Arizona 54th Legislature - 2nd Regular Session Status: Passed House 1 R cosponsors

HB 2157 — PSPRS; benefit computation; return-to-work

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    Introduced
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  3. 3
    Passed House
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 54th Legislature - 2nd Regular Session. It reached “Passed House” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Bill Text

What changed in the latest version

816 added · 234 removed

Plain-language change summary

The legislative amendments to HB 2157 have primarily involved changes to the sections concerning pension payments within the public safety personnel retirement system in Arizona. The updated bill clarifies how the monthly pension will be calculated for members who joined before January 1, 2012, and explicitly states that pension payments cannot be made in advance. This matters because it ensures that retired members understand exactly when and how their pension payments will begin and end, which provides clearer financial planning for those in the retirement system.

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Fifty-fourth Legislature Second Regular Session COMMITTEE ON GOVERNMENT HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B.
HB2157 - 542R - H Ver     House Engrossed         State of Arizona House of Representatives Fifty-fourth Legislature Second Regular Session       HOUSE BILL 2157       AN ACT   Amending sections 38‑808, 38‑842, 38-844, 38‑849 and 38-890, Arizona Revised Statutes;
2157 (Reference to printed bill) Page 1, between lines 1 and 2, insert:
relating to the public safety personnel retirement system.
"Section 1.
    (TEXT OF BILL BEGINS ON NEXT PAGE)   Be it enacted by the Legislature of the State of Arizona:
Section 38-808, Arizona Revised Statutes, is amended to read:
Section 1.  Section 38-808, Arizona Revised Statutes, is amended to read:
38-808.
START_STATUTE38-808.  Pension payments;
Pension payments;
termination A.
termination A.  Plan retirement commences on the first day of the month following the date of the member's retirement or death.  Pension payments shall be received on or about the first day of the month next following the member's plan retirement.  The last pension payment shall be made as of the last day of the month in which the death of the retired member or the surviving spouse or minor children occurs.  Pension payments shall not be made in advance.
Plan retirement commences on the first day of the month following the date of the member's retirement or death.
B.  For a member who becomes a member of the plan before January 1, 2012, the monthly pension shall be equal to one‑twelfth of the following amount:
Pension payments shall be received on or about the first day of the month next following the member's plan retirement.
1.  Four per cent percent of the member's average yearly salary multiplied by the member's credited service, not to exceed eighty per cent percent of the member's average yearly salary.  This amount shall be reduced if the member takes early retirement pursuant to section 38‑805, subsection C.  The amount of reduction is three‑twelfths of one per cent percent for each month the retired member's early retirement age precedes the member's normal retirement age pursuant to section 38‑805, subsection A, except that the reduction shall not be more than thirty per cent percent.
The last pension payment shall be made as of the last day of the month in which the death of the retired member or the surviving spouse or minor children occurs.
2.  A member who meets the requirements for a disability retirement pension shall receive a disability pension equal to four per cent percent of the member's average yearly salary multiplied by twenty years of credited service if the member has ten or more years of credited service, four per cent percent of the member's average yearly salary multiplied by ten years of credited service if the member has five or more years of credited service but fewer than ten years of credited service or four per cent percent of the member's average yearly salary multiplied by five years of credited service if the member has fewer than five years of credited service.
Pension payments shall not be made in advance.
C.  The monthly pension of a member who becomes a member of the plan on or after January 1, 2012 shall be equal to one‑twelfth of the following amount:
B.
1.  Three per cent percent of the member's average yearly salary multiplied by the member's credited service, not to exceed seventy‑five per cent percent of the member's average yearly salary.
For a member who becomes a member of the plan before January 1, 2012, the monthly pension shall be equal to one-twelfth of the following amount:
2.  A member who meets the requirements for a disability retirement pension shall receive a disability pension equal to three per cent percent of the member's average yearly salary multiplied by twenty‑five years of credited service if the member has ten or more years of credited service, three per cent percent of the member's average yearly salary multiplied by twelve and one‑half years of credited service if the member has five or more years of credited service but fewer than ten years of credited service or three per cent percent of the member's average yearly salary multiplied by 6.25 years of credited service if the member has fewer than five years of credited service.
1.
D.  The plan shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.
Four per cent PERCENT of the member's average yearly salary multiplied by the member's credited service, not to exceed eighty per cent PERCENT of the member's average yearly salary.
Notwithstanding any other provision of this plan, beginning January 1, 1987, payment of benefits to a member shall commence no not later than April 1 of the calendar year following the later of:
This amount shall be reduced if the member takes early retirement pursuant to section 38-805, subsection C.
1.  The calendar year in which the member attains seventy and one‑half seventy‑two years of age.
The amount of reduction is three-twelfths of one per cent PERCENT for each month the retired member's early retirement age precedes the member's normal retirement age pursuant to section 38-805, subsection A, except that the reduction shall not be more than thirty per cent PERCENT.
2.  The date the member terminates employment.
2.
E.  If all pension payments terminate before an amount equal to the member's accumulated contributions has been paid, the difference between the member's accumulated contributions and the aggregate amount of pension payments shall be paid to the person or persons and in such shares as designated by the retired member in writing and filed with the board.  If the designated person or persons do not survive the retired member, the difference shall be paid to the estate of the retired member.
A member who meets the requirements for a disability retirement pension shall receive a disability pension equal to four per cent PERCENT House Amendments to H.B.
END_STATUTE Sec. 2.  Section 38-842, Arizona Revised Statutes, is amended to read:
2157 of the member's average yearly salary multiplied by twenty years of credited service if the member has ten or more years of credited service, four per cent PERCENT of the member's average yearly salary multiplied by ten years of credited service if the member has five or more years of credited service but fewer than ten years of credited service or four per cent PERCENT of the member's average yearly salary multiplied by five years of credited service if the member has fewer than five years of credited service.
START_STATUTE38-842.  Definitions In this article, unless the context otherwise requires:
C.
1.  "Accidental disability" means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's job classification and that was incurred in the performance of the employee's duty.
The monthly pension of a member who becomes a member of the plan on or after January 1, 2012 shall be equal to one-twelfth of the following amount:
2.  "Accumulated contributions" means, for each member, the sum of the amount of the member's aggregate contributions made to the fund and the amount, if any, attributable to the employee's contributions before the member's effective date under another public retirement system, other than the federal social security act, and transferred to the fund minus the benefits paid to or on behalf of the member.
1.
3.  "Actuarial equivalent" means equality in present value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest assumptions adopted by the board.
Three per cent PERCENT of the member's average yearly salary multiplied by the member's credited service, not to exceed seventy-five per cent PERCENT of the member's average yearly salary.
