2004 Legislation
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SENATE BILL NO. 1446 – PERSI, military service


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Bill Status

S1446......................................................by STATE AFFAIRS
relating to the Public Employee Retirement System to further define
"military service."
03/15    Senate intro - 1st rdg - to printing
03/16    Rpt prt - to St Aff
    Rpt out - rec d/p - to 2nd rdg
03/17    2nd rdg - to 3rd rdg
03/18    3rd rdg - PASSED - 26-0-9
      AYES -- Andreason, Bailey, Bunderson, Burkett, Burtenshaw,
      Darrington, Gannon, Goedde, Hill, Ingram, Kennedy, Keough, Little,
      Lodge, Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
      Richardson, Sorensen, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Brandt, Calabretta, Cameron, Compton, Davis,
      Geddes, Schroeder, Stegner, Stennett
    Floor Sponsor - Bailey
    Title apvd - to House
03/18    House intro - 1st rdg - to Com/HuRes
03/19    Rpt out - rec d/p - to 2nd rdg
03/20    2nd rdg - to 3rd rdg
    Rls susp - PASSED - 60-0-10
      AYES -- Andersen, Barraclough, Barrett, Bayer, Bedke, Bell, Black,
      Block, Boe, Bolz, Campbell, Cannon, Collins, Crow, Cuddy, Deal,
      Denney, Douglas, Edmunson, Ellsworth, Eskridge, Field(18), Field(23),
      Gagner, Garrett, Henbest, Jaquet, Jones, Kellogg, Kulczyk, Lake,
      Langford, Langhorst, Martinez, McGeachin, McKague, Meyer, Miller,
      Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart, Raybould, Ring,
      Ringo, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley,
      Skippen, Smith(30), Smylie, Snodgrass, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Bauer, Bradford, Clark, Eberle, Harwood,
      Ridinger, Roberts, Smith(24), Stevenson, Trail
    Floor Sponsor - Schaefer
    Title apvd - to Senate
03/20    To enrol
03/22    Rpt enrol - Pres signed - Sp signed
    To Governor
03/23    Governor signed
         Session Law Chapter 232
         Effective: 03/23/04

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                       IN THE SENATE
                                    SENATE BILL NO. 1446
                                 BY STATE AFFAIRS COMMITTEE
  1                                        AN ACT
  4        GENCY.
  5    Be It Enacted by the Legislature of the State of Idaho:
  6        SECTION 1.  That Section 59-1302, Idaho Code, be, and the same  is  hereby
  7    amended to read as follows:
  8        59-1302.  DEFINITIONS.  (1)  As  used  in  this chapter, each of the terms
  9    defined in this section shall have the meaning given in this section unless  a
 10    different meaning is clearly required by the context.
 11        (2)  "Active  member" means any employee who is not establishing the right
 12    to receive benefits through his or her employer's participation in  any  other
 13    retirement  system  established for Idaho public employees, if such participa-
 14    tion is mandated by applicable Idaho statutes other than this chapter.  In  no
 15    case will an employee be entitled to any benefit under this chapter for public
 16    service  if  such  employee is establishing retirement benefit entitlements by
 17    other Idaho statutes or federal statutes other than military service or social
 18    security for that same service.
 19        (3)  "Accumulated contributions" means the sum of amounts contributed by a
 20    member of the system, together with regular interest credit thereon.
 21        (4)  "Actuarial equivalent" means a benefit equal in value to another ben-
 22    efit, when computed upon the basis of the actuarial tables in use by the  sys-
 23    tem.
 24        (5)  "Actuarial  tables"  means  such tables as shall have been adopted by
 25    the board in accordance with recommendations of the actuary.
 26        (5A) "Alternate payee" means a spouse or former spouse of a member who  is
 27    recognized  by  an approved domestic retirement order as having a right to all
 28    or a portion of the accrued benefits in the retirement system with respect  to
 29    such member.
 30        (5B) "Approved  domestic  retirement  order"  means  a domestic retirement
 31    order which creates or recognizes the existence of an alternate payee's  right
 32    or  assigns to an alternate payee the right to all or a portion of the accrued
 33    benefits of a member under the retirement system, which directs the system  to
 34    establish a segregated account or disburse benefits to an alternate payee, and
 35    which the executive director of the retirement system has determined meets the
 36    requirements of sections 59-1319 and 59-1320, Idaho Code.
