Assigned to FIN                                                                                                                                     AS ENACTED

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FINAL REVISED

FACT SHEET FOR S.B. 1151

 

PSPRS; deferred retirement; twenty years

 

Purpose

 

            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.

 

Background

 

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 general fund is $87,300 in FY 2004.  The fiscal impact to other funds is $82,900.

 

Provisions

 

1.      Decreases the minimum years of credited service required of PSPRS members to participate in DROP from 25 to 20 years.

           

2.      Provides, beginning July 1, 2001, an effective date for the section outlining the requirements for eligibility and participation in the deferred retirement option plan (DROP) of the Public Safety Personnel Retirement System (PSPRS).

 

3.      Makes a technical change.

 

4.      Contains an effective date beginning July 1, 2004.

 

 

Amendments Adopted by the House of Representatives

 

1.      Provides, beginning July 1, 2001, an effective date for the section outlining the requirements for eligibility and participation in the deferred retirement option plan (DROP) of the Public Safety Personnel Retirement System (PSPRS).

 

2.      Makes a technical change.

 

House Action                                                               Senate Action

 

RGO                3/27/01     DPA     7-0-0-3-0              FIN                  1/22/01     DP     5-2-1-0

APPROP         4/18/01     DP        16-0-0-0                3rd Read           2/7/01                 24-6-0-0

3rd Read                                          58-0-2-0               Final Read        5/1/01                 22-7-1-0

 

 

Signed by Governor 5/7/01

Chapter 349

 

Prepared by Senate Staff

May 30, 2001