Assigned to FIN                                                                                                            FOR COMMITTEE

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FACT SHEET FOR H.B. 2111

 

state retirement service credits; transfers

 

Purpose

 

Allows both active and inactive members of the four state retirement systems, the Arizona State Retirement System, the Elected Officials’ Retirement Plan, the Public Safety Personnel Retirement System and the Corrections Officer Retirement Plan, to transfer retirement service credits from one system to a former system. 

 

Background

 

Current law only allows a contributing member of a state retirement system to transfer service credits from one system to the member’s current system.  This measure increases the pool of candidates that are able to transfer retirement service credits by allowing both inactive and active members, not only contributing members, to transfer credit.  Additionally, this measure also allows a member to transfer credit into either their current or former retirement plan. 

 

To enact the credit transfer, the member of the retirement system initiates the transfer with a written application to the governing board of the retirement system to which the member is contributing.  The board or fund manager of the retirement system from which the service credits are being taken and the governing board of the system to which the service credits will be transferred must be in agreement with the terms of the transfer.  Neither of the retirement systems can incur any unfunded liabilities as a result of the transaction.

 

According to Joint Legislative Budget Committee staff, there are no actuarial costs associated with this measure.  However, there may be administrative costs to the individual retirement systems to process the potential additional transfers.

 

Provisions

 

1.      Allows active and inactive members to transfer retirement service credits from one system to a former system, under prescribed conditions in statute.

 

2.      Defines “active member” as a member who has met eligibility requirements of a state retirement system and who is currently making contributions or receiving credited service from the system.

 

3.      Defines “inactive member” as a member of ASRS who has previously contributed to the system and meets the following criteria:

 

·        Is not retired;

·        Is not eligible for active membership in ASRS;

·        Is not currently contributing to ASRS; and

·        Has not withdrawn contributions from ASRS.

 

4.      Provides for a general effective date.

 

House Action

 

RGO                1/16/01            DP       9-0-0-1-0

APPROP         2/19/01            DP       13-0-0-3-0

3rd Read           2/27/01                        60-0-0-0

 

 

Prepared by Senate Staff

March 8, 2001