 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
REVISED
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 and requiring the contributions to occur at specified service 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;
b) is made only on a specified service interval such as 5, 10 or 15 years of service;
c) is made equally to all Tier 3 CORP members who participate in the PSPDCRP and meet the service requirement; and
d) does not require the member to make any additional monetary contribution to receive the employer's supplemental contribution.
2. Allows a CORP employer to discontinue supplemental contribution incentive payments at any time.
3. Specifies that a supplemental contribution does not affect any other CORP employer or CORP member employed by the contributing employer.
4. 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.
5. Becomes effective on the general effective date.
Revisions
· Updates the fiscal impact statement.
Prepared by Senate Research
April 8, 2026
MG/hk