REFERENCE TITLE: ASRS; supplemental employee deferral plans
State of Arizona
First Regular Session
Amending sections 38‑715 and 38‑781, Arizona Revised Statutes; repealing title 38, chapter 5, article 5, Arizona Revised Statutes; relating to supplemental employee deferral plans.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-715, Arizona Revised Statutes, is amended to read:
38-715. Director; powers and duties
A. The board shall appoint a director. The director shall serve at the pleasure of the board.
B. The director shall appoint a deputy director and assistant directors with the approval of the board.
C. The director, under the supervision of the board, shall:
1. Administer this article.
2. Be responsible for the recruitment, hiring and day‑to‑day management of employees.
3. Prescribe procedures to be followed by members and their beneficiaries in filing applications for benefits.
4. Prescribe procedures to be followed by employers for remitting data and monies to ASRS and for receiving data and monies from ASRS.
5. Be responsible for:
(a) Income and the collection of income and the accuracy of all expenditures.
(b) Maintaining books and maintaining and processing records of ASRS.
(c) Providing continuing education programs for the board to keep the board members informed of current issues and information needed to carry out their duties.
6. Perform additional powers and duties as may be prescribed by the board and delegated to the director.
D. The director, under the supervision and approval of the board, may:
1. Delegate duties and responsibilities to such state departments as the director deems feasible and desirable to administer this article.
2. Appoint a custodian for the safekeeping of all investments owned by ASRS and register stocks, bonds and other investments in the name of a nominee.
3. Establish one or more reserve holding accounts, into which the board shall close periodically the account balances of inactive accounts. If any person files a claim and furnishes proof of ownership of any amounts in any inactive account, the claim shall be paid from the reserve holding account on the same basis as if no action had been taken under this paragraph. Interest and supplemental credits shall be allocated to each reserve holding account on June 30 of each year, as determined by the board. For the purposes of this paragraph, "inactive account" means an account to which contributions have not been paid for six months or more.
4. Make retirement under this article effective retroactively to on or after the day following the date employment is terminated if the member was unable to apply before the retroactive effective date through no fault of the member.
E. For current or prospective employees of ASRS, the director, under the supervision of the board, may:
1. Conduct criminal records checks. The director may require a current or prospective employee to submit a full set of fingerprints to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.
2. Conduct credit checks for accounting, investment and other finance‑related positions. The director shall establish a policy for conducting credit checks on a current employee that includes the method for determining when a credit check may be conducted, retaining records relating to the reason for the credit check and notifying an employee of the credit check and the result of the credit check.
F. The director, under supervision of the governing committee for deferred compensation plans, may hire and supervise employees and obtain services the director deems necessary to administer article 5 of this chapter. The deferred compensation plans established pursuant to article 5 of this chapter shall bear the costs for these employees and services.
G. F. The director and all persons employed by the director are subject to section 38‑611 and title 41, chapter 4, article 4.
H. G. In consultation with the director of the department of administration, the board may enter into employment agreements and establish the terms of those agreements with persons holding any of the following ASRS positions:
2. Deputy director.
3. Chief investment officer.
4. Fiduciary or investment counsel.
Sec. 2. Section 38-781, Arizona Revised Statutes, is amended to read:
38-781. Supplemental employee deferral plan; public employees; administration; immunity; definitions
A. A One or more supplemental employee deferral plan is plans may be established pursuant to this section to provide public employees, other than state employees, an opportunity to save additional tax-deferred monies for retirement.
B. ASRS may establish, administer, manage and operate a supplemental employee deferral plan plans for employers other than this state.
C. ASRS may:
1. Employ services it deems necessary, including legal services, for the operation and administration of the plan plans.
2. Administer the plan plans through contracts with multiple vendors.
3. Perform all acts, whether or not expressly authorized, that it deems necessary and proper for the operation and protection of the plan plans.
4. For the purposes of this section, enter into intergovernmental agreements pursuant to title 11, chapter 7, article 3.
D. A supplemental employee deferral plan is in addition to and does not replace an employee's existing state defined benefit retirement plan.
E. If an employer, that is not including this state, elects to participate in the a supplemental employee deferral plan, any employee of the employer who meets the eligibility requirements that are prescribed by ASRS for participation in the supplemental employee deferral plan may participate in the supplemental employee deferral plan.
F. Notwithstanding subsection E of this section, on or after July 1, 2022, an employee of an employer may elect to participate in a supplemental employee deferral plan if the employee meets the eligibility requirements that are prescribed by ASRS for participation in the supplemental employee deferral plan.
F. G. Employee participation in the a supplemental employee deferral plan authorizes requires the participant's employer to make salary reductions from the participant's compensation at no cost to the employee, ASRS or any vendor retained by ASRS and contribute such salary reductions to the plan. An employer may make employer contributions to the supplemental employee deferral plan if the plan permits allows. The employer shall submit any reports required by the plan. If the participant is an active member, any compensation deferred by an employee under the a plan shall be included as regular compensation or compensation for the purpose of computing the retirement and pension benefits provided in this article earned by any employee participating in the plan.
G. H. Employee contributions and earnings on employee contributions are immediately vested. Employer contributions, if any, and the earnings on employer contributions shall vest according to the schedule established in by the plan employer, if the employer completes and submits a schedule to ASRS. If the employer does not complete and submit a schedule to ASRS, employer contributions, if any, and the earnings on employer contributions shall vest according to the default schedule established by ASRS.
H. I Notwithstanding any other law, this state and its officers and employees, the board and ASRS are immune from civil liability and are not subject to suit directly or by way of contribution for any act or omission resulting in any damage or injury arising out of the supplemental employee deferral plan.
I. J. For the purposes of this section:
1. "State" means this state, including any department, office, board, commission, agency or university, but does not mean any school district or community college district.
2. "Supplemental employee deferral plan" means a tax deferred annuity described in section 403(b) of the internal revenue code, including a custodial account described in 403(b)(7) of the internal revenue code, and an eligible deferred compensation plan described in section 457(b) of the internal revenue code. A supplemental employee deferral plan shall comply with all applicable provisions of the section of the internal revenue code under which such plan is adopted and maintained.
Sec. 3. Repeal
Title 38, chapter 5, article 5, Arizona Revised Statutes, is repealed.