 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
public retirement systems; administration
Purpose
Modifies administration of the Public Safety Personnel Retirement System (PSPRS) and other PSPRS-managed retirement plans relating to reemployment restrictions, authorized investments and supplemental defined contribution plan and disability program participation.
Background
PSPRS provides a uniform, consistent and equitable statewide retirement program for Arizona’s municipal firefighters and police, highway patrol and other public safety personnel. PSPRS is funded through employee and employer contributions and interest earned through investment. PSPRS administers separate plans for Arizona’s elected officials, known as the Elected Officials’ Retirement Plan (EORP), and for corrections officers, known as the Corrections Officer Retirement Plan (CORP) (A.R.S. § 38-841).
The PSPRS Board of Trustees (PSPRS Board) has the full power in its sole
discretion to invest and reinvest, alter and change the monies accumulated
under PSPRS and other PSPRS Board-administered retirement plans and trusts. All
contributions under PSPRS and other PSPRS Board-administered retirement plans must
be forwarded to the PSPRS Board and held, invested and reinvested as outlined.
All property and monies of the PSPRS Fund and other PSPRS
Board-administered retirement plans must be retained for the exclusive benefit
of members and must be used to pay benefits to members or their beneficiaries
or to pay operation and administration expenses (A.R.S.
§ 38-848).
A retired PSPRS or CORP member is eligible for a normal pension beginning on the member's normal retirement date. If a retired PSPRS member becomes reemployed in any capacity by the employer from which the member retired before six months after the retirement date or in the same position at any time following retirement or if a retired CORP member is reemployed within six months after retirement in a designated position by the employer from which the employee retired: 1) the payment of pension benefits must be suspended during the period of reemployment; 2) employee contributions may not be made on the member's account; and 3) for a member who retired on or after July 1, 2009, any pension payments during reemployment are considered overpayments, with certain exceptions (A.R.S. §§ 38-849 and 38-884).
The board or employer of an eligible group may establish, administer, manage and operate a supplemental defined contribution plan. Currently, an eligible group includes: 1) the Arizona State Retirement System; 2) EORP; 3) PSPRS; 4) CORP; 5) optional retirement programs established by a community college district board or the Arizona Board of Regents; 6) the Elected Officials' Defined Contribution Retirement System (EODCRS); and 7) the PSPRS Defined Contribution Plan (A.R.S. §§ 38-951; 38-952; and 38-953).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Subjects retired PSPRS and CORP members who become reemployed as contracted or leased employees before six months after the member's retirement date to outlined pension payment limitations.
2. Specifies that, for a PSPRS or CORP retired member that is reemployed as a contracted or leased employee:
a) employee contributions may not be made on the member's account;
b) service may not be credited during the period of reemployment; and
c) the employer must pay the alternate contribution rate.
3. Removes the specification that a PSPRS or CORP member who becomes reemployed in the same position from which the person retired at any time following retirement is subject to outlined pension payment limitations.
4. Specifies that an EODCRS member who develops a total disability and who was not an active, inactive or retired member of EORP or a member of EORP with a disability may receive benefits from the EODCRS Disability Program.
5. Allows the PSPRS Board to invest in stocks acquired as an investment in any commingled investment.
6. Adds, to the definition of eligible groups for the purposes of participating in a supplemental defined contribution plan, term-limited state elected officials and exempt state officers and employees who elected to participate in the supplemental defined contribution plan in effect on August 6, 1999.
7. Makes technical changes.
8. Becomes effective on the general effective date.
House Action
WM 2/5/25 DP 8-0-0-1
3rd Read 3/5/25 58-0-2
Prepared by Senate Research
March 13, 2025
MG/ci