4.  "Alternate payee" means the spouse or former spouse of a participant as designated in a domestic relations order.
2.
5.  "Alternate payee's portion" means benefits that are payable to an alternate payee pursuant to a plan approved domestic relations order.
A member who meets the requirements for a disability retirement pension shall receive a disability pension equal to three per cent PERCENT of the member's average yearly salary multiplied by twenty-five years of credited service if the member has ten or more years of credited service, three per cent PERCENT of the member's average yearly salary multiplied by twelve and one-half years of credited service if the member has five or more years of credited service but fewer than ten years of credited service or three per cent PERCENT of the member's average yearly salary multiplied by 6.25 years of credited service if the member has fewer than five years of credited service.
6.  "Annuitant" means a person who is receiving a benefit pursuant to section 38‑846.01.
D.
7.  "Average monthly benefit compensation" means the result obtained by dividing the total compensation paid to an employee during a considered period by the number of months, including fractional months, in which such compensation was received.  For an employee who becomes a member of the system:
The plan shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.
(a)  Before January 1, 2012, the considered period shall be the three consecutive years within the last twenty completed years of credited service that yield the highest average.  In the computation under this subdivision, a period of nonpaid or partially paid industrial leave shall be considered based on the compensation the employee would have received in the employee's job classification if the employee was not on industrial leave.
Notwithstanding any other provision of this plan, beginning January 1, 1987, payment of benefits to a member shall commence no NOT later than April 1 of the calendar year following the later of:
(b)  On or after January 1, 2012 and before July 1, 2017, the considered period is the five consecutive years within the last twenty completed years of credited service that yield the highest average.  In the computation under this paragraph subdivision, a period of nonpaid or partially paid industrial leave shall be considered based on the compensation the employee would have received in the employee's job classification if the employee was not on industrial leave.
1.
(c)  On or after July 1, 2017, the considered period is the five consecutive years within the last fifteen completed years of credited service that yield the highest average.  In the computation under this paragraph subdivision, a period of nonpaid or partially paid industrial leave shall be considered based on the compensation the employee would have received in the employee's job classification if the employee was not on industrial leave.
The calendar year in which the member attains seventy and one-half SEVENTY-TWO years of age.
8.  "Board" means the board of trustees of the system, who are the persons appointed to invest and operate the fund.
2.
9.  "Catastrophic disability" means a physical and not a psychological condition that the local board determines prevents the employee from totally and permanently engaging in any gainful employment and that results from a physical injury incurred in the performance of the employee's duty.
The date the member terminates employment.
10.  "Certified peace officer" means a peace officer certified by the Arizona peace officer standards and training board.
-2- House Amendments to H.B.
11.  "Claimant" means any member or beneficiary who files an application for benefits pursuant to this article.
2157 E.
12.  "Compensation" means, for the purpose of computing retirement benefits, base salary, overtime pay, shift differential pay, military differential wage pay, compensatory time used by an employee in lieu of overtime not otherwise paid by an employer and holiday pay paid to an employee by the employer for the employee's performance of services in an eligible group on a regular monthly, semimonthly or biweekly payroll basis and longevity pay paid to an employee at least every six months for which contributions are made to the system pursuant to section 38‑843, subsection D.  Compensation does not include, for the purpose of computing retirement benefits, payment for unused sick leave, payment in lieu of vacation, payment for unused compensatory time or payment for any fringe benefits.  In addition, compensation does not include, for the purpose of computing retirement benefits, payments made directly or indirectly by the employer to the employee for work performed for a third party on a contracted basis or any other type of agreement under which the third party pays or reimburses the employer for the work performed by the employee for that third party, except for third party third‑party contracts between public agencies for law enforcement, criminal, traffic and crime suppression activities training or fire, wildfire, emergency medical or emergency management activities or where the employer supervises the employee's performance of law enforcement, criminal, traffic and crime suppression activities training or fire, wildfire, emergency medical or emergency management activities.  For the purposes of this paragraph, "base salary" means the amount of compensation each employee is regularly paid for personal services rendered to an employer before the addition of any extra monies, including overtime pay, shift differential pay, holiday pay, longevity pay, fringe benefit pay and similar extra payments.
If all pension payments terminate before an amount equal to the member's accumulated contributions has been paid, the difference between the member's accumulated contributions and the aggregate amount of pension payments shall be paid to the person or persons and in such shares as designated by the retired member in writing and filed with the board.
13.  "Credited service" means the member's total period of service before the member's effective date of participation, plus those compensated periods of the member's service thereafter for which the member made contributions to the fund.
If the designated person or persons do not survive the retired member, the difference shall be paid to the estate of the retired member." Renumber to conform Page 9, after line 44, insert:
14.  "Cure period" means the ninety-day period in which a participant or alternate payee may submit an amended domestic relations order and request a determination, calculated from the time the system issues a determination finding that a previously submitted domestic relations order did not qualify as a plan approved domestic relations order.
"Sec.
15.  "Depository" means a bank in which all monies of the system are deposited and held and from which all expenditures for benefits, expenses and investments are disbursed.
3.
16.  "Determination" means a written document that indicates to a participant and alternate payee whether a domestic relations order qualifies as a plan approved domestic relations order.
Section 38-844, Arizona Revised Statutes, is amended to read:
17.  "Determination period" means the ninety-day period in which the system must review a domestic relations order that is submitted by a participant or alternate payee to determine whether the domestic relations order qualifies as a plan approved domestic relations order, calculated from the time the system mails a notice of receipt to the participant and alternate payee.
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38-844.
18.  "Direct rollover" means a payment by the system to an eligible retirement plan that is specified by the distributee.
Requirements for retirement benefits and disability pensions A.
19.  "Distributee" means a member, a member's surviving spouse or a member's spouse or former spouse who is the alternate payee under a plan approved domestic relations order.
A member shall be eligible for a normal pension on retirement on or after the member's normal retirement date.
20.  "Domestic relations order" means an order of a court of this state that is made pursuant to the domestic relations laws of this state and that creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive a portion of the benefits payable to a participant.
Payment of a normal pension shall commence as of the first day of the month following the date of retirement, and the last payment shall be made as of the last day of the month in which the death of the retired member occurs.
21.  "Effective date of participation" means July 1, 1968, except with respect to employers and their covered employees whose contributions to the fund commence thereafter, the effective date of their participation in the system is as specified in the applicable joinder agreement.
B.
