
21 retirement allowance for a person not making a final contribution subsequent
22 to 1974, the bridging factor referred to in subsections (1) and (2) shall be
23 1.000. Any recomputed retirement allowance shall be payable only prospectively
24 from July 1, 1974.
25 (4) Benefits payable to a person who became a member prior to July 1,
26 1974, or to the member's beneficiaries shall never be less than they would
27 have received under this chapter as in effect on June 30, 1974; provided, how-
28 ever, that the member shall have accrued the amount of accumulated contribu-
29 tions required thereby prior to payment of an initial retirement allowance.
30 (5) If the majority of a member's credited service is as an elected offi-
31 cial or as an appointed official, except as a member of the Idaho legislature,
32 and that official was normally in the administrative offices of the employer
33 less than twenty (20) hours per week during the term of office, or was nor-
34 mally not required to be present at any particular work station for the
35 employer twenty (20) hours per week or more during the term of office, and
36 that member's initial service retirement allowance for service credited only
37 during that period would be computed under subsection (1)(b) and/or (2)(b) of
38 this section, without consideration of any other credited service, then it
39 will be so computed for that period of service. If that member has credited
40 service from any other employment, the accrued service retirement allowance
41 for the credited service from such other employment shall be computed from an
42 average monthly salary for salary received during the period of such other
43 employment. The initial service retirement allowance of for service as a mem-
44 bers of the Idaho legislature will be computed under subsection (1) and/or (2)
45 of this section, on the basis of their total months of credited service and
46 average salary for that service separate from all other periods of employment.
47 Calculations pursuant to this subsection which apply to members of the Idaho
48 legislature shall apply to the separate calculation of legislative service in
49 the benefit calculation for legislative service which first begins on or after
50 December 1, 2004, or whose other qualified employment begins on or after
51 December 1, 2004.
52 (6) In no case, however, will a member's initial service retirement bene-
53 fit be equal to more than the member's accrued benefit as of May 1, 1990, or
54 one hundred percent (100%) of the member's average compensation for the three
55 (3) consecutive years of employment which produce the greatest aggregate com-
3
1 pensation, whichever is greater. If the benefit is calculated to exceed one
2 hundred percent (100%) of the member's average compensation, the member shall
3 be eligible for and may choose either:
4 (a) an annual service retirement allowance equal to the member's average
5 annual compensation for the three (3) consecutive years of employment
6 which produced the greatest aggregate compensation; or
7 (b) a separation benefit.
8 (7) The annual amount of initial service retirement allowance of a member
9 who is over age seventy (70) on the effective date of the member's retirement
10 shall be a percentage of the member's initial service retirement allowance.
11 Such percentage shall be one hundred percent (100%) increased as determined by
12 the board to compensate for each month that the member's retirement is
13 deferred beyond age seventy (70).
14 (8) A member's accrued retirement allowance, as otherwise provided in
15 subsections (1), (2), (3), (4) and (5) of this section, shall not be less than
16 the minimum accrued retirement allowance provided in this subsection. The
17 determination of the initial service retirement allowance provided in subsec-
18 tions (1) and (2) of this section, and the application of the provisions in
19 subsections (6) and (7) of this section, will be made after the determination
20 of the minimum accrued retirement allowance provided in this subsection.
21 This subsection shall apply to members who have at least two (2) separate
22 periods of employment covered under this chapter where each separate period of
23 employment would otherwise be eligible for a separation benefit described in
24 section 59-1359, Idaho Code. For purposes of this subsection, if a separation
25 of employment occurs that does not exceed sixty (60) consecutive calendar
26 months then the member's period of employment shall be considered a continuous
27 period of employment. For purposes of this subsection, date of last contribu-
28 tion is the date of final contribution for each period or periods of employ-
29 ment.
30 For each separate period of employment considered under this subsection,
31 the member must not have received a separation benefit for that period, or if
32 he has received such a separation benefit under section 59-1359, Idaho Code,
33 he must have completed reinstatement of all previous credited service associ-
34 ated with all separation benefits for all periods of employment as permitted
35 under section 59-1360, Idaho Code.
