Assigned to FICO FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
FACT SHEET FOR H.B. 2203
public retirement plans; liabilities; administration
Purpose
Modifies administration of the Public Safety Personnel Retirement System (PSPRS) and
other PSPRS-managed retirement plans relating to actuarially accrued liability, abandoned
benefits, loans and supplemental plans.
Background
PSPRS provides a uniform, consistent and equitable statewide retirement program for
Arizona’s public safety personnel. PSPRS administers separate plans for Arizona’s elected
officials, known as the Elected Officials’ Retirement Plan (EORP), and for corrections officers,
known as the Corrections Officer Retirement Plan (CORP). If a PSPRS or CORP member's
employment is terminated with an employer by either party, the total liability under the plan or
system associated with the member's service remains with the employer (A.R.S. §§ 38-841;
38-843 and 38-891).
The PSPRS Board of Trustees (PSPRS Board) has the full power in its sole discretion to
invest and reinvest, alter and change the monies accumulated under PSPRS and other PSPRS
Board-administered retirement plans and trusts. All contributions under PSPRS and other PSPRS
Board-administered retirement plans must be forwarded to the PSPRS Board and held, invested
and reinvested as outlined. All property and monies of the PSPRS Fund and other PSPRS Board-
administered retirement plans must be retained for the exclusive benefit of members and must be
used to pay benefits to members or their beneficiaries or to pay operation and administration
expenses (A.R.S. § 38-848).
Statute prohibits participants of the Public Safety Personnel Defined Contribution
Retirement Plan (PSPDCRP) from taking loans on any portion of the accumulated assets in the
participant's annuity account. An annuity account is established for each participant to record the
deposit of participant contributions, employer contributions and interest, dividends or other
accumulations credited on behalf of the participant (A.R.S. §§ 38-865 and 38-867).
The board or employer of an eligible group may establish, administer, manage and operate
a supplemental defined contribution plan. Currently, an eligible group includes: 1) the Arizona
State Retirement System; 2) EORP; 3) PSPRS; 4) CORP; and 5) optional retirement programs
established by a community college district board or the Arizona Board of Regents. A
supplemental defined contribution plan is in addition to and does not replace an employee's
existing state defined benefit retirement plan (A.R.S. §§ 38-951; 38-952; and 38-953).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation. FACT SHEET
H.B. 2203
Page 2
Provisions
PSPRS Actuarially Accrued Liability
(Retroactive to August 6, 2016)
1. Stipulates that, if an active or inactive PSPRS member who is reemployed in the same
retirement plan under PSPRS with a subsequent employer, the assets equal to the actuarially
accrued liability earned with the previous employer through the date of reemployment must
transfer to the subsequent employer and all benefit liabilities for the member are attributed to
that employer.
2. Requires the actuarially accrued liability to be computed using the actuarial methods and
assumptions prescribed by PSPRS's actuary and prescribed by the PSPRS Board.
CORP Actuarially Accrued Liability
(Retroactive to August 10, 2017)
3. Stipulates that, if an active or inactive CORP member who is reemployed in the same
retirement plan under PSPRS with a subsequent employer, the assets equal to the actuarially
accrued liability earned with the previous employer through the date of reemployment must
transfer to the subsequent employer and all benefit liabilities for the member are attributed to
that employer.
4. Requires the actuarially accrued liability to be computed using the actuarial methods and
assumptions prescribed by PSPRS's actuary and prescribed by the PSPRS Board.
Abandoned Monies
5. Exempts all trust funds administered by the PSPRS Board from the Arizona Unclaimed
Property Act.
6. Requires the PSPRS Board to adopt policies for monies presumed to be abandoned, including
requirements for:
a) notifying the presumed owner; and
b) distributing the monies, if the owner establishes an entitlement in the monies.
7. Presumes that monies in PSPRS and any PSPRS Board-administered retirement plans are
abandoned two years after the first occurrence of:
a) the date of the distribution or attempted distribution of the monies;
b) the date of the required distribution stated in the plan or the plan's trust agreement; or
c) if determinable by the holder, the date specified in the federal income tax laws by which
the distribution of monies must begin to avoid a tax penalty.
Supplemental Defined Contribution Plans
8. Adds, to the definition of eligible groups for the purposes of establishing or participating in a
supplemental defined contribution plan, the EODC Retirement System and PSPDCRP. FACT SHEET
H.B. 2203
Page 3
9. Specifies that a supplemental defined contribution plan is in addition to and does not replace
an employee's existing state defined contribution retirement plan.
Miscellaneous
10. Removes the prohibition on a PSPDCRP participant from taking loans on any portion of the
accumulated assets in the participant's annuity account.
11. Requires the late penalty on Elected Officials' Defined Contribution Retirement System
Disability Program employer and employee contributions that are transferred by the Arizona
Department of Administration and each participating county, city or town treasurer to the
PSPRS Board after the due date to be compounded annually, rather than daily.
12. Makes technical and conforming changes.
13. Becomes effective on the general effective date, with retroactive provisions as noted.
House Action
WM 1/31/24 DP 9-0-0-1
3
rd
Read 2/15/24 58-0-1-0-1
Prepared by Senate Research
February 29, 2024
MG/AB/cs