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S1272.......................................by COMMERCE AND HUMAN RESOURCES
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law relating to the
Public Employee Retirement System to further limit automatic separation
benefits for an inactive member who is not a vested member.
01/18 Senate intro - 1st rdg - to printing
01/19 Rpt prt - to Com/HuRes
02/10 Rpt out - rec d/p - to 2nd rdg
02/13 2nd rdg - to 3rd rdg
02/21 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Coiner
Title apvd - to House
02/22 House intro - 1st rdg - to Com/HuRes
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/10 3rd rdg - PASSED - 64-0-6
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford,
Cannon, Chadderdon, Clark, Collins, Denney, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews,
McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
Rydalch, Sayler, Schaefer, Shepherd(2), Shirley, Skippen, Smith(30),
Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Mr. Speaker
NAYS -- None
Absent and excused -- Crow, Deal, Henderson, Sali, Shepherd(8), Wood
Floor Sponsor - Trail
Title apvd - to Senate
03/13 To enrol
03/14 Rpt enrol - Pres signed
03/15 Sp signed
03/16 To Governor
03/22 Governor signed
Session Law Chapter 152
Effective: 03/22/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE SENATE
SENATE BILL NO. 1272
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION 59-1359,
3 IDAHO CODE, TO FURTHER LIMIT AUTOMATIC SEPARATION BENEFITS; AND DECLARING
4 AN EMERGENCY.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 59-1359, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 59-1359. SEPARATION BENEFITS. (a) The separation benefit, if any, shall
9 become payable upon the written request of an inactive member who has been
10 separated from employment. If the person who received a separation benefit is
11 reemployed or reinstated by the same employer within ninety (90) days or is
12 guaranteed a right to employment or reinstatement with the same employer, the
13 person shall repay to the system any separation benefit paid.
14 (b) A separation benefit shall automatically be payable three (3) years
15 after the a person becomes an inactive member if the inactive member is not a
16 vested member, has accumulated contributions of less than one thousand dollars
17 ($1,000), and has been separated from employment and is not reemployed or
18 reinstated by the same employer within ninety (90) days.
19 (c) For purposes of this section, "separated from employment" means the
20 inactive member terminated all employment with the employer. For purposes of
21 this section, "same employer" means the employer for which the person last
22 worked prior to being separated from employment.
23 (d) Any member may elect to have eligible rollover distributions paid
24 directly to a specified eligible retirement plan as required by 26 U.S.C. sec-
25 tion 401(a)(31).
26 SECTION 2. An emergency existing therefor, which emergency is hereby
27 declared to exist, this act shall be in full force and effect on and after its
28 passage and approval.
STATEMENT OF PURPOSE
RS 15335
Idaho Code 59-1359 currently provides that non-vested PERSI
members who separate from employment must be paid a separation
benefit within three (3) years. A separation benefit can be
rolled over to another qualified plan or IRA, or can be taken as
a lump-sum distribution. Recent changes to federal law require
that any mandatory distribution of an account balance in excess
of one thousand dollars ($1,000) must be rolled over unless the
member affirmatively requests a lump-sum distribution. This
requirement poses challenges where a member cannot be located and
money must rolled over to an IRA chosen by the plan in accordance
with federal regulations. This bill amends Idaho Code 59-1359
to eliminate mandatory distribution of account balances exceeding
one thousand dollars ($1,000), thus avoiding the new federal
mandatory rollover requirements.
This bill must become effective immediately upon its passage and
approval in order to meet federal requirements governing
qualified retirement plans.
FISCAL NOTE
None.
CONTACT
Name: Alan Winkle
Agency: PERSI
Phone: 334-2455
STATEMENT OF PURPOSE/FISCAL NOTE S 1272