36 The minimum accrued retirement allowance shall be equal to the largest
37 accrued retirement allowance calculated at each date of last contribution
38 based upon the benefit and eligibility provisions in effect as of the date of
39 the last contribution made during such separate period of employment. For pur-
40 poses of determining the accrued retirement allowance for each date of last
41 contribution:
42 (a) the member must have at least sixty (60) months of credited service
43 at the date of last contribution;
44 (b) the member's months of credited service and average monthly salary
45 are determined based solely on all periods of employment up to that date
46 of last contribution, ignoring later periods of employment; and
47 (c) the accrued retirement allowance computed for each period is multi-
48 plied by the bridging factor as provided in section 59-1355(3), Idaho
49 Code, between the date of the last contribution made during that separate
50 period of employment and the date of the member's final contribution made
51 during the last period of employment prior to retirement.
52 SECTION 2. That Section 59-1346, Idaho Code, be, and the same is hereby
53 amended to read as follows:
4
1 59-1346. COMPUTATION OF EARLY RETIREMENT ALLOWANCES. (1) The annual
2 amount of initial early retirement allowance of a member shall be a percentage
3 of the member's accrued retirement allowance. Such percentage shall be one
4 hundred percent (100%) if the sum of the number of years and months of cred-
5 ited service and the age in years and months is equal to or greater than the
6 sum indicated below. Otherwise, such percentage shall be one hundred percent
7 (100%) reduced by one-fourth of one percent (.25%) for each month up to sixty
8 (60) months that the member's retirement precedes the date the member would be
9 eligible to receive full accrued benefit without additional credited service,
10 and further reduced by two-thirds of one percent (.6667%) for each additional
11 month. Effective October 1, 1992, the further reduction for each additional
12 month shall equal six thousand and forty-two ten-thousandths of one percent
13 (.6042%) of the member's average monthly salary; effective October 1, 1993,
14 the further reduction for each additional month shall equal five thousand four
15 hundred and seventeen ten-thousandths of one percent (.5417%) of the member's
16 average monthly salary; and effective October 1, 1994, the further reduction
17 for each additional month shall equal four thousand seven hundred and nine-
18 ty-two ten-thousandths of one percent (.4792%) of the member's average monthly
19 salary. Entitlement to an annual amount of accrued retirement allowance shall
20 not vest until the effective date of that annual amount of accrued retirement
21 allowance. The retirement benefits shall be calculated on the amounts, terms
22 and conditions in effect at the date of the final contribution by the member.
23 If a member's service retire- Then the sum of the member's
24 ment ratio as defined by section credited service and age must be
25 59-1341, Idaho Code, is: equal to or greater than:
26 0.000 to 0.050 90
27 0.051 to 0.150 89
28 0.151 to 0.250 88
29 0.251 to 0.350 87
30 0.351 to 0.450 86
31 0.451 to 0.550 85
32 0.551 to 0.650 84
33 0.651 to 0.750 83
34 0.751 to 0.850 82
35 0.851 to 0.950 81
36 0.951 to 1.000 80.
37 (2) If the majority of a member's credited service is as an elected offi-
38 cial or as an appointed official, except as a member of the Idaho legislature,
39 and that official was normally in the administrative offices of the employer
40 less than twenty (20) hours per week during the term of office, or was nor-
41 mally not required to be present at any particular work station for the
42 employer twenty (20) hours per week or more during the term of office, that
43 member's accrued retirement allowance for service credited only during that
44 period shall be computed from an average monthly salary for salary received
45 during that period of such employment only. The initial service retirement
46 allowance of for service as a members of the Idaho legislature will be com-
47 puted under the provisions of this section, on the basis of their total months
48 of credited service and average salary for that service separate from all
49 other periods of employment. Calculations pursuant to this subsection which
50 apply to members of the Idaho legislature shall apply to the separate calcula-
51 tion of legislative service in the benefit calculation for legislative service
52 which first begins on or after December 1, 2004, or whose other qualified
53 employment begins on or after December 1, 2004.
54 (3) If that member has credited service from any other employment, the
55 accrued retirement allowance for the credited service from such other employ-
5
1 ment shall be computed from an average monthly salary for salary received dur-
2 ing the period of such other employment.
STATEMENT OF PURPOSE
RS 14261
This legislation prevents a person that first begins service in
the State Legislature after December 1, 2004, from using the
months of service accumulated as a legislator, for retirement
purposes under the Public Employee Retirement System (PERSI), as
part of their benefit calculation if that legislator later
becomes a non-legislative employee that qualifies for retirement
benefits under PERSI. The benefit calculation for legislative
service is treated separately from other PERSI qualified
employment.
FISCAL IMPACT
None.
Contact
Name: Rep. Mike Moyle
Rep. Dennis Lake
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 831