Arizona 2025 Regular Session

Arizona Senate Bill SB1148 Compare Versions

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1-Senate Engrossed CORP; defined contribution; membership election (now: CORP; defined contributions) State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SENATE BILL 1148 An Act amending sections 38-865 and 38-867, Arizona Revised Statutes; relating to public retirement systems. (TEXT OF BILL BEGINS ON NEXT PAGE)
1+REFERENCE TITLE: CORP; defined contribution; membership election State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SB 1148 Introduced by Senator Payne An Act amending sections 38-865, 38-881 and 38-881.01, Arizona Revised Statutes; amending title 38, chapter 5, article 6, Arizona Revised Statutes, by adding section 38-881.02; relating to public retirement systems. (TEXT OF BILL BEGINS ON NEXT PAGE)
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68+amending sections 38-865, 38-881 and 38-881.01, Arizona Revised Statutes; amending title 38, chapter 5, article 6, Arizona Revised Statutes, by adding section 38-881.02; relating to public retirement systems.
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71- Be it enacted by the Legislature of the State of Arizona: Section 1. Section 38-865, Arizona Revised Statutes, is amended to read: START_STATUTE38-865. Definitions In this article, unless the context otherwise requires: 1. "Annuity account" means an account that 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. 2. "Board" means the board of trustees of the public safety personnel retirement system established by section 38-848. 3. "Compensation": (a) For participants as defined in paragraph 7, subdivision (a) of this section and section 38-865.01, has the same meaning prescribed in section 38-842. (b) For participants as defined in paragraph 7, subdivision (b) of this section, means salary as defined in section 38-881. 4. "Defined contribution plan" means the public safety personnel defined contribution retirement plan established pursuant to this article. 5. "Employer" has the same meaning prescribed in section 38-842 or 38-881, as applicable. 6. "Employer contribution" means an amount deposited by an employer, from the employer's own monies, in the participant's annuity account on a periodic basis coinciding with the participant's regular pay period. 7. "Participant" means: (a) A member as defined in section 38-842, paragraph 31, subdivision (a), excluding subdivision (a), item (vi), who is one of the following: (i) An employee who is hired on or after July 1, 2017, who makes the irrevocable election to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the system or a member of the system with a disability on June 30, 2017. (ii) An employee who is hired on or after July 1, 2017, who is not covered by the federal old age and survivors insurance system and who makes the irrevocable election to participate in the system or is enrolled in the system pursuant to section 38-842.01, subsection A. (b) A member as defined in section 38-881, paragraph 27, subdivision (a) who is one of the following: (i) An employee who is hired on or after July 1, 2018 and before July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018. (ii) An employee who is hired on or after July 1, 2018, who is in a designated position as defined in section 38-881, paragraph 13, subdivision (g), who makes the irrevocable election pursuant to section 38-881.01 to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018. (iii) An employee who is hired on or after July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026. 8. "Pensionable compensation" means the amount of the participant's annual compensation that does not exceed the limitation specified in section 38-843.04 or 38-895.01, as applicable. 9. "System" means the public safety personnel retirement system established by article 4 of this chapter. END_STATUTE Sec. 2. Section 38-867, Arizona Revised Statutes, is amended to read: START_STATUTE38-867. Contributions; member; employer; pickup A. Each participant in the defined contribution plan shall contribute the following percentage of the participant's gross pensionable compensation by salary reduction that shall be deposited in the participant's annuity account: 1. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (ii), three percent. 2. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (i), nine percent. 3. For a participant as defined in section 38-865, paragraph 7, subdivision (b), items (i) and (ii), seven percent. 4. For a participant as defined in section 38-865, paragraph 7, subdivision (b), item (iii), seven and one-half percent. B. A participant as defined in section 38-865 may make a onetime irrevocable election, before the participant is eligible to participate in any qualified plan of the employer, to contribute more than the percentage of the participant's gross pensionable compensation specified in this section, up to the amount allowable under section 415(c) of the internal revenue code. A participant as defined in section 38-865, paragraph 7, subdivision (b), item (i) or (ii) may make a onetime irrevocable election, before the participant is eligible to participate in any qualified plan of the employer, to contribute less than the percentage of the participant's gross pensionable compensation specified in this section but may not elect to contribute less than five percent of the participant's gross pensionable compensation. The election made pursuant to this subsection shall be the participant's contribution rate for the remainder of the participant's employment. C. Although designated as employee contributions, all participant contributions made to the defined contribution plan shall be picked up and paid by the employer in lieu of contributions by the employee. The contributions picked up by an employer may be made through a reduction in the participant's compensation. A participant in the defined contribution plan may not choose to receive the contributed amounts directly instead of the employer paying the amounts to the defined contribution plan. All participant contributions that are picked up by the employer as provided in this subsection shall be treated as employer contributions under section 414(h) of the internal revenue code, shall be excluded from the participant's gross income for federal and state income tax purposes and are includable in the gross income of the participant or the participant's beneficiaries only in the taxable year in which they are distributed. D. Each employer shall annually make a contribution equal to the following percentages of each participant's gross pensionable compensation: 1. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (ii), three percent. 2. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (i), nine percent. 3. For a participant as defined in section 38-865, paragraph 7, subdivision (b), five percent. 4. Beginning July 1, 2026, for a participant as defined in section 38-865, paragraph 7, subdivision (b), item (i) or (iii), ten percent. E. The pro rata share of the amount paid in subsection D of this section shall be paid on each date that a participant contribution is made and shall be credited to the participant's annuity account. F. Each participant as defined in section 38-865, paragraph 7, subdivision (a), item (i) and subdivision (b) and each employer shall contribute: 1. To the public safety personnel defined contribution retirement plan disability program established by article 4.2 of this chapter. 