House of Representatives

SB 1149

PSPRS; EORP; tax equity; benefits

Sponsors: Senators Bundgaard, Cummiskey, Valadez

DP	Committee on Retirement and Government Operations
x	Committee on Appropriations
	Caucus and COW
	As Passed the House

SB 1149 permanently increases Public Safety Personnel Retirement System (PSPRS) and Elected Official Retirement Plan (EORP) members’ base benefit by 2 per cent, if the member retires after November 1, 2000 but before November 1, 2001.

History

In 1989, the U.S. Supreme Court ruled the taxation difference between state and federal retirement systems discriminatory (Davis v. Michigan). As a result, Arizona conformed its systems to the federal tax regulations. Arizona granted a 3 per cent tax equity benefit increase to offset the change in tax liability to those who had retired before 1989, except CORP members who received a 1.5 per cent increase.

Since that time, Arizona has extended tax equity benefit increases for all effected retirement members. All PSPRS members who retired before October 31, 1996 have received at least a 2 per cent increase, and other systems have varied.

Provisions

· Prescribes a permanent increase of 2 per cent of a PSPRS and EORP members’ base benefit, if the member retires after November 1, 2000 but before November 1, 2001.

· Specifies that the cost of the increase for PSPRS members is payable from the applicable employer cost of the PSPRS system.

· Specifies that the cost of the increase for EORP members is payable from the assets of EORP and shall be added to the unfunded liability of EORP.

· Establishes a repeal date of January 1, 2002.

SB 1149 passed the Retirement and Government Operations Committee unamended.

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45th Legislature

First Regular Session 2 April 17, 2001

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