Assigned to FIN                                                                                                                              AS ENACTED

ARIZONA STATE SENATE

Fifty-Fifth Legislature, First Regular Session

ENACTED

FACT SHEET FOR S.B. 1053/H.B. 2356

ASRS; nonparticipatory employer liability

Purpose

            Removes the requirement for the Arizona State Retirement System (ASRS) to establish a separate fund for certain nonparticipating employers.

Background

            ASRS must establish a separate fund for an employer, other than a charter school, who is considered to employ a minimum of 50 employees as of August 3, 2018, and is no longer participating in ASRS after reducing the number of actively contributing employees by: 1) 30 percent or more over a three-year period; or 2) 50 percent or more over any period by filling a position that would ordinarily be filled by an employee of the employer with an employee who is not otherwise actively contributing.

            ASRS must establish a separate fund for an employer who: 1) changes from a public entity to a private entity; 2) dissolves, other than Arizona; and 3) through legislative action, is no longer enrolling new employees in ASRS or contributing to ASRS.

The nonparticipation date is the date on which the employer is no longer participating in ASRS. A nonparticipatory employer is not eligible to participate in ASRS after the employer's nonparticipation date (A.R.S. § 38-751).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Removes the requirement for ASRS to establish a separate fund for a nonparticipating employer who, based on the number of contributing employees as of August 3, 2018, is:

a) considered to employ a minimum of 50 employees one year before their participation date; and

b) no longer participating in ASRS because of a reduction in the number of actively contributing employees.

2. Removes the ineligibility of a nonparticipating employer's participation in ASRS after the employer's nonparticipation date.

3. Makes technical and conforming changes.

4. Becomes effective on the general effective date.

Senate Action House Action

FIN                 1/20/21      DP     9-0-1                    GE                   2/3/21       DP     13-0-0-0

3^rd Read          1/28/21                 29-0-1                  3^rd Read          2/15/21               60-0-0

                                                                                 (S.B. 1052 was substituted for H.B. 2356 on 3^rd                                                                                  Read)

Signed by the Governor 2/18/21

Chapter 29

Prepared by Senate Research

February 22, 2021

MG/ML/gs