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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
Senate: FIN DP 6-1-0-0 | Third Read 20-7-3-0-0House: PSLE DPA 10-1-2-1 |
SB 1270: correctional officers; supplemental contributions
Sponsor: Senator Gowan, LD 19
House Engrossed
Overview
Allows an employer to make a supplemental contribution incentive payment to a participant's Public Safety Personnel Defined Contribution Retirement Plan (Plan) in accordance with the outlined contribution criteria.
History
The Plan was established in 2017 and is administered by the Board of Trustees (Board) of the Public Safety Personnel Retirement System (PSPRS). The Plan is designed to be: 1) fully funded on a current basis from employer and participant contributions; 2) a qualified governmental plan under the IRC's definition; and 3) exempt from federal taxation. Participants of this Plan are considered Tier 3 members of the PSPRS and include public safety personnel and the corrections employees, except for probation and surveillance officers, that are statutorily required to participate in the Plan rather than the Corrections Officer Retirement Plan (CORP) (A.R.S. §§ 38-866; 38-881.01).
Participants of the Plan are required to contribute 7% of their gross pensionable compensation by salary reduction to their annuity account but are allowed to make a one-time irrevocable election to contribute an amount not less than 5% of their gross compensation. Contributions are paid by the employer on the participant's behalf through a reduction in the participant's compensation (A.R.S. § 38-867).
Similarly, employers are required to contribute annually to participants' Plans in an amount equal to 5% of each participant's gross pensionable compensation. Employer contributions are made simultaneously with participant contributions and are deposited directly into the participant's annuity account (A.R.S. § 38-867).
Participant is defined as any employee who is a full-time, paid employee of the participating employer and who was either: 1) hired on or after July 1, 2018, not to a designated position and was not a member of CORP; or 2) hired on or after July 1, 2018, to a designated position, who participates solely in the Plan and who was not a member of CORP (A.R.S. § 38-865).
Employer means an agency or department of this state or a political subdivision of this state that has one or more employees in a designated position (A.R.S. § 38-881).
Designated position encompasses corrections employees throughout counties, cities and towns; from the Department of Corrections and Department of Juvenile Corrections; from the judiciary; and from the Department of Public Safety (A.R.S. § 38-881).
Provisions
1. Authorizes an employer to make a supplemental contribution incentive payment to a participant's defined contribution plan account if the supplemental contribution meets all the following requirements:
a. does not exceed $5,000 per participant per employment or service interval with a 5-year graded vesting schedule;
b. is made only on a specified years of employment or years of service interval;
c. is made equally as an amount or as a rate of pensionable compensation at each interval to all participants of the employer who meet specified requirements; and
d. does not require the participant to make any additional monetary contribution to receive the employer's supplemental contribution. (Sec. 1)
2. Specifies a supplemental contribution does not affect any other employer or participant who is employed by the employer that made the contribution. (Sec. 1)
3. Asserts an employer is not obligated to make an additional supplemental contribution to a participant who has received a previous contribution. (Sec. 1)
4. Allows employers to discontinue supplemental contributions at any time. (Sec. 1)
5. Requires employers to adopt a policy detailing the requirements and amounts of the supplemental contribution incentive payments before implementation of the payments. (Sec. 1)
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9. Initials NM/AI SB 1270
10. 5/5/2026 Page 0 House Engrossed
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