22.  "Effective date of vesting" means the date a member's rights to benefits vest pursuant to section 38‑844.01.
A member is eligible for an accidental disability pension if the member's employment is terminated by reason of accidental disability.
23.  "Eligible child" means an unmarried child of a deceased member or retired member who meets one of the following qualifications:
A member is eligible for an ordinary disability pension if the member's employment is terminated before the member's normal retirement date by reason of ordinary disability.
(a)  Is under eighteen years of age.
A member shall file an application for a disability pension after the disabling incident or within one year after the date the member ceases to be an employee.
(b)  Is at least eighteen years of age and under twenty‑three years of age only during any period that the child is a full‑time student.
Timely application for an accidental, catastrophic or ordinary disability pension is a prerequisite to receipt of the pension.
(c)  Is under a disability that began before the child attained twenty‑three years of age and remains a dependent of the surviving spouse or guardian.
Payment of an accidental, catastrophic or ordinary disability pension shall commence as of the first day of the month following the date of retirement or the expiration of a period during which the member is receiving sick leave payments or a temporary disability pension, whichever is later, but not earlier than section 38-845.02 allows for retroactive payments.
24.  "Eligible groups" means only the following who are regularly assigned to hazardous duty:
The last payment shall be made as of the last day of the month in which the death of the retired member occurs, or if -3- House Amendments to H.B.
(a)  Municipal police officers who are certified peace officers.
2157 disability ceases before the member's normal retirement date, the first day of the month in which disability ceases.
(b)  Municipal firefighters.
C.
(c)  Paid full‑time firefighters employed directly by a fire district organized pursuant to section 48‑803 or 48‑804 or a joint powers authority pursuant to section 48‑805.01 with three or more full‑time firefighters, but not including firefighters employed by a fire district pursuant to a contract with a corporation.
A member is eligible for a catastrophic disability pension if the member's employment is terminated by reason of catastrophic disability.
(d)  State highway patrol officers who are certified peace officers.
If more than the allowable catastrophic disability pensions are approved by the local boards in a calendar year, from and after December 31 of the following calendar year a member of the system is not eligible to apply for a catastrophic disability pension.
(e)  State firefighters.
On or before January 31, the board of trustees shall report to the president of the senate and the speaker of the house of representatives the number of catastrophic disability pensions that were approved by the local boards in the preceding calendar year.
(f)  County sheriffs and deputies who are certified peace officers.
For the purposes of this subsection, "allowable catastrophic disability pensions" means for calendar year 2004, ten, and for subsequent calendar years the number of allowable catastrophic disability pensions allowed in the prior calendar year minus the number of catastrophic disability pensions approved by the local boards in the prior calendar year plus four.
(g)  Game and fish wardens who are certified peace officers.
D.
(h)  Police officers who are certified peace officers and firefighters of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424.  A police officer shall be designated pursuant to section 28‑8426 to aid and supplement state and local law enforcement agencies and a firefighter's sole duty shall be to perform firefighting services, including services required by federal regulations.
Notwithstanding any other provision of this section, no member shall qualify for an accidental, catastrophic or ordinary disability pension if the local board determines that the member's disability results from the following:
(i)  Police officers who are certified peace officers and who are appointed by the Arizona board of regents.
1.
(j)  Police officers who are certified peace officers and who are appointed by a community college district governing board.
An injury suffered while engaged in a felonious criminal act or enterprise.
(k)  State attorney general investigators who are certified peace officers.
2.
(l)  County attorney investigators who are certified peace officers.
Service in the armed forces of the United States that entitles the member to a veteran's disability pension.
(m)  Police officers who are certified peace officers and who are employed by an Indian reservation police agency.
3.
(n)  Firefighters who are employed by an Indian reservation firefighting agency.
A physical or mental condition or injury that existed or occurred before the member's date of membership in the system.
(o)  Department of liquor licenses and control investigators who are certified peace officers.
E.
(p)  Arizona department of agriculture officers who are certified peace officers.
Accidental or ordinary disability shall be considered to have ceased and an accidental or ordinary disability pension terminates if the member:
(q)  Arizona state parks board rangers and managers who are certified peace officers.
1.
(r)  County park rangers who are certified peace officers.
Has sufficiently recovered, in the opinion of the local board, based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board, to be able to -4- House Amendments to H.B.
25.  "Eligible retirement plan" means any of the following that accepts a distributee's eligible rollover distribution:
2157 engage in a reasonable range of duties within the member's department and the member refuses an offer of employment by an employer in the system.
(a)  An individual retirement account described in section 408(a) of the internal revenue code.
2.
(b)  An individual retirement annuity described in section 408(b) of the internal revenue code.
Refuses to undergo any medical examination requested by the local board, provided that a medical examination shall not be required more frequently than once in any calendar year.
(c)  An annuity plan described in section 403(a) of the internal revenue code.
F.
(d)  A qualified trust described in section 401(a) of the internal revenue code.
Sixty months after the award of a catastrophic disability pension, the local board shall reevaluate the member.
(e)  An annuity contract described in section 403(b) of the internal revenue code.
If the member still qualifies for the catastrophic disability pension, the member is entitled to continue to receive the pension at the reduced amount prescribed in section 38-845, subsection E.
(f)  An eligible deferred compensation plan described in section 457(b) of the internal revenue code that is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into the eligible deferred compensation plan from this plan.
A catastrophic disability shall be considered to have ceased and a catastrophic disability pension terminates if the local board determines that the member has sufficiently recovered and is able to engage in gainful employment based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board.
26.  "Eligible rollover distribution" means a payment to a distributee, but does not include any of the following:
After the sixty-month review, the catastrophic disability shall be considered to have ceased and a catastrophic disability pension terminates if the local board determines that the member has sufficiently recovered and is able to engage in gainful employment based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board, except that the medical examination shall not be required more frequently than once in a calendar year.
(a)  Any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the member or the joint lives or joint life expectancies of the member and the member's beneficiary or for a specified period of ten years or more.
The medical review after the sixty-month period does not apply after the date the catastrophic disability pensioner would have attained twenty-five years of service assuming the pensioner remained a member of the system.
(b)  Any distribution to the extent the distribution is required under section 401(a)(9) of the internal revenue code.
The local board shall also terminate a catastrophic disability pension if the member refuses to undergo any medical examination requested by the local board.
(c)  The portion of any distribution that is not includable in gross income.
A member whose catastrophic disability pension is terminated may apply for and if eligible is entitled to receive an accidental disability pension as provided in this section.
