SB 1268 — PSPRS; deferred retirement option plan

SenateHouse Engrossed Senate Bill PSPRS;

deferred retirement option plan State of Arizona Senate Fifty-fifth Legislature Second Regular Session CHAPTER 351 SENATE BILL 1268 AN ACT AMENDING SECTIONS 38-844.03 AND 38-844.05, ARIZONA REVISED STATUTES;

RELATINGAMENDING TOTITLE THE38, PUBLICCHAPTER SAFETY5, PERSONNELARTICLE RETIREMENT4, SYSTEM.ARIZONA REVISED STATUTES, BY ADDING SECTION 38-844.10;

REPEALING SECTION 38-844.10, ARIZONA REVISED STATUTES;

RELATING TO RETIREMENT SYSTEMS.

Any member who is eligible for a normal pension pursuant to section 38-844, subsection A, who becomes a member of the system before January 1, 2012 and who has at least twenty years of credited service is eligible to participate FOR NOT MORE THAN SIXTY CONSECUTIVE MONTHS in the deferred retirement option plan.

In addition, any member who is subject to section 38-858, subsection C is eligible to participate FOR NOT MORE THAN SIXTY CONSECUTIVE MONTHS in the deferred retirement option plan retroactive to the member's twentieth year of credited service or on the day before the member began military service, whichever is later, if the member makes the election pursuant to this section on or before resuming employment with the member's employer.

ANY MEMBER WHO IS ELIGIBLE FOR A NORMAL PENSION PURSUANT TO SECTION 38-844, SUBSECTION A, WHO BECOMES A MEMBER OF THE SYSTEM BEFORE JANUARY 1, 2012, WHO IS AT LEAST FIFTY-ONE YEARS OF AGE AND WHO HAS AT LEAST TWENTY-FOUR AND ONE-HALF YEARS OF CREDITED SERVICE IS ELIGIBLE TO PARTICIPATE FOR NOT MORE THAN EIGHTY-FOUR CONSECUTIVE MONTHS IN THE DEFERRED RETIREMENT OPTION PLAN.

Designate a period of participation that is not more than sixty consecutive months OR EIGHTY-FOUR consecutiveCONSECUTIVE months.MONTHS, AS APPLICABLE PURSUANT TO SUBSECTION A OF THIS SECTION.

The deferred retirement option plan participation account shall not be credited with the monthly amount prescribed in section 38-844.05, subsection- C, paragraph 1 and- thatS.B. amount shall not be paid directly to the member.

1268 subsection C, paragraph 1 and that amount shall not be paid directly to the member.

-Sec. 1 - S.B.

1268 Sec.

FOR THE REMAINING TWENTY-FOUR MONTHS, AN AMOUNT, CREDITED MONTHLY, THAT REPRESENTS INTEREST ON THE AMOUNT CREDITED PURSUANT TO PARAGRAPH 1 OF THIS SUBSECTION AT A RATE EQUAL TO THE ACTUAL RATE OF RETURN, SMOOTHED OVER A PERIOD OF SEVEN YEARS, TO BE NOT LESS THAN ZERO PERCENT OR NOT MORE THAN NINE PERCENT.

BEGINNING ON OR BEFORE JANUARY 1, 2023, AT THE END OF THE FIRST SIXTY-MONTH PERIOD, FOR A MEMBER WHO EXTENDED THE MEMBER'S PERIOD OF PARTICIPATION IN THE DEFERRED RETIREMENT OPTION PLAN PAST SIXTY MONTHS, THE SYSTEM SHALL TRANSFER THE ACCUMULATED BALANCE OF A MEMBER'S DEFERRED RETIREMENT OPTION PLAN PARTICIPATION ACCOUNT TO AN ACCOUNT CREATED FOR THE MEMBER IN A DEFINED CONTRIBUTION PLAN.

FOR THE SUBSEQUENT PERIOD OF TIME IN THE DEFERRED RETIREMENT OPTION PLAN, UP TO TWENTY-FOUR MONTHS, ALL DEFERRED RETIREMENT OPTION PLAN BENEFITS THAT ARE ACCRUED AND CREDITED MONTHLY PURSUANT TO SUBSECTION C, PARAGRAPH 1 OF THIS SECTION SHALL BE DEPOSITED IN THE MEMBER'S DEFINED CONTRIBUTION PLAN ACCOUNT.

A MEMBER MAY NOT WITHDRAW THE ASSETS OF THE MEMBER'S DEFINED CONTRIBUTION PLAN ACCOUNT UNTIL THE MEMBER TERMINATES EMPLOYMENT.

- 2 - S.B.

1268 D.

E.

Title 38, chapter 5, article 4, Arizona Revised Statutes, is amended by adding section 38-844.10, to read:

38-844.10.

Deferred retirement option plan;

employer;

extension approval NOTWITHSTANDING THE AGE AND SERVICE REQUIREMENTS PRESCRIBED IN SECTION 38-844.03, AN EMPLOYER MAY APPROVE, FOR A MEMBER OF THE PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM WHO IS PARTICIPATING IN THE DEFERRED RETIREMENT OPTION PLAN ON THE EFFECTIVE DATE OF THIS SECTION, AN EXTENSION OF THE MEMBER'S PERIOD OF PARTICIPATION FOR UP TO AN ADDITIONAL TWENTY-FOUR MONTHS.

Sec.

4.

Delayed repeal Section 38-844.10, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2027.

Sec.

5.

-Sec. 2 -

6.

Deferred retirement option plan;

transfer and deposit requirements;

interest Notwithstanding the transfer and deposit requirements in section 38-844.05, subsection D, Arizona Revised Statutes, as added by this act, beginning on the effective date of this act until the system transfers the balance of a member's deferred retirement option plan participation account to an account in a defined contribution plan pursuant to section 38-844.05, subsection D, Arizona Revised Statutes, as added by this act, the member's participation account shall continue to accrue benefits but will receive zero percent interest for that period of time.

Sec.

7.

Emergency This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.

APPROVED BY THE GOVERNOR JULY 6, 2022.

FILED IN THE OFFICE OF THE SECRETARY OF STATE JULY 6, 2022.