Bill Text: AZ HB2035 | 2018 | Fifty-third Legislature 2nd Regular | Chaptered
Bill Title: Deferred compensation plans; governing committee
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-03-29 - Chapter 90 [HB2035 Detail]
Download: Arizona-2018-HB2035-Chaptered.html
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House Engrossed |
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State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018
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CHAPTER 90
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HOUSE BILL 2035 |
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AN ACT
Amending sections 38-715, 38‑871 and 38‑872, Arizona Revised Statutes; relating to deferred compensation plans.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-715, Arizona Revised Statutes, is amended to read:
38-715. Director; powers and duties
A. The board shall appoint a director. The director shall serve at the pleasure of the board.
B. The director shall appoint a deputy director and assistant directors with the approval of the board.
C. The director, under the supervision of the board, shall:
1. Administer this article.
2. Be responsible for the recruitment, hiring and day‑to‑day management of employees.
3. Prescribe procedures to be followed by members and their beneficiaries in filing applications for benefits.
4. Prescribe procedures to be followed by employers for remitting data and monies to ASRS and for receiving data and monies from ASRS.
5. Be responsible for:
(a) Income and the collection of income and the accuracy of all expenditures.
(b) Maintaining books and maintaining and processing records of ASRS.
(c) Providing continuing education programs for the board to keep the board members informed of current issues and information needed to carry out their duties.
6. Perform additional powers and duties as may be prescribed by the board and delegated to the director.
D. The director, under the supervision and approval of the board, may:
1. Delegate duties and responsibilities to such state departments as the director deems feasible and desirable to administer this article.
2. Appoint a custodian for the safekeeping of all investments owned by ASRS and register stocks, bonds and other investments in the name of a nominee.
3. Establish one or more reserve holding accounts, into which the board shall close periodically the account balances of inactive accounts. If any person files a claim and furnishes proof of ownership of any amounts in any inactive account, the claim shall be paid from the reserve holding account on the same basis as if no action had been taken under this paragraph. Interest and supplemental credits shall be allocated to each reserve holding account on June 30 of each year, as determined by the board. For the purposes of this paragraph, "inactive account" means an account to which contributions have not been paid for six months or more.
4. Make retirement under this article effective retroactively to on or after the day following the date employment is terminated if the member was unable to apply before the retroactive effective date through no fault of the member.
E. For current or prospective employees of ASRS, the director, under the supervision of the board, may:
1. Conduct criminal records checks. The director may require a current or prospective employee to submit a full set of fingerprints to the department of public safety for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.
2. Conduct credit checks for accounting, investment and other finance‑related positions. The director shall establish a policy for conducting credit checks on a current employee that includes the method for determining when a credit check may be conducted, retaining records relating to the reason for the credit check and notifying an employee of the credit check and the result of the credit check.
F. The director, under supervision of the governing committee for tax deferred annuity and deferred compensation plans, may hire and supervise employees and obtain services the director deems necessary to administer article 5 of this chapter. The tax deferred annuity and deferred compensation programs plans established pursuant to article 5 of this chapter shall bear the costs for these employees and services.
G. The director and all persons employed by the director are subject to section 38‑611 and title 41, chapter 4, article 4.
H. In consultation with the director of the department of administration, the board may enter into employment agreements and establish the terms of those agreements with persons holding any of the following ASRS positions:
1. Director.
2. Deputy director.
3. Chief investment officer.
4. Fiduciary or investment counsel.
Sec. 2. Heading change
The article heading of title 38, chapter 5, article 5, Arizona Revised Statutes, is changed from "TAX DEFERRED ANNUITY AND DEFERRED COMPENSATION PROGRAMS" to "DEFERRED COMPENSATION PLANS".
Sec. 3. Section 38-871, Arizona Revised Statutes, is amended to read:
38-871. Deferred compensation governing committee; members; powers and duties
A. A The governing committee for tax deferred annuity and deferred compensation plans is established that consists of the following seven members:
1. Three employees of the state members who are appointed by the governor and who are either of the following:
(a) Individuals who have an account balance in a deferred compensation plan that is overseen by the governing committee. These individuals may be contributing or noncontributing participants in a deferred compensation plan and may be retired or nonretired.
(b) Members of the public who are not deferred compensation plan participants and who have at least ten years of relevant experience in either finance, investment management, pension plans or retirement plans.
2. The director of the department of administration or the director's designee.
3. The superintendent of financial institutions or the superintendent's designee.
4. The director of insurance or the director's designee.
5. The director of the Arizona state retirement system or the director's designee.
B. Governing committee members are subject to the conflict of interest provisions of title 38, chapter 3, article 8.
B. C. The governing committee may:
1. Investigate and approve tax deferred compensation and annuity programs which plans that give state employees of the state income tax benefits authorized by title 26, United States Code Annotated.
2. In carrying out the purposes of this article, enter into agreements with life insurance companies authorized to do business in this state and with bank trustees or custodians and investment counseling firms registered with the securities exchange commission with demonstrable expertise in the areas encompassed by this article.
3. Adopt rules.
C. D. The governing committee shall:
1. Arrange for consolidated billing and efficient administrative services in order so that any such plans approved shall operate without cost or contribution from the this state except for the incidental expense of administering the expenses of statutorily required administrative duties and the administration of payroll salary deduction or reduction and remittance thereof of the monies to the administrator, trustee or custodian of the plan or plans.
2. Meet monthly quarterly or more frequently as the chairman of the committee deems necessary.
3. Arrange for an annual financial audit of the programs and a performance audit of the programs at least once every three years plans.
4. Adopt rules governing the solicitation of employees by persons offering tax deferred compensation or annuity plans to such employees.
4. Arrange for a performance review of the plans or participation in benchmarking surveys or studies at least every five years.
Sec. 4. Section 38-872, Arizona Revised Statutes, is amended to read:
38-872. Voluntary participation; authorization
A. State employees may participate in tax deferred annuity and deferred compensation programs plans established pursuant to the provisions of section 38‑871.
B. Participants in such the plans shall authorize their employers in writing to make reductions or deductions in their remuneration as provided in an executed deferred compensation agreement.
APPROVED BY THE GOVERNOR MARCH 29, 2018.
FILED IN THE OFFICE OF THE SECRETARY OF STATE MARCH 29, 2018.