(d)  Any distribution made to satisfy the requirements of section 415 of the internal revenue code.
G.
(e)  Hardship distributions.
Subsection E of this section does not apply after a disability pensioner's normal retirement date.
(f)  Similar items designated by the commissioner of the United States internal revenue service in revenue rulings, notices and other guidance published in the internal revenue bulletin.
The amount of a disability pension shall not be recomputed at a disability pensioner's normal retirement date.
27.  "Employee" means any person who is employed by a participating employer and who is a member of an eligible group but does not include any persons compensated on a contractual or fee basis.  If an eligible group requires certified peace officer status or firefighter certification and at the option of the local board, employee may include a person who is training to become a certified peace officer or firefighter.
-5- House Amendments to H.B.
28.  "Employers" means:
2157 H.
(a)  Cities contributing to the fire fighters' relief and pension fund as provided in sections 9‑951 through 9‑971 or statutes amended thereby and antecedent thereto, as of June 30, 1968 on behalf of their full‑time paid firefighters.
If accidental or ordinary disability ceases before a retired member attains the member's normal retirement date and the member is reemployed by an employer, the member shall be treated as if the member has been on an uncompensated leave of absence during the period of the member's disability retirement and shall be a contributing member of the system.
(b)  Cities contributing under the state police pension laws as provided in sections 9‑911 through 9‑934 or statutes amended thereby and antecedent thereto, as of June 30, 1968 on behalf of their municipal policemen.
The pension payable on the member's subsequent retirement shall be determined as provided in section 38-845.
(c)  The state highway patrol covered under the state highway patrol retirement system.
I.
(d)  The state, or any political subdivision of this state, including towns, cities, fire districts, joint powers authorities, counties and nonprofit corporations operating public airports pursuant to sections 28‑8423 and 28‑8424, that has elected to participate in the system on behalf of an eligible group of public safety personnel pursuant to a joinder agreement entered into after July 1, 1968.
A member shall be eligible for a temporary disability pension if the member's employment is terminated before the member's normal retirement date by reason of temporary disability.
(e)  Indian tribes that have elected to participate in the system on behalf of an eligible group of public safety personnel pursuant to a joinder agreement entered into after July 1, 1968.
Payment of a temporary disability pension shall commence as of the first day of the month following the date of disability or the expiration of a period during which the member is receiving compensation and sick leave payments, whichever is later.
29.  "Fund" means the public safety personnel retirement fund, which is the fund established to receive and invest contributions accumulated under the system and from which benefits are paid.
The last payment shall be made as of the first day of the month in which either the death of the member occurs or the local board deems the member is no longer under temporary disability, whichever first occurs, provided that no NOT more than twelve monthly temporary disability payments shall be made in total to the member.
30.  "Local board" means the retirement board of the employer, who are the persons appointed to administer the system as it applies to their members in the system.
J.
31.  "Member":
If on the expiration of a temporary disability pension the local board finds on application that the member has an accidental or ordinary disability, the member shall be eligible for an accidental or ordinary disability pension, as provided in this section.
(a)  Means any full-time employee who meets all of the following qualifications:
K.
(i)  Who is either a paid municipal police officer, a paid firefighter, a law enforcement officer who is employed by this state including the director thereof, a state firefighter who is primarily assigned to firefighting duties, a firefighter or police officer of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424, all ranks designated by the Arizona law enforcement merit system council, a state attorney general investigator who is a certified peace officer, a county attorney investigator who is a certified peace officer, a department of liquor licenses and control investigator who is a certified peace officer, an Arizona department of agriculture officer who is a certified peace officer, an Arizona state parks board ranger or manager who is a certified peace officer, a county park ranger who is a certified peace officer, a person who is a certified peace officer and who is employed by an Indian reservation police agency, a firefighter who is employed by an Indian reservation firefighting agency or an employee included in a group designated as eligible employees under a joinder agreement entered into by their employer after July 1, 1968 and who is or was regularly assigned to hazardous duty or, beginning retroactively to January 1, 2009, who is a police chief or a fire chief.
The system shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.
(ii)  Who, on or after the employee's effective date of participation, is receiving compensation for personal services rendered to an employer or would be receiving compensation except for an authorized leave of absence.
Notwithstanding any other provision of the system, beginning January 1, 1987 payment of benefits to a member shall commence no NOT later than April 1 of the calendar year following the later of:
(iii)  Whose customary employment is at least forty hours per week or, for those employees who customarily work fluctuating workweeks, whose customary employment averages at least forty hours per week.
1.
(iv)  Who is engaged to work for more than six months in a calendar year.
The calendar year in which the member attains seventy and one-half SEVENTY-TWO years of age.
(v)  Who, if economic conditions exist, is required to take furlough days or reduce the hours of the employee's normal workweek below forty hours but not less than thirty hours per pay cycle, and maintain the employee's active member status within the system as long as the hour change does not extend beyond twelve consecutive months.
2.
(vi)  Who has not attained age sixty‑five before the employee's effective date of participation or who was over age sixty‑five with twenty‑five years or more of service prior to the employee's effective date of participation.
The date the member terminates employment." Renumber to conform -6- House Amendments to H.B.
(b)  Does not include an employee who is hired on or after July 1, 2017, who makes the irrevocable election to participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter and who was not an active, an inactive or a retired member of the system or a member of the system with a disability on June 30, 2017.
2157 Page 13, after line 33, insert:
32.  "Normal retirement date" means:
"Sec.
(a)  For an employee who becomes a member of the system before January 1, 2012, the first day of the calendar month immediately following the employee's completion of twenty years of service or the employee's sixty‑second birthday and the employee's completion of fifteen years of service.
5.
(b)  For an employee who becomes a member of the system on or after January 1, 2012 and before July 1, 2017, the first day of the calendar month immediately following the employee's completion of either twenty‑five years of service or fifteen years of credited service if the employee is at least fifty‑two and one‑half years of age.
Section 38-890, Arizona Revised Statutes, is amended to read:
(c)  For an employee who becomes a member of the system on or after July 1, 2017, the first day of the calendar month immediately following the employee's completion of fifteen years of credited service if the employee is at least fifty‑five years of age.
38-890.
33.  "Notice of receipt" means a written document that is issued by the system to a participant and alternate payee and that states that the system has received a domestic relations order and a request for a determination that the domestic relations order is a plan approved domestic relations order.
Pensions;
34.  "Ordinary disability" means a physical condition that the local board determines will prevent an employee totally and permanently from performing a reasonable range of duties within the employee's department or a mental condition that the local board determines will prevent an employee totally and permanently from engaging in any substantial gainful activity.
commencement and duration A.
