ARIZONA STATE SENATE
Phoenix, Arizona
Requires the recalculation
of the costs of redeemed active military service for certain members of the
Arizona State Retirement System (ASRS) and appropriates $50,000 from the ASRS
administration account in FY 2001-2002 to the ASRS to defray the cost of
performing the recalculations.
In 1986 and in 1992, the
Legislature allowed members of the ASRS to purchase previously forfeited
credited service by paying the fund the amount of the employer and employee
contributions plus interest (Laws 1986, Chapter 77; Laws 1992, Chapter 137),
even though, when these members left the system before retiring, they only received
the amount of the employee contribution plus interest. Members who had served in the military could
purchase the time spent in active service under the same provisions.
In 1997, the Legislature allowed those members who had purchased service a refund based on a new method of calculating previous service purchases that no longer included the employer contribution amount (Laws 1997, Chapter 280). However, active members could still not receive refunds until they terminated or retired. This new method of calculating the cost to purchase that time was similarly reduced for those purchasing military service, if the time was purchased after June 20, 1996, but no refunds were made to those who purchased military time prior to that date. S.B. 1257 remedies that situation by providing this group with the opportunity to collect a refund at the time retirement benefits are received.
There is no fiscal impact to
the state general fund associated with this measure. A fiscal note has been requested from Joint Legislative Budget
Committee staff.
1. Appropriates $50,000 from the ASRS administration account in FY 2001-2002 to the ASRS for the purpose of defraying the cost of recalculating benefits for retired members who redeemed active military service before July 20, 1996.
2. Requires the ASRS to recalculate the cost of credited service retroactive to the date the credited service was credited, when an active member, retired member or beneficiary of a deceased retired member received credited service for active military service before July 20, 1996.
3. Requires the ASRS to determine the amount a member, retired member or beneficiary of a deceased retired member would have paid for credited service for active military service if that time was purchased on or after July 20, 1996, and further requires the ASRS to subtract that figure from the amount the member actually paid for the service.
4. Requires the ASRS to refund any positive difference to the retired member or the beneficiary of the deceased retired member immediately and to the active member at the time retirement benefits are paid.
5. Requires the ASRS to pay interest on the refund amounts compounded annually at an interest rate approved by the ASRS Board.
6. Enables an active member who is entitled to a refund to use the refund to purchase additional active military service.
7. Requires the ASRS to notify members who might be eligible for a refund.
8. Provides for a general effective date.
Prepared by Senate Staff
February 1, 2001