Utah Code 49-12-701. Early retirement incentive — Eligibility — Calculation of benefit — Payment of costs — Savings to be appropriated by Legislature — Restrictions on reemployment
49-12-701. Early retirement incentive — Eligibility — Calculation of benefit — Payment of costs — Savings to be appropriated by Legislature — Restrictions on reemployment.
(1)
Any member of this system may retire and receive the allowance allowed under Subsection (2) if the member meets the following requirements as of the member’s retirement date:
Terms Used In Utah Code 49-12-701
Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
Compensation: means the total amount of payments made by a participating employer to a member of this system for services rendered to the participating employer, including:
(i)
bonuses;
(ii)
cost-of-living adjustments;
(iii)
other payments currently includable in gross income and that are subject to social security deductions, including any payments in excess of the maximum amount subject to deduction under social security law;
(iv)
amounts that the member authorizes to be deducted or reduced for salary deferral or other benefits authorized by federal law; and
Employer: means any department, educational institution, or political subdivision of the state eligible to participate in a government-sponsored retirement system under federal law. See Utah Code 49-11-102
Final average salary: means the amount calculated by averaging the highest five years of annual compensation preceding retirement subject to Subsections (3)(b), (c), (d), (e), and (f). See Utah Code 49-12-102
Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
Political subdivision: includes special districts, special service districts, or authorities created by the Legislature or by local governments, including the office. See Utah Code 49-11-102
Retirement: means the status of an individual who has become eligible, applies for, and is entitled to receive an allowance under this title. See Utah Code 49-11-102
retirement allowance: means the pension plus the annuity, including any cost of living or other authorized adjustments to the pension and annuity. See Utah Code 49-11-102
Retirement date: means the date selected by the member on which the member's retirement becomes effective with the office. See Utah Code 49-11-102
Service credit: means :
(a)
the period during which an employee is employed and compensated by a participating employer and meets the eligibility requirements for membership in a system or the Utah Governors' and Legislators' Retirement Plan, provided that any required contributions are paid to the office; and
(b)
periods of time otherwise purchasable under this title. See Utah Code 49-11-102
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
System: means the Public Employees' Contributory Retirement System created under this chapter. See Utah Code 49-12-102
Years of service credit: means :
(a)
a period consisting of 12 full months as determined by the board;
(b)
a period determined by the board, whether consecutive or not, during which a regular full-time employee performed services for a participating employer, including any time the regular full-time employee was absent on a paid leave of absence granted by a participating employer or was absent in the service of the United States government on military duty as provided by this chapter; or
(c)
the regular school year consisting of not less than eight months of full-time service for a regular full-time employee of an educational institution. See Utah Code 49-12-102
(a)
the member is eligible for retirement under Section 49-12-401, or has 25 years of service credit;
(b)
the member elects to forfeit any stipend for retirement offered by the participating employer; and
(c)
the member elects to retire from this system by applying for retirement by the date established under Subsection (3)(a) or (3)(b).
(2)
(a)
A member who retires under Subsection (1) shall receive 2% of that member’s final average salary for all years of service credit.
(b)
An actuarial reduction may not be applied to the allowance granted under this section.
(3)
In order to receive the allowance allowed by this section, a member shall submit an application to the office as follows:
(a)
(i)
For state and school employees under Level A, the application shall be filed by May 31, 1987. The member’s retirement date shall then be set by the member on the 1st or 16th day of July, August, or September, 1987.
(ii)
If a Level A member elects to retire, the executive director or participating employer may request the member to delay the retirement date until a later date, but no later than June 30, 1988.
(iii)
If the member agrees to delay the retirement date, the retirement date shall be delayed, but service credit may not be accrued after the member’s original retirement date elected by the member, and compensation earned after the member’s original retirement date may not be used in the calculation of the final average salary for determining the retirement allowance.
(b)
(i)
For political subdivision employees under Level B, the application shall be filed by September 30, 1987.
(ii)
The retirement date shall then be set by the member on the 1st or 16th day of July, August, September, October, November, or December, 1987.
(4)
(a)
The cost of providing the allowance under this section shall be funded in fiscal year 1987-88 by a supplemental appropriation in the 1988 General Session based on the retirement contribution rate increase established by the consulting actuary and approved by the board.
(b)
The cost of providing the allowance under this section shall be funded beginning July 1, 1988, by means of an increase in the retirement contribution rate established by the consulting actuary and approved by the board.
(c)
The rate increase under Subsections (4)(a) and (b) shall be funded:
(i)
for state employees, by an appropriation from the account established by the Division of Finance under Subsection (4)(d), which is funded by savings derived from this early retirement incentive and a work force reduction;
for political subdivisions under Level B, by direct contributions by the participating employer.
(d)
(i)
Each year, any excess savings derived from this early retirement incentive which are above the costs of funding the increase and the costs of paying insurance, sick leave, compensatory leave, and vacation leave under Subsections (4)(c)(i) and (ii) shall be reported to the Legislature and shall be appropriated as provided by law.
(ii)
In the case of Subsection (4)(c)(i), the Division of Finance shall establish an account into which all savings derived from this early retirement incentive shall be deposited as the savings are realized.
(iii)
In the case of Subsection (4)(c)(ii), the State Board of Education shall certify the amount of savings derived from this early retirement incentive.
(iv)
The State Board of Education and the participating employer may not spend the savings until appropriated by the Legislature as provided by law.
(5)
A member who retires under this section is subject to Section 49-11-504 and 12.
(6)
The board may adopt rules to administer this section.
(7)
The Legislative Auditor General shall perform an audit to ensure compliance with this section.
