S.B. 25 Retirement Modifications: transcript

Thank you. Uh, Senate Bill 25 is the, um, annual, uh, cleanup bill that is, uh, brought to the retirement and independent entities, uh, committee over the, uh, center Last interim. Um, what it is, is basically a bunch of cleanup items based on either court cases or rulings or appeals or things like that. Most lot commonly that comes in from changes in law, both federal and state. Um, there is nothing really substantive in here. It goes through and, and clarifies and modifies the definition of bonafide termination of employment. Standardizes certain terminology, uh, expands the retirement membership council by three members at the request of the, of the, uh, stakeholders in URS, uh, clarifies the Attorney General's office, uh, retirement elections, um, clarifies administrative rules and appeals and prohibits, uh, permanent relinquishment of benefits. They're just technical things for administrating the program.

Thank you, Mr. Chair. I, I just had a question regarding that. The expansion of the council members. Um, would you mind expanding on that, please?

Yeah. Uh, there are people in statute right now that are stakeholders where their organizations participate in URS. And it came to it, it was asked, why don't we have a school board member or somebody from the district or the, the, uh, the Superintendent's Association, why or not they on, on that board and it's advisory only. Uh, but they asked to be on, we, uh, vent that with URS and some of the other, uh, uh, outside groups, and they said it makes more sense to have more eyes on the system and make sure that it's operating as it should.

Thank you, Mr. Chair. May I ask another question? Please? Yes. Thank you. Um, so adding the, I I noticed that there were, I, I, I don't understand what a service credit is and what the, um, what, what adding the judge's Contributory Retirement Act and the judge's Non-Contributory Retirement Act means on this specific line. 4 52 and 4 53 I what it means when it says that they, are they, that they may, oh, hold on. Under no circumstances, may they be transferable.

Yeah. What it means is you are vested in the, in the retirement program that you are, that you started in. Okay. We have, uh, we have a legislative retirement, we have a governor, we have a judiciary, we have a, uh, there's a different higher ed. There's a public ed. So it means where you start, that's where you are.

I've got, oh, I'm, shall we phone a friend for more technical spec specifications on this? Thank

Yeah. Hi, my name is Corey Cox. I'm with Utah Retirement Systems. Um, ba basically what happens with this is that if there is, if people are, have multiple credit or credit in two different systems, for example, so the tier one public employee retirement system, maybe they were a district attorney or something like that, and then they became a judge. Um, this, this just helps clarify that language to make sure that we can coordinate those benefits, uh, to make it work for their, their overall benefit. 'cause we only pay one payment, but we coordinate those benefits together So they're not transferable.

Is that correct? Right. Okay.

Thank you, Mr. Chair. Um, just a couple of questions. I noticed that there was a carve out for, um, the attorney general and senior staff at will receiving retirement options that aren't available to other public employees. Is there a reason why there's a specific, um, retirement option that isn't available to other public?

Yeah, there's basically, we have retirement. The governor has a retirement, judges have a retirement. So there are different programs. They're eligible for those workers. But I'll let Mr. Cox fill in some more.

Yeah. So, so effectively there are some senior staff members that aren't necessarily career employees. Um, and this is across the board. We do this with, with several agencies already. Um, where say an executive director is appointed by the governor in a state agency, they can exempt out of the URS system. This does the same thing allows for these individuals to exempt out of the, of the retirement system. Can you name other positions or groups that also fall under this, that receive the same type of option? Yeah, so, so every um, ex executive director position in, in the state of Utah in the executive branch is, is eligible to do that. The elected officials such as the treasurer, um, the auditor, the Attorney General, the attorney general's already in there, but they, they asked specifically to include senior staff as part of that as well, because they don't see themselves as career, um, employees. And so I hope that clarifies it a little bit. We do allow for, even in cities, you know, some of their senior staff to do the same thing. Um, and there's also similar provision on the federal level for people to be exempt from Social Security as long as they have a comparable or better retirement program.

Maybe I can make a comment on this. 'cause I think I, we had this case where, uh, I noticed one of these exempt employees is certain city managers, and I think there was a city managers association that provided the retirement instead of URS. So they wanted to be exempt from, from URS, is that right? And have those contributions go to their, uh, they negotiated a contract where it would the don the, the, uh, money would go to their, their plan. That's,

That's correct. Yeah. So

Some of these employees work in different states. Sure. So it's not a, a Utah Specific. I, I guess now understanding, I'm, I'm, I'm supportive of this. It is just, I'm just curious why this hasn't been included and now why it's happening now. I just, it seems like it should have been included before and what this extra measure does now, instead of, you know, it should have been included always. It's just expanded to a, a few more people. That's it.

Thank you Mr. Chair. So when you mentioned the senior staff, you said it was optional. Do they ever not do it or did they, or do they opt in? I mean, like, have you seen that in the past?

Yeah, so, so effectively, um, we'll see some, because they have service credit already in the URS system. Um, some will continue to earn additional service credit. Oftentimes where we see this is an issue is where there's senior staff that comes from private sector and then moves into one of these positions. They're only planning on staying for a couple, three, four years or so. And then, and, and so they ex they exempt out of, of the system. So They're not necessarily double dipping into anything like that.

No. Okay. Thank you.

I'd like to make a motion for a positive recommendation for, uh, Senator Wayne Hoppers as our Boston friend said, uh, Senate bill.

