Utah Code 49-23-302. Defined contribution benefit established — Contribution by employer and employee — Vesting of contributions — Plans to be separate — Tax-qualified status of plans
49-23-302. Defined contribution benefit established — Contribution by employer and employee — Vesting of contributions — Plans to be separate — Tax-qualified status of plans.
defined contribution plan: means any defined contribution plan or deferred compensation plan authorized under the Internal Revenue Code and administered by the board. See Utah Code 49-11-102
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
Firefighter service: means employment normally requiring an average of 2,080 hours of regularly scheduled employment per year rendered by a member who is:
(i)
a firefighter service employee trained in firefighter techniques and assigned to a position of hazardous duty with a regularly constituted fire department;
(ii)
the state fire marshal appointed under Section 53-7-103 or a deputy state fire marshal; or
Nonelective contribution: means an amount contributed by a participating employer into a participant's defined contribution account. See Utah Code 49-11-102
Plan: means the Utah Governors' and Legislators' Retirement Plan created by Chapter 19, Utah Governors' and Legislators' Retirement Act, the New Public Employees' Tier II Defined Contribution Plan created by 4, the New Public Safety and Firefighter Tier II Defined Contribution Plan created by 4, or the defined contribution plans created under Section 49-11-801. See Utah Code 49-11-102
Public safety service: means employment normally requiring an average of 2,080 hours of regularly scheduled employment per year rendered by a member who is:
(i)
a law enforcement officer in accordance with Section 53-13-103;
(ii)
a correctional officer in accordance with Section 53-13-104;
(iii)
a special function officer approved in accordance with Sections 49-15-201 and 53-13-105;
(iv)
a dispatcher who is certified in accordance with Section 53-6-303;
(v)
a full-time member of the Board of Pardons and Parole created under Section 77-27-2;
(vi)
the commissioner of the Department of Public Safety; or
(vii)
the executive director of the Department of Corrections. See Utah Code 49-23-102
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
System: means the New Public Safety and Firefighter Tier II Contributory Retirement System created under this chapter. See Utah Code 49-23-102
Voluntary deferrals: means an amount contributed by a participant into that participant's defined contribution account. See Utah Code 49-11-102
Years of service credit: means :
(a)
a period, consisting of 12 full months as determined by the board; or
(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. See Utah Code 49-23-102
(a)
A participating employer shall make a nonelective contribution on behalf of each public safety service employee or firefighter service employee who is a member of this system in an amount equal to 14% minus the contribution rate paid by the employer under Subsection 49-23-301(2)(a) of the member’s compensation to a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code which:
(i)
is sponsored by the board; and
(ii)
has been grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
(b)
The member may make voluntary deferrals to:
(i)
the qualified 401(k) plan which receives the employer contribution described in this Subsection (1); or
(ii)
at the member’s option, another defined contribution plan established by the participating employer.
(2)
(a)
The total amount contributed by the participating employer under Subsection (1)(a), including associated investment gains and losses, vests to the member upon accruing four years of service credit under this title.
(b)
The total amount contributed by the member under Subsection (1)(b) vests to the member’s benefit immediately and is nonforfeitable.
(c)
(i)
Years of service credit under Subsection (2)(a) includes any fraction of a year to which the member may be entitled.
(ii)
At the time of vesting, if a member’s years of service credit is within one-tenth of one year of the total years required for vesting, the member shall be considered to have the total years of service credit required for vesting.
(3)
(a)
Contributions made by a participating employer under Subsection (1)(a) shall be invested in a default option selected by the board until the member is vested in accordance with Subsection (2)(a).
(b)
A member may direct the investment of contributions made by a participating employer under Subsection (1)(a) only after the contributions have vested in accordance with Subsection (2)(a).
(c)
A member may direct the investment of contributions made by the member under Subsection (1)(b).
(4)
No loans shall be available from contributions made by a participating employer under Subsection (1)(a).
(5)
No hardship distributions shall be available from contributions made by a participating employer under Subsection (1)(a).
(6)
(a)
Except as provided in Subsection (6)(b), if a member terminates employment with a participating employer prior to the vesting period described in Subsection (2)(a), all contributions, including associated investment gains and losses, made by a participating employer on behalf of the member under Subsection (1)(a) are subject to forfeiture.
(b)
If a member who terminates employment with a participating employer prior to the vesting period described in Subsection (2)(a) subsequently enters employment with the same or another participating employer within 10 years of the termination date of the previous employment:
(i)
all contributions made by the previous participating employer on behalf of the member, including associated investment gains and losses, shall be reinstated upon the member’s employment as a regular full-time employee; and
(ii)
the length of time that the member worked with the previous employer shall be included in determining whether the member has completed the vesting period under Subsection (2)(a).
(c)
The office shall establish a forfeiture account and shall specify the uses of the forfeiture account, which may include an offset against administrative costs or employer contributions made under this section.
(7)
The office may request from any other qualified 401(k) plan under Subsection (1) or (2) any relevant information pertaining to the maintenance of its tax qualification under the Internal Revenue Code.
(8)
The office may take any action which in its judgment is necessary to maintain the tax-qualified status of its 401(k) defined contribution plan under federal law.