2. For participants who make an election pursuant to section 38-869, an equal amount for the group health benefits plan payments as specified in section 38-869 as determined by actuarial valuations reported by the board to the employer and local board, which shall be deposited in a separate account established pursuant to section 38-869. G. A participant's contributions and earnings on those contributions are immediately vested. H. A participant as defined in section 38-865, paragraph 7, subdivision (a) or section 38-865.01 is fully vested in the defined contribution plan after ten years of service, with employer contributions vesting at a rate of ten percent per year. If a participant described in this subsection dies or is determined to be eligible for an accidental or catastrophic disability pension pursuant to section 38-844 before completing ten years of service, the employer contributions are immediately fully vested. I. A participant as defined in section 38-865, paragraph 7, subdivision (b) is fully vested in the defined contribution plan after three years of service, with the employer contributions vesting at the following rates: 1. Twenty-five percent after the first year of service. 2. Fifty percent after the second year of service. 3. One hundred percent after the third year of service. J. If a participant as defined in section 38-865, paragraph 7, subdivision (b) dies or is determined to be eligible for an accidental or total and permanent disability pension pursuant to section 38-886 before completing three years of service, the employer contributions are immediately fully vested. END_STATUTE
78+ Be it enacted by the Legislature of the State of Arizona: Section 1. Section 38-865, Arizona Revised Statutes, is amended to read: START_STATUTE38-865. Definitions In this article, unless the context otherwise requires: 1. "Annuity account" means an account that 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. 2. "Board" means the board of trustees of the public safety personnel retirement system established by section 38-848. 3. "Compensation": (a) For participants as defined in paragraph 7, subdivision (a) of this section and section 38-865.01, has the same meaning prescribed in section 38-842. (b) For participants as defined in paragraph 7, subdivision (b) of this section, means salary as defined in section 38-881. 4. "Defined contribution plan" means the public safety personnel defined contribution retirement plan established pursuant to this article. 5. "Employer" has the same meaning prescribed in section 38-842 or 38-881, as applicable. 6. "Employer contribution" means an amount deposited by an employer, from the employer's own monies, in the participant's annuity account on a periodic basis coinciding with the participant's regular pay period. 7. "Participant" means: (a) A member as defined in section 38-842, paragraph 31, subdivision (a), excluding subdivision (a), item (vi), who is one of the following: (i) An employee who is hired on or after July 1, 2017, who makes the irrevocable election to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the system or a member of the system with a disability on June 30, 2017. (ii) An employee who is hired on or after July 1, 2017, who is not covered by the federal old age and survivors insurance system and who makes the irrevocable election to participate in the system or is enrolled in the system pursuant to section 38-842.01, subsection A. (b) A member as defined in section 38-881, paragraph 27, subdivision (a) who is one of the following: (i) Except as provided in item (iii) of this subdivision and section 38-881.02, an employee who is hired on or after July 1, 2018, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018. (ii) An employee who is hired on or after July 1, 2018, who is in a designated position as defined in section 38-881, paragraph 13, subdivision (g), who makes the irrevocable election pursuant to section 38-881.01 to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018. (iii) An employee who is hired on or after July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g), who makes the irrevocable election pursuant to section 38-881.01 to participate solely in the defined contribution retirement plan established pursuant to this article and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026. 8. "Pensionable compensation" means the amount of the participant's annual compensation that does not exceed the limitation specified in section 38-843.04 or 38-895.01, as applicable. 9. "System" means the public safety personnel retirement system established by article 4 of this chapter.END_STATUTE Sec. 2. Section 38-881, Arizona Revised Statutes, is amended to read: START_STATUTE38-881. Definitions In this article, unless the context otherwise requires: 1. "Accidental disability" means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's department and was incurred in the performance of the employee's duties. 2. "Accumulated member contributions" means for each member the sum of the amount of all the member's contributions deducted from the member's salary and paid to the fund, plus member contributions transferred to the fund by another retirement plan covering public employees of this state, plus previously withdrawn accumulated member contributions that are repaid to the fund in accordance with this article, minus any benefits paid to or on behalf of a member. 3. "Actuarial equivalent" means equality in present value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest assumptions adopted by the board. 4. "Alternate payee" means the spouse or former spouse of a participant as designated in a domestic relations order. 5. "Alternate payee's portion" means benefits that are payable to an alternate payee pursuant to a plan approved domestic relations order. 6. "Annuitant" means a person who is receiving a benefit pursuant to section 38-911. 7. "Average monthly salary" means: (a) For an employee who becomes a member of the plan: (i) Before January 1, 2012, one-thirty-sixth of the aggregate amount of salary that is paid a member by a participating employer during a period of thirty-six consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service. (ii) On or after January 1, 2012 and before July 1, 2018, one-sixtieth of the aggregate amount of salary that is paid a member by a participating employer during a period of sixty consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service. (iii) On or after July 1, 2018, one-sixtieth of the aggregate amount of salary that is paid a member by a participating employer during a period of sixty consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service. (b) The aggregate amount of salary that is paid a member divided by the member's months of service if the member has less than thirty-six or sixty months of service. In the computation under this paragraph, a period of nonpaid or partially paid industrial leave shall be considered based on the salary the employee would have received in the employee's job classification if the employee was not on industrial leave. 