So am I to understand that we're expanding the URS help for the senior?

No. Well, What was the question? We're not expanding What it means they're exempt from the system. My understanding is it means that those contributions, they don't have to contribute to, uh, to URS. They can take those contributions to Another qualified plan Yes.

And use their own plan or to Oh, gotcha. Take those somewhere else. Okay. Thank you for the clarification.

I just wanna express my thanks to this committee. There's been some good questions here, so thank you. Keep up the good work.

To adjourn.

Senator Harper. Thank you Mr. President. This is the annual cleanup bill for the Utah Retirement Systems. Uh, it was reviewed by the interim committee and other stakeholders. It, uh, based on operation di different things, we've, uh, clarified the definition of bonafide termination of employment, retirement membership counsel, attorney general's, retirement election, administrative appeals and rulings, and then relinquishment of benefits. It just clarifies those four better practice.

Thank you. I'd move under suspension of the rules that Senate Bill 25 pass.

Senator Vickers Baldry Blue in Brammer bus Cullimore Escamia Aye. Fillmore Aye. Grover Harper Aye. Kins Ipson Johnson. Aye. K Juab McKay Macl Mikel Milner Milner Musselman Owens Pitcher Plum Reebie Sandal Stevenson Aye. Stratton Aye. Vickers Weiler Aye. Wilson Aye. Winterton Aye. President Adams Aye.

go ahead and place the motion, the motion before us the House circle SB 25.

Thank you. Yes. Each year, Utah Retirement Systems kind of collects things that, that come up throughout the year that they need to, they'd like to modify or tweak to improve our system. And so this year's bill is a modification, but it's, it has no real huge substance, nothing substantive about it or it, and no fiscal impact, but it will continue to refine and improve our system. It does five things. It clarifies one definition. Um, it also officially expands the membership council, which is not the same thing as the board. So these are not voting members, but just interested parties who would like to be involved and understand what's going on with URS. And then it also coordinates the service credit between tier one and tier two employees. Sometimes there's some confusion there. It allows the executive director to delegate some rulings to a deputy director and it clarifies the how benefits can be relinquished. So those are the things it does, um, Mr. Speaker and I would appreciate the body's support.

Mr. Speaker, will the sponsor yield to a question? Representative Acton, will you yield to a question?

Yes, I will. You ask Representative Boxier,

Um, I see in here that it would allow employer contributions to vest immediately. Can I ask why that is being requested and also what the process is right now?

Um, I believe you're referring to the Attorney General's Senior Staff Exemption election. Um, and you know, I, let's see it, it says that it authorizes the senior staff in the Attorney General's office, uh, including the Attorney General himself or herself, uh, to be exempt from some of the rules. I don't know exactly why that would be, but I would assume we have a lot of, um, a lot of needs in the Attorney General's office in terms of, um, personnel and, and retaining staff. At a very high level, those Utah has become a very important hub for international legal teams. And so it's very difficult to retain senior staff at, at, at state wage levels. And so that may be a perk. That's my assumption. I'm, I'm not exactly sure Mr. Speaker, Uh, Mr. Speaker, But it is only pertaining to that senior staff.

Would the sponsor yield to another question? Representative Acton, will you yield to another question?

Yes, I will. Yes. Representative

Bobier, um, as I'm thinking about trying to retain staff, letting employer contributions best immediately makes it so that there's no skin in the game. So I'm wondering how this will actually help retain them in that office.

Uh, Mr. Speaker, I would, uh, in answer to that, I would say that, um, sometimes just hiring and, uh, it, it's sometimes those very subtle differences can make a big difference in hiring even and also in retaining. So I would assume that it is an opportunity for them to be able to attract and retain staff, um, only in that very specific part of the URS, which is, you know, vast. It's, it, there are many participants in URS, but we're only talking about the Attorney General's office and they do have specific and, and different needs than most of the offices throughout the state employment system.

Thank you for that answer, Mr. Speaker. Um, as I'm contemplating this, I, I think of other, um, jobs in the private sector and usually higher executives and higher compensation, they make sure that those employer contributions are spread out so that someone is willing to stay and be able to make use of those. So as is written right now, I don't know if I could support that. Thank you.

Thank you Mr. Speaker. I'd like to take the opportunity to clarify the last question. My understanding is that URS has exemptions for certain individuals who have not been part of the URS system. They may be, for example, some city managers have their, uh, retirement outside the URS system, if they work in different states or some professional staff do it with their professional body outside of different states. So what the bill is asking for is in, in certain situations to allow Utah to contribute to that system that's not part of URS, uh, which is a common practice for, uh, certain high level staff who may just be coming in to do a job for a couple of years and then going back to a different job. Thank you.

Thank you, Mr. Speaker. I appreciate further clarification on that practice. Um, I would say that, uh, I know that sometimes we have to hire staff for a specific case and that may be short in duration, not long enough for an attorney, for example, to, to, um, become fully vested in URS, and yet it may be part of the package that would attract an employee. So, and as, as I said, that only pertains to the Attorney General's office and they do have unique staffing situations. But I, um, the rest of, of the bill and including that one, I would appreciate your support. Um, it will just help our, we have a great retirement system in Utah. It gets better every year and I believe it's because of these little modifications that they continually make to improve. And I would appreciate your support. Thank you.