CORRECTIONS OFFICER RETIREMENT PLAN
2009 LEGISLATIVE SESSION (ended July 1, 2009)
Bills become law on September 30, 2009 (unless stated otherwise)
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Bills enclosed in a border have been passed. To review a bill in its entirety, please visit the State Legislature’s Website: www.azleg.state.az.us |
HB2110 PUBLIC RETIREMENT PLANS; FEDERAL CHANGES
Various technical changes to EORP, CORP, and PSPRS to conform the plans to federal law.
Provisions
· Mandates that the plan make payments under the regulations of the Internal Revenue Code (IRC).
· Instructs that payments of benefits shall not begin any later than April 1, following the year which the member reaches 70.5 years of age or the date the member terminates employment.
· Caps member compensation at $150,000 from January 1, 1996 through December 31, 2001.
· Caps member compensation at $200,000 beginning January 1, 2002.
· States that if the compensation is established for a time less than 12 months, the compensation limit for that period of time will equal the dollar limit for the calendar year during which the period of time begins multiplied by time served.
· Authorizes the fund manager to adjust annual compensation limits under IRC regulation.
· Sets forth a maximum annual pension of the lesser of $90,000 or 100% percent of the member’s annual salary for years beginning before 1995.
· Sets forth a maximum annual pension of $90,000 for years beginning in 1995 and ending before 2002.
· Sets forth a maximum annual pension of $160,000 for years ending in and after 2002.
· States that the maximum annual pensions will be determined by section 415 of the IRC, and allows the pensions to be reduced to prevent disqualification under this federal law.
· Allows members to redeem services through a lump-sum payment, trustee-trustee transfer, direct rollover, an eligible rollover distribution from an individual retirement account, or annuity.
· Determines that lump-sum payments are eligible for direct rollover distribution.
· Validates service credits for active military service occurring before the member’s current employment if:
· The member was honorably discharged from the military.
· The active military service does not exceed 48 months.
· The period of service for which the member receives credited service is not on account with another retirement system, unless provided by 10 U.S.C. § 12736.
· The member pays to purchase the previous active military service.
· States that an active member who volunteers or is ordered by the military may not receive more than 60 months of military service under the Uniformed Services Employment and Reemployment Rights Act.
· Requires employer and employee contributions to continue if:
· The employee was an active member of the plan the day prior to beginning military service.
· The employee entered into the armed forces or is a member of the National Guard.
· The employee complies with the notice and return to work requirements of 38 U.S.C. § 4312.
· Mandates that contributions made as a result of an active member volunteering or being ordered into military service must be for the period of time beginning on the date the member began military service and ending on the later of:
· The date the member is separated from military service.
· The date the member is released from service-related hospitalization or two years after the start of service-related hospitalization, whichever is earlier.
· The date the member dies as a result of military service.
· Stipulates that a member may not receive credit for any military service in excess of 60 months.
· Instructs the employer and member contributions to be based on the contributions the member would have received but for the military service, and if that rate is indeterminate the contribution rate is based on the member’s average rate of compensation during the 12-month period immediately preceding the military service.
· Allows the member to make contributions up to three times the length of military service so long as that time does not exceed 60 months.
· Requires the employer to make their contributions in a lump sum after the member has made his or her contributions, or upon receipt of the member’s death certificate.
· Directs the employer to make contributions to the plan for any military differential wage pay the employer would have paid to members serving in the military.
· Includes the time of military service in the computation of the member’s total credited service.
· Mandates that the employer and member contributions on the member’s return to employment if the member performs military service due to a presidential call-up, not exceed 48 months.
· States that the statute must be interpreted in a manner consistent with section 414(u) of the IRC.
· Clarifies that a deferred annuity is not a retirement benefit and that annuitants are not permitted to receive a tax-equity benefit allowance, death benefits, benefit increases or group health and accident coverage for retirees.
· States that a retired member of PSPRS is not eligible for pension payments if he or she becomes employed by the employer from which the member retired earlier than 12 months after the member’s retirement.
· Stipulates that the statutes relating to deferred retirement under PSPRS apply to new members and current members who have not already applied for and begun receiving benefits.
· Defines actuarial equivalent, annuitant, direct rollover, distributee, eligible retirement plan and eligible rollover distribution.
· Makes the provisions of the bill retroactive to from and after December 31, 1993.
· Contains a conditional enactment clause.
· Makes technical and conforming changes.
Sponsor: Rep. Boone
Current Action: 7/10 signed by Governor. Chapter 35, Laws 2009.
