Reference Title: CORP; accrual rate; contribution rate

AN ACT
AMENDING SECTIONS 38-881, 38-885 AND 38-891, ARIZONA REVISED STATUTES; RELATING TO THE CORRECTIONS OFFICER RETIREMENT PLAN.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 38-881, Arizona Revised Statutes, is amended to read:

38-881 . Definitions

In this article, unless the context otherwise requires:

1. "Accidental disability" means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's department, was incurred in the performance of the employee's duties and was the result of any of the following:

(a) Physical contact with inmates, prisoners, parolees or persons on probation.

(b) Responding to a confrontational situation with inmates, prisoners, parolees or persons on probation.

(c) A job related motor vehicle accident while on official business for the employee's employer. A job related motor vehicle accident does not include an accident that occurs on the way to or from work. Persons found guilty of violating a personnel rule, a rule established by the employee's employer or a state or federal law in connection with a job related motor vehicle accident do not meet the conditions for accidental disability.

2. "Accumulated member contributions" means the sum of all member contributions deducted from a member's salary and paid to the fund, plus member contributions transferred to the fund by another retirement plan covering public employees of this state, plus previously withdrawn accumulated member contributions which are repaid to the fund in accordance with this article, minus any benefits paid to or on behalf of a member.

3. "Average monthly salary" means one-thirty-sixth of the aggregate amount of salary paid a member by a participating employer during a period of thirty-six consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service. Average monthly salary means the aggregate amount of compensation paid a member divided by the member's months of service if the member has less than thirty-six months of service. In the computation under this paragraph, a period of nonpaid or partially paid industrial leave shall be considered based on the salary the employee would have received in the employee's job classification if the employee was not on industrial leave.

4. "Beneficiary" means an individual who is being paid or who has entitlement to the future payment of a pension on account of a reason other than the individual's membership in the retirement plan.

5. "Claimant" means a member, beneficiary or estate that files an application for benefits with the retirement plan.

6. "Credited service" means credited service transferred to the retirement plan from another retirement system or plan for public employees of this state, plus those compensated periods of service as a member of the retirement plan for which member contributions are on deposit in the fund.

7. "Designated position" means:

(a) For a county:

(i) A county detention officer.

(ii) A nonuniformed employee of a sheriff's department whose primary duties require direct contact with inmates.

(b) For the state department of corrections and the department of juvenile corrections, only the following specifically designated positions:

(i) Food service.

(ii) Nursing personnel.

(iii) Corrections physician assistant.

(iv) Therapist.

(v) Corrections dental assistant.

(vi) Hygienist.

(vii) Corrections medical assistant.

(viii) Correctional service officer, including assistant deputy warden, deputy warden, warden and superintendent.

(ix) State correctional program officer.

(x) Parole or community supervision officers.

(xi) Investigators.

(xii) Teachers.

(xiii) Institutional maintenance workers.

(xiv) Youth corrections officer.

(xv) Youth program officer.

(xvi) Behavioral health treatment unit managers.

(xvii) The director and assistant directors of the department of juvenile corrections and the superintendent of the state educational system for committed youth, only if hired after July 1, 1992.

(xviii) THE DIRECTOR, DEPUTY DIRECTORS AND ASSISTANT DIRECTORS OF THE STATE DEPARTMENT OF CORRECTIONS, ONLY IF HIRED FOR ANY OF THESE POSITIONS AFTER JULY 1, 1998.

(xviii) (xix) Other positions designated by the local board of the state department of corrections or the local board of the department of juvenile corrections pursuant to section 38-891, subsection E.

(c) For a city or town, a city or town detention officer.

8. "Employee" means a person determined by the local board to be employed by a participating employer in a designated position.

9. "Employer" means an agency or department of this state or a political subdivision of this state which has one or more employees in a designated position.

10. "Fund" means the corrections officer retirement plan fund.

11. "Fund manager" means the fund manager of the public safety personnel retirement system.

12. "Local board" means the retirement board of the employer that consists of persons appointed or elected to administer the plan as it applies to the employer's members in the plan.

13. "Member" means any employee who meets all of the following qualifications:

(a) Who is a full-time paid person employed by a participating employer in a designated position.

(b) Who is receiving salary for personal services rendered to a participating employer or would be receiving salary except for an authorized leave of absence.

(c) Whose customary employment is for more than twenty hours each week and for more than six months in a calendar year.

14. "Normal retirement date" means the first day of the calendar month immediately following an employee's completion of twenty-five years of service, the employee's sixty-second birthday and completion of ten years of service or the month in which the sum of the employee's age and years of credited service equals eighty.

