-------------------------------------------------------- ¦ REFERENCE TITLE: ASRS; accumulated leave; sick; annual ¦ -------------------------------------------------------- ¦ ¦ ¦ ¦ ¦ ¦ ¦ State of Arizona ¦ ¦ House of Representatives ¦ ¦ Forty-fourth Legislature ¦ ¦ Second Regular Session ¦ ¦ 2000 ¦ -------------------------------------------------------- ¦ HB 2638 ¦ -------------------------------------------------------- ¦ Introduced by ¦ ¦ Representative Voss (By Request) ¦ --------------------------------------------------------
AN ACT
AMENDING SECTIONS 38-615 AND 38-711, ARIZONA REVISED STATUTES; AMENDING TITLE 38, CHAPTER 4, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 38-618; RELATING TO THE ARIZONA STATE RETIREMENT SYSTEM.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-615, Arizona Revised Statutes, is amended to read:
38-615. Payment for accumulated sick leave; limit; definition
A. An officer or employee of the state, subject to legislative appropriation, or an officer or employee of a county, subject to authorization by the board of supervisors, is eligible, on retirement, to receive benefits as follows:
1. An officer or employee who has at least five hundred but less than seven hundred fifty hours of sick leave shall receive payments equal to twenty-five per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave.
2. An officer or employee who has at least seven hundred fifty but less than one thousand hours of sick leave shall receive payments equal to thirty-three per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave.
3. An officer or employee who has at least one thousand hours of sick leave shall receive payments equal to fifty per cent of the officer's or employee's salary at the officer's or employee's current hourly rate for each hour of accumulated sick leave not to exceed one thousand five hundred hours of accumulated sick leave.
B. An officer or employee who receives payments as provided in subsection A of this section shall not receive more than thirty thousand dollars. If an officer or employee receives payments pursuant to subsection A of this section, the officer or employee shall be paid the amount due the officer or employee in installments over a three year period.
C. If an officer or employee dies before the officer or employee receives the total payment due to the officer or employee or if an officer or employee is eligible for normal retirement but has not retired at the time of the officer's or employee's death, the officer's or employee's beneficiary shall receive the balance due to the officer or employee in a lump sum.
D. Notwithstanding any other law AND EXCEPT AS PROVIDED IN SUBSECTION E OF THIS SECTION:
1. The cash value of the sick leave credit pursuant to subsection A of this section shall not be used to compute the average salary.
2. The payment authorized by this section for accumulated sick leave is not salary or compensation for the purposes of making retirement contributions or computing any pension benefit.
E. IN LIEU OF THE PAYMENTS PRESCRIBED IN SUBSECTION A OF THIS SECTION, A MEMBER OF THE ARIZONA STATE RETIREMENT SYSTEM MAY ELECT TO HAVE THE CASH VALUE OF THOSE PAYMENTS FOR ACCUMULATED SICK LEAVE INCLUDED IN THE MEMBER'S AVERAGE MONTHLY COMPENSATION PURSUANT TO CHAPTER 5, ARTICLE 2 OF THIS TITLE.
E. F. The provisions of SUBSECTIONS A THROUGH D, G AND H OF
this section apply to an officer or employee of the state or a county who is eligible
to participate in the Arizona state retirement system as provided in chapter 5, article 2
of this title, in the public safety personnel retirement system as provided in chapter 5,
article 4 of this title, in the corrections officer retirement plan as provided in
chapter 5, article 6 of this title or in an optional retirement program established by
the Arizona board of regents pursuant to section 15-1628 and to an officer or employee of
a university under the jurisdiction of the Arizona board of regents who participates in a
federal retirement system, except that this section does not apply to a participant in a
federal retirement system if the participant receives any sick leave payment from the
federal government.
F. G. The provisions of this section shall apply only to officers or
employees of the state or a county whose compensation regulations provide for a
forfeiture of sick leave on retirement.
G. H. For the purposes of this section, "hourly rate" means an officer's
or employee's hourly salary on retirement, excluding overtime pay and pay for unused
annual leave.
