Utah 2025 Regular Session

Utah Senate Bill SB0020 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	12-18 15:37 S.B. 20
2	2	1
3	3	Utah Retirement Systems Amendments
4	4	2025 GENERAL SESSION
5	5	STATE OF UTAH
6	6	Chief Sponsor: Wayne A. Harper
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8	8
9	9	3
10	10	LONG TITLE
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12	12	Committee Note:
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14	14	The Retirement and Independent Entities Interim Committee recommended this bill.
15	15	6 Legislative Vote:7 voting for 1 voting against7 absent
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17	17	General Description:
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19	19	This bill modifies the contribution provisions of the New Public Employees' Tier II
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21	21	Contributory Retirement Act.
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23	23	Highlighted Provisions:
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25	25	This bill:
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27	27	▸ authorizes a participating employer to elect to pay member contributions that exceed the
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29	29	contribution cap for employees that are members of the Public Employees' Tier II
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31	31	Hybrid Retirement System; and
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33	33	▸ requires a participating employer to make an additional nonelective contribution to an
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35	35	employee that is a member of the Public Employees' Tier II Defined Contribution Plan,
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37	37	if the participating employer elects to pay the required member contribution as an
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39	39	employer pick up for employees that are members of the Public Employees' Tier II
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41	41	Hybrid Retirement System.
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43	43	Money Appropriated in this Bill:
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45	45	None
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47	47	Other Special Clauses:
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49	49	This bill provides a special effective date.
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51	51	Utah Code Sections Affected:
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53	53	AMENDS:
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55	55	49-22-301, as last amended by Laws of Utah 2011, Chapter 439
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57	57	49-22-401, as last amended by Laws of Utah 2022, Chapter 171
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59	59
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61	61	Be it enacted by the Legislature of the state of Utah:
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63	63	Section 1. Section 49-22-301 is amended to read:
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65	65	49-22-301 . Contributions. S.B. 20 12-18 15:37
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67	67	(1) Participating employers and members shall pay the certified contribution rates to the
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69	69	office to maintain the defined benefit portion of this system on a financially and
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71	71	actuarially sound basis.
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73	73	(2)(a) A participating employer shall pay up to 10% of compensation toward the
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75	75	certified contribution rate to the office for the defined benefit portion of this system.
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77	77	(b) [A] Except as provided in Subsection (2)(c), a member shall [only ]pay to the office
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79	79	the amount, if any, of the certified contribution rate for the defined benefit portion of
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81	81	this system that exceeds the percent of compensation paid by the participating
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83	83	employer under Subsection (2)(a).
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85	85	(c) A participating employer may elect to pay all or part of the required member
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87	87	contribution under Subsection (2)(b) on behalf of the member as an employer pick up
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89	89	under 26 U.S.C. Sec. 414(h)(2), in addition to the required participating employer
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91	91	contribution under Subsection (2)(a).
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93	93	[(c)] (d) In addition to the percent specified under Subsection (2)(a), the participating
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95	95	employer shall pay the corresponding Tier I system amortization rate of the
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97	97	employee's compensation to the office to be applied to the employer's corresponding
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99	99	Tier I system liability.
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101	101	[(3) A participating employer may not elect to pay all or part of the required member
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103	103	contributions under Subsection (2)(b), in addition to the required participating employer
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105	105	contributions.]
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107	107	[(4)] (3)(a) A member contribution is credited by the office to the account of the
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109	109	individual member.
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111	111	(b) This amount, together with refund interest, is held in trust for the payment of benefits
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113	113	to the member or the member's beneficiaries.
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115	115	(c) A member contribution is vested and nonforfeitable.
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117	117	[(5)] (4)(a) Each member is considered to consent to payroll deductions of member
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119	119	contributions.
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121	121	(b) The payment of compensation less these payroll deductions is considered full
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123	123	payment for services rendered by the member.
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125	125	[(6)] (5) Benefits provided under the defined benefit portion of the Tier II Hybrid
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127	127	Retirement System created under this part:
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129	129	(a) may not be increased unless the actuarial funded ratios of all systems under this title
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131	131	reach 100%; and
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133	133	(b) may be decreased only in accordance with the provisions of Section 49-22-310.
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136	136	Section 2. Section 49-22-401 is amended to read:
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138	138	49-22-401 . Contributions -- Rates.
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140	140	(1)(a) Up to the amount allowed by federal law, the participating employer shall make a
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142	142	nonelective contribution of 10% of the participant's compensation to a defined
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144	144	contribution plan.
