Bill Text: AZ HB2017 | 2014 | Fifty-first Legislature 2nd Regular | Engrossed
Bill Title: ASRS; defined contribution plan
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2014-02-19 - Referred to Senate FIN Committee [HB2017 Detail]
Download: Arizona-2014-HB2017-Engrossed.html
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House Engrossed |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HOUSE BILL 2017 |
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AN ACT
Amending sections 38‑728 and 38‑956, Arizona Revised Statutes; relating to the Arizona state retirement system.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-728, Arizona Revised Statutes, is amended to read:
38-728. Eligibility determinations; employee enrollment
A. For an employee hired on or after the effective date of this section September 13, 2013, if an employer disagrees with a written determination made by the state social security section 218 administrator of the employee's inclusion under agreements providing for the employee's coverage under the federal old age and survivors insurance system or the application or use of that written determination by ASRS for ASRS membership, the employer shall enroll the employee pursuant to section 38‑956 in the plan established by ASRS pursuant to section 38‑955 during the social security administration or ASRS administrative appeals process. If there is a determination of the employee's eligibility that is final and is not appealable and the employee is determined:
1. To be eligible for ASRS, the employer shall enroll the employee in ASRS and section 38‑738 applies, and the employer shall discontinue the employee's participation in the plan established by ASRS pursuant to section 38‑955.
2. To be not eligible for ASRS, the employee shall continue participation in the plan established by ASRS pursuant to section 38‑955, unless the employee has entered into an agreement with the employer that requires participation in an alternative retirement plan or for other compensation provided in lieu of retirement benefits and that agreement is executed within two years thirty days of the date that the employee first commenced participation in the plan or the effective date of this amendment to this section, whichever is later, and is irrevocable for the remainder of the employee's employment with the employer.
3. To be not eligible for ASRS and the employer elects not to provide coverage under section 38‑956, subsection B, the retired employee's participation in the plan established by ASRS pursuant to section 38‑955 shall be discontinued.
B. For an employee who is hired on or after the effective date of this section September 13, 2013, if an employer disagrees with a written determination made by the state social security section 218 administrator of the employee's inclusion under agreements providing for the employee's coverage under the federal old age and survivors insurance system or the application or use of that written determination by ASRS for ASRS membership and the employee is enrolled in ASRS, the following shall occur:
1. The employee's participation in ASRS shall be suspended, additional contributions shall not be collected or permitted and service credit shall not be applied during the social security administration or ASRS administrative appeals process.
2. The employee shall be enrolled pursuant to section 38‑956 in the plan established by ASRS pursuant to section 38‑955.
3. If there is a determination of the employee's eligibility that is final and is not appealable and the employee is determined eligible for ASRS, the employee's suspension from participation in ASRS shall cease and section 38‑738 applies, and the employer shall discontinue the employee's participation in the plan established by ASRS pursuant to section 38‑955.
4. If there is a determination of the employee's eligibility that is final and is not appealable and the employee is determined ineligible for ASRS, the employee shall continue participation pursuant to section 38‑956 in the plan established by ASRS pursuant to section 38‑955, except:
(a) If the employer elects not to provide coverage under section 38‑956, subsection B, a retired employee's participation in the plan established by ASRS pursuant to section 38‑955 shall be discontinued.
(b) If the employee has entered into an agreement with the employer that requires participation in an alternative retirement plan or for other compensation provided in lieu of retirement benefits and that agreement was executed within two years thirty days of the date that the employee first commenced participation in the plan or the effective date of this amendment to this section, whichever is later, and is irrevocable for the remainder of the employee's employment with the employer, the employee's participation in the plan established by ASRS pursuant to section 38‑955 shall be discontinued.
C. If an employee's participation in the plan established by ASRS pursuant to section 38‑955 is discontinued pursuant to this section, no additional employee or employer contributions shall be made to the plan and the employee is entitled to the employee's retirement savings account and earnings on the account as permitted under the terms of the plan.
D. An employer is not required to formally adopt the plan established by ASRS pursuant to section 38‑955.
E. This section only applies to an employer that has entered into an agreement approved by the board under section 38‑729.
Sec. 2. Section 38-956, Arizona Revised Statutes, is amended to read:
38-956. Defined contribution plan; eligibility; contribution; vesting
A. Except as provided in subsection B of this section, an employee of this state or a political subdivision of this state shall be enrolled in the plan established by ASRS pursuant to section 38‑955 if all of the following apply:
1. The employee is hired on or after the effective date of this section September 13, 2013.
2. The employee is not eligible for the Arizona state retirement system pursuant to article 2 of this chapter because the employee is not included in agreements providing for the employee's coverage under the federal old age and survivors insurance system because the employee performs services in a class of positions that was covered by a retirement system on the date the agreement providing for the coverage under the federal old age and survivors insurance system was made applicable to the coverage group in which the employee is included.
3. The employee is not eligible for a statewide retirement system or plan pursuant to article 3, 4 or 6 of this chapter because the employee does not meet the definition of a member in those systems or plans.
4. The employee is engaged to work at least twenty weeks in each fiscal year and at least twenty hours each week.
B. A retired member of a statewide retirement system or plan pursuant to article 3, 4, or 6 of this chapter who meets the requirements of subsection A of this section may be enrolled in the plan established by ASRS pursuant to section 38‑955 at the employer's option. The option is irrevocable for the remainder of the employee's employment with the employer, and an agreement must be executed within thirty days of the employee's employment by the employer or the effective date of this amendment to this section, whichever is later.
C. Each employee shall contribute one‑half of the total ASRS normal cost plus one and one‑half per cent of the employee's compensation, as defined in section 38‑711, by salary reduction that shall be deposited in the employee's retirement savings account. Each employer shall contribute one‑half of the total ASRS normal cost plus one and one‑half per cent of the employee's compensation, as defined in section 38‑711, that shall be deposited in the employee's retirement savings account. Employee and employer contributions and earnings on those contributions are immediately vested.
D. Each employee and employer shall also contribute to the long-term disability program pursuant to article 2.1 of this chapter. An employee may receive benefits pursuant to article 2.1 of this chapter if the employee becomes totally disabled.
E. Notwithstanding the requirements of subsection A of this section, an employee shall not be enrolled under this section if the employee has entered into an agreement with the employer that requires participation in an alternative retirement plan or for other compensation provided in lieu of retirement benefits. The agreement shall specify that it is irrevocable for the remainder of the employee's employment with the employer and shall be executed within two years of initial eligibility under this section thirty days of the employee's employment by the employer or the effective date of this amendment to this section, whichever is later, and before any appeal described in section 38‑728.
