ARIZONA STATE SENATE
Phoenix, Arizona
community colleges; optional
retirement; contributions
Makes administrative changes
to the optional retirement plans established by community college district
boards.
In 1995, the Arizona State
Legislature authorized an optional retirement program (ORP) for community
college employees similar to the existing program for state university
employees. ORP was designed to be optional for each community college district
so that individual community college boards could decide whether to offer ORPs
within their district. At this time,
only Yavapai community colleges offer an ORP.
Currently, the community
college district board must make contributions on behalf of each ORP
participant in an amount equal to the employer contribution required by the
Arizona State Retirement System (ASRS). However, the ASRS contribution rate,
which is used by ORP, is comparatively low and, additionally, does not allow
for benefit increases. S.B. 1155 would
allow current employees to contribute at higher levels. The community college board hopes that such
increases would enhance employee retention and attraction. Additionally, S.B. 1155 allows employees who
had not previously opted to participate in ORP another opportunity to enter
ORP.
According to the community
college districts, there is no impact to the state general fund. However, ASRS
administrators suggest that there may be some fiscal impact to ASRS due to the
administrative cost to effect the transfers. Staff estimates there is no impact
to the state general fund provided increased contributions are not allocated
for state general fund appropriation.
1. Limits the community college district boards’ maximum contribution amount to not more than seven percent of the participant’s compensation.
2. Specifies that the employee contribution amount prescribed for participating employers in ASRS is the minimum amount the community college district boards may contribute to an ORP.
3. Adds a third time frame between October 1, 2001 and December 31, 2001 during which an eligible member of ASRS may elect to participate in an ORP
4. Makes technical changes.
5. Provides for a general effective date.
Prepared by Senate Staff
January 25, 2001