PERSI – Amends existing law to revise provisions regarding qualified pre-tax contributions and investment earnings and certain qualified Roth contributions and investment earnings.

LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
HOUSE
OF
REPRESENTATIVES
HOUSE
BILL
NO.
543
BY
COMMERCE
AND
HUMAN
RESOURCES
COMMITTEE
AN
ACT
1
RELATING
TO
THE
PUBLIC
EMPLOYEE
RETIREMENT
SYSTEM;
AMENDING
SECTION
2
59
-
1308,
IDAHO
CODE,
TO
REVISE
PROVISIONS
REGARDING
QUALIFIED
PRE
-
TAX
3
CONTRIBUTIONS
AND
INVESTMENT
EARNINGS
AND
CERTAIN
QUALIFIED
ROTH
CON
-
4
TRIBUTIONS
AND
INVESTMENT
EARNINGS;
AND
DECLARING
AN
EMERGENCY
AND
5
PROVIDING
AN
EFFECTIVE
DATE.
6
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
7
SECTION
1.
That
Section
59
-
1308,
Idaho
Code,
be,
and
the
same
is
hereby
8
amended
to
read
as
follows:
9
59
-
1308.
SUPPLEMENTAL
BENEFIT
PLAN
-
-
CONTRIBUTIONS
AND
EXPENSES
10
OF
THE
SUPPLEMENTAL
BENEFIT
PLAN
-
-
INDEMNIFICATION.
(1)
The
state
shall
1
1
sponsor
and
the
board
shall
administer
one
(1)
or
more
supplemental
benefit
12
plans
to
be
used
for
allocation
of
extraordinary
gains
as
provided
in
section
13
59
-
1309,
Idaho
Code,
and
for
voluntary
contributions
of
active
members.
14
The
supplemental
plans
may
be
established
under
the
qualified
requirements
15
of
section
401(a)
of
the
Internal
Revenue
Code
and
with
the
qualified
cash
16
or
deferred
arrangements
under
section
401(k)
of
the
Internal
Revenue
Code
17
or
any
other
tax
-
deferred
plan
permitted
by
law,
as
determined
by
the
re
-
18
tirement
board.
The
board
is
authorized
to
secure
such
qualified
staff
and
19
consultants
as
it
determines
necessary
to
establish
and
administer
such
20
plans.
Employee
and
employer
contributions
shall
be
permitted
according
to
21
the
provisions
of
these
plans
as
established
by
the
board.
For
purposes
of
22
this
section,
"employee"
shall
mean
a
participant
as
defined
in
the
supple
-
23
mental
benefit
plan
documents
or
board
rules.
24
(2)
The
board
is
authorized,
but
not
required,
to
establish
separate
25
trust
funds
to
hold
the
assets
of
the
supplemental
benefit
plans
created
un
-
26
der
this
section.
The
investment
options
available
under
supplemental
bene
-
27
fit
plans
shall
be
determined
by
the
board
and
may
include
but
are
not
limited
28
to
investment
in
all
or
part
of
the
public
employee
retirement
fund
and
use
of
29
private
vendor
options.
30
(3)
Supplemental
benefit
plans
shall
be
available
to
all
active
members
31
and
shall
be
in
addition
to
any
other
retirement
or
tax
-
deferred
compensa
-
32
tion
system
established
by
the
employer.
The
board
may
provide
educational
33
opportunities
related
to
supplemental
benefit
plans
and
retirement
savings,
34
as
determined
by
the
board.
35
(4)
Accounts
shall
be
established
in
supplemental
benefit
plans
for
all
36
active
members
eligible
for
an
extraordinary
gains
transfer
under
section
37
59
-
1309,
Idaho
Code.
After
the
initial
transfer
of
extraordinary
gains,
38
any
active
member
may
make
additional
voluntary
contributions
to
his/her
39
account,
subject
to
applicable
limitations,
by
authorizing
his/her
employer
40
to
contribute
an
amount
by
payroll
deduction
to
the
supplemental
benefit
41
plan
in
lieu
of
receiving
such
amount
as
salary.
The
amount
of
such
contribu
-
42