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146	146	(b) In addition to the nonelective contribution described in Subsection (1)(a), if a
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148	148	participating employer elects under Subsection 49-22-301(2)(c) to pay all or part of
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150	150	the required member contribution on behalf of the participating employer's
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152	152	employees that are members covered under Part 3, Tier II Hybrid Retirement System,
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154	154	the participating employer shall make an additional nonelective contribution to an
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156	156	employee that is a member covered under this part at the same percentage rate of the
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158	158	participant's compensation as the participating employer's election to pay required
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160	160	member contributions on behalf of the participating employer's employees that are
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162	162	members covered under Part 3, Tier II Hybrid Retirement System.
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164	164	(2)(a) The participating employer shall contribute the 10% nonelective contribution
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166	166	described in Subsection (1) to a defined contribution plan qualified under Section
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168	168	401(k) of the Internal Revenue Code that:
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170	170	(i) is sponsored by the board; and
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172	172	(ii) has been grandfathered under Section 1116 of the Federal Tax Reform Act of
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174	174	1986.
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176	176	(b) The member may make voluntary deferrals to:
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178	178	(i) the qualified 401(k) plan that receives the employer contribution described in this
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180	180	Subsection (2); or
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182	182	(ii) at the member's option, another defined contribution plan established by the
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184	184	participating employer.
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186	186	(c) In addition to the percent specified under Subsection (2)(a), the participating
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188	188	employer shall pay the corresponding Tier I system amortization rate of the
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190	190	employee's compensation to the office to be applied to the employer's corresponding
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192	192	Tier I system liability.
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194	194	(3)(a) Except as provided under Subsection (3)(c), the total amount contributed by the
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196	196	participating employer under Subsection (2)(a) vests to the member upon accruing
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198	198	four years of employment as a regular full-time employee under this title.
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200	200	(b) The total amount contributed by the member under Subsection (2)(b) vests to the
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202	202	member's benefit immediately and is nonforfeitable.
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205	205	(c)(i) Upon filing a written request for exemption with the office, an eligible
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207	207	employee is exempt from the vesting requirements of Subsection (3)(a) in
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209	209	accordance with Section 49-22-205.
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211	211	(ii) An employee who is exempt under this Subsection (3)(c) is not eligible for
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213	213	additional service credit in the plan for the period of exempt employment.
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215	215	(d)(i) Years of employment under Subsection (3)(a) includes any fraction of a year
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217	217	to which the member may be entitled.
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219	219	(ii) At the time of vesting, if a member's years of service credit is within one-tenth of
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221	221	one year of the total years required for vesting, the member shall be considered to
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223	223	have the total years of employment required for vesting.
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225	225	(4)(a) Contributions made by a participating employer under Subsection (2)(a) shall be
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227	227	invested in a default option selected by the board until the member is vested in
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229	229	accordance with Subsection (3)(a).
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231	231	(b) A member may direct the investment of contributions including associated
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233	233	investment gains and losses made by a participating employer under Subsection
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235	235	(2)(a) only after the contributions have vested in accordance with Subsection (3)(a).
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237	237	(c) A member may direct the investment of contributions made by the member under
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239	239	Subsection (3)(b).
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241	241	(5) No loans shall be available from contributions made by a participating employer under
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243	243	Subsection (2)(a).
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245	245	(6) No hardship distributions shall be available from contributions made by a participating
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247	247	employer under Subsection (2)(a).
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249	249	(7)(a) Except as provided in Subsection (7)(b), if a member terminates employment
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251	251	with a participating employer prior to the vesting period described in Subsection
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253	253	(3)(a), all contributions made by a participating employer on behalf of the member
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255	255	including associated investment gains and losses under Subsection (2)(a) are subject
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257	257	to forfeiture.
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259	259	(b) If a member who terminates employment with a participating employer prior to the
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261	261	vesting period described in Subsection (3)(a) subsequently enters employment with
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263	263	the same or another participating employer within 10 years of the termination date of
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265	265	the previous employment:
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267	267	(i) all contributions made by the previous participating employer on behalf of the
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269	269	member including associated investment gains and losses shall be reinstated upon
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271	271	the member's employment as a regular full-time employee; and
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274	274	(ii) the length of time that the member worked with the previous employer shall be
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276	276	included in determining whether the member has completed the vesting period
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278	278	under Subsection (3)(a).
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280	280	(c) The office shall establish a forfeiture account and shall specify the uses of the
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282	282	forfeiture account, which may include an offset against administrative costs or
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284	284	employer contributions made under this section.
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286	286	(8) The office may request from any other plan under Subsection (2)(b)(ii) any relevant
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288	288	information pertaining to the maintenance of the plan's tax qualification under the
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290	290	Internal Revenue Code.
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292	292	(9) The office may take any action that in the office's judgment is necessary to maintain the
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294	294	tax-qualified status of the office's 401(k) defined contribution plan under federal law.
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296	296	Section 3. Effective date.
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298	298	This bill takes effect on July 1, 2025.
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