8. "Beneficiary" means an individual who is being paid or who has entitlement to the future payment of a pension on account of a reason other than the individual's membership in the retirement plan. 9. "Board" means the board of trustees of the public safety personnel retirement system. 10. "Claimant" means a member, beneficiary or estate that files an application for benefits with the retirement plan. 11. "Credited service" means credited service transferred to the retirement plan from another retirement system or plan for public employees of this state, plus those compensated periods of service as a member of the retirement plan for which member contributions are on deposit in the fund. 12. "Cure period" means the ninety-day period in which a participant or alternate payee may submit an amended domestic relations order and request a determination, calculated from the time the plan issues a determination finding that a previously submitted domestic relations order did not qualify as a plan approved domestic relations order. 13. "Designated position" means: (a) For a county: (i) A county detention officer. (ii) A nonuniformed employee of a sheriff's department whose primary duties require direct contact with inmates. (b) For the state department of corrections and the department of juvenile corrections, only the following specifically designated positions: (i) Food service. (ii) Nursing personnel. (iii) Corrections physician assistant. (iv) Therapist. (v) Corrections dental assistant. (vi) Hygienist. (vii) Corrections medical assistant. (viii) Correctional service officer, including assistant deputy warden, deputy warden, warden and superintendent. (ix) State correctional program officer. (x) Parole or community supervision officers. (xi) Investigators. (xii) Teachers. (xiii) Institutional maintenance workers. (xiv) Youth corrections officer. (xv) Youth program officer. (xvi) Behavioral health treatment unit managers. (xvii) The director and assistant directors of the department of juvenile corrections and the superintendent of the state educational system for committed youth. (xviii) The director, deputy directors and assistant directors of the state department of corrections. (xix) Other positions designated by the local board of the state department of corrections or the local board of the department of juvenile corrections pursuant to section 38-891. (c) For a city or town, a city or town detention officer. (d) For an employer of an eligible group as defined in section 38-842, full-time dispatchers. (e) For the judiciary, juvenile detention officers and those positions designated by the local board of the judiciary pursuant to section 38-891. (f) For the department of public safety, state detention officers. (g) For the judiciary, probation and surveillance officers. 14. "Determination" means a written document that indicates to a participant and alternate payee whether a domestic relations order qualifies as a plan approved domestic relations order. 15. "Determination period" means the ninety-day period in which the plan must review a domestic relations order that is submitted by a participant or alternate payee to determine whether the domestic relations order qualifies as a plan approved domestic relations order, calculated from the time the plan mails a notice of receipt to the participant and alternate payee. 16. "Direct rollover" means a payment by the plan to an eligible retirement plan that is specified by the distributee. 17. "Distributee" means a member, a member's surviving spouse or a member's spouse or former spouse who is the alternate payee under a plan approved domestic relations order. 18. "Domestic relations order" means an order of a court of this state that is made pursuant to the domestic relations laws of this state and that creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive a portion of the benefits payable to a participant. 19. "Eligible child" means an unmarried child of a deceased active or retired member who meets one of the following qualifications: (a) Is under eighteen years of age. (b) Is at least eighteen years of age and under twenty-three years of age only during any period that the child is a full-time student. (c) Is under a disability that began before the child attained twenty-three years of age and remains a dependent of the surviving spouse or guardian. 20. "Eligible retirement plan" means any of the following that accepts a distributee's eligible rollover distribution: (a) An individual retirement account described in section 408(a) of the internal revenue code. (b) An individual retirement annuity described in section 408(b) of the internal revenue code. (c) An annuity plan described in section 403(a) of the internal revenue code. (d) A qualified trust described in section 401(a) of the internal revenue code. (e) An annuity contract described in section 403(b) of the internal revenue code. (f) An eligible deferred compensation plan described in section 457(b) of the internal revenue code that is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into the eligible deferred compensation plan from this plan. (g) Effective January 1, 2008, a Roth individual retirement account that satisfies the requirements of section 408A of the internal revenue code. (h) For distributions made after December 18, 2015, a simple retirement account as defined in section 408(p) of the internal revenue code. 21. "Eligible rollover distribution" means a payment to a distributee, but does not include any of the following: (a) Any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the member or the joint lives or joint life expectancies of the member and the member's beneficiary or for a specified period of ten years or more. (b) Any distribution to the extent the distribution is required under section 401(a)(9) of the internal revenue code. (c) The portion of any distribution that may not be included in gross income. (d) Any distribution made to satisfy the requirements of section 415 of the internal revenue code. (e) Hardship distributions. (f) Similar items designated by the commissioner of the United States internal revenue service in revenue rulings, notices and other guidance published in the internal revenue bulletin. 22. "Employee" means a person employed by a participating employer in a designated position. 23. "Employer" means an agency or department of this state or a political subdivision of this state that has one or more employees in a designated position. 24. "Fund" means the corrections officer retirement plan fund. 25. "Juvenile detention officer" means a juvenile detention officer responsible for the direct custodial supervision of juveniles who are detained in a county juvenile detention center. 