2
tions
shall
be
subject
to
any
limitations
established
by
the
board
or
state
1
or
federal
law.
The
employer
shall
provide
coordination
of
contributions
2
between
multiple
plans
to
assure
that
contribution
limits
are
not
exceeded.
3
Should
aggregate
contributions
to
multiple
plans
exceed
applicable
lim
-
4
its,
excess
contributions
shall
be
deemed
to
apply
exclusively
to
plans
not
5
created
by
this
chapter.
In
the
event
a
preexisting
plan
is
used
as
a
sup
-
6
plemental
plan,
voluntary
contributions
may
continue
to
be
made
to
that
plan
7
despite
the
absence
of
extraordinary
gains
transfers.
8
(5)
For
purposes
of
this
section,
the
employer
is
authorized
to
make
9
such
deductions
from
salary
for
any
employee
who
has
authorized
such
deduc
-
10
tions
in
writing.
The
employer
shall
forward
all
contributions
under
this
1
1
section
to
the
board
by
the
fifth
working
day
after
each
payroll,
in
addi
-
12
tion
to
reports
as
directed
by
the
board.
Any
costs
incurred
by
the
board,
13
whether
direct
or
indirect,
due
to
an
employer's
failure
to
properly
with
-
14
hold,
transfer,
limit
and
report
contributions,
shall
be
the
responsibil
-
15
ity
of
the
employer
and
shall
be
immediately
due
and
payable
upon
notice
from
16
the
board.
This
includes
but
is
not
limited
to
costs
associated
with
plan
17
corrections.
Such
costs
shall
be
treated
as
delinquent
contributions
under
18
section
59
-
1325,
Idaho
Code.
19
(6)
The
board
may
enter
into
agreements
with
employers
or
require
par
-
20
ticipation
to
implement
the
supplemental
benefit
plans,
and
the
board
may
21
designate
administrative
agents
to
execute
all
necessary
agreements
per
-
22
taining
to
the
supplemental
benefit
plans.
23
(7)
All
contributions
received
from
participants
in
the
supplemental
24
benefit
plans
shall
be
deposited
with
a
trustee
designated
by
the
board.
All
25
such
funds
are
hereby
perpetually
appropriated
to
the
board,
shall
not
be
in
-
26
cluded
in
the
department's
budget,
and
may
be
invested
or
used
to
pay
for
in
-
27
vestment
and
administrative
expenses
of
the
supplemental
benefit
plans.
In
-
28
active
members
may
be
required
to
transfer
supplemental
benefit
plan
account
29
balances
as
determined
by
the
board.
30
(8)
The
board
may
establish
rules
to
implement
and
administer
supple
-
31
mental
benefit
plans.
Costs
of
administration
shall
be
appropriated
by
the
32
legislature
and
may
be
paid
from
the
interest
earnings
of
the
funds
accrued
33
as
a
result
of
the
deposits
or
as
an
assessment
against
each
account,
to
be
34
decided
by
the
board.
Investment
-
related
expenses
are
exempt
from
appropri
-
35
ation.
36
(9)(a)
Qualified
pre
-
tax
contributions
and
investment
earnings
under
37
the
supplemental
benefit
plans
shall
be
in
compliance
with
the
require
-
38
ments
of
sections
401(a)
and
401(k)
of
the
Internal
Revenue
Code
,
as
now
39
in
effect
and
as
hereafter
amended,
or
any
other
tax
-
deferred
plan
per
-
40
mitted
by
law.
41
(b)
Qualified
after
-
tax
contributions
Roth
contributions
and
invest
-
42
ment
earnings
shall
be
in
compliance
with
the
requirements
of
section
43
401(k)
sections
401(a),
401(k),
and
402A
of
the
Internal
Revenue
Code
as
44
now
in
effect
and
as
hereafter
amended
.
45
(c)
Distributions
of
funds
held
in
supplemental
benefit
plan
accounts
46
are
subject
to
federal
law
limitations.
The
board
may
provide
for
re
-
47
tirement
disbursement
options
other
than
lump
sum
payments.
48
(10)
All
additional
contributions
made
by
the
employee
under
this
sec
-
49
tion
shall
continue
to
be
included
as
regular
compensation
for
the
purpose
50

3
of
computing
the
employer
and
employee
retirement
contributions
and
pension
1
benefits
earned
by
an
employee
under
this
chapter,
but
such
sum
shall
not
be
2
included
in
the
computation
of
any
income
taxes
withheld
on
behalf
of
any
em
-
3
ployee.
However,
funds
accrued
in
a
supplemental
benefit
plan
account
shall
4
not
be
considered
in
determining
any
other
benefits
under
this
chapter.
5
(11)
The
provisions
of
sections
59
-
1316
and
59
-
1317(1),
(2)
and
(5),
6
Idaho
Code,
shall
also
apply
to
the
supplemental
benefit
plans
created
under
7
this
section.
Should
a
court
order
that
an
assignment
be
made
to
a
partici
-
8
pant's
spouse
or
former
spouse
of
all
or
part
of
an
account
created
under
this
9
section,
the
assignment
shall
be
separate
and
distinct
from
any
approved
10
domestic
retirement
order
required
by
section
59
-
1317(4),
Idaho
Code.
Re
-
1
1
quirements
for
assignments
of
supplemental
accounts
may
be
set
forth
in
rule
12
or
other
plan
documents.
13
(12)
Members
of
the
retirement
board
or
retirement
system
staff
shall,
14
jointly
or
individually,
be
provided
a
defense
and
indemnified
against
all
15
claims,
demands,
judgments,
costs,
charges
and
expenses,
including
court
16
costs
and
attorney's
fees,
and
against
all
liability
losses
and
damages
of
17
any
nature
whatsoever
arising
out
of
and
in
the
course
and
scope
of
their
18
official
duties
and
functions
in
administering
any
plans
created
pursuant
19
to
the
provisions
of
this
section
to
the
same
extent
as
provided
in
section
20
59
-
1305(1),
Idaho
Code.
The
venue
of
all
actions
in
which
the
retirement
21
board
or
retirement
staff
is
a
party
shall
be
in
Ada
county,
Idaho.
22
SECTION
2.
An
emergency
existing
therefor,
which
emergency
is
hereby
23
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
24
July
1,
2026.
25