2006 Legislation
Print Friendly

SENATE BILL NO. 1272 – PERSI member, not vested, separatn


View Bill Status

View Bill Text

View Statement of Purpose / Fiscal Impact

Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status

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

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                       IN THE SENATE
                                    SENATE BILL NO. 1272
  1                                        AN ACT
  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 / Fiscal Impact

                       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


Name:     Alan Winkle
Agency:   PERSI
Phone:    334-2455
STATEMENT OF PURPOSE/FISCAL NOTE                      S 1272