26. "Local board" means the retirement board of the employer that consists of persons appointed or elected to administer the plan as it applies to the employer's members in the plan. 27. "Member": (a) Means any employee who meets all of the following qualifications: (i) Who is a full-time paid person employed by a participating employer in a designated position. (ii) Who is receiving salary for personal services rendered to a participating employer or would be receiving salary except for an authorized leave of absence. (iii) Whose customary employment is at least forty hours each week. (b) Includes an employee who meets the requirements of subdivision (a) of this paragraph, and who meets one of the following: (i) Is hired on or after July 1, 2018, who is in a designated position as defined in paragraph 13, subdivision (g) of this section and who makes the irrevocable election to participate in the plan pursuant to section 38-881.01. (ii) Is hired on or after July 1, 2026 and who makes the irrevocable election to participate in the plan pursuant to section 38-881.01. (iii) Is hired on or after July 1, 2018 and before the effective date of this amendment to this section and who makes the irrevocable election to participate in the plan pursuant to section 38-881.02. (c) Except as provided in subdivision (b) of this paragraph, does not include an employee who is hired on or after July 1, 2018, unless the employee was an active, an inactive or a retired member of the plan or a member of the plan with a disability on June 30, 2018. 28. "Normal retirement date" means: (a) For an employee who becomes a member of the plan before January 1, 2012, the first day of the calendar month immediately following the employee's completion of twenty years of service or, in the case of a dispatcher, twenty-five years of service, the employee's sixty-second birthday and completion of ten years of service or the month in which the sum of the employee's age and years of credited service equals eighty. (b) For an employee who becomes a member of the plan on or after January 1, 2012 and before July 1, 2018, the first day of the calendar month immediately following the employee's completion of twenty-five years of service if the employee is at least fifty-two and one-half years of age or the employee's sixty-second birthday and completion of ten years of service. (c) For an employee who becomes a member of the plan on or after July 1, 2018, the first day of the calendar month immediately following the employee's completion of ten years of credited service if the employee is at least fifty-five years of age. 29. "Notice of receipt" means a written document that is issued by the plan to a participant and alternate payee and that states that the plan has received a domestic relations order and a request for a determination that the domestic relations order is a plan approved domestic relations order. 30. "Ordinary disability" means a physical condition that the local board determines will totally and permanently prevent an employee from performing a reasonable range of duties within the employee's department or a mental condition that the local board determines will totally and permanently prevent an employee from engaging in any substantial gainful activity. 31. "Participant" means a member who is subject to a domestic relations order. 32. "Participant's portion" means benefits that are payable to a participant pursuant to a plan approved domestic relations order. 33. "Participating employer" means an employer that the board has determined to have one or more employees in a designated position or a county, city, town or department of this state that has entered into a joinder agreement pursuant to section 38-902. 34. "Pension" means a series of monthly payments by the retirement plan but does not include an annuity that is payable pursuant to section 38-911. 35. "Personal representative" means the personal representative of a deceased alternate payee. 36. "Physician" means a physician who is licensed pursuant to title 32, chapter 13 or 17. 37. "Plan approved domestic relations order" means a domestic relations order that the plan approves as meeting all the requirements for a plan approved domestic relations order as otherwise prescribed in this article. 38. "Plan year" or "fiscal year" means the period beginning on July 1 of any year and ending on June 30 of the next succeeding year. 39. "Probation or surveillance officer" means an officer appointed pursuant to section 8-203, 12-251 or 12-259 but does not include other personnel, office assistants or support staff. 40. "Retired member" means an individual who terminates employment and who is receiving a pension pursuant to either section 38-885 or 38-886. 41. "Retirement" or "retired" means termination of employment after a member has fulfilled all requirements for a pension or, for an employee who becomes a member of the plan on or after January 1, 2012, attains the age and service requirements for a normal retirement date. 42. "Retirement plan" or "plan" means the corrections officer retirement plan established by this article. 43. "Salary" means the base salary, shift differential pay, military differential wage pay and holiday pay paid a member for personal services rendered in a designated position to a participating employer on a regular monthly, semimonthly or biweekly payroll basis. Salary includes amounts that are subject to deferred compensation or tax shelter agreements. Salary does not include payment for any remuneration or reimbursement other than as prescribed by this paragraph. For the purposes of this paragraph, "base salary" means the amount of compensation each member is regularly paid for personal services rendered to an employer before the addition of any extra monies, including overtime pay, shift differential pay, holiday pay, fringe benefit pay and similar extra payments. 44. "Segregated funds" means the amount of benefits that would currently be payable to an alternate payee pursuant to a domestic relations order under review by the plan, or a domestic relations order submitted to the plan that failed to qualify as a plan approved domestic relations order, if the domestic relations order were determined to be a plan approved domestic relations order. 45. "Service" means employment rendered to a participating employer as an employee in a designated position. Any absence that is authorized by an employer, including any periods during which the employee is on an employer-sponsored long-term disability program, is considered as service if the employee returns or is deemed by the employer to have returned to a designated position within the period of the authorized absence. 