Sec. 2. Title 38, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 38-618, to read:
38-618. Retirement compensation in lieu of payments for annual leave
IN LIEU OF RECEIVING A PAYMENT FOR ACCUMULATED ANNUAL LEAVE ON RETIREMENT, AN OFFICER OR EMPLOYEE OF THIS STATE WHO IS A MEMBER OF THE ARIZONA STATE RETIREMENT SYSTEM MAY ELECT TO HAVE THE CASH VALUE OF SUCH A PAYMENT INCLUDED IN THE MEMBER'S AVERAGE MONTHLY COMPENSATION PURSUANT TO CHAPTER 5, ARTICLE 2 OF THIS TITLE.
Sec. 3. Section 38-711, Arizona Revised Statutes, is amended to read:
38-711. Definitions
In this article, unless the context otherwise requires:
1. "Active member" means a member as defined in paragraph 22, subdivision (b) of this section who satisfies the eligibility criteria prescribed in section 38-727 and who either is currently making member contributions as prescribed in section 38-736 or is receiving credited service under article 2.1 of this chapter.
2. "Actuarial equivalent" means equality in value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest rate assumptions approved from time to time by the board.
3. "ASRS" means the Arizona state retirement system established by this article.
4. "Assets" means the resources of ASRS including all cash, investments or securities.
5. "Average monthly compensation":
(a) Means:
(a) (i) For a member whose membership in ASRS commenced before January 1, 1984
and who left the member's contributions on deposit or reinstated forfeited credited
service pursuant to section 38-742 for a period of employment that commenced before
January 1, 1984, the monthly average of compensation on which contributions were remitted
during a period of sixty consecutive months during which the member receives the highest
compensation within the last one hundred twenty months of credited service. Any month
for which no contributions are reported to ASRS or that falls within a period of nonpaid
or partially paid leave of absence or sabbatical leave shall be excluded from the
computation. The sixty consecutive months may entirely precede, may be both before and
after or may be completely after any excluded months. If the member was employed for
less than sixty consecutive months, the average monthly compensation is based on the
total consecutive months worked.
(b) (ii) Effective July 1, 1985, the monthly average of compensation on which
contributions were remitted during a period of thirty-six consecutive months during which
a member receives the highest compensation within the last one hundred twenty months of
credited service. Any month for which no contributions are reported to ASRS or that
falls within a period of nonpaid or partially paid leave of absence or sabbatical leave
shall be excluded from the computation. The thirty-six consecutive months may entirely
precede, may be both before and after or may be completely after any excluded months. If
the member was employed for less than thirty-six consecutive months, the average monthly
compensation shall be based on the total consecutive months worked. This subdivision
applies only to members whose membership in ASRS was effective after December 31, 1983 or
who agree in writing as a binding condition of eligibility for being granted the benefit
advantages available under this subdivision to have their benefit computed on the basis
of the definition of compensation.
(b) INCLUDES THE CASH VALUE OF ACCUMULATED SICK LEAVE PURSUANT TO SECTION 38-615 AND THE CASH VALUE OF ACCUMULATED ANNUAL LEAVE PURSUANT TO SECTION 38-618.
6. "Board" means the ASRS board established in section 38-713.
7. "Compensation" means the gross amount paid to a member by an employer as salary
or wages, including amounts that are subject to deferred compensation or tax shelter
agreements, for services rendered to or for an employer, or that would have been paid to
the member except for the member's election or a legal requirement that all or part of
the gross amount be used for other purposes, but does not include amounts paid in excess
of compensation limits established in section 38-746. Compensation includes amounts paid
as salary or wages to a member by a second employer. Compensation, as provided in
paragraph 5, subdivision (b) (a), ITEM (ii) of this section, does
not include:
(a) Lump sum payments, on termination of employment, for accumulated vacation or annual leave, sick leave, compensatory time or any other form of termination pay whether the payments are made in one payment or by installments over a period of time.
