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House Engrossed
deferred retirement optional plan; reinstatement |
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State of Arizona House of Representatives Fifty-fifth Legislature Second Regular Session 2022
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HOUSE BILL 2337 |
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An Act
amending sections 38-844.02, 38-844.03 and 38-844.05, Arizona Revised Statutes; relating to the public safety personnel retirement system.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-844.02, Arizona Revised Statutes, is amended to read:
38-844.02. Deferred retirement option plan; purpose
A. A deferred retirement option plan is established for those employees who become members of the system before January 1, 2012 and who meet the eligibility requirements of section 38-844.03. The purpose of the deferred retirement option plan is to add flexibility to the system and to provide members who elect to participate in the deferred retirement option plan access to a lump sum benefit in addition to their normal monthly retirement benefit on actual retirement.
B. The board shall offer the deferred retirement option plan to members on a voluntary basis as an alternative method of benefit accrual under the system.
Sec. 2. Section 38-844.03, Arizona Revised Statutes, is amended to read:
38-844.03. Eligibility; participation
A. Any member who is eligible for a normal pension pursuant to section 38-844, subsection A, who becomes a member of the system before January 1, 2012 and who has at least twenty years of credited service is eligible to participate in the deferred retirement option plan. In addition, any member who is subject to section 38-858, subsection C is eligible to participate in the deferred retirement option plan retroactive to the member's twentieth year of credited service or on the day before the member began military service, whichever is later, if the member makes the election pursuant to this section on or before resuming employment with the member's employer.
B. A member who elects to participate in the deferred retirement option plan shall voluntarily and irrevocably:
1. For a member who became a member of the system before January 1, 2012, designate a period of participation that is not more than sixty eighty-four consecutive months. For a member who became a member of the system on or after January 1, 2012, designate a period of PARTICIPATION that is not more than sixty consecutive months.
2. Beginning on the date the member elects to participate in the deferred retirement option plan, cease to accrue benefits under any other provision of this article. The member's effective date of participation is the first day of the month following the date the member elects to participate.
3. Have deferred retirement option plan benefits credited to a deferred retirement option plan participation account pursuant to section 38-844.05.
4. Receive benefits from the system on termination of employment at the same time and in the same manner as otherwise prescribed in this article.
5. Agree to terminate employment on completion of the deferred retirement option plan participation period designated by the member on the appropriate deferred retirement option plan participation form.
C. If a member fails to terminate employment on completion of the designated deferred retirement option plan participation period:
1. The member is not entitled to the interest accumulation on the deferred retirement option plan participation account.
2. The deferred retirement option plan participation account shall not be credited with the monthly amount prescribed in section 38-844.05, subsection C, paragraph 1, and that amount shall not be paid directly to the member.
3. The payment prescribed in section 38-844.08, subsection A, paragraph 1 shall not be paid until the member terminates employment and is payable at the same time as the pension amount is paid on retirement.
4. The member does not acquire any further credited service in the system.
Sec. 3. Section 38-844.05, Arizona Revised Statutes, is amended to read:
38-844.05. Deferred retirement option benefits and participation accounts
A. A deferred retirement option plan participation account is an account established within the system on behalf of each deferred retirement option plan participant. All benefits accrued pursuant to this article shall be accounted for in the deferred retirement option plan participation account. A deferred retirement option plan participant does not have a claim on the assets of the system with respect to the member's deferred retirement option plan participation account, and assets shall not be set aside for any deferred retirement option plan participant that are separate from all other system assets.
B. All amounts credited to a member's deferred retirement option plan participation account are fully vested.
C. A member's deferred retirement option plan participation account shall be credited with the following:
1. An amount, credited monthly, that is computed in the same manner as a normal retirement benefit using the factors of credited service and average monthly benefit compensation in effect on the date of deferred retirement option plan participation.
2. An amount, credited monthly, that represents interest on the amount credited pursuant to paragraph 1 of this subsection:
(a) For a member who became a member of the system before January 1, 2012, for the first sixty months, at a rate equal to the assumed rate of return determined by the board. For the remaining twenty-four months, at a rate equal to the actual rate of return, smoothed over a period of seven years, to be not less than zero percent or not more than nine percent.
(b) For a member who became a member of the system on or after January 1, 2012, at a rate equal to the actual rate of return, smoothed over a period of seven years, to be not less than zero percent or not more than nine percent.
D. The participant is not entitled to receive any amount prescribed by section 38-856.05 or 38-857 during the deferred retirement option plan participation period.