46. "Total and permanent disability" means a physical or mental condition that is not an accidental disability, that the local board finds totally and permanently prevents a member from engaging in any gainful employment and that is the direct and proximate result of the member's performance of the member's duty as an employee of a participating employer. END_STATUTE Sec. 3. Section 38-881.01, Arizona Revised Statutes, is amended to read: START_STATUTE38-881.01. Employees hired on or after July 1, 2018; employees hired on or after July 1, 2026; defined contribution plan; benefit election; disability A. Except as provided in subsection subsections B and C of this section, an employee who is hired on or after July 1, 2018 and before July 1, 2026, who is a member as defined in section 38-881, paragraph 27, subdivision (a) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018 shall participate in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter. For an employee who is hired on or after September 1, 2019, the employee's participation in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired. B. An employee who is hired on or after July 1, 2018, who is in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018 is eligible to participate in the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter, depending on the employee's election under this section. During the first sixty days of an employee's employment and before the employee makes a decision regarding the individual's retirement plan, the board shall provide each probation and surveillance officer who is hired on or after July 1, 2018 interactive, objective educational training, counseling and participant-specific plan information about both the corrections officer retirement plan and the public safety personnel defined contribution retirement plan options. The employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired. Unless the elections made under this section are made before the ninetieth day after the date of employment, the employee is automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment. Any election made under this section is irrevocable and is the employee's election for the remainder of the employee's employment, unless the employee is subsequently in a position that allows for an election under this section. If an employee is subsequently rehired after a bona fide termination of employment from the employee's employer of not less than six months with no prearranged reemployment agreement with the employer or hired by a new employer, the employee may make a new election under this section before the ninetieth day after the date of hire. If the employee does not make a new election within that time frame, the employee's previous election will continue. The employee may make one of the following irrevocable elections: 1. To participate solely in the corrections officer retirement plan. 2. To participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter. C. An employee who is hired on or after July 1, 2026, who is a member as defined in section 38-881, paragraph 27, subdivision (a) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026 is eligible to participate in the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter, depending on the employee's election under this section. During the first sixty days of an employee's employment and before the employee makes a decision regarding the individual's retirement plan, the board shall provide each employee who is hired on or after July 1, 2026 interactive, objective educational training, counseling and participant-specific plan information about both the corrections officer retirement plan and the public safety personnel defined contribution retirement plan options. The employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired. Unless the elections made under this section are made before the ninetieth day after the date of employment, the employee is automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment. Any election made under this section is irrevocable and is the employee's election for the remainder of the employee's employment, unless the employee is subsequently in a position that allows for an election under this section. If an employee is subsequently rehired after a bona fide termination of employment from the employee's employer of not less than six months with no prearranged reemployment agreement with the employer or hired by a new employer, the employee may make a new election under this section before the ninetieth day after the date of hire. If the employee does not make a new election within that time frame, the employee's previous election will continue. The employee may make one of the following irrevocable elections: 1. To participate solely in the corrections officer retirement plan. 2. To participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter. C. D. If an employee specified in subsection subsections B and C of this section in the employee's first ninety days of employment is determined to be eligible for an accidental or total and permanent disability pension pursuant to section 38-886, the employee shall be automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment with any employer under the plan commencing on the employee's date of disability and shall receive an accidental or total and permanent disability pension as prescribed in this article. D. E. If an employee specified in subsection subsections B and C of this section in the employee's first ninety days of employment is killed in the line of duty or dies from injuries suffered in the line of duty, the employee shall be considered as having been enrolled in the corrections officer retirement plan and the surviving spouse of the deceased employee is eligible for survivor benefits as prescribed in this article. E. F. Notwithstanding subsection subsections B and C of this section, if an employee who is hired on or after July 1, 2018 and who is an active or inactive member of the plan or a participant in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter is subsequently rehired by the employee's previous employer or another employer under the corrections officer retirement plan, the employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan, for which the employee had elected to participate, begins on the date the employee is rehired or hired by another employer. If the employee makes a new election pursuant to subsection subsections B and C of this section, the employee's participation in the previous plan continues until the date in on which the employee makes a different election, not to exceed ninety days after the date of hire for the eligible position. END_STATUTE Sec. 4. Title 38, chapter 5, article 6, Arizona Revised Statutes, is amended by adding section 38-881.02, to read: START_STATUTE38-881.02. Employees hired on and after July 1, 2018 and before the effective date of this section; benefit election A. Notwithstanding section 38-881.01, subsection A, a person who is a member as defined in section 38-881, paragraph 27, subdivision (a), who was hired on or after July 1, 2018 and before the effective date of this section and who participates in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter has ninety days after the effective date of this section to make one of the following elections: 1. To continue participating in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter. 2. To participate solely in the corrections officer retirement plan. B. If an election is not made under this section before the ninetieth day after the effective date of this section, the employee shall continue to be enrolled in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter for the remainder of the employee's employment.END_STATUTE
7279
7380 Be it enacted by the Legislature of the State of Arizona:
7481
7582 Section 1. Section 38-865, Arizona Revised Statutes, is amended to read:
7683
7784 START_STATUTE38-865. Definitions
7885
7986 In this article, unless the context otherwise requires:
8087
8188 1. "Annuity account" means an account that 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.
