49-11-404 - Benefit protection contract authorized -- Annual report required.
49-11-404. Benefit protection contract authorized -- Annual report required.
(1) (a) A participating employer may establish a salary protection program under whichits employees are paid during periods of disability.
(b) If a salary protection program is established, a participating employer may enter intobenefit protection contracts with the office.
(c) A salary protection program shall:
(i) pay benefits based on the disabled member's rate of compensation at the time ofdisability;
(ii) pay benefits over the period of the disability;
(iii) not include settlement or lump sum payments of any type;
(iv) be substantially equivalent to the long-term disability programs offered underChapter 21, Public Employees' Long-Term Disability Act; and
(v) comply with requirements adopted by the board.
(2) A benefit protection contract shall allow:
(a) the disabled member to be considered an active member in a system and continue toaccrue service credit and salary credit based on the member's rate of pay in effect at the timedisability commences;
(b) the office to require participating employer contributions to be paid before grantingservice credit and salary credit to the member;
(c) the disabled member to remain eligible during the contract period for any benefitsprovided by the system that covers the member; and
(d) the benefit for the disabled member to be improved by the annual cost-of-livingincrease factor applied to retired members of the system that covered the member on the date themember is eligible to receive benefits under a benefit protection contract.
(3) (a) The office shall establish the manner and times when employer contributions arepaid.
(b) A failure to make the required payments is cause for the office to cancel a contract.
(c) Service credit and salary credit granted and accrued up to the time of cancellationmay not be forfeited.
(4) For an employee covered under Chapter 22, New Public Employees' Tier IIContributory Retirement Act, or Chapter 23, New Public Safety and Firefighter Tier IIContributory Retirement Act, a benefit protection contract shall allow:
(a) for the defined benefit portion for a member covered under Chapter 22, Part 3, Tier IIHybrid Retirement System, or Chapter 23, Part 3, Tier II Hybrid Retirement System:
(i) the disabled member to be considered an active member in a system and continue toaccrue service credit and salary credit based on the member's rate of pay in effect at the timedisability commences;
(ii) the office to require participating employer contributions to be paid before grantingservice credit and salary credit to the member;
(iii) the disabled member to remain eligible during the contract period for any benefitsprovided by the system that covers the member; and
(iv) the benefit for the disabled member to be improved by the annual cost-of-livingincrease factor applied to retired members of the system that covered the member on the date themember is eligible to receive benefits under a benefit protection contract; and
(b) for the defined contribution portion for a member covered under Chapter 22, Part 3,
Tier II Hybrid Retirement System or Chapter 23, Part 3, Tier II Hybrid Retirement System or fora participant covered under Chapter 22, Part 4, Tier II Defined Contribution Plan or Chapter 23,Part 4, Tier II Defined Contribution Plan, the office to require participating employers tocontinue making the nonelective contributions on behalf of the disabled member or participant inthe amounts specified in Subsection 49-22-303(1)(a), 49-22-401(1), 49-23-302(1)(a), or49-23-401(1).
(5) A participating employer that has entered into a benefit protection contract under thissection shall submit an annual report to the office which identifies:
(a) the employees receiving long-term disability benefits under policies initiated by theparticipating employer and approved under the benefit protection contract;
(b) the employees that have applied for long-term disability benefits and who are waitingapproval; and
(c) the insurance carriers that are actively providing long-term disability benefits.
(6) If an employer fails to provide the annual report required under Subsection (5), thebenefits that would have accrued under the benefit protection contract shall be forfeited.
(7) The board may adopt rules to implement and administer this section.
Amended by Chapter 266, 2010 General Session
Amended by Chapter 321, 2010 General Session