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HB2109 RETIREMENT SYSTEMS AND PLANS; AMENDMENTS
Changes in statutes governing the Elected Officials Retirement Plan, the Public Safety Personnel Retirement System and the Corrections Officer Retirement Plan pertaining to procedures used when the plan receives an order regarding distribution of a member's community property. The proposed changes of HB2109 are already within A.R.S sections 9-956, 38-822, 38-860, and 38-910. HB2109 relocates the latter provisions into alternative subsections of the aforementioned sections.
Provisions
Sponsor: Rep. Boone
Current Action: Held in Senate.
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HB2326 RETIREMENT; CORP; OMNIBUS AMENDMENTS
Various changes to statutes governing the Corrections Officer Retirement Plan, including the following:
· Defines an “annuitant” as a member with at least ten years of credited service, who terminates employment for reasons other than retirement or disability and receives a lifetime monthly annuity payment
· Enables an annuitant to receive a life-long monthly deferred annuity benefit equal to the actuarial value of a member’s contributions to the plan plus an equal amount paid by the employer
· Enables an annuitant to receive his or her deferred annuity on application on or after the person’s 62nd birthday.
· Provides that annuitants are not eligible for benefit increases, survivor benefits or health insurance subsidy payments.
· Specifies that the definition of a “pension” does not include a deferred annuity and that the definition of a “retired member” does not include an individual receiving a deferred annuity.
· Requires a surviving spouse to have been married for at least two consecutive years to a retired member at the time of the retired member’s death in order to receive a surviving spouse’s pension.
· Requires a surviving spouse to have been married to an active or inactive member on the date of the member’s death in order to receive a surviving spouse’s pension.
· Specifies that a surviving spouse’s pension begins as of the last day of the month following the member’s date of death and ends after the final payment, which is paid on the last day of the month in which the surviving spouse dies.
· Defines an “eligible child” as an unmarried child of a deceased active or retired member who is either:
a) under 18 years old.
b) a full-time student between the ages of 18 and 23.
c) a dependent, of the surviving spouse or guardian, suffering from a disability that began before the age of 23.
· Specifies that a surviving child will stop receiving a surviving child pension payment if the child is no longer a dependent of the surviving spouse or guardian; or, in the case of a disabled child, the child is no longer disabled.
· Requires a local board to be fully constituted within 60 days after the employer’s effective date of participation in the plan.
· Enables the Fund Manager to appoint local board members for two or four-year terms if the local board isn’t fully constituted within 60 days after the employer’s effective date of participation in the plan.
· Enables the Fund Manger to appoint individuals to serve as interim local board members until qualified individuals are appointed or elected.
· Enables the Fund Manager to refuse the granting and approval of relief demanded by a party petitioning a local board or any other local board decision if the Fund Manager determines that granting the relief violates the Internal Revenue Code (IRC) or threatens to impair the plan’s status as a qualified retirement plan under the IRC.
· Requires the Fund Manager to issue a written determination to the local board and the party petitioning the local board for relief if the Fund Manager refuses to grant the relief.
· Subjects a decision to refuse relief to a local board or petitioning party made by the Fund Manager to judicial review.
· Requires local boards to submit to the Fund Manager the names of members affected by local board decisions, a description of the action taken and an explanation of the reasons supporting the local board’s action within 20 business days of taking action.
· Requires local boards to:
a) prescribe procedures to be followed by claimants in filing applications for benefits
b) receive and review the actuarial valuation of the plan for its group of members.
c) receive and review reports of the financial condition and of the receipts and disbursements of the fund from the Fund Manager.
· Stipulates that a limitation period for the Fund Manager or Administrator to contest a local board decision does not apply if that decision violates the IRC or threatens to impair the tax qualified status of the system or plans administered by the Fund Manager or Administrator.
· Clarifies that a local board does not need a separate majority of both appointed and elected members to make a decision.
· Clarifies that CORP employers and not the Fund Manager or plan are required to pay the fees of the medical board and of the local board’s independent legal counsel and all other expenses of the local board necessary for the administration of the plan.
· Indemnifies local boards and individuals of local boards from the assets of the employer in a judgment, including attorney fees and costs arising from any act, or failure to act, made in good faith pursuant to the provisions of the plan.
· Subjects a person who defrauds the plan or who takes, converts, steals or embezzles money from the plan, and who fails or refuses to return the monies to the plan on the Fund Manager’s written request, to civil suit by the plan in Maricopa County Superior Court.
· Requires a person who defrauds the plan or who takes, converts, steals or embezzles money from the Plan to pay for any costs and expenses of any kind to CORP, including attorney fees for CORP to successfully prosecute the action.
· Requires the court to grant the plan a judicial lien on all of the nonexempt property owned by the person when judgment is entered in an amount equal to all amounts awarded to the plan, plus interest, until all owed amounts are paid to CORP.