8289
8390 2. "Board" means the board of trustees of the public safety personnel retirement system established by section 38-848.
8491
8592 3. "Compensation":
8693
8794 (a) For participants as defined in paragraph 7, subdivision (a) of this section and section 38-865.01, has the same meaning prescribed in section 38-842.
8895
8996 (b) For participants as defined in paragraph 7, subdivision (b) of this section, means salary as defined in section 38-881.
9097
9198 4. "Defined contribution plan" means the public safety personnel defined contribution retirement plan established pursuant to this article.
9299
93100 5. "Employer" has the same meaning prescribed in section 38-842 or 38-881, as applicable.
94101
95102 6. "Employer contribution" means an amount deposited by an employer, from the employer's own monies, in the participant's annuity account on a periodic basis coinciding with the participant's regular pay period.
96103
97104 7. "Participant" means:
98105
99106 (a) A member as defined in section 38-842, paragraph 31, subdivision (a), excluding subdivision (a), item (vi), who is one of the following:
100107
101108 (i) An employee who is hired on or after July 1, 2017, who makes the irrevocable election to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the system or a member of the system with a disability on June 30, 2017.
102109
103110 (ii) An employee who is hired on or after July 1, 2017, who is not covered by the federal old age and survivors insurance system and who makes the irrevocable election to participate in the system or is enrolled in the system pursuant to section 38-842.01, subsection A.
104111
105112 (b) A member as defined in section 38-881, paragraph 27, subdivision (a) who is one of the following:
106113
107-(i) An employee who is hired on or after July 1, 2018 and before July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018.
114+(i) Except as provided in item (iii) of this subdivision and section 38-881.02, an employee who is hired on or after July 1, 2018, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018.
108115
109116 (ii) An employee who is hired on or after July 1, 2018, who is in a designated position as defined in section 38-881, paragraph 13, subdivision (g), who makes the irrevocable election pursuant to section 38-881.01 to participate solely in the defined contribution plan established pursuant to this article and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018.
110117
111-(iii) An employee who is hired on or after July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026.
118+(iii) An employee who is hired on or after July 1, 2026, who is not in a designated position as defined in section 38-881, paragraph 13, subdivision (g), who makes the irrevocable election pursuant to section 38-881.01 to participate solely in the defined contribution retirement plan established pursuant to this article and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026.
112119
113120 8. "Pensionable compensation" means the amount of the participant's annual compensation that does not exceed the limitation specified in section 38-843.04 or 38-895.01, as applicable.
114121
115122 9. "System" means the public safety personnel retirement system established by article 4 of this chapter.END_STATUTE
116123
117-Sec. 2. Section 38-867, Arizona Revised Statutes, is amended to read:
124+Sec. 2. Section 38-881, Arizona Revised Statutes, is amended to read:
118125
119-START_STATUTE38-867. Contributions; member; employer; pickup
126+START_STATUTE38-881. Definitions
120127
121-A. Each participant in the defined contribution plan shall contribute the following percentage of the participant's gross pensionable compensation by salary reduction that shall be deposited in the participant's annuity account:
128+In this article, unless the context otherwise requires:
122129
123-1. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (ii), three percent.
130+1. "Accidental disability" means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's department and was incurred in the performance of the employee's duties.
124131
125-2. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (i), nine percent.
132+2. "Accumulated member contributions" means for each member the sum of the amount of all the member's contributions deducted from the member's salary and paid to the fund, plus member contributions transferred to the fund by another retirement plan covering public employees of this state, plus previously withdrawn accumulated member contributions that are repaid to the fund in accordance with this article, minus any benefits paid to or on behalf of a member.
126133
127-3. For a participant as defined in section 38-865, paragraph 7, subdivision (b), items (i) and (ii), seven percent.
134+3. "Actuarial equivalent" means equality in present value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest assumptions adopted by the board.
128135
129-4. For a participant as defined in section 38-865, paragraph 7, subdivision (b), item (iii), seven and one-half percent.
136+4. "Alternate payee" means the spouse or former spouse of a participant as designated in a domestic relations order.