 37        (5C) "Average monthly salary" means the member's average salary during the
 38    base period as calculated pursuant to rules adopted by the retirement board.
 39        (5D) (a) "Base  period"  means  the  period of fifty-four (54) consecutive
 40        calendar months during which the member earned:
 41             (i)   The highest average salary; and
 42             (ii)  Membership service of at least one-half  (1/2)  the  number  of
 43             months in the period, excluding months of service attributable to:
  1                  A.  Military service;
  2                  B.  Service  qualifying  as  minimum benefit pursuant to section
  3                  59-1342(5), Idaho Code; and
  4                  C.  Worker's compensation income benefits.
  5        (b)  Effective October 1, 1993, the consecutive calendar months  shall  be
  6        forty-eight  (48).  Effective  October  1,  1994, the consecutive calendar
  7        months shall be forty-two (42).
  8        (c)  Entitlement to a base period shall not vest until the effective  date
  9        of  that  base  period. The retirement benefits shall be calculated on the
 10        amounts, terms and conditions in effect at the date of the final contribu-
 11        tion by the member.
 12        (d)  If no base period exists for a member, the member's  average  monthly
 13        salary  shall be determined by the board, using standards not inconsistent
 14        with those established in this subsection.
 15        (e)  To assure equitable treatment  for  all  members,  salary  increments
 16        inconsistent  with  usual  compensation  patterns may be disallowed by the
 17        board in determining average monthly salary and base period.
 18        (6)  "Beneficiary" means the person who is nominated by the written desig-
 19    nation of a member, duly executed and filed with the  board,  to  receive  the
 20    death benefit.
 21        (7)  "Calendar  year"  means twelve (12) calendar months commencing on the
 22    first day of January.
 23        (7A) "Contingent annuitant" means the person designated by a member  under
 24    certain  retirement  options to receive benefit payments upon the death of the
 25    member. The person so designated must be born and living on the effective date
 26    of retirement.
 27        (8)  "Credited service" means the aggregate of membership  service,  prior
 28    service and disabled service.
 29        (9)  "Date  of  establishment"  means July 1, 1965, or a later date estab-
 30    lished by the board or statute.
 31        (10) "Death benefit" means the amount, if any, payable upon the death of a
 32    member.
 33        (11) "Disability retirement allowance" means the periodic payment becoming
 34    payable upon an active member's ceasing to be an employee while  eligible  for
 35    disability retirement.
 36        (12) "Disabled" means:
 37        (a)  That  the  member  is  prevented  from  engaging in any occupation or
 38        employment for remuneration or profit as a result of bodily injury or dis-
 39        ease, either occupational or nonoccupational in cause, but excluding  dis-
 40        abilities  resulting  from  service in the armed forces of any country, or
 41        from an intentionally self-inflicted injury; and
 42        (b)  That the member will likely remain so disabled permanently  and  con-
 43        tinuously during the remainder of the member's life.
 44    It is not necessary that a person be absolutely helpless or entirely unable to
 45    do anything worthy of compensation to be considered disabled. If the person is
 46    so  disabled  that  substantially all the avenues of employment are reasonably
 47    closed to the person, that condition is within the meaning of  "disabled."  In
 48    evaluating  whether  a person is disabled, medical factors and nonmedical fac-
 49    tors including, but not limited to, education, economic  and  social  environ-
 50    ment, training and usable skills may be considered.
 51        Refusal to submit to a medical examination ordered by the board before the
 52    commencement  of  a  disability retirement allowance or at any reasonable time
 53    thereafter shall constitute proof that the member is not disabled.  The  board
 54    shall be empowered to select for such medical examination one (1) or more phy-
 55    sicians or surgeons who are licensed to practice medicine and perform surgery.
  1    The  fees  and expenses of such examination shall be paid from the administra-
  2    tion account of the fund. No member shall be required to undergo such examina-
  3    tion more often than once each year after he has received a disability retire-
  4    ment allowance continuously for two (2) years.
