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S.B. 71
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RETIREMENT DEFERRED COMPENSATION
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EMPLOYER MATCH
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Gene Davis
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AN ACT RELATING TO RETIREMENT; AMENDING EMPLOYER CONTRIBUTION TO
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CERTAIN EMPLOYEES' SUPPLEMENTAL BENEFITS; AND PROVIDING AN EFFECTIVE
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DATE.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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49-3-302, as last amended by Chapter 157, Laws of Utah 1992
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
49-3-302
is amended to read:
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49-3-302. Supplemental benefit established -- Deferred compensation plan options
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-- Contribution by employer and employee -- Immediate vesting of contributions -- Plans to
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be separate -- Tax-qualified status of plans.
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(1) There is established a supplemental deferred compensation benefit for members of this
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system.
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(a) (i) For members of level A under Section
49-3-301
, which are participating educational
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institutions or participating employers whose activities are associated with participating
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educational institutions, the employer shall contribute on behalf of each of its employees 1.5% of
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the employee's salary to a deferred compensation plan qualified under Section 401(k) of the
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Internal Revenue Code which is selected by the employee and which is sponsored by the board,
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by that level A employer, or by a group of similar level A employers and which has been
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grandfathered under Section 1116 of the Federal Tax Reform Act of 1986.
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(ii) For all other members of level A under Section
49-3-301
, the employer shall contribute
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on behalf of each of its employees [1.5% of the employee's salary] to the deferred compensation
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plan qualified under Section 401(k) of the Internal Revenue Code which is sponsored by the
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board[.]:
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(A) 1.5% of the employee's salary; and
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(B) 1% of the employee's salary for each 1% of the employee's salary contributed by the
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employee up to a maximum employer participation of 4% under this Subsection (1)(a)(ii).
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(iii) The employee may also make elective contributions to either the qualified 401(k) plan
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which receives the [1.5%] employer contribution described in this Subsection [(i)] (1)(a), or to any
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other deferred compensation plan qualified under Section 401(k) of the Internal Revenue Code
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which is selected by the employee and sponsored by the board, that level A employer, or a group
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of similar level A employers, and which has been grandfathered under Section 1116 of the Federal
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Tax Reform Act of 1986, but only up to an amount permitted by federal law.
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(b) (i) For members of level B under Section
49-3-301
, the participating employer may
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contribute on behalf of each of its employees any amount to the deferred compensation plan
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qualified under Section 401(k) of the Internal Revenue Code which is sponsored by the board.
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(ii) The employee may also contribute to the same qualified 401(k) plan which the
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employee selected to receive the employer contribution described in Subsection (1)(b)(i), but only
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up to an amount permitted by federal law.
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(c) The employee may not make elective contributions to any other qualified 401(k) plan
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sponsored by a state or local government.
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(2) The total amount contributed by the employer under Subsection (1)(a) or (b) vests to
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the employee's benefit immediately and is nonforfeitable.
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(3) (a) Each qualified deferred compensation 401(k) plan is separate and distinct from any
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other qualified deferred compensation 401(k) plan for all purposes including, but not limited to,
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purposes of fiduciary liability and plan administration.
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(b) The board may request from any other qualified 401(k) plan under Subsection
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(1)(a)(iii) any relevant information pertaining to the maintenance of its tax qualification under the
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Internal Revenue Code and may request indemnification from such other plan to the extent it
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performs testing functions for that plan.
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(4) (a) Prior to January 1 of each calendar year, each employee of an employing unit
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specified in Subsection (1)(a)(i) shall notify the employing unit which qualified deferred
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compensation 401(k) plan the employee has selected to receive the employer and employee
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contributions described in Subsections (1)(a) and (b) for that calendar year.
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(b) This election may be changed only in accordance with procedures established by the
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employing unit.
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(c) Notwithstanding this section, the board may take any action which in its judgment is
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necessary to maintain the tax-qualified status of its 401(k) deferred compensation plan pursuant
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to federal law. The board shall submit findings of fact and its conclusions prior to taking any such
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action.
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Section 2. Effective date.
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This act takes effect on July 1, 2000.
Legislative Review Note
as of 1-18-00 1:31 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.