HB2007

House of Representatives

retirement; legislative employees option; transfers

Sponsors: Representative Kyle

dpa	Committee on Government Operations
x	Caucus and COW
	As Passed the House

HB 2007 allows a legislative employee who is a member of the Arizona State Retirement System (ASRS) to transfer all monies accrued by the member to a tax-deferred annuity and compensation program.

History

SB 1238, Ch. 329, Sec. 1, from the Forty-fourth Legislature, First Regular Session, added a third retirement option for ASRS members, which was classified as a 457 deferred compensation plan. Because of the tax status of a 457, members were unable to transfer the money already accrued by their current plan to the new option. The program is now classified as a 401(a) plan, which allows the transfer to be completed because of its tax-qualified status. This bill provides for the transfer of the member’s account.

Provisions

· Allows a legislative employee to request a transfer of their accrued liability as calculated by the fund to a tax-deferred annuity and compensation plan.

· States that a member who elects to participate in the tax-deferred annuity and compensation program, but does not request a transfer of their account (from ASRS to the tax-deferred annuity and compensation program), can collect the benefits accrued from ASRS upon retirement, in addition to the money from the tax-deferred annuity and compensation program. A member who elects to participate in the tax-deferred annuity and compensation program and transfers their ASRS account, waives the benefits of ASRS and does not receive benefits from ASRS upon retirement.

HB 2007 was amended in the Government Operations committee as follows:

· Allows term-limited elected officials to transfer their funds from EORP to the tax-deferred annuity and compensation program.

· Allows term-limited elected officials, exempt state officers, and legislative employees to contribute up to the IRS tax limit of 25% of their monthly compensation, or $30,000 annually.

· Provides a delayed effective date for the IRS contribution limit of June 30, 2001.

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· 44th Legislature Analyst Initials _______