Bill Text: AZ HB2264 | 2012 | Fiftieth Legislature 2nd Regular | Introduced
Bill Title: ASRS; employee; employer contributions; rate
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-05-07 - Governor Signed [HB2264 Detail]
Download: Arizona-2012-HB2264-Introduced.html
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REFERENCE TITLE: ASRS; employee; employer contributions; rate |
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State of Arizona House of Representatives Fiftieth Legislature Second Regular Session 2012
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HB 2264 |
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Introduced by Representative Robson
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AN ACT
amending sections 38‑736, 38‑737, 38‑797.05 and 38‑797.06, 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 38-736, Arizona Revised Statutes, is amended to read:
38-736. Member contributions
A. Member contributions are required as a condition of employment and shall be made by payroll deductions. Member contributions shall begin simultaneously with membership in ASRS. Beginning July 1, 2011, member contributions are a percentage of a member's compensation equal to fifty‑three per cent of the total contributions, as determined the employer contribution required pursuant to section 38‑737. Amounts so deducted by employers shall be deposited in the ASRS depository.
B. The employer shall pay the member contributions required of members on account of compensation earned. The paid contributions shall be treated as employer contributions for the purpose of determining tax treatment under the internal revenue code. The effective date of the employer payment shall not be before the date ASRS has received notification from the United States internal revenue service that pursuant to section 414(h) of the internal revenue code the member contributions paid will not be included in gross income for income tax purposes until the paid contributions are distributed by refund or retirement benefit payments. The employer shall pay the member contributions from monies that are established and available in the retirement deduction account and that would otherwise have been designated as member contributions and paid to ASRS. Member contributions paid pursuant to this subsection shall be treated for all other purposes, in the same manner and to the same extent, as member contributions made before the approval of the United States internal revenue service pursuant to this section.
Sec. 2. Section 38-737, Arizona Revised Statutes, is amended to read:
38-737. Employer contributions
A. Employer contributions shall be a percentage of compensation of all employees of the employers, excluding the compensation of those employees who are members of the defined contribution program administered by ASRS, as determined by the ASRS actuary pursuant to this section for June 30 of the fiscal year immediately preceding the preceding fiscal year, except that beginning with fiscal year 2001‑2002 the contribution rate shall not be less than two per cent of compensation of all employees of the employers. Beginning July 1, 2011, the total employer contribution shall be forty-seven per cent of the total contributions. The total contributions shall be determined on the projected unit credit method. The total employer contributions shall be equal to the employer normal cost plus the amount required to amortize the past service funding requirement over a rolling thirty‑year period.
B. All contributions made by the employer and allocated to the fund established by section 38‑712 are irrevocable and shall be used as benefits under this article or to pay expenses of ASRS.
C. The required total employer contributions shall be determined on an annual basis by an actuary who is selected by the board and who is a fellow of the society of actuaries. ASRS shall provide a preliminary report by November 1 and a final report by December 15 of each fiscal year to the governor, the speaker of the house of representatives and the president of the senate on the contribution rate for the ensuing fiscal year.
Sec. 3. Section 38-797.05, Arizona Revised Statutes, is amended to read:
38-797.05. Employer and member contributions
A. Beginning July 1, 2011, employers shall contribute the percentage of the compensation of all of the members under their employment so that the total employer contributions equals the amount that the board determines is necessary to pay forty-seven per cent one‑half of all benefits under and costs of administering the LTD program.
B. Beginning July 1, 2011, a member shall contribute a percentage of the member's compensation equal to the remainder necessary to pay for all benefits under and costs of administering the LTD program after the employer contribution for the member required pursuant to subsection A of this section is paid.
C. The employer shall pay the member contributions required of members on account of compensation earned. All employer and member contributions shall be paid to the board. The board shall allocate the contributions to the LTD trust fund and shall place the contributions in the LTD program's depository.
D. Each employer shall certify on each payroll the amount to be contributed to the LTD program and shall remit that amount to the board. The contributions are irrevocable.
E. Payments due pursuant to this article by employers become delinquent after the due date prescribed in the board's rules and thereafter shall be increased by interest from and after that date until payment is received by the board. The board shall charge interest on the delinquent payments at an annual rate equal to the interest rate assumption approved by the board for actuarial equivalency pursuant to article 2 of this chapter. Delinquent payments due under this subsection, together with interest charges as provided in this subsection, may be recovered by an action in a court of competent jurisdiction against an employer liable for payments or, at the request of the director, may be deducted from any monies, including excise revenue taxes, payable to the employer by any department or agency of this state.
F. If more than the correct amount of contributions required is paid by an employer, proper adjustment shall be made in connection with subsequent payments. The board shall return excess contributions to the employer if the employer requests return of the contributions within one year after the date of overpayment.
G. Member contributions are not refundable and are not included in the calculation of survivor benefits pursuant to section 38‑762.
Sec. 4. Section 38-797.06, Arizona Revised Statutes, is amended to read:
38-797.06. Contribution rate; annual report
A. The board shall select an actuary to determine required employer contributions on an annual basis. The actuary shall be a fellow of the society of actuaries.
B. employer contributions shall be a percentage of compensation of all employees of the employers, as the ASRS actuary determines pursuant to this section. The actuary shall make this determination in an annual valuation performed as of June 30. The valuation as of June 30 of a calendar year shall determine the percentage to be applied to compensation for the fiscal year beginning July 1 of the following calendar year. The actuary shall determine the total contributions employer CONTRIBUTION using an actuarial cost method consistent with generally accepted actuarial standards. The total employer contributions shall be equal to the employer normal cost plus the amount required to amortize the past service funding requirement over a period consistent with generally accepted actuarial standards.
C. All contributions made by the employer and allocated to the LTD trust fund established by section 38‑797.02 are irrevocable and shall be used as benefits under this article or to pay expenses of the LTD program.
D. ASRS shall provide a preliminary report on or before November 30 of the valuation year and a final report on or before January 15 of the following year to the governor, the speaker of the house of representatives and the president of the senate on the contribution rate for the ensuing fiscal year.
Sec. 5. Return of contributions; retroactivity
A. This act does not apply to a member of the Arizona state retirement system who retired from and after June 30, 2011 until the effective date of this act or to a person who is no longer employed by an employer that is subject to the Arizona state retirement system on the effective date of this act.
B. On or before June 30, 2012, each employer who is subject to the Arizona state retirement system shall return employee contributions to those current employees who during fiscal year 2011‑2012 had made employee contributions in excess of the employer contributions required pursuant to section 38‑737, Arizona Revised Statutes, that was in effect as of July 1, 2011.
C. This act applies retroactively to from and after June 30, 2011.
Sec. 6. 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.
