Senate Engrossed

 

PSPRS; deferred retirement option plan

 

 

 

 

State of Arizona

Senate

Fifty-fifth Legislature

Second Regular Session

2022

 

 

 

SENATE BILL 1268

 

 

 

An Act

 

amending sections 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 38-844.03, Arizona Revised Statutes, is amended to read:

START_STATUTE38-844.03. 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. Designate a period of participation that is not more than sixty eighty-four 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. END_STATUTE

Sec. 2. Section 38-844.05, Arizona Revised Statutes, is amended to read:

START_STATUTE38-844.05. 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. For the first sixty months, an amount, credited monthly, that represents interest on the amount credited pursuant to paragraph 1 of this subsection at a rate equal to the assumed rate of return determined by the board.  For the remaining twenty-four months, an amount, credited monthly, that represents interest on the amount credited pursuant to paragraph 1 of this subsection 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. END_STATUTE

Sec. 3. Public safety personnel retirement system board of trustees; recommendations

On or before December 31, 2022, the public safety personnel retirement system board of trustees shall report to the governor, president of the senate and the speaker of the house of representatives recommendations from stakeholders regarding measures that can improve retention for members of the public safety personnel retirement system who were hired on or after January 1, 2012 and before July 1, 2017 and measures that can improve retention and recruitment for members who were hired on or after July 1, 2017.