49-11-701 - Allowance increase to offset tax liability -- Administration. - Utah Statutes

49-11-701. Allowance increase to offset tax liability -- Administration.
(1) This section applies to members of any system administered by the board under thistitle, whose retirement allowance remained exempt from the tax imposed under Title 59, Chapter10, Individual Income Tax Act, pursuant to Laws of Utah 1988, Chapter 195, Section 2, butwhose allowance has subsequently become subject to that tax.
(2) Any member who meets the conditions established under Subsection (1) shall receivethe following:
(a) the administrator shall calculate the member's retirement allowance pursuant to theformula governing the system from which the member retired;
(b) the administrator shall then increase the allowance calculated under Subsection (2)(a)by 3%; and
(c) the adjusted retirement allowance under Subsection (2)(b) is the new basis uponwhich any future adjustments to benefits are made.
(3) (a) For all members who retire or are receiving retirement allowances in calendar year1989, the administrator shall apply the 3% adjustment under Subsection (2) to all retirementallowances received in 1989, so that the period for which the allowance becomes subject to thetax under Title 59, Chapter 10, Individual Income Tax Act, and the period for which the 3%adjustment is given are the same.
(b) For all members who retire after December 31, 1989, and who meet the requirementsof Subsection (1), the administrator shall apply the 3% adjustment under Subsection (2)beginning on the effective date of retirement.
(4) Any penalty or interest for underpayment of taxes under Title 59, Chapter 1, GeneralTaxation Policies, or 10, Individual Income Tax Act, shall be waived for members whosenoncompliance is attributable to Section 49-11-611 and this section. This only applies to taxyear 1989.
(5) The administrator shall comply with Title 59, Chapter 10, Part 4, Withholding ofTax, with respect to withholding of taxes.
(6) (a) The retirement board shall annually certify the contribution rate necessary for eachsystem to comply with this section and may adopt rules to administer this section.
(b) This contribution rate shall be reported separately from the total contribution ratenecessary to fund the systems on an actuarially sound basis and may not be used in comparativestudies of public employee benefits.

Amended by Chapter 250, 2008 General Session