DAR File No. 39836
This rule was published in the November 1, 2015, issue (Vol. 2015, No. 21) of the Utah State Bulletin.
LEA Post-employment Benefits Plans
Notice of Proposed Rule
DAR File No.: 39836
Filed: 10/15/2015 03:07:52 PM
Purpose of the rule or reason for the change:
This rule is repealed in response to H.B. 208, School District Postemployment Health Insurance Benefits, from the 2015 General Session. The state law is now inclusive of the provisions in Rule R277-118 making the rule no longer necessary.
Summary of the rule or change:
This rule is repealed in its entirety.
State statutory or constitutional authorization for this rule:
- Subsection 53A-1-401(3)
- Art. X, Sec. 3
Anticipated cost or savings to:
the state budget:
There is likely no cost or savings to the state budget by repealing this rule. State law now supersedes Rule R277-118.
There is likely no cost or savings to local government by repealing this rule. State law now supersedes Rule R277-118.
There is likely no cost or savings to small businesses by repealing this rule. State law now supersedes Rule R277-118.
persons other than small businesses, businesses, or local governmental entities:
There is likely no cost or savings to persons other than small businesses, businesses, or local government entities by repeal this rule. State law now supersedes Rule R277-118.
Compliance costs for affected persons:
There are likely no compliance costs for affected persons by repealing this rule. State law now supersedes Rule R277-118.
Comments by the department head on the fiscal impact the rule may have on businesses:
To the best of my knowledge, there should be no fiscal impact on businesses resulting from repealing this rule.
Brad C. Smith, State Superintendent
The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:Education
250 E 500 S
SALT LAKE CITY, UT 84111-3272
Direct questions regarding this rule to:
- Angela Stallings at the above address, by phone at 801-538-7656, by FAX at 801-538-7768, or by Internet E-mail at firstname.lastname@example.org
Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:
This rule may become effective on:
Angela Stallings, Associate Superintendent, Policy and Communication
R277. Education, Administration.
R277-118. LEA Post-employment Benefits Plans.
A. "Board" means the Utah State Board of
Education. B. "GASB Statement 43" (or successor rule)
means a Statement of the Governmental Accounting and Standards
Boards that establishes uniform standards of financial reporting
by state and local governmental entities for OPEB plans. This
Statement provides standards for measurement, recognition, and
display of the assets, liabilities, and, where applicable, net
assets and changes in net assets of such funds and for related
disclosures. GASB Statement 43 applies to financial reports of
all state and local governmental entities, including public
employee retirement systems. C. "LEA" means a local education agency,
including local school boards/public school districts, charter
schools, and for purposes of this rule, the Utah Schools for the
Deaf and the Blind. D. "Other post-employment benefits (OPEB)"
means benefits after retirement, other than pension benefits,
provided over an extended period of time and may
include: (1) healthcare; (2) dental care; and (3) life insurance. E. "Other post-employment benefits plan (OPEB
plan)" means a plan approved by an LEA that provides
post-employment benefits as identified in R277-118D to
employees. F. "Qualified actuary" means a statistician who
determines the present effects of future contingent events;
especially one who calculates insurance and pension rates on the
basis of empirically based tables. An actuary shall have
appropriate credentials or experience or both. G. "Termination benefit plan" means benefit(s)
(such as cash payments, health insurance supplements or bridge
payments or sick leave payouts) offered to an employee as
incentive(s) to retire or sever employment from an LEA
voluntarily. H. "Trust or a set aside fund balance," for
purposes of this rule, means a legal trust established consistent
with requirements of state law or a designation of a portion of
the LEA's maintenance and operations (M and O) fund balances.
Either a trust or an LEA designation of fund balance liability
would be dedicated to supporting an LEA's outstanding
R277-118-2. Authority and Purpose.
A. This rule is authorized under Utah Constitution
Article X, Section 3 which vests general control and supervision
over public education in the Board, Section 53A-1-401(3) which
allows the Board to adopt rules in accordance with its
responsibilities, and Section 53A-17a-125 which appropriates
funds to the Board to distribute to LEAs for employee retirement
and social security payments. B. The purpose of this rule is to direct LEAs not to add
new employee benefits, not to lengthen existing employee benefits
and not to offer employee benefit plans to new employees unless
LEAs maintain adequate ongoing assets to fund the plans. The rule
provides required timelines for meeting the provisions of this
R277-118-3. Other Post-Employment Benefit Plans; Exceptions;
Funding of Liability; Compliance.
A. LEAs shall not add enhanced benefits nor extend time
periods for benefits to employees currently enrolled in and not
enroll new members in post-retirement benefit plans. B. Exceptions to R277-118-3A (1) If an LEA has and desires to continue an outstanding
OPEB liability for post-employment benefit plans, the LEA shall
comply with GASB Statement 43, Paragraph 24 in the LEA's
computation of its liability by a qualified actuary. (2) If an LEA has an existing OPEB plan and the plan is
fully funded consistent with the provisions of GASB Statement 43,
an LEA may make the plan open to new employees so long as it
remains fully funded. (3) If an LEA's OPEB plan becomes less than fully
funded at any time and the LEA has not provided the documentation
for an exception under R277-118-B(2), the OPEB plan shall be
closed to eligibility to new employees and shall lose its USOE
approved status. C. Funding of liability - If an LEA has an OPEB
plan: (1) the LEA must compute an annual required contribution
(ARC) as provided in GASB Statement 43; (2) the LEA shall contribute annually the amount of the
ARC in a trust account or annually set aside as a designated fund
balance the equivalent amount of the ARC; and (3) have a plan consistent with the timeline of GASB
Statement 43, Paragraph 24, to ensure compliance with this
rule. D. Compliance (1) LEAs with OPEB plans shall comply with all outlined
GASB Statement 43 financial reporting requirements. (2) If, due to adverse economic conditions, an LEA fails
to meet the ARC requirement, the LEA shall provide to the Board a
reasonable funding plan to bring the LEA into compliance with the
actuarial timeline required in GASB Statement 43 by the end of
the second year following the year of inadequate
R277-118-4. Termination Benefits.
An LEA may offer retirement or severance benefits in
addition to retirement/severance benefits currently in place for
one year only if the LEA has adequate funds to fully pay out the
benefits in the fiscal year in which the benefits are
KEY: post-retirement benefits
Date of Enactment or Last Substantive Amendment: June 9,
Authorizing, and Implemented or Interpreted Law: Art X Sec
3; 53A-1-401(3); 53A-17a-125]
More information about a Notice of Proposed Rule is available online.
The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull-pdf/2015/b20151101.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.
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For questions regarding the content or application of this rule, please contact Angela Stallings at the above address, by phone at 801-538-7656, by FAX at 801-538-7768, or by Internet E-mail at email@example.com. For questions about the rulemaking process, please contact the Division of Administrative Rules.