35.  "Participant" means a member who is subject to a domestic relations order.
A normal retirement pension, an accidental disability pension, a total and permanent disability pension or an ordinary disability pension commences on the first day of the calendar month next following the member's date of retirement.
36.  "Participant's portion" means benefits that are payable to a participant pursuant to a plan approved domestic relations order.
A survivor pension commences on the first day of the calendar month next following the month in which the death causing payment of the pension occurs.
37.  "Pension" means a series of monthly amounts that are payable to a person who is entitled to receive benefits under the plan but does not include an annuity that is payable pursuant to section 38‑846.01.
B.
38.  "Personal representative" means the personal representative of a deceased alternate payee.
Termination of payment of a pension occurs at the end of the calendar month in which the event causing the termination occurred.
39.  "Physician" means a physician who is licensed pursuant to title 32, chapter 13 or 17.
The payment shall be made for the full month of termination.
40.  "Plan approved domestic relations order" means a domestic relations order that the system approves as meeting all the requirements for a plan approved domestic relations order as otherwise prescribed in this article.
C.
41.  "Plan year" or "fiscal year" means the period beginning on July 1 of any year and ending on June 30 of the next succeeding year.
A change in the amount of a pension occurs on the first day of the calendar month next following the date of the event causing the change.
42.  "Regularly assigned to hazardous duty" means regularly assigned to duties of the type normally expected of municipal police officers, municipal or state firefighters, eligible fire district firefighters, state highway patrol officers, county sheriffs and deputies, fish and game wardens, firefighters and police officers of a nonprofit corporation operating a public airport pursuant to sections 28‑8423 and 28‑8424, police officers who are appointed by the Arizona board of regents or a community college district governing board, state attorney general investigators who are certified peace officers, county attorney investigators who are certified peace officers, department of liquor licenses and control investigators who are certified peace officers, Arizona department of agriculture officers who are certified peace officers, Arizona state parks board rangers and managers who are certified peace officers, county park rangers who are certified peace officers, police officers who are certified peace officers and who are employed by an Indian reservation police agency or firefighters who are employed by an Indian reservation firefighting agency.  Those individuals who are assigned solely to support duties such as secretaries, stenographers, clerical personnel, clerks, cooks, maintenance personnel, mechanics and dispatchers are not assigned to hazardous duty regardless of their position classification title.  Since the normal duties of those jobs described in this paragraph are constantly changing, questions as to whether a person is or was previously regularly assigned to hazardous duty shall be resolved by the local board on a case‑by‑case basis.  Resolutions by local boards are subject to rehearing and appeal.
D.
43.  "Retirement" or "retired" means termination of employment after a member has fulfilled all requirements for a pension, for an employee who becomes a member of the system on or after January 1, 2012 and before July 1, 2017, attains the age and service requirements for a normal retirement date or for an employee who becomes a member of the system on or after July 1, 2017 attains the age and credited service requirements for a normal retirement date.  Retirement shall be considered as commencing on the first day of the month immediately following a member's last day of employment or authorized leave of absence, if later.
The plan shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.
44.  "Segregated funds" means the amount of benefits that would currently be payable to an alternate payee pursuant to a domestic relations order under review by the system, or a domestic relations order submitted to the system that failed to qualify as a plan approved domestic relations order, if the domestic relations order were determined to be a plan approved domestic relations order.
Notwithstanding any other provision of the plan, beginning January 1, 1987 payment of benefits to a member shall commence no NOT later than April 1 of the calendar year following the later of:
45.  "Service" means the last period of continuous employment of an employee by the employers before the employee's retirement, except that if such period includes employment during which the employee would not have qualified as a member had the system then been effective, such as employment as a volunteer firefighter, then only twenty‑five percent of such noncovered employment shall be considered as service.  Any absence that is authorized by an employer shall not be considered as interrupting continuity of employment if the employee returns within the period of authorized absence.  Transfers between employers also shall not be considered as interrupting continuity of employment.  Any period during which a member is receiving sick leave payments or a temporary disability pension shall be considered as service.  Notwithstanding any other provision of this paragraph, any period during which a person was employed as a full‑time paid firefighter for a corporation that contracted with an employer to provide firefighting services on behalf of the employer shall be considered as service if the employer has elected at its option to treat part or all of the period the firefighter worked for the company as service in its applicable joinder agreement.  Any reference in this system to the number of years of service of an employee shall be deemed to include fractional portions of a year.
1.
46.  "State" means the state of Arizona, including any department, office, board, commission, agency or other instrumentality of the state.
The calendar year in which the member attains seventy and one- half SEVENTY-TWO years of age.
47.  "System" means the public safety personnel retirement system established by this article.
2.
48.  "Temporary disability" means a physical or mental condition that the local board finds totally and temporarily prevents an employee from performing a reasonable range of duties within the employee's department and that was incurred in the performance of the employee's duty.
The date the member terminates employment." Amend title to conform And, as so amended, it do pass JOHN KAVANAGH CHAIRMAN 2157GOVERNMENT 01/30/2020 10:09 AM H:
END_STATUTE Sec. 3.  Section 38-844, Arizona Revised Statutes, is amended to read:
ra -7-
START_STATUTE38-844.  Requirements for retirement benefits and disability pensions A.  A member shall be eligible for a normal pension on retirement on or after the member's normal retirement date.  Payment of a normal pension shall commence as of the first day of the month following the date of retirement, and the last payment shall be made as of the last day of the month in which the death of the retired member occurs.
B.  A member is eligible for an accidental disability pension if the member's employment is terminated by reason of accidental disability.  A member is eligible for an ordinary disability pension if the member's employment is terminated before the member's normal retirement date by reason of ordinary disability.  A member shall file an application for a disability pension after the disabling incident or within one year after the date the member ceases to be an employee.  Timely application for an accidental, catastrophic or ordinary disability pension is a prerequisite to receipt of the pension.  Payment of an accidental, catastrophic or ordinary disability pension shall commence as of the first day of the month following the date of retirement or the expiration of a period during which the member is receiving sick leave payments or a temporary disability pension, whichever is later, but not earlier than section 38‑845.02 allows for retroactive payments.  The last payment shall be made as of the last day of the month in which the death of the retired member occurs, or if disability ceases before the member's normal retirement date, the first day of the month in which disability ceases.
