ARIZONA STATE SENATE
Phoenix, Arizona
ASRS; retirees; graded
multiplier increase
Purpose
Retroactive to August 9,
2001, provides for a one-time permanent increase to current retired defined benefit
Arizona State Retirement System (ASRS) members.
Background
In 2001, the Legislature
established a graduated retirement formula multiplier for retirees (Laws 2001,
Chapter 380, section 6). Specifically,
this multiplier begins at 2.1 percent for members with less than 20 years of
service, and increases up to 2.3 percent for members with 30 or more years of
service. The graded multiplier was
enacted on a prospective basis for retirees who retired on or after August 9,
2001. Individuals who retired prior to
August 9, 2001, were not eligible for the graded multiplier. For these individuals, the normal retirement
multiplier was a flat 2.1 percent.
S.B. 1120, retroactive to
August 9, 2001, provides for a one-time permanent increase to current retired defined
benefit ASRS members.
According to ASRS, the cost
of this measure will be an increase of 26 basis points, which equates to a $33
million annual increase in both employer and employee contributions. Additionally, there will be a $255,000
implementation cost.
Provisions
1. Provides for a one-time permanent increase, using the same graduated multiplier, to current retired defined benefit ASRS members, as follows:
a)
2.38
percent if that member has 20 or more years of service but less than 25 years.
b)
4.76
percent if that member has 25 or more years of service but less than 30 years.
c)
9.52
percent if that member has 30 or more years of service.
2. Contains a retroactivity clause of August 9, 2001.
Prepared by Senate Staff
March 12, 2002