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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
ASRS; retirement; elected officials
Purpose
Allows an Arizona State Retirement System (ASRS) member who is an elected official and who attains a normal retirement date to retire at any time without resigning from the member's elected position. Requires an ASRS employer to pay the alternate contribution rate on behalf of an ASRS member who retires from ASRS without terminating employment and on behalf of an elected official who retires from ASRS without resigning from the member's elected position.
Background
An elected official who is an active, an inactive or a retired member of ASRS or a member of ASRS with a disability is eligible for ASRS service credit for the elected official's service, if the elected official's employer is a participating ASRS employer (A.R.S. § 38-727).
Statute allows ASRS members to purchase past service time under specific categories which may increase the member's monthly retirement benefit or allow the member to retire at an earlier date (A.R.S. §§ 38-743 and 38-744).
An ASRS member may retire, receive a pension and continue working without first terminating employment if: 1) the member has reached the normal retirement date; 2) the member has reduced work hours below 20 hours per week, 20 weeks per year; and 3) the employer agrees to the reduced work hours.
A retired member who is engaged to work by an ASRS employer for more than 20 hours per week at least 20 weeks each year resumes active ASRS membership and ASRS must suspend retirement benefit payments until the member either: 1) terminates employment and files an application for reretirement; or 2) attains a normal retirement date, no longer meets the requirements for active membership and files an application for reretirement. However, a retired member may return to work as a state elected official who is subject to term limits and still be eligible to receive retirement benefits.
All retirement
benefits are normally payable in monthly installments beginning on the
commencement of retirement. Statute requires ASRS employers to pay an alternate
contribution rate on behalf of a retired member who returns to work with an
ASRS employer in any capacity in a position ordinarily filled by an employee of
the employer (A.R.S. §§ 38-766.02;
38-764;
and 38-766).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Grants the authority for a retired ASRS member to return to work as an elected official and continue to receive retirement benefits to all elected officials who attain a normal retirement age, rather than term-limited state elected officials.
2. Allows an ASRS member who is an elected official and who attains a normal retirement date to retire at any time without resigning from the member's elected position.
3. Specifies that an elected official who retires from ASRS without resigning from the member's elected position (retired elected official member) is a retired member as of the date of retirement.
4. Specifies that a retired elected official member's period of employment after retirement is not eligible for service purchase.
5. Specifies that a retired elected official member is not eligible for long-term disability benefits and does not earn service credit while retired.
6. Requires a retired elected official member, if the member is employed by an ASRS employer in a nonelected position for which the member is required to make employee contributions to ASRS, to terminate employment for the nonelected positions or reduce the hours worked in the nonelected positions to less than 20 hours per week, 20 weeks per year.
7. Clarifies that the alternate contribution rate must be paid by ASRS employers on behalf of retired members who work with an ASRS employer after employment.
8. Requires an ASRS employer to pay the alternate contribution rate on behalf of:
a) a retired elected official member; and
b) a member who retires without terminating employment.
9. Requires a retired elected official member and a member who retires without terminating employment, and their ASRS employer, to notify ASRS in writing of the member's retirement without terminating employment or the member's retirement without resigning from an elected position.
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date.
House Action
WM 2/16/26 W/D
APPROP 2/23/26 DP 15-1-0-2
3rd Read 3/9/26 19-33-7-0-1
3rd Read* 3/17/26 37-16-6-0-1
*on reconsideration
Prepared by Senate Research
March 19, 2026
MG/hk