130137
131-B. A participant as defined in section 38-865 may make a onetime irrevocable election, before the participant is eligible to participate in any qualified plan of the employer, to contribute more than the percentage of the participant's gross pensionable compensation specified in this section, up to the amount allowable under section 415(c) of the internal revenue code. A participant as defined in section 38-865, paragraph 7, subdivision (b), item (i) or (ii) may make a onetime irrevocable election, before the participant is eligible to participate in any qualified plan of the employer, to contribute less than the percentage of the participant's gross pensionable compensation specified in this section but may not elect to contribute less than five percent of the participant's gross pensionable compensation. The election made pursuant to this subsection shall be the participant's contribution rate for the remainder of the participant's employment.
138+5. "Alternate payee's portion" means benefits that are payable to an alternate payee pursuant to a plan approved domestic relations order.
132139
133-C. Although designated as employee contributions, all participant contributions made to the defined contribution plan shall be picked up and paid by the employer in lieu of contributions by the employee. The contributions picked up by an employer may be made through a reduction in the participant's compensation. A participant in the defined contribution plan may not choose to receive the contributed amounts directly instead of the employer paying the amounts to the defined contribution plan. All participant contributions that are picked up by the employer as provided in this subsection shall be treated as employer contributions under section 414(h) of the internal revenue code, shall be excluded from the participant's gross income for federal and state income tax purposes and are includable in the gross income of the participant or the participant's beneficiaries only in the taxable year in which they are distributed.
140+6. "Annuitant" means a person who is receiving a benefit pursuant to section 38-911.
134141
135-D. Each employer shall annually make a contribution equal to the following percentages of each participant's gross pensionable compensation:
142+7. "Average monthly salary" means:
136143
137-1. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (ii), three percent.
144+(a) For an employee who becomes a member of the plan:
138145
139-2. For a participant as defined in section 38-865, paragraph 7, subdivision (a), item (i), nine percent.
146+(i) Before January 1, 2012, one-thirty-sixth of the aggregate amount of salary that is paid a member by a participating employer during a period of thirty-six consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service.
140147
141-3. For a participant as defined in section 38-865, paragraph 7, subdivision (b), five percent.
148+(ii) On or after January 1, 2012 and before July 1, 2018, one-sixtieth of the aggregate amount of salary that is paid a member by a participating employer during a period of sixty consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service.
142149
143-4. Beginning July 1, 2026, for a participant as defined in section 38-865, paragraph 7, subdivision (b), item (i) or (iii), ten percent.
150+(iii) On or after July 1, 2018, one-sixtieth of the aggregate amount of salary that is paid a member by a participating employer during a period of sixty consecutive months of service in which the member received the highest salary within the last one hundred twenty months of service.
144151
145-E. The pro rata share of the amount paid in subsection D of this section shall be paid on each date that a participant contribution is made and shall be credited to the participant's annuity account.
152+(b) The aggregate amount of salary that is paid a member divided by the member's months of service if the member has less than thirty-six or sixty months of service. In the computation under this paragraph, a period of nonpaid or partially paid industrial leave shall be considered based on the salary the employee would have received in the employee's job classification if the employee was not on industrial leave.
146153
147-F. Each participant as defined in section 38-865, paragraph 7, subdivision (a), item (i) and subdivision (b) and each employer shall contribute:
154+8. "Beneficiary" means an individual who is being paid or who has entitlement to the future payment of a pension on account of a reason other than the individual's membership in the retirement plan.
148155
149-1. To the public safety personnel defined contribution retirement plan disability program established by article 4.2 of this chapter.
156+9. "Board" means the board of trustees of the public safety personnel retirement system.
150157
151-2. For participants who make an election pursuant to section 38-869, an equal amount for the group health benefits plan payments as specified in section 38-869 as determined by actuarial valuations reported by the board to the employer and local board, which shall be deposited in a separate account established pursuant to section 38-869.
158+10. "Claimant" means a member, beneficiary or estate that files an application for benefits with the retirement plan.
152159
153-G. A participant's contributions and earnings on those contributions are immediately vested.
160+11. "Credited service" means credited service transferred to the retirement plan from another retirement system or plan for public employees of this state, plus those compensated periods of service as a member of the retirement plan for which member contributions are on deposit in the fund.
154161
155-H. A participant as defined in section 38-865, paragraph 7, subdivision (a) or section 38-865.01 is fully vested in the defined contribution plan after ten years of service, with employer contributions vesting at a rate of ten percent per year. If a participant described in this subsection dies or is determined to be eligible for an accidental or catastrophic disability pension pursuant to section 38-844 before completing ten years of service, the employer contributions are immediately fully vested.
162+12. "Cure period" means the ninety-day period in which a participant or alternate payee may submit an amended domestic relations order and request a determination, calculated from the time the plan issues a determination finding that a previously submitted domestic relations order did not qualify as a plan approved domestic relations order.
156163
157-I. A participant as defined in section 38-865, paragraph 7, subdivision (b) is fully vested in the defined contribution plan after three years of service, with the employer contributions vesting at the following rates:
164+13. "Designated position" means:
158165
159-1. Twenty-five percent after the first year of service.
166+(a) For a county:
160167
161-2. Fifty percent after the second year of service.
168+(i) A county detention officer.
162169
163-3. One hundred percent after the third year of service.
170+(ii) A nonuniformed employee of a sheriff's department whose primary duties require direct contact with inmates.