15. "Participating employer" means an employer which the fund manager has determined to have one or more employees in a designated position or a county, city or town which has entered into a joinder agreement pursuant to section 38-902.

16. "Pension" means a series of monthly payments by the retirement plan.

17. "Retired member" means an individual who is being paid a pension on account of the individual's membership in the retirement plan.

18. "Retirement" means termination of employment after a member has fulfilled all requirements for a pension.

19. "Retirement plan" or "plan" means the corrections officer retirement plan established by this article.

20. "Salary" means the base salary, shift differential pay, holiday pay or wages paid a member in a designated position for personal services rendered to a participating employer on a regular monthly, semimonthly or biweekly payroll basis. Salary includes amounts that are subject to deferred compensation or tax shelter agreements. Salary does not include any remuneration or reimbursement other than as prescribed by this paragraph.

21. "Service" means employment rendered to a participating employer as an employee in a designated position. Any absence that is authorized by an employer, including any periods during which the employee is on an employer sponsored long-term disability program, is considered as service if the employee returns or is deemed by the employer to have returned to a designated position within the period of the authorized absence.

22. "Total and permanent disability" means a physical or mental condition that is not an accidental disability, that the local board finds totally and permanently prevents a member from engaging in any gainful employment and that is the direct and proximate result of the member's performance of the member's duty as an employee of a participating employer.

Sec. 2. Section 38-885, Arizona Revised Statutes, is amended to read:

38-885 . Normal retirement; conditions and pension

A. A member may retire if the member:

1. Files a written application for normal retirement with the plan in the form prescribed by the plan.

2. Ceases to be an employee before the date of retirement.

3. Meets one of the age and service requirements for normal retirement prescribed in subsection B.

B. A member is eligible for a normal retirement pension if the member satisfies one of the following requirements:

1. Is sixty-two years or older and has ten or more years of service.

2. Has twenty-five or more years of service.

3. The sum of the member's age and years of credited service equals at least eighty.

C. On normal retirement as provided in this section a member is entitled to receive a pension equal to the product of:

1. Two and two-tenths ONE-HALF per cent of the member's average monthly salary.

2. The member's credited service to a maximum of thirty-four THIRTY years.

D. In no case shall the amount of a member's pension exceed seventy-five per cent of the member's average monthly salary. Such limitation does not preclude cost-of-living increases granted by the legislature.

Sec. 3. Section 38-891, Arizona Revised Statutes, is amended to read:

38-891 . Employer and member contributions

A. As determined by actuarial valuations reported to the employers and the local boards by the fund manager, each employer shall make level per cent of compensation contributions sufficient under the actuarial valuations to meet both the normal cost plus the actuarially determined amount required to amortize the unfunded accrued liability over a period of forty years commencing July 1, 1990. An employer may pay a higher level per cent of compensation thereby reducing its unfunded past service liability. All contributions made by the employers and all state taxes allocated to the fund shall be irrevocable and shall be used to pay benefits under the plan or to pay expenses of the plan and fund. Forfeitures arising because of severance of employment before a member becomes eligible for a pension or for any other reason shall be applied to reduce the cost to the employer, not to increase the benefits otherwise payable to members.

B. Each member shall contribute 6.65 EIGHT AND ONE-HALF per cent of the member's salary to the retirement plan. Member contributions shall be made by payroll deduction. Continuation of employment by the member constitutes consent and agreement to the deduction of the applicable member contribution. Payment of the member's compensation less the deducted contributions constitutes full and complete discharge and satisfaction of all claims and demands of the member relating to compensation for services rendered during the period covered by the payment.

C. Each participating employer shall cause the member contributions to be deducted from the compensation of each member. The deducted member contributions shall be paid to the retirement plan within five working days and shall be credited to the member's individual account.

D. During a period when an employee is on industrial leave and the employee elects to continue contributions during the period of industrial leave, the employer and employee shall make contributions based on the compensation the employee would have received in the employee's job classification if the employee was in normal employment status.

E. The local board of the state department of corrections or the local board of the department of juvenile corrections may specify a position within that department as a designated position if the position is filled by an employee who has at least five years of credited service under the plan, who is transferred to temporarily fill the position and who makes a written request to the local board to specify the position as a designated position within ninety days of being transferred. On the employee leaving the position, the position is no longer a designated position.

F. The local board of the state department of corrections or the local board of the department of juvenile corrections may specify a designated position within the department as a nondesignated position if the position is filled by an employee who has at least five years of credited service under the Arizona state retirement system and who makes a written request to the local board to specify the position as a nondesignated position within ninety days of accepting the position. On the employee leaving the position, the position reverts to a designated position.

APPROVED BY THE GOVERNOR APRIL 25, 1997.

FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 28, 1997.