(1) Any employer may withdraw from its participation in the statewide defined benefit plan established by part 4 of this article for the sole purpose of electing participation in the statewide money purchase plan created pursuant to the authority granted in section 31-31-502.
(2) (a) The employer may initiate withdrawal from the statewide defined benefit plan by filing with the board a resolution adopted by the employer pursuant to paragraph (b) of this subsection (2) no less than nine months prior to the effective date of withdrawal unless a shorter waiting period is approved by the board. The effective date of withdrawal shall be the first day of the month immediately following the month in which the waiting period expires.
The employer's withdrawal resolution shall be adopted by the governing body of theemployer and shall state the employer's intent to withdraw from participation in the statewide defined benefit plan for the purpose of electing participation in the statewide money purchase plan.
Any withdrawal shall be approved by at least sixty-five percent of all active membersemployed by the employer who are participating in the statewide defined benefit plan at the time of the election and who vote in the election proposing the withdrawal.
The board shall promulgate rules relating to standards for disclosure of all ramifications and procedures for obtaining the member approval provided for in paragraph (c) of this subsection (2).
All withdrawals from the statewide defined benefit plan shall comply with the requirements set forth in this section, and, except as otherwise provided in this section, all withdrawals meeting such requirements shall be approved by the board. Withdrawal requests that do not meet the requirements of this section shall not be approved by the board.
The rights of benefit recipients and the vested rights of inactive members shall not beimpaired or reduced in any manner as a result of the withdrawal of an employer as provided in this section.
(a) (I) The board shall determine the amount of reserves required as of the effective date of withdrawal to maintain current benefits payable by the association to benefit recipients and to preserve the vested rights of inactive members. The amount of reserves shall be determined by the board utilizing certified actuarial reports prepared by the actuary for the statewide defined benefit plan. Any such actuarial report shall also certify that the employer's withdrawal shall not have an adverse financial impact on the actuarial soundness of the new hire benefits account. If the actuary determines, in accordance with accepted actuarial principles, that the withdrawal will not have an adverse financial impact on the actuarial soundness of the new hire benefits account, the board shall transfer such employer's share of the employer contribution reserve in the new hire benefits account, as determined by the actuary, and all member contributions for the employer's active members to a short-term investment account. If the actuary determines, in accordance with accepted actuarial principles, that the withdrawal shall have an adverse financial impact on the actuarial soundness of the new hire benefits account, the employer shall not be permitted to withdraw.
(II) At least sixty days prior to the effective date of the withdrawal, the actuarial reports shall be updated and appropriate adjustments made to the amount of reserves transferred by the board to the short-term investment account on behalf of the employer if an update is required pursuant to rules adopted by the board. Within thirty days after the receipt of such updated reports, the withdrawal may be terminated by either:
The employer filing with the board a subsequent resolution revoking the employer'sresolution of intent to withdraw; or
More than thirty-five percent of the employer's active members who are eligible tovote filing with the board ballots indicating that they no longer wish to withdraw.
If a resolution or a sufficient number of ballots is timely filed with the board pursuant to subparagraph (II) of this paragraph (a), the withdrawal shall be terminated, and the board shall return to the new hire benefits account any amounts transferred to the short-term investment account pursuant to subparagraph (I) of this paragraph (a). If no resolution or an insufficient number of ballots is timely filed, the withdrawal shall proceed in accordance with the provisions of this section.
The board shall prescribe the form of the ballot to be submitted by members indicating that they no longer wish to withdraw and any other rules necessary for the implementation of this subsection (4).
On the effective date of withdrawal, the actuarial reports prepared pursuant to theprovisions of paragraph (a) of this subsection (4) shall be updated to finalize the amount of reserves required for the purposes specified in paragraph (a) of this subsection (4).
Expenses incurred by the board for the actuarial reports prepared as a result of anapplication for withdrawal shall be paid by the employer making such application.
The board shall provide any information contained in such actuarial reports uponrequest of the employer making the application for withdrawal.
(5) (a) In the event that the amount of the reserves required pursuant to the provisions of subsection (4) of this section exceeds the amount of the employer's share of the employer contribution reserve in the new hire benefits account as calculated by the actuary, the employer shall make an additional payment no later than ten working days after the effective date of withdrawal in an amount equal to the difference between the amount of reserves required and the amount of reserves on deposit.
In the event that the amount of the reserves on deposit in the new hire benefits account, as calculated by the actuary, for the employer making application for withdrawal, exceeds the amount of reserves required pursuant to the provisions of subsection (4) of this section, such excess amount and the amount required for the transfer of member contributions as provided in subsection (6) of this section shall be transferred to the fire and police members' statewide money purchase plan benefit trust fund on the effective date of withdrawal. Allocation of such amounts to individual member accounts under the statewide money purchase plan shall be made as set forth in section 31-31-502.
The payments required by this section are subject to interest if not submitted whendue.
(6) (a) Members who are not vested under the statewide defined benefit plan and who are employed by an employer who has withdrawn from the statewide defined benefit plan shall have their member contributions credited to the statewide money purchase pension plan as set forth in section 31-31-502.
(b) (I) Members who are vested under the statewide defined benefit plan and who are employed by an employer who has filed a resolution of intent to withdraw from the statewide defined benefit plan may elect that, if the withdrawal becomes effective, their contributions remain with the statewide defined benefit plan by giving written notice to the association no later than the date established for completion of the member election provided in paragraph (c) of subsection (2) of this section.
Members who have made such an election shall become inactive statewide definedbenefit plan members entitled to vested benefits upon termination and attainment of vested retirement age.
Members who have made such an election shall not be entitled to withdraw anyamounts from their separate retirement account until they have terminated their current employment.
If members who have made such an election die or become disabled prior to termination of employment, neither they nor their survivors shall be eligible for benefits under the statewide defined benefit plan, but rather they shall be limited to those benefits provided in sections 31-31-803, 31-31-807, and 31-31-807.5.
(c) Members who do not elect to leave their contributions with the statewide defined benefit plan pursuant to paragraph (b) of this subsection (6) shall have their member contributions credited to the statewide money purchase pension plan as set forth in section 3131-502.
(7) The provisions of section 31-31-404 (1)(b) that relate to the purchase of service credit forfeited by the refund of member contributions shall not apply to members who are employees of an employer that has withdrawn from the statewide defined benefit plan. Such service credit forfeited by such withdrawal may be purchased pursuant to the provisions of section 31-31-403 (7).
Source: L. 96 Entire article added with relocations, p. 914, § 1, effective May 23. L. 98: (6)(b)(IV) amended, p. 62, § 2, effective February 8, 1999. L. 2001: (2)(a), (2)(d), and IP(4)(a)(II) amended, p. 420, § 7, effective June 1. L. 2006: (5)(b) amended, p. 194, § 18, effective March 31. L. 2015: (5)(c) amended, (SB 15-027), ch. 9, p. 21, § 4, effective August 5. L. 2017: (2)(c) amended, (SB 17-020), ch. 23, p. 69, § 1, effective March 8.
Editor's note: This section was formerly numbered as § 31-30-1003.1.