  5        (12A) "Disabled service" means the total number of  months  elapsing  from
  6    the  first day of the month next succeeding the final contribution of a member
  7    prior to receiving a disability retirement allowance to the first day  of  the
  8    month  following  the date of termination of such disability retirement allow-
  9    ance. During such period, the member shall remain classified in the membership
 10    category held during the month of final  contribution.  The  total  number  of
 11    months of disabled service credited for a person first becoming disabled after
 12    the  effective  date  of  this chapter shall not exceed the excess, if any, of
 13    three hundred sixty (360) over the total number of months of prior service and
 14    membership service.
 15        (12B) "Domestic retirement order" means any judgment,  decree,  or  order,
 16    including  approval  of  a  property settlement agreement which relates to the
 17    provision of marital property rights to a spouse or former spouse of a member,
 18    and is made pursuant to a domestic  relations  law,  including  the  community
 19    property law of the state of Idaho or of another state.
 20        (13) "Early retirement allowance" means the periodic payment becoming pay-
 21    able  upon  an  active  member's  ceasing to be an employee while eligible for
 22    early retirement.
 23        (14)  (A) "Employee" means:
 24        (a)  Any person who normally works twenty (20) hours or more per week  for
 25        an  employer  or  a  school  teacher  who  works  half-time or more for an
 26        employer and who receives salary for services rendered for such  employer;
 27        or
 28        (b)  Elected officials or appointed officials of an employer who receive a
 29        salary; or
 30        (c)  A  person  who is separated from service with less than five (5) con-
 31        secutive months of employment and who is reemployed or reinstated  by  the
 32        same employer within thirty (30) days.
 33        (B)  "Employee" does not include employment as:
 34        (a)  A person rendering service to an employer in the capacity of an inde-
 35        pendent business, trade or profession; or
 36        (b)  A  person  whose employment with any employer does not total five (5)
 37        consecutive months; or
 38        (c)  A person provided sheltered  employment  or  made-work  by  a  public
 39        employer in an employment or industries program maintained for the benefit
 40        of such person; or
 41        (d)  An  inmate of a state institution, whether or not receiving compensa-
 42        tion for services performed for the institution; or
 43        (e)  A student enrolled in an undergraduate,  graduate,  or  professional-
 44        technical  program  at and employed by a state college, university, commu-
 45        nity college or professional-technical  center  when  such  employment  is
 46        predicated on student status; or
 47        (f)  A person making contributions to the United States civil service com-
 48        mission under the United States Civil Service System Retirement Act except
 49        that  a  person who receives separate remuneration for work currently per-
 50        formed for an employer and the United States government may elect to be  a
 51        member of the retirement system in accordance with rules of the board; or
 52        (g)  A person occupying a position that does not exceed eight (8) consecu-
 53        tive  months  in  a  calendar  year with a city or county when the city or
 54        county has certified, in writing to the system, the position is  (i)  sea-
 55        sonal  or  casual;  and  (ii)  affected by weather and the growing season,
  1        including parks and golf course positions.
  2        (15) "Employer" means the state of Idaho, or any political subdivision or
  3    governmental entity, provided such subdivision or entity has elected  to  come
  4    into  the system. Governmental entity means any organization composed of units
  5    of government of Idaho or organizations funded only by government or  employee
  6    contributions  or organizations who discharge governmental responsibilities or
  7    proprietary responsibilities that would otherwise be performed by  government.
  8    All governmental entities are deemed to be political subdivisions for the pur-
  9    pose of this chapter.
 10        (15A) "Final  contribution"  means the final contribution made by a member
 11    pursuant to sections 59-1331 through 59-1334, Idaho Code.
 12        (16) "Firefighter" means an employee, including paid firefighters hired on
 13    or after October 1, 1980, whose primary occupation is that of  preventing  and
 14    extinguishing fires as determined by the rules of the board.
 15        (17) "Fiscal  year"  means  the period beginning on July 1 in any year and
 16    ending on June 30 of the next succeeding year.
 17        (18) "Fund" means the public employee retirement fund established by  this
 18    chapter.
