Arizona – The Public Safety Personnel Retirement System reminds employers of corrections officers in Arizona that pension benefits will be replaced with a 401(a) Defined Contribution account for all those hired on or after July 1, 2018.

However, the law provides that AOC probation and surveillance officers hired on or after July 1, 2018, will have the option to choose between a pension (Defined Benefit plan) and the 401(a) retirement account managed by PSPRS and administered by Nationwide Retirement Solutions.

This reform, signed into law in 2017, will not impact the benefits of corrections officers currently employed in Arizona and covered by the Corrections Officer Retirement Plan.

Details of the 401(a) plan include a default 7 percent employee contribution with an employer match of 5 percent. Unlike reforms to PSPRS, which require employees to work 10 years for full vesting of employer matching contributions, the defined contribution plan provides full vesting within only three years.

The 2017 legislation, Senate Bill 1442, also works in tandem with a 2018 referendum to replace CORP’s permanent benefit increase (PBI) with a cost-of-living-adjustment similar to what Prop 124 did for the PSPRS plan. Additionally, this bill requires that PSPRS and each employer publish on their websites the funding ratio of each plan in the system.

Click here for more information on SB1442.