(b) Damages, costs, attorney fees, interest or other penalties paid pursuant to a court order or a compromise settlement or agreement to satisfy a grievance or claim even though the amount of the payment is based in whole or in part on previous salary or wage levels, except that, if the court order or compromise settlement or agreement directs salary or wages to be paid for a specific period of time, the payment is compensation for that specific period of time. If the amount directed to be paid is less than the actual salary or wages that would have been paid for the period if service had been performed, the contributions for the period shall be based on the amount of compensation that would have been paid if the service had been performed.
(c) Payment, at the member's option, in lieu of fringe benefits that are normally paid for or provided by the employer.
(d) Merit awards pursuant to section 38-613 and performance bonuses paid to assistant attorneys general pursuant to section 41-192.
8. "Contingent annuitant" means the person named by a member to receive retirement income payable following a member's death after retirement as provided in section 38-760.
9. "Credited service" means, subject to section 38-739, the number of years standing to the member's credit on the books of ASRS during which the member made the required contributions.
10. "Early retirement" means retirement before a member's normal retirement date after five years of total credited service and attainment of age fifty.
11. "Effective date" means July 1, 1970, except with respect to employers and members whose contributions to ASRS commence thereafter, the effective date of their membership in ASRS is as specified in the applicable joinder agreement.
12. "Employer" means:
(a) This state.
(b) Participating political subdivisions.
13. "Employer contributions" means all amounts paid into ASRS by an employer on behalf of a member.
14. "Fiscal year" means the period from July 1 of any year to June 30 of the following year.
15. "Inactive member" means a member who previously made contributions to ASRS and who satisfies each of the following:
(a) Has not retired.
(b) Is not eligible for active membership in ASRS.
(c) Is not currently making contributions to ASRS.
(d) Has not withdrawn contributions from ASRS.
16. "Interest" means the assumed actuarial investment earnings rate approved by the board.
17. "Internal revenue code" means the United States internal revenue code of 1986, as amended.
18. "Investment management" means the persons, companies, banks, insurance company investment funds, mutual fund companies, management or any combinations of those entities that are appointed by ASRS and that have responsibility and authority for investment of the monies of ASRS.
19. "Late retirement" means retirement after normal retirement.
20. "Leave of absence" means any unpaid leave authorized by the employer, including leaves authorized for sickness or disability or to pursue education or training.
21. "Life annuity" means equal monthly installments payable during the member's lifetime after retirement.
22. "Member":
(a) Means any employee of an employer on the effective date.
(b) Means all employees of an employer who are eligible for membership pursuant to section 38-727 and who are engaged to work at least twenty weeks in each fiscal year and at least twenty hours each week.
(c) Means any person receiving a benefit under ASRS.
(d) Does not include any employee of an employer who is otherwise eligible pursuant to this article and who begins service in a limited appointment for not more than eighteen months on or after July 1, 1979. If the employment exceeds eighteen months, the employee shall be covered by ASRS as of the beginning of the nineteenth month of employment. In order to be excluded under this subdivision, classifications of employees designated by employers as limited appointments must be approved by the director.
23. "Member contributions" means all amounts paid to ASRS by a member.
24. "Normal costs" means costs of ASRS as computed under the projected unit credit method of actuarial computation that would have arisen if the benefits in effect at the time of the computation had always been in effect from the time of earliest eligibility of the current members.
25. "Normal retirement date" means the earliest of the following:
(a) A member's sixty-fifth birthday.
(b) A member's sixty-second birthday and completion of at least ten years of credited service.
(c) The first day that the sum of a member's age and years of total credited service equals eighty.
26. "Political subdivision" means any political subdivision of this state.
27. "Retired member" means a member who is receiving retirement benefits pursuant to this article.
28. "Service year" means fiscal year, except that:
(a) If the normal work year required of a member is less than the full fiscal year but is for a period of at least nine months, the service year is the normal work year.
(b) For a salaried member employed on a contract basis under one contract, or two or more consecutive contracts, for a total period of at least nine months, the service year is the total period of the contract or consecutive contracts.
(c) In determining average monthly compensation pursuant to paragraph 5 of this section, the service year is considered to be twelve months of compensation.
29. "State" means this state, including any department, office, board, commission, agency, institution or other instrumentality of this state.
30. "Vested" means that a member is eligible to receive a future retirement benefit.