· Subjects a member, convicted of, or discharged because of, theft, embezzlement, fraud or misappropriation of an employer’s property or property under the control of the employer to restitution and fines imposed by a court of competent jurisdiction.
· Stipulates that an individual, who knowingly makes any false statement or who falsifies or permits to be falsified any record of the plan with an intent to defraud the plan, is subject to a class six felony if found guilty.
· Requires the local board to correct any change or error caused by a member falsifying a record of the plan resulting in a member or beneficiary receiving a benefit payment of more or less than the person should have received.
· Requires the local board, as practicable, to actuarially adjust and pay benefits to a member or beneficiary who received an inaccurate benefit payment as a result of a member falsifying a record of the plan.
· Entitles a member, found guilty of defrauding the plan, converting, stealing or embezzling money from the plan, to a lump sum payment of the member’s accumulated contributions but revokes any benefits regularly awarded to CORP members.
· Enables the Fund Manager to offset any court ordered amounts awarded to the Fund Manager and plan against benefits otherwise payable to a member or survivor.
· Restricts members who are awarded an accidental, ordinary or total and permanent disability pension from participating in the Reverse Deferred Retirement Option Plan (DROP).
· Stipulates that dispatchers must have at least 25 years of credited service in order to be eligible to participate in the Reverse DROP.
· Clarifies that an “employee” means any person who is employed by a participating employer in a designated position.
· Eliminates the definitional requirement that a “member” must work for more than six months in a calendar year.
· Defines “ordinary disability” as a physical or mental condition that the local board determines will totally and permanently prevent an employee from performing a reasonable range of duties or from engaging in any substantial gainful activity within the employee’s department.
· Establishes CORP as a jural entity that may sue and be sued.
· Clarifies that a “temporarily filled position” is a position transferred into and filled by an employee for a period of less than one year.
· Makes identical changes to both versions of statute relating to CORP definitions and retains the conditional enactment date of version two of that statute.
· Allows a retired member of CORP, retroactive to January 1, 2009, to return to work in a designated position while still receiving their pension payment, provided the retired member returns to work at least 12 months after beginning retirement.
· Permits certain part-time employees, retroactive to July 1, 2009, to qualify as members of CORP and is set to repeal June 30, 2011.
· Makes technical and conforming changes.
· Becomes effective on the general effective date or later, subject to the provisions of the conditional enactment.
· Allows a retired member of CORP, retroactive to January 1, 2009, to return to work in a designated position while still receiving their pension payment, provided the retired member returns to work at least 12 months after retirement.
· Permits certain part-time employees, retroactive to July 1, 2009, to qualify as members of CORP and is set to repeal June 30, 2011.
Sponsor: Rep. Boone
Current Action: 7/10 signed by Governor. Chapter 83, Laws 2009.
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HB2007 RETIREMENT; CORP; RETURN TO WORK
Suspension of pension payments for retired members of the Corrections Officer Retirement Plan (CORP) who return to work applies only to those who return within 12 months of retirement or those whose new position does not involve substantial inmate contact. A retired member of CORP may be employed by a member employer and still receive a pension if the re-employment occurs at least 12 months after retirement and the employment involves "substantial" inmate contact. The person does not accrue additional credited service and does not contribute to the fund.
Sponsor: Rep. Konopnicki
Current Action: Held in Senate.
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HB2061 RETIREMENT;
CORP; PROBATION OFFICERS; CUSTOMARY
EMPLOYMENT
The requirement that to be a member of the Corrections Officer Retirement Plan an employee must work for at least 40 hours per week for 6 months a year is relaxed for certain positions (including probation and juvenile detention) to include those who customarily work at least 20 hours a week for at least 20 weeks in a fiscal year. Effective on July 1 of the fiscal year following a determination that CORP is 100% funded. Emergency clause.
Sponsor: Rep. Konopnicki
Current Action: Held in House.
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HB2084 RETIREMENT; CORP; STATE HOSPITAL; EMPLOYEES
Certain specified positions at the Arizona State Hospital (ASH) are designated as qualified to participate in the Corrections Officer Retirement Plan. An ASH employee is eligible for normal CORP retirement after 25 years of service. Provides for joinder and the purchase of credited service. Effective on July 1 of the year following determination that CORP is 100% funded.
First sponsor: Rep. Farley
Others: Rep. Chabin
Current Action: Held in Committees.
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HB 2506 RETIREMENT; CORP; CHAPLAINS; MEMBERSHIP
Chaplains employed by the Department of Corrections are eligible for membership in the Corrections Officer Retirement Plan.
First sponsor: Rep. Pancrazi
Others: Rep. Jones, Rep. McGuire, Rep. Waters, Sen. Aguirre
Current Action: Held in Committees.