C.  A member is eligible for a catastrophic disability pension if the member's employment is terminated by reason of catastrophic disability.  If more than the allowable catastrophic disability pensions are approved by the local boards in a calendar year, from and after December 31 of the following calendar year a member of the system is not eligible to apply for a catastrophic disability pension.  On or before January 31, the board of trustees shall report to the president of the senate and the speaker of the house of representatives the number of catastrophic disability pensions that were approved by the local boards in the preceding calendar year.  For the purposes of this subsection, "allowable catastrophic disability pensions" means for calendar year 2004, ten, and for subsequent calendar years the number of allowable catastrophic disability pensions allowed in the prior calendar year minus the number of catastrophic disability pensions approved by the local boards in the prior calendar year plus four.
D.  Notwithstanding any other provision of this section, no member shall qualify for an accidental, catastrophic or ordinary disability pension if the local board determines that the member's disability results from the following:
1.  An injury suffered while engaged in a felonious criminal act or enterprise.
2.  Service in the armed forces of the United States that entitles the member to a veteran's disability pension.
3.  A physical or mental condition or injury that existed or occurred before the member's date of membership in the system.
E.  Accidental or ordinary disability shall be considered to have ceased and an accidental or ordinary disability pension terminates if the member:
1.  Has sufficiently recovered, in the opinion of the local board, based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board, to be able to engage in a reasonable range of duties within the member's department and the member refuses an offer of employment by an employer in the system.
2.  Refuses to undergo any medical examination requested by the local board, provided that a medical examination shall not be required more frequently than once in any calendar year.
F.  Sixty months after the award of a catastrophic disability pension, the local board shall reevaluate the member.  If the member still qualifies for the catastrophic disability pension, the member is entitled to continue to receive the pension at the reduced amount prescribed in section 38‑845, subsection E.  A catastrophic disability shall be considered to have ceased and a catastrophic disability pension terminates if the local board determines that the member has sufficiently recovered and is able to engage in gainful employment based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board.  After the sixty‑month review, the catastrophic disability shall be considered to have ceased and a catastrophic disability pension terminates if the local board determines that the member has sufficiently recovered and is able to engage in gainful employment based on a medical examination by a designated physician or a physician working in a clinic that is appointed by the local board, except that the medical examination shall not be required more frequently than once in a calendar year.  The medical review after the sixty‑month period does not apply after the date the catastrophic disability pensioner would have attained twenty‑five years of service assuming the pensioner remained a member of the system.  The local board shall also terminate a catastrophic disability pension if the member refuses to undergo any medical examination requested by the local board.  A member whose catastrophic disability pension is terminated may apply for and if eligible is entitled to receive an accidental disability pension as provided in this section.
G.  Subsection E of this section does not apply after a disability pensioner's normal retirement date.  The amount of a disability pension shall not be recomputed at a disability pensioner's normal retirement date.
H.  If accidental or ordinary disability ceases before a retired member attains the member's normal retirement date and the member is reemployed by an employer, the member shall be treated as if the member has been on an uncompensated leave of absence during the period of the member's disability retirement and shall be a contributing member of the system.  The pension payable on the member's subsequent retirement shall be determined as provided in section 38‑845.
I.  A member shall be eligible for a temporary disability pension if the member's employment is terminated before the member's normal retirement date by reason of temporary disability.  Payment of a temporary disability pension shall commence as of the first day of the month following the date of disability or the expiration of a period during which the member is receiving compensation and sick leave payments, whichever is later.  The last payment shall be made as of the first day of the month in which either the death of the member occurs or the local board deems the member is no longer under temporary disability, whichever first occurs, provided that no not more than twelve monthly temporary disability payments shall be made in total to the member.
J.  If on the expiration of a temporary disability pension the local board finds on application that the member has an accidental or ordinary disability, the member shall be eligible for an accidental or ordinary disability pension, as provided in this section.
K.  The system shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.  Notwithstanding any other provision of the system, beginning January 1, 1987 payment of benefits to a member shall commence no not later than April 1 of the calendar year following the later of:
1.  The calendar year in which the member attains seventy and one‑half seventy‑two years of age.
2.  The date the member terminates employment.END_STATUTE Sec. 4.  Section 38-849, Arizona Revised Statutes, is amended to read:
START_STATUTE38-849.  Limitations on receiving pension;
violation;
classification;
reemployment after severance;
reinstatement of service credits;
reemployment of retired member or member with a disability;
definition A.  If a member is convicted of, or discharged because of, theft, embezzlement, fraud or misappropriation of an employer's property or property under the control of the employer, the member shall be subject to restitution and fines imposed by a court of competent jurisdiction.  The court may order the restitution or fines to be paid from any payments otherwise payable to the member from the retirement system.
B.  A person who knowingly makes any false statement or who falsifies or allows to be falsified any record of the system with an intent to defraud the system is guilty of a class 5 felony.  If any change or error in the records results in any member or beneficiary receiving from the system more or less than the member or beneficiary would have been entitled to receive had the records been correct, the local board shall correct such error, and as far as practicable shall adjust the payments in such manner that the actuarial equivalent of the benefit to which such member or beneficiary was correctly entitled shall be paid.  If a member is convicted of a crime specified in this subsection, section 13‑713 applies.
C.  If a member who received a severance refund on termination of employment pursuant to section 38‑846.02 becomes reemployed with the same employer within two years after the former member's termination date, the member may have forfeited credited service attributable to service rendered during a prior period of service as an employee restored on satisfaction of each of the following conditions:
1.  The member files with the system a written application for reinstatement of forfeited credited service within ninety days after again becoming an employee.
2.  The retirement fund is paid the total amount previously withdrawn pursuant to section 38‑846.02 plus compound interest from the date of withdrawal to the date of repayment.  Interest shall be computed at the rate of nine percent for each year compounded each year from the date of withdrawal to the date of repayment.  Forfeited credited service shall not be restored until complete payment is received by the fund.
3.  The required payment is completed within one year after returning to employee status.
D.  If a member who received a severance refund on termination of employment, as provided in section 38‑846.02, is subsequently reemployed by an employer, the member's prior service credits shall be cancelled and service shall be credited only from the date the member's most recent reemployment period commenced.  However, a present active member of the system who forfeited credited service, received a severance refund pursuant to section 38‑846.02 and becomes reemployed with the same employer two years or more after the member's termination date or becomes reemployed with another employer may elect to redeem any part of that forfeited credited service by paying into the system any amounts required pursuant to this subsection.  A present active member who elects to redeem any part of forfeited credited service for which the member is deemed eligible by the board shall pay into the system the amounts previously paid or transferred to the member as a severance refund plus an amount, computed by the system's actuary that is necessary to equal the increase in the actuarial present value of projected benefits resulting from the redemption calculated using the actuarial methods and assumptions prescribed by the system's actuary.  On satisfaction of this obligation the member's prior service credits shall be reinstated.