164171
165-J. If a participant as defined in section 38-865, paragraph 7, subdivision (b) dies or is determined to be eligible for an accidental or total and permanent disability pension pursuant to section 38-886 before completing three years of service, the employer contributions are immediately fully vested. END_STATUTE
172+(b) For the state department of corrections and the department of juvenile corrections, only the following specifically designated positions:
173+
174+(i) Food service.
175+
176+(ii) Nursing personnel.
177+
178+(iii) Corrections physician assistant.
179+
180+(iv) Therapist.
181+
182+(v) Corrections dental assistant.
183+
184+(vi) Hygienist.
185+
186+(vii) Corrections medical assistant.
187+
188+(viii) Correctional service officer, including assistant deputy warden, deputy warden, warden and superintendent.
189+
190+(ix) State correctional program officer.
191+
192+(x) Parole or community supervision officers.
193+
194+(xi) Investigators.
195+
196+(xii) Teachers.
197+
198+(xiii) Institutional maintenance workers.
199+
200+(xiv) Youth corrections officer.
201+
202+(xv) Youth program officer.
203+
204+(xvi) Behavioral health treatment unit managers.
205+
206+(xvii) The director and assistant directors of the department of juvenile corrections and the superintendent of the state educational system for committed youth.
207+
208+(xviii) The director, deputy directors and assistant directors of the state department of corrections.
209+
210+(xix) Other positions designated by the local board of the state department of corrections or the local board of the department of juvenile corrections pursuant to section 38-891.
211+
212+(c) For a city or town, a city or town detention officer.
213+
214+(d) For an employer of an eligible group as defined in section 38-842, full-time dispatchers.
215+
216+(e) For the judiciary, juvenile detention officers and those positions designated by the local board of the judiciary pursuant to section 38-891.
217+
218+(f) For the department of public safety, state detention officers.
219+
220+(g) For the judiciary, probation and surveillance officers.
221+
222+14. "Determination" means a written document that indicates to a participant and alternate payee whether a domestic relations order qualifies as a plan approved domestic relations order.
223+
224+15. "Determination period" means the ninety-day period in which the plan must review a domestic relations order that is submitted by a participant or alternate payee to determine whether the domestic relations order qualifies as a plan approved domestic relations order, calculated from the time the plan mails a notice of receipt to the participant and alternate payee.
225+
226+16. "Direct rollover" means a payment by the plan to an eligible retirement plan that is specified by the distributee.
227+
228+17. "Distributee" means a member, a member's surviving spouse or a member's spouse or former spouse who is the alternate payee under a plan approved domestic relations order.
229+
230+18. "Domestic relations order" means an order of a court of this state that is made pursuant to the domestic relations laws of this state and that creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive a portion of the benefits payable to a participant.
231+
232+19. "Eligible child" means an unmarried child of a deceased active or retired member who meets one of the following qualifications:
233+
234+(a) Is under eighteen years of age.
235+
236+(b) Is at least eighteen years of age and under twenty-three years of age only during any period that the child is a full-time student.
237+
238+(c) Is under a disability that began before the child attained twenty-three years of age and remains a dependent of the surviving spouse or guardian.
239+
240+20. "Eligible retirement plan" means any of the following that accepts a distributee's eligible rollover distribution:
241+
242+(a) An individual retirement account described in section 408(a) of the internal revenue code.
243+
244+(b) An individual retirement annuity described in section 408(b) of the internal revenue code.
245+
246+(c) An annuity plan described in section 403(a) of the internal revenue code.
247+
248+(d) A qualified trust described in section 401(a) of the internal revenue code.
249+
250+(e) An annuity contract described in section 403(b) of the internal revenue code.
251+
252+(f) An eligible deferred compensation plan described in section 457(b) of the internal revenue code that is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into the eligible deferred compensation plan from this plan.
253+
254+(g) Effective January 1, 2008, a Roth individual retirement account that satisfies the requirements of section 408A of the internal revenue code.
255+
256+(h) For distributions made after December 18, 2015, a simple retirement account as defined in section 408(p) of the internal revenue code.
257+
258+21. "Eligible rollover distribution" means a payment to a distributee, but does not include any of the following:
259+
260+(a) Any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the member or the joint lives or joint life expectancies of the member and the member's beneficiary or for a specified period of ten years or more.
261+
262+(b) Any distribution to the extent the distribution is required under section 401(a)(9) of the internal revenue code.
263+
264+(c) The portion of any distribution that may not be included in gross income.
265+
266+(d) Any distribution made to satisfy the requirements of section 415 of the internal revenue code.
267+
268+(e) Hardship distributions.
269+
270+(f) Similar items designated by the commissioner of the United States internal revenue service in revenue rulings, notices and other guidance published in the internal revenue bulletin.
271+
272+22. "Employee" means a person employed by a participating employer in a designated position.
273+
274+23. "Employer" means an agency or department of this state or a political subdivision of this state that has one or more employees in a designated position.
275+
276+24. "Fund" means the corrections officer retirement plan fund.
277+
278+25. "Juvenile detention officer" means a juvenile detention officