ARIZONA STATE SENATE
Phoenix, Arizona
Purpose
Requires Arizona State Retirement System (ASRS) members to obtain their spouse's consent when naming or changing a beneficiary or contingent annuitant if that beneficiary or contingent annuitant is not the member's spouse.
Background
A Abeneficiary@ is a person designated to
receive the income of a member’s benefits upon the member’s death, although the
amount and length of this benefit varies.
A Acontingent annuitant@ is a type of beneficiary
and refers to a person who will continue to receive the retirement income of a
member even after that member dies.
Prior to 1984, a member of
any pension plan could opt to keep that member=s spouse from receiving
survivor benefits without the affected spouse=s knowledge. Many surviving spouses were surprised to
find that they had no pension benefits.
The federal government legislated two remedies: the Employee Retirement
Income Security Act of 1974 and the Retirement Equity Act of 1984. These two responsive pieces of legislation
affected only private pension plans. A
1994 survey of state pension plans conducted by the American Association of
Retired Persons found that Arizona, along with three other states (Utah,
Massachusetts and Pennsylvania), does not require spousal acknowledgment,
although it includes a space for a spouse=s signature. A signature or witnessing form constitutes
spousal notice of election for Arizona=s system.
According to ASRS, there is no actuarial fiscal impact associated with S.B. 1004; however, ASRS anticipates there will be an administrative cost of $113,846.
Provisions
1. Requires a member whose contingent annuitant is the member's spouse to obtain the spouse's consent before the member names a new contingent annuitant or rescinds a joint survivor annuity.
2. Requires a member, retiring after August 9, 2001, whose contingent annuitant is the member's spouse to obtain the spouse’s consent before the member rescinds the election of a period certain and life annuity or re-elects a period certain and life annuity. This provision applies to members retiring after August 9, 2001.
3. Requires a member=s retirement application to contain the signature of a spouse, if any, to acknowledge that spouse=s consent of the retirement option elected by the member, with the following exceptions:
(a) The member is unmarried.
(b) The current spouse has no identifiable community property interest in member=s benefits.
(c) The member does not reasonably know the location of current spouse.
(d) The member=s current spouse is unable to execute acknowledgment because of an incapacitating mental or physical condition.
4. Requires a member to affirm in writing and under penalty of perjury that one of the above exceptions applies to the member.
5. Requires a member to obtain the consent of the member's current spouse before the member names a beneficiary other than the member's current spouse or before the member changes the beneficiary if the spouse is the current beneficiary.
6. Applies the provisions of this act to those members who name or change their beneficiary or contingent annuitant after August 1, 2002.
7. Makes technical changes.
8. Provides for a general effective date.
Prepared by Senate Staff
January 8, 2002