ARIZONA STATE SENATE
Phoenix, Arizona
PSPRS; deferred retirement;
twenty years
Decreases the minimum years of
credited service for Public Safety Personnel Retirement System (PSPRS) members
who wish to participate in the deferred retirement option plan (DROP) from 25
to 20 years.
Deferred retirement programs
enable participants to accumulate a substantial lump sum payment upon
termination of employment. To receive this payment a participant, instead of
taking retirement, places his or her monthly pension payment into a DROP
account that also earns or is credited with a set interest rate while the
participant continues working. In exchange, the participant ceases to accrue credited
years of service or benefit increases based on salary raises during this period
of time. Upon termination of employment, the participant starts receiving
monthly pension payments along with the lump sum payment.
For public safety employees,
eligibility for normal retirement occurs after 20 years of service. However, as
of July 1, 2001, PSPRS employees may voluntarily participate in a DROP only if
they have completed 25 years of credited service. This bill matches the minimum
number of years of credited service required for participation in DROP with the
number of years of service required for normal retirement eligibility.
The fiscal impact to the
state is $200,000. The fiscal impact to the general fund is as of yet
undetermined.
1. Decreases the minimum years of credited service required of PSPRS members to participate in DROP from 25 to 20 years.
2. Provides for a general effective date.
Prepared
by Senate Staff
January
18, 2001