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Senate Bill 63 Summary
New Public Employees’ Tier II Contributory Retirement Act
Effective: July 1, 2011
- Tier I employees are employees who began employment prior to July 1, 2011.
- Tier I employees’ defined benefit (DB) retirement benefits are not changed by S.B. 63 in any way.
- Tier I state and school employees will continue to receive the 1.5% employer paid defined contribution (DC).
- Existing retirees and future Tier I retirees promised retirement benefits are not changed.
- Tier II employees are employees who begin initial employment on or after July 1, 2011.
- Tier II employees will choose between a DC retirement benefit or a hybrid retirement benefit (combination of DC and DB plans).
Tier II Public Employees
- Employer contribution for Tier II public employees is 10% of salary.
- Tier II public employees who choose the DC retirement benefit will have10% of salary placed in a DC account.
- Tier II public employees who select the hybrid retirement benefit will have the DB option funded by the employer contribution and any excess between the 10% contribution and the cost of the DB plan will go into the employee’s DC account; if the cost of the DB plan exceeds 10% of salary, the employee will be required to contribute the difference to fund the DB plan and no employer funds will go into the employee’s DC account.
- Tier II public employees’ DB has a 1.5% multiplier, 5 year final average salary, 35 year retirement at any age, up to a 2.5% COLA, death benefit, and disability benefit.
Tier II Public Safety (PS) and Firefighter (FF) Employees
- Employer contribution for Tier II PS and FF employees is 12% of salary.
- Tier II PS and FF employees who choose the DC retirement benefit will have 12% of salary placed in a DC account.
- Tier II PS and FF employees who select the hybrid retirement benefit will have the DB option funded by the employer contribution and any excess between the 12% contribution and the cost of the DB plan will go into the employee’s DC account; if the cost of the DB plan exceeds 12% of salary, the employee will be required to contribute the difference to fund the DB plan and no employer funds will go into the employee’s DC account.
- Tier II PS and FF employees’ DB has a 1.5% multiplier, 5 year final average salary, 25 year retirement at any age, up to a 2.5% COLA, death benefit, line-of-duty death benefit, and disability benefit.
Presentations
Education and Marketing - Overview of Senate Bill 63
Links to Other Resources about Legislative Information
Utah State Legislature – Senate Bill 63 text
Office of Legislative Research and General Counsel - Summary
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