COMMITTEE ON GOVERNMENT OPERATIONS
(Reference to printed bill)
Page 3, line 4, strike the second "the" insert "a"; strike "election" insert "request"
After line 13, insert:
"Sec. 2 Section 38-804, Arizona Revised Statutes, is amended to read:
38-804. Membership; termination; reinstatement of credited service
A. All elected officials are members of the plan, except that a state elected official who is subject to term limits may elect not to participate in the plan. The state elected official who is subject to term limits shall make the election in writing and file the election with the fund manager within thirty days after the state elected official assumes office. The election is effective on the first day of the state elected official’s eligibility for that term of office. The election not to participate is specific for that term of office. If a state elected official who is subject to term limits fails to make an election as provided in this subsection, the state elected official is deemed to have elected to participate in the plan. The election not to participate in the plan is irrevocable and constitutes a waiver of all benefits provided by the plan for the state elected official’s entire term, except for any benefits accrued by the state elected official in the plan for periods of participation prior to being elected to an office subject to term limits or any benefits expressly provided by law. The state elected official who elects not to participate in the plan shall participate in the Arizona state retirement system unless the state elected official makes an irrevocable election not to participate in the Arizona state retirement system as provided in section 38-727. If the state elected official elects not to participate in the plan, the Arizona state retirement system or the defined contribution retirement plan option pursuant to article 8 of this chapter, the state elected official may participate in a tax deferred annuity and deferred compensation program established pursuant to article 5 of this chapter. If the state elected official chooses to participate in such a tax deferred annuity and deferred compensation program: ,
1. If
requested by the state elected official in a written request filed with the
fund manager, the fund manager shall transfer to the tax deferred annuity and
deferred compensation program an amount equal to the state elected official's
actuarial accrued liability computed by the plan's actuary. The actuarial accrued liability shall be
based on the same actuarial cost method and assumptions that were used for
computing the funding requirements of the plan in the annual actuarial
valuation preceding the transfer.
2. The state elected official's employer shall pay an amount equal to five per cent of the state elected official's base salary directly to the program in lieu of employer contributions to a public retirement system.
B. If a member ceases to hold office for any reason other than death or retirement, within twenty days after filing a completed application with the fund manager, the member is entitled to receive the following amounts, less any benefit payments the member has received and any amount the member may owe to the plan:
1. If the member has less than five years of credited service with the plan, the member may withdraw the member's accumulated contributions from the plan.
2. If the member has five or more years of credited service with the plan, the member may withdraw the member's accumulated contributions plus an amount equal to the amount determined as follows:
(a) 5.0 to 5.9 years of credited service, twenty-five per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
(b) 6.0 to 6.9 years of credited service, forty per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
(c) 7.0 to 7.9 years of credited service, fifty-five per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
(d) 8.0 to 8.9 years of credited service, seventy per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
(e) 9.0 to 9.9 years of credited service, eighty-five per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
(f) 10.0 or more years of credited service, one hundred per cent of all member contributions deducted from the member's salary pursuant to section 38-810, subsection A.
C. If a member has more than ten years of credited service with the plan, leaves the monies prescribed in subsection B of this section on account with the plan for more than thirty days after termination of employment and after that time period requests a refund of those monies, the member is entitled to receive the amount prescribed in subsection B of this section plus interest at a rate determined by the fund manager for each year computed from and after the member's termination of employment.
D. If the amount prescribed in subsection B or C of this section includes monies that are an eligible rollover distribution and the member elects to have the distribution paid directly to an eligible retirement plan or individual retirement account or annuity and specifies the eligible retirement plan or individual retirement account or annuity to which the distribution is to be paid, the distribution shall be made in the form of a direct trustee-to-trustee transfer to the specified eligible retirement plan. The distribution shall be made in the form and at the time prescribed by the fund manager. A member who receives the amount prescribed in subsection B or C of this section from the plan or who elects a transfer pursuant to this subsection forfeits the member’s credited service, and all rights to benefits under the plan and membership in the plan terminate.
E. If an elected official who has terminated the member’s membership in the plan pursuant to subsection B of this section is subsequently elected or otherwise becomes eligible for membership in the plan pursuant to subsection A of this section, credited service only accrues from the date of the member’s most recent eligibility as an elected official.
F. Notwithstanding subsection E of this section, if an elected official files a written election form with the fund manager within ninety days after the day of the member’s reemployment as an elected official and repays the amount previously withdrawn pursuant to subsection B or C of this section within one year after the date of the member’s reemployment as an elected official, with interest on that amount at the rate of nine per cent for each year, compounded each year from the date of withdrawal to the date of repayment, credited service shall be restored. Credited service shall not be restored until complete repayment is made to the fund.
G. If a retired member subsequently becomes an elected official, contributions shall not be made by the retired member or the retired member’s employer and credited service shall not accrue while the retired member is holding office, except that if a retired member subsequently becomes an elected official of the same office from which the member retired, the member shall not receive a pension, contributions shall not be made by the member or the member’s employer and credited service shall not accrue while the member is holding office. If the elected official ceases to hold the same office, the elected official is entitled to receive the same pension the elected official was receiving when the elected official’s pension was discontinued pursuant to this subsection. Nothing in this subsection prohibits a retired judge called by the supreme court to active duties of a judge pursuant to section 38-813 from receiving retirement benefits.
Sec. 3. Section
38-955, Arizona Revised Statutes, is amended to read:
38-955. Contributions
A. An
elected official or exempt state officer or employee who participates in the
defined contribution retirement plan option shall contribute an amount equal to
two and sixty-six hundredths per cent of the elected official's or exempt state
officer's or employee's gross salary.
B. Employers
shall contribute to each participating elected official's or exempt state
officer's or employee's account an amount equal to two and sixty-six hundredths
per cent of the elected official's or exempt state officer's or employee's
gross salary.
c. From and after June 30, 2001, an elected
official or exempt state officer or employee who participates in the defined
contribution retirement plan option may contribute an additional amount to the
option provided that the amount when combined with the amounts contributed
pursuant to subsections a and b of this section do not exceed the limits
prescribed in section 415 (c) of the
internal revenue code, as amended.
C. d. Although designated as
employee contributions, all employee contributions made to the defined
contribution retirement plan shall be picked up and paid by the employer in
lieu of contributions by the elected official or exempt state officer or
employee. The contributions picked up by an employer may be made
through a reduction in the elected official's or exempt state officer's or
employee's salary or an offset against future salary increases, or a
combination of both. The elected officials and exempt state officers
and employees participating in the defined contribution retirement plan option
do not have the option of choosing to receive the contributed amounts directly
instead of the employer paying the amounts to the defined contribution
retirement plan. It is intended that all employee contributions that
are picked up by the employer as provided in this subsection shall be treated
as employer contributions under section 414(h) of the internal revenue code,
shall be excluded from elected officials' and exempt state officers'
and employees' gross income for federal and state income tax purposes and are
includable in the gross income of the elected officials and exempt state
officers and employees or their beneficiaries only in the taxable year in which
they are distributed. The specified effective date shall not be
before the date the defined contribution retirement plan receives notification
from the internal revenue service that pursuant to section 414(h) of the internal
revenue code the employee contributions picked up shall not be included in
gross income for income tax purposes until the time that the picked up
contributions are distributed by refund or pension payments."
and, as so amended, it do pass
MICHAEL
GARDNER
Chairman
1/12/00
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