E.  If a retired member becomes reemployed in any capacity by the employer from which the member retired before twelve months after the date of retirement or in the same position at any time following retirement:
1.  The following apply:
(a)  Within ten days after the retired member is reemployed, the local board shall advise the system in writing of the retired member's reemployment.
(b)  The system shall not make pension payments to the retired member during the period of reemployment.
(c)  Employee contributions shall not be made on the retired member's account, nor shall any service be credited during the period of reemployment.  On subsequent termination of employment by the retired member, the retired member is entitled to receive a pension based on the member's service and compensation before the date of the member's reemployment.  The employer shall pay the alternate contribution rate pursuant to section 38‑843.05.
(d)  Any pension payments received by the retired member, who retired on or after July 1, 2009, during the period of reemployment are considered overpayments pursuant to section 38‑850, unless subsection B of this section applies.  If the board determines in the board's sole discretion, for a member who retired on or after July 1, 2009, that the retired member's reemployment during the twelve‑month period and the failure of the employer or the local board to suspend the member's pension were not intentional to circumvent the requirements of this subsection, the pension payments received by the retired member after the retired member's reemployment are subject to repayment up to only the amount received between the date of the member's reemployment and the expiration of the twelve‑month period.
(e)  If a retired member who retired on or after July 1, 2009 and who is reemployed terminates employment, the retired member may be subsequently reemployed with the employer from which the member retired and resume receiving pension payments after a period of twelve months, less the period of time the retired member was not reemployed after retirement with the employer from which the member retired, if at least sixty days of the twelve months are consecutive.
2.  Paragraph 1, subdivisions (a) and (b) of this subsection do not apply if any of the following occurs:
(a)  The retired member becomes reemployed after sixty consecutive days from the member's retirement date as a result of participating in an open competitive new hire process for an entry level, nonsupervisory position, except if the retired member is hired for the same position.
(b)  The retired member is hired as a fire inspector or arson investigator.
(c)  Notwithstanding section 38‑844, The retired member who is receiving an accidental disability, ordinary disability, catastrophic disability or temporary disability and who pension accepts a job reassignment as an accommodation in accordance with the Americans with disabilities act of 1990 due to a disability that is directly related to the retired member being awarded an accidental disability, ordinary disability, catastrophic disability or temporary disability benefit.
F.  If a retired member is assigned voluntary duties acting as a limited authority peace officer, pursuant to the Arizona peace officer standards and training board rules, employee contributions shall not be made on the retired member's account, and any service shall not be credited during the period of reemployment.  The employer shall not pay the alternate contribution rate pursuant to section 38‑843.05.
G.  If after twelve months after the date of retirement a retired member becomes reemployed by the employer from which the member retired in a position other than the same position from which the member retired, employee contributions shall not be made on the retired member's account, and any service shall not be credited during the period of reemployment.
The employer shall pay the alternate contribution rate pursuant to section 38‑843.05.
H.  At any time following retirement, if the retired member becomes employed by an employer, other than the employer from which the member retired, in a position ordinarily filled by an employee of an eligible group, employee contributions shall not be made on the retired member's account, and any service shall not be credited during the period of reemployment.  The employer shall pay the alternate contribution rate pursuant to section 38‑843.05.
I.  If a member who retired under an accidental or ordinary disability becomes reemployed as an employee of an eligible group, section 38‑844 applies and a determination shall be made by the local board as to whether subsection E, F, G or H of this section applies.
J.  The local board shall review all reemployment determinations and voluntary assignments as described in subsection F of this section.  If the local board or the system is not provided the necessary information required by the system to make a reemployment determination, the local board and the system shall suspend pension payments until information is received and a determination is made regarding whether the reemployment meets the requirements of subsection E, F, G, H or I of this section.
K.  A person who defrauds the system or who takes, converts, steals or embezzles monies owned by or from the system and who fails or refuses to return the monies to the system on the board's written request is subject to civil suit by the system in the superior court in Maricopa county.  On entry of an order finding the person has defrauded the system or taken, converted, stolen or embezzled monies owned by or from the system, the court shall enter an order against that person and for the system awarding the system all of its costs and expenses of any kind, including attorney fees, that were necessary to successfully prosecute the action.  The court shall also grant the system a judicial lien on all of the nonexempt property of the person against whom judgment is entered pursuant to this subsection in an amount equal to all amounts awarded to the system, plus interest at the rate prescribed by section 44‑1201, until all amounts owed are paid to the system.
L.  Notwithstanding any other provision of this article, the board may offset against any benefits otherwise payable by the system to an active or retired member or survivor any court ordered amounts awarded to the board and system and assessed against the member or survivor.
M.  Notwithstanding any other provision of this article, a member who retires having met all of the qualifications for retirement and who subsequently becomes an elected official, by election or appointment, is not considered reemployed by the same employer.
N.  For the purposes of this section, "same position" means a position in which the member performs substantially similar duties that were performed and exercises substantially similar authority that was exercised by the retired member before retirement.
END_STATUTE Sec. 5.  Section 38-890, Arizona Revised Statutes, is amended to read:
START_STATUTE38-890.  Pensions;
commencement and duration A.  A normal retirement pension, an accidental disability pension, a total and permanent disability pension or an ordinary disability pension commences on the first day of the calendar month next following the member's date of retirement.  A survivor pension commences on the first day of the calendar month next following the month in which the death causing payment of the pension occurs.
B.  Termination of payment of a pension occurs at the end of the calendar month in which the event causing the termination occurred.  The payment shall be made for the full month of termination.
C.  A change in the amount of a pension occurs on the first day of the calendar month next following the date of the event causing the change.
D.  The plan shall make payments pursuant to section 401(a)(9) of the internal revenue code and the regulations that are issued under that section.
Notwithstanding any other provision of the plan, beginning January 1, 1987 payment of benefits to a member shall commence no not later than April 1 of the calendar year following the later of:
1.  The calendar year in which the member attains seventy and one‑half seventy‑two years of age.
2.  The date the member terminates employment.END_STATUTE
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Action History

