Amends existing law to provide for a retired member who is appointed to an elective public office.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE SENATE SENATE BILL NO. 1261 BY COMMERCE AND HUMAN RESOURCES COMMITTEE AN ACT1 RELATING TO THE PUBLIC EMPLOYEE RETIREMENT SYSTEM; AMENDING SECTION2 59-1356, IDAHO CODE, TO REVISE A PROVISION REGARDING THE REEMPLOYMENT3 OF RETIRED MEMBERS; AND DECLARING AN EMERGENCY AND PROVIDING AN EFFEC-4 TIVE DATE.5

Be It Enacted by the Legislature of the State of Idaho:6

SECTION 1. That Section 59-1356, Idaho Code, be, and the same is hereby7 amended to read as follows:8 59-1356. REEMPLOYMENT OF RETIRED MEMBERS. (1) If an early retired mem-9 ber, except as provided in subsection (6) of this section, is reemployed with10 an employer participating in the public employee retirement system of Idaho11 within ninety (90) days from retiring, or the early retired member is guaran-12 teed reemployment with an employer participating in the public employee re-13 tirement system of Idaho, the member shall be considered to have continued in14 the status of an employee and not to have separated from service. Any retire-15 ment allowance payments received by the retired member shall be repaid to the16 system and the retirement shall be negated. The month of last contribution17 prior to the negated retirement and the month of initial contribution upon18 return to reemployment shall be considered consecutive months of contribu-19 tions in the determination of an appropriate salary base period upon subse-20 quent retirement. A retired member is not considered to have separated from21 service if he continues performing services for an employer participating22 in the public employee retirement system of Idaho in any capacity, includ-23 ing but not limited to independent contractor, leased employee, or temporary24 services.25 (2) Except as provided in subsections (3), (4), (5), and (6) of this26 section, when a retired member meets the definition of an employee as defined27 in section 59-1302(14)(A)(a), Idaho Code, any benefit payable on behalf of28 such member shall be suspended and any contributions payable by such member29 under sections 59-1331 through 59-1334, Idaho Code, shall again commence.30 The suspended benefit, as adjusted pursuant to section 59-1355, Idaho Code,31 shall resume upon subsequent retirement, along with a separate allowance32 computed with respect only to that salary and service credited during the33 period of reemployment. Any death benefit that becomes payable under the34 suspended benefit shall be payable under section 59-1361(2), Idaho Code.35 Any death benefit that becomes payable with respect to salary and service36 accrued during the period of reemployment shall be payable under section37 59-1361(3), Idaho Code, if the member dies during the period of reemploy-38 ment.39 (3) If a retired member who is receiving a benefit that is not reduced40 under section 59-1346, Idaho Code, and who has been retired for more than41 six (6) months again becomes employed as defined in this section and section42

2 59-1302(14)(A)(b), Idaho Code, as a result of being elected or appointed to a1 an elective public office other than an office held prior to retirement, the2 retired member may elect to continue receiving benefits and not accrue ad-3 ditional service, in which event no contributions shall be made by the mem-4 ber or employer during such reemployment and any benefit payable on behalf of5 such member shall continue.6 (4) If a retired school employee, as defined in section 59-1302(31A),7 Idaho Code, who retired on or after age sixty (60) years or a retired pub-8 lic safety officer returns to work as a school employee as defined in section9 59-1302(31A), Idaho Code, and is receiving a benefit that is not reduced un-10 der section 59-1346, Idaho Code, again becomes an employee as defined in this11 section and section 59-1302(14), Idaho Code, as a result of returning to em-12 ployment with a school district as provided in section 33-1004H, Idaho Code,13 the retired member may elect to continue receiving benefits and not accrue14 additional service, in which event no contributions shall be made by the mem-15 ber during such reemployment and any benefit payable on behalf of such member16 shall continue.17 (5) If a retired member as defined in section 59-1302(27), Idaho Code,18 who retired prior to January 1, 2022, and retired on or after age fifty-five19 (55) years again becomes an employee as defined in this section and in sec-20 tion 59-1302(14), Idaho Code, as a result of returning to employment with an21 employer as defined in section 59-1302(15), Idaho Code, the retired member22 may elect to continue receiving benefits and not to accrue additional ser-23 vice. In such a situation, no contributions shall be made by the member dur-24 ing the reemployment and any benefit payable on behalf of such member shall25 continue. This subsection shall no longer be in force and effect after June26 30, 2026, however, the other provisions of this section shall remain in full27 force and effect and shall remain applicable to all employment.28 (6) A retired member as defined in section 59-1302(27), Idaho Code,29 with police officer status as defined in section 59-1303, Idaho Code, or30 with firefighter member status as defined in section 59-1302(16), Idaho31 Code, who retires on or after age fifty (50) years and who, within thirty32 (30) days after retiring, again becomes an employee as defined in section33 59-1302(14), Idaho Code, with an employer participating in PERSI, or who34 is guaranteed reemployment with an employer participating in PERSI, shall35 be considered to have continued in the status of an employee and not to have36 separated from service. As a result of returning to employment with an em-37 ployer as defined in section 59-1302(15), Idaho Code, the retired member may38 elect to continue receiving benefits and not to accrue additional service.39 In such a situation, contributions shall be made by the member and employer40 during the reemployment at the rate established by PERSI for police officer41 or firefighter members, as applicable, and any benefit payable on behalf of42 such member shall continue. The provisions of this subsection shall be null,43 void, and of no force and effect after June 30, 2027. However, the other44 provisions of this section shall remain in full force and effect and shall45 remain applicable to all employment.46 (7) It is the responsibility of each employer to immediately report to47 the retirement board the employment of any retired member so that benefit48 payments can be suspended as provided in this section. If an employer fails49 to properly report the employment of a retired member and it results in the50

3 retirement board making benefit payments that should have been suspended,1 the employer shall, in addition to paying delinquent employee and employer2 contributions from the date of eligibility, also be responsible for repaying3 to the retirement board the benefit payments made to the retired member that4 should have been suspended, plus interest. The employer may then recoup such5 payments from the retired member.6 (8)(a) A retired member may provide services as a bona fide volunteer7 for an employer as defined in section 59-1302, Idaho Code, after retire-8 ment. Such service shall not be considered reemployment of a retired9 member, and a retired member who is a bona fide volunteer will not be10 considered to be an employee as defined in section 59-1302(14), Idaho11 Code.12 (b) A retired member shall not claim to be a bona fide volunteer un-13 less such retired member qualifies as a bona fide volunteer pursuant to14 this subsection. Any retirement allowance payments received by a re-15 tired member who is not a bona fide volunteer shall be repaid to the sys-16 tem, such retired member's retirement shall be negated, and the provi-17 sions of subsection (1) of this section shall apply.18 (c) For the purposes of this subsection, "bona fide volunteer" means19 an individual who performs service without promise, expectation, or re-20 ceipt of any type of compensation, who is not performing a kind of work21 or service that would normally be compensated by an employer, and who22 is not classifying employment conduct as volunteering in an effort to23 avoid being considered an employee as defined in section 59-1302(14),24 Idaho Code.25

SECTION 2. An emergency existing therefor, which emergency is hereby26 declared to exist, this act shall be in full force and effect on and after27 July 1, 2026.28