1997
HOUSE BILL 971022
BY REPRESENTATIVES Schwarz, Allen, Entz, June, George, Mace, Taylor, and S. Williams;
also SENATORS Powers, B. Alexander, Chlouber, Feeley,
Congrove, Hernandez, J. Johnson, Martinez, Phillips, Reeves,
and Weddig.
CONCERNING THE USE OF EXCESS FUNDS OF OLD HIRE FIRE
AND POLICE PENSION PLANS.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. 3130.5209,
Colorado Revised Statutes, 1986 Repl. Vol., as amended, is amended
BY THE ADDITION OF A NEW SUBSECTION to read:
3130.5209. Idle funds.
(4) (a) (I) NOTWITHSTANDING
THE PROVISIONS OF SUBSECTIONS (1) AND (2) OF THIS SECTION AND
SUBJECT TO THE PROVISIONS OF PARAGRAPH (c) OF THIS SUBSECTION
(4), IF NO MEMBERS ARE PARTICIPATING IN AN EMPLOYER'S OLD HIRE
PENSION PLAN ESTABLISHED UNDER THIS ARTICLE, THE GOVERNING BODY
OF THE EMPLOYER, BY RESOLUTION, MAY AUTHORIZE THE USE OF THE EXCESS
BALANCE IN THE PLAN FUND FOR THE PURPOSES PERMITTED IN SUBSECTIONS
(1) AND (2) OF THIS SECTION. IF A GOVERNING BODY AUTHORIZES THE
USE OF THE EXCESS BALANCE UNDER THIS SUBSECTION (4), THE EMPLOYER
SHALL MAINTAIN THE PLAN FUND AT A LEVEL EQUAL TO AT LEAST TWO
TIMES THE AMOUNT NECESSARY TO FUND THE BENEFIT LIABILITIES OF
ANY PERSONS CONTINUING TO RECEIVE BENEFITS FROM THE PLAN FUND.
(II) FOR PURPOSES OF THIS PARAGRAPH (a),
"EXCESS BALANCE" MEANS THE AMOUNT IN AN OLD HIRE PLAN
FUND IN EXCESS OF TWO TIMES THE AMOUNT NECESSARY TO FUND THE BENEFIT
LIABILITIES OF PERSONS CONTINUING TO RECEIVE BENEFITS FROM THE
PLAN FUND, AS DETERMINED BY THE PLAN'S ACTUARY. IN DETERMINING
THE EXCESS BALANCE IN AN OLD HIRE PLAN FUND, THE ACTUARY SHALL
UTILIZE THE ASSUMPTIONS APPROVED BY THE BOARD OF DIRECTORS OF
THE FIRE AND POLICE PENSION ASSOCIATION PURSUANT TO SECTION 3130.5306
(2) (b).
(b) NOTWITHSTANDING THE PROVISIONS OF
SUBSECTIONS (1) AND (2) OF THIS SECTION AND PARAGRAPH (a) OF THIS
SUBSECTION (4) AND SUBJECT TO THE PROVISIONS OF PARAGRAPH (c)
OF THIS SUBSECTION (4), IF NO MEMBERS ARE PARTICIPATING IN AN
EMPLOYER'S OLD HIRE PENSION PLAN ESTABLISHED UNDER THIS ARTICLE
AND THE PLAN PROVIDES NO RANK ESCALATION BENEFIT OR OTHER TYPE
OF COSTOFLIVING BENEFIT TO PERSONS RECEIVING BENEFITS
FROM THE PLAN FUND OTHER THAN COSTOFLIVING BENEFITS
PROVIDED THROUGH THE ANNUAL ADJUSTMENT REQUIRED PURSUANT TO PARAGRAPH
(c) OF THIS SUBSECTION (4), THE BOARD, AFTER DISCLOSURE TO THE
AFFECTED RETIREES, IS AUTHORIZED TO USE THE ASSETS IN THE PLAN
FUND FOR THE PURPOSE OF PURCHASING ANNUITIES IN AMOUNTS SUFFICIENT
TO PAY ANY REQUIRED BENEFITS TO THOSE PERSONS WHO CONTINUE TO
RECEIVE BENEFITS FROM THE PLAN FUND. IF THE BOARD PURCHASES ANNUITIES
FOR SUCH PERSONS, THE GOVERNING BODY OF THE EMPLOYER, BY RESOLUTION,
MAY AUTHORIZE THE USE OF ANY ADDITIONAL FUNDS THAT REMAIN IN THE
PLAN FUND AFTER PURCHASING SUCH ANNUITIES FOR THE PURPOSES PERMITTED
IN SUBSECTIONS (1) AND (2) OF THIS SECTION. ANNUITIES MAY BE
PURCHASED PURSUANT TO THIS PARAGRAPH (b) ONLY FROM INSURANCE COMPANIES
RATED AT LEAST A+ BY THE A.M. BEST COMPANY OR RATED AT LEAST AA
BY STANDARD & POORS CORPORATION. IF THERE IS A DEFAULT ON
THE PAYMENT OF BENEFITS RESULTING FROM AN ANNUITY PURCHASED UNDER
THIS PARAGRAPH (b), THE EMPLOYER SHALL REMAIN LIABLE TO MAKE ANY
REQUIRED BENEFIT PAYMENTS TO PERSONS FOR WHOM THE ANNUITIES WERE
PURCHASED.
(c) IF A PLAN FUND DOES NOT PROVIDE ANY
TYPE OF COSTOFLIVING BENEFIT TO PERSONS RECEIVING
BENEFITS FROM THE PLAN FUND, THE ASSETS IN THE PLAN FUND SHALL
BE USED TO PROVIDE AN ANNUAL ADJUSTMENT TO THE PENSION BENEFITS
FOR SUCH PERSONS PRIOR TO USING THE EXCESS BALANCE IN THE PLAN
FUND AS PROVIDED IN PARAGRAPH (a) OF THIS SUBSECTION (4) AND PRIOR
TO PURCHASING ANNUITIES AS PROVIDED IN PARAGRAPH (b) OF THIS SUBSECTION
(4). THE MINIMUM ANNUAL ADJUSTMENT SHALL BE CALCULATED IN THE
SAME MANNER AS THE ANNUAL ADJUSTMENT TO TOTAL DISABILITY BENEFITS
PROVIDED FOR MEMBERS OF THE STATEWIDE DEATH AND DISABILITY PLAN
PURSUANT TO SECTION 3131407 (2) (b) AND (3); EXCEPT
THAT THE EFFECTIVE DATE OF THE BENEFIT FOR PURPOSES OF THE FORMULA
SET FORTH IN SAID SECTION SHALL BE THE DATE ON WHICH THE BOARD
PROVIDES THE ANNUAL ADJUSTMENT REQUIRED UNDER THIS PARAGRAPH (c).
SECTION 2. Effective
date applicability. This act shall take effect July
1, 1997, and shall apply to old hire pension plans existing on
or after said date.
SECTION 3. Safety
clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation
of the public peace, health, and safety.
____________________________ ____________________________
Charles E. Berry Tom Norton
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Judith M. Rodrigue Joan M. Albi
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE
OF COLORADO