 19        (19) "Funding  agent" means any bank or banks, trust company or trust com-
 20    panies, legal reserve life insurance company or legal reserve  life  insurance
 21    companies,  or combinations thereof, any thrift institution or credit union or
 22    any  investment management firm or individual investment manager  selected  by
 23    the  board to hold and/or invest the employers' and members' contributions and
 24    pay certain benefits granted under this chapter.
 25        (20) "Inactive member" means a former active member who is not an employee
 26    and is not receiving any form of retirement allowance, but for whom a  separa-
 27    tion benefit has not become payable.
 28        (20A) "Lifetime  annuity" means periodic monthly payments of income by the
 29    retirement system to an alternate payee.
 30        (20B) "Lump sum distribution" means a payment by the retirement system  of
 31    the  entire balance in the alternate payee's segregated account, together with
 32    regular interest credited thereon.
 33        (21) "Member" means an active member, inactive member or a retired member.
 34        (22) "Membership service" means military service which  occurs  after  the
 35    commencement  of contributions payable under sections 59-1331 through 59-1334,
 36    Idaho Code, and service with respect to which contributions are payable  under
 37    sections 59-1331 through 59-1334, Idaho Code, which, except for benefit calcu-
 38    lations  described  in sections 59-1342 and 59-1353, Idaho Code, includes ser-
 39    vice transferred to a segregated account under an approved domestic retirement
 40    order.
 41        (23) "Military service" means any period of active  duty  service  in  the
 42    armed  forces  of the United States including the national guard and reserves,
 43    under the provisions of title 10, title 32, and title 37, United States  code,
 44    which  commences  less  than ninety (90) days after the person ceases to be an
 45    employee and ends less than ninety (90) days before the person  again  becomes
 46    an  employee.  Provided,  however,  for the purposes of this chapter, military
 47    service SHALL NOT if a member fails to again become an employee due  to  being
 48    killed  while in active duty service, the member shall be entitled to military
 49    service through the date of death. In no event shall military service include:
 50        (a)  Any period ended by dishonorable discharge or during  which  termina-
 51        tion of such service is available but not accepted; or
 52        (b)  Any  period which commences more than ninety (90) days after the per-
 53        son ceases to be an employee or ends more than ninety (90) days before the
 54        person again becomes an employee unless such ninety (90) day  requirements
 55        are  waived  by  the board due to circumstances beyond the employee's con-
  1        trol; or
  2        (c)  Any active duty service in excess of five (5) years if at the  conve-
  3        nience  of the United States government, or in excess of four (4) years if
  4        not at the convenience of the United States government.
  5        (24) (a) "Police officer" for retirement purposes shall be as  defined  in
  6        section 59-1303, Idaho Code.
  7        (b)  "POST"  means  the Idaho peace officer standards and training council
  8        established in chapter 51, title 19, Idaho Code.
  9        (25) "Prior service" means any period prior to July 1, 1965,  of  military
 10    service  or  of employment for the state of Idaho or any political subdivision
 11    or other employer of each employee who is an active member or in military ser-
 12    vice or on leave of absence on the date of establishment,  provided,  however,
 13    an employee who was not an active member or in military service or on leave of
 14    absence  on  the  date  of establishment shall receive credit for the member's
 15    service prior to July 1, 1965, on the basis of recognizing two (2)  months  of
 16    such  service for each month of membership service. For the purpose of comput-
 17    ing such service, no deduction shall be made  for  any  continuous  period  of
 18    absence from service or military service of six (6) months or less.
 19        (26) "Regular  interest"  means interest at the rate set from time to time
 20    by the board.
 21        (27) "Retired member" means a former active member receiving a  retirement
 22    allowance.
 23        (28) "Retirement"  means  the  acceptance  of a retirement allowance under
 24    this chapter upon termination of employment.
 25        (29) "Retirement board" or "board" means the board provided  for  in  sec-
 26    tions 59-1304 and 59-1305, Idaho Code, to administer the retirement system.
 27        (30) "Retirement  system" or "system" means the public employee retirement
 28    system of Idaho.