  1. DPA

  2. Senate Second Reading

  3. Senate First Reading

  4. Transmit to Senate

  5. PASSED

  6. DPA

  7. DPA

  8. House Second Reading

  9. House First Reading.

  10. Prefiled.

Sponsors

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 92 not signed on · 1 voted No

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (92)

92 members have not signed on to this bill.

Show all 92 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Passed

Passed 59 Yea · 1 Nay
Party YeaNayPresentNot Voting
Unaffiliated 43100
Republican 12000
Democrat 4000
Total 59100
% of votes cast 98%2%0%0%
How each member voted (60)
Member Party Vote
Aaron Lieberman — Yea
Amish Shah — Yea
Andres Cano — Yea
Anthony T. Kern — Yea
Arlando Teller — Yea
Athena Salman — Yea
Becky A. Nutt — Yea
Ben Toma — Yea
Bob Thorpe — Yea
Bret Roberts — Yea
Charlene R. Fernandez — Yea
César Chávez — Yea
Daniel Hernandez — Yea
David L. Cook — Yea
Diego Espinoza — Yea
Diego Rodriguez — Yea
Domingo DeGrazia — Yea
Gerae Peten — Yea
Isela Blanc — Yea
Jay Lawrence — Yea
Jennifer Jermaine — Yea
Jennifer Longdon — Yea
Jennifer Pawlik — Yea
Joanne Osborne — Yea
John Fillmore — Yea
John M. Allen — Yea
Kelli Butler — Yea
Kelly Townsend — Yea
Kirsten Engel — Yea
Lorenzo Sierra — Yea
Michelle Udall — Yea
Nancy Barto — Yea
Noel W. Campbell — Nay
Pamela Powers Hannley — Yea
Randall Friese — Yea
Raquel Terán — Yea
Regina E. Cobb — Yea
Reginald Bolding — Yea
Richard C. Andrade — Yea
Robert Meza — Yea
Russell Bowers — Yea
Steve Pierce — Yea
Travis W. Grantham — Yea
Walter Blackman — Yea
Alma Hernandez Democrat Yea
Denise “Mitzi” Epstein Democrat Yea
Myron Tsosie Democrat Yea
Rosanna Gabaldón Democrat Yea
Frank Carroll Republican Yea
Gail Griffin Republican Yea
Jeff Weninger Republican Yea
John Kavanagh Republican Yea
Kevin Payne Republican Yea
Leo Biasiucci Republican Yea
Mark Finchem Republican Yea
Shawnna Bolick Republican Yea
Thomas "T.J." Shope Republican Yea
Timothy "Tim" Dunn Republican Yea
Tony Rivero Republican Yea
Warren Petersen Republican Yea

Official roll call →

Subjects

public-safety labor health-insurance
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Frequently asked questions

Who sponsors HB 2157?
HB 2157 is sponsored by Walt Blackman (Republican).
What is the current status of HB 2157?
This bill died with 54th Legislature - 2nd Regular Session. It reached “Passed House” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
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