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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
correctional officers; supplemental contributions
Purpose
Allows a Correction Officer Retirement Plan (CORP) employer to make supplemental contribution incentive payments to specified employees who are hired on or after July 1, 2018 (Tier 3 CORP members). Outlines criteria for the supplemental contributions, including setting a $5,000 maximum per person, per year, and requiring the contributions to occur at specified intervals.
Background
Laws 2016,
Chapter 2 required the PSPRS Board of Trustees to establish, design and
administer a defined contribution retirement plan. The PSPRS Defined
Contribution Plan (PSPDCRP) is a type of retirement plan in which the employer
and employee make contributions on a regular basis. A Tier 3 CORP member must
participate in the PSPDCRP, except for court probation and surveillance
officers who may participate in CORP or the PSPDCRP. The
Tier 3 CORP member employee contribution rate is statutorily set at 7 percent
of the member's gross pensionable compensation and each member may make a
onetime irrevocable election to adjust the contribution rate to not less than 5
percent. The employer contribution rate for Tier 3 CORP members is 5 percent
and member contribution rate adjustments do not impact employer contributions.
Tier 3 CORP members are fully vested in the PSPDCRP after three years of
service, with employer contributions vesting at: 1) 25 percent after the first
year of service; 2) 50 percent after the second year of service; and 3) 100
percent after the third year of service (A.R.S.
§§ 38-867;
38-881;
and 38-881.01).
The Joint Legislative Budget Committee fiscal note for S.B. 1270 states that the actual cost of allowing CORP employers to make supplemental contribution payments to Tier 3 CORP members' PSPDCRP accounts would depend on whether and how individual employers choose to implement the payments and the fiscal note includes the estimated cost of different payment scenarios (JLBC fiscal note).
Provisions
1. Allows a CORP employer, in addition to the required employer contributions, to make a supplemental contribution incentive payment to a Tier 3 CORP member's PSPDCRP account, if the contribution:
a) does not exceed $5,000 per person per year;
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 Tier 3 CORP members who participate in the PSPDCRP and meet the employment or service requirement and requirements outlined by the employer's adopted policy; and
d) does not require the member to make any additional monetary contribution to receive the employer's supplemental contribution.
2. Requires a CORP employer, before implementing a supplemental contribution incentive payment, to adopt a policy detailing the statutory requirements and amounts of the outlined supplemental contribution incentive payments.
3. Allows a CORP employer to discontinue supplemental contribution incentive payments at any time.
4. Specifies that a supplemental contribution does not affect any other CORP employer or CORP member employed by the contributing employer.
5. Specifies that a CORP employer that makes a supplemental contribution is not obligated to make additional supplemental contributions to a member who has received a previous supplemental contribution.
6. Becomes effective on the general effective date.
Amendments Adopted by the House of Representatives
1. Requires a CORP employer to adopt a policy that details the statutory requirements and amounts of the supplemental contribution incentive payments.
2. Modifies the supplemental contribution incentive payment criteria.
Senate Action House Action
FIN 2/26/26 DP 6-1-0 PSLE 3/23/26 DPA 10-1-2-1
3rd Read 2/26/26 20-7-3 3rd Read 5/5/26 51-0-9
Prepared by Senate Research
May 5, 2026
MG/hk