Public safety personnel retirement system

interoffice memorandum

to:                 MEMBERS and employer groups

from:           tracey peterson

subject:       supplemental defined contribution plan

date:      monday, September 15, 2003

The supplemental defined contribution plan has been available to members and employer groups since 2001.  Recently, there have been some legislative changes to the supplemental defined contribution plan and PSPRS received an IRS private letter ruling allowing contributions to the supplemental defined contribution plan to be on a pre-tax basis.  This ruling and the legislative changes may make the supplemental defined contribution plan more attractive to our members and employer groups. 

In order to participate in the supplemental defined contribution plan through PSPRS, the employer groups must sign a joinder agreement with PSPRS.  Please note that the supplemental defined contribution plan is in addition to and does not replace the employee’s existing state defined benefit retirement plan.

Effective September 18, 2003, Senate Bill 1224 amends A.R.S. 38-952 and 38-953 regarding the supplemental defined contribution plan.

To briefly summarize Senate Bill 1224, all employee contributions shall be made on a pre-tax basis; an employee has two years from the date of eligibility to elect to participate; the election to participate is irrevocable and continues for the remainder of the employee’s employment with that employer; the employee must contribute at least 1% of gross compensation; and, an employer may match the employee contributions.

If you and your employees are interested in participating in the Supplemental Defined Contribution Plan, please contact our office for additional information.