 29        (31) (A) "Salary" means:
 30        (a)  The total salary or wages paid to a person who meets  the  definition
 31        of  employee  by an employer for  personal services performed and reported
 32        by the employer for income tax purposes, including the cash value  of  all
 33        remuneration in any medium other than cash.
 34        (b)  The  total  amount  of any voluntary reduction in salary agreed to by
 35        the member and employer where the reduction is used as an alternative form
 36        of remuneration to the member.
 37        (B)  Salary in excess of the compensation limitations set forth in section
 38    401(a)(17) of the Internal Revenue Code shall be disregarded  for  any  person
 39    who becomes a member of the system on or after July 1, 1996. The system had no
 40    limitations  on compensation in effect on July 1, 1993. The compensation limi-
 41    tations set forth in section 401(a)(17) of the Internal Revenue Code shall not
 42    apply for an "eligible employee." For purposes of this  subsection,  "eligible
 43    employee" is an individual who was a member of the system before July 1, 1996.
 44        (C)  "Salary" does not include:
 45        (a)  Contributions by employers to employee held medical savings accounts,
 46        as those accounts are defined in section 63-3022K, Idaho Code.
 47        (b)  Lump  sum payments inconsistent with usual compensation patterns made
 48        by the employer to the employee only upon termination from service includ-
 49        ing, but not limited to,  vacation  payoffs,  sick  leave  payoffs,  early
 50        retirement incentive payments and bonuses.
 51        (31A) "Segregated account" means the account established by the retirement
 52    system  for  the  alternate  payee of a member who is not a retired member. It
 53    shall include the months of credited  service  and  accumulated  contributions
 54    transferred from the member's account.
 55        (32) "Separation benefit" means the amount, if any, payable upon or subse-
  1    quent to separation from service.
  2        (33) "Service"  means  being shown on an employer's payroll as an employee
  3    receiving a salary. For each calendar month, service is credited only  when  a
  4    member  is an employee as defined in subsection (14)(A) of this section and is
  5    employed for fifteen (15) days or more during the calendar  month.  Employment
  6    of fourteen (14) days or less during any calendar month shall not be credited.
  7    No more than one (1) month of service shall be credited for all service in any
  8    month.
  9        (34) "Service  retirement  allowance"  means the periodic payment becoming
 10    payable upon an active member's ceasing to be an employee while  eligible  for
 11    service retirement.
 12        (35) "State" means the state of Idaho.
 13        (36) "Vested  member"  means an active or inactive member who has at least
 14    five (5) years of credited service, except that a member, who at the  time  of
 15    his separation from service:
 16        (a)  Held an office to which he had been elected by popular vote or having
 17        a  term  fixed by the constitution, statute or charter or was appointed to
 18        such office by an elected official; or
 19        (b)  Was the head or director of a department, division, agency, statutory
 20        section or bureau of the state; or
 21        (c)  Was employed on or after July 1, 1965, by an elected official of  the
 22        state of Idaho and occupied a position exempt from the provisions of chap-
 23        ter 53, title 67, Idaho Code; and
 24        (d)  Was  not  covered  by  a  merit  system for employees of the state of
 25        Idaho,
 26    is vested without regard to the length of credited service.
 27        (37) The masculine pronoun, wherever used, shall include the feminine pro-
 28    noun.
 29        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
 30    declared to exist, this act shall be in full force and effect on and after its
 31    passage and approval.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE
                             RS 14267

This bill makes a minor change to the definition of PERSI
Military Service to address inequity in the crediting of military
service.  This change will ensure that Military Service will be
credited for calculation of both regular retirement benefits as
well as for survivor benefits.

                          FISCAL IMPACT

The impact to the General Fund and retirement system funds is
considered negligible.  This is because the PERSI actuary does
not assume any incidence of military service for cost purposes of
program benefits since it represents such a small fraction of the
entire fund's assets.  To the extent that there would be a cost
associated with the benefit provided in this bill, it would be
included in the annual valuation and amortized with any other
liability.  Therefore, the fiscal impact of this legislation is
indeterminate due to its extremely small impact.

Name: Senator Kent Bailey
      Alan Winkle, PERSI 
      Phone: 334-2455

STATEMENT OF PURPOSE/FISCAL NOTE                    S 1446