ASRS; federal conforming
changes
SB 1095 conforms Arizona State Retirement System (ASRS) statute to the changes in federal law due to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTERRA).
SB 1095 passed the Retirement and Government Operations Committee unamended. The Committee of the Whole amended SB 1095 to include effective dates, strike the amount appropriated from the ASRS administrative account, include effective dates and to strike the requirement that amounts directly transferred to ASRS from another plan be separately accounted for by ASRS.
The EGTERRA is also known as HR 1836. It specifically targets the Internal Revenue Code of 1986. Moreover, HR 1836 reduces the income tax rate for individuals and protects social security and Medicare. Because of EGTERRA, Arizona must adjust their retirement statute to account for the provisions in HR 1836.
· Increases the annual compensation limit that may be taken into account of each employee under ASRS to $200,000 and changes the effective date from July 1, 1996 to July 1, 2002.
· Changes the contribution limits to not exceed the lessor of $40,000 or 100% of compensation for the limitation year and specifies that the compensation limit does not apply to medical benefits after a member’s separation from service.
· Changes the maximum amount of benefit from $90,000 to $160,000, which will be paid in a straight life annuity.
· Permits direct rollovers from 403(b), 457 and individual retirement plans on a pre-tax basis to allow for the purchase of credited service.
· Requires ASRS to account for direct transfers and rollovers separately.
· Clarifies the definition of distributee includes a member’s spouse and specifies that the distributee must be someone who is the alternate payee under an acceptable domestic relations order.
· Clarifies that the definition for eligible retirement plan as any of the following that accepts a distributee’s eligible rollover distribution and includes in the definition an annuity contract and an eligible deferred compensation plan.
· Makes the return to work option permanent for ASRS by repealing Laws 2000, Chapter 132, Section 4.
· Appropriates $270,342 from the ASRS administration account in FY 2002-2003 to the ASRS for the administrative implementation of this act.
· Makes changes to the return to work and maximum retirement benefits statute apply retroactively to July 1, 2001, purchase of credited service in Section 3 and rollover distribution changes apply retroactively to January 1, 2002, and purchase of credited service in Section 4 and annual compensations changes apply retroactively to July 1, 2002.
· States this act is an emergency measure.
· Makes numerous technical and conforming changes.
SB 1095 adopted the Rules amendment in Committee of the Whole as
follows:
· Makes technical and conforming changes.
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45th Legislature
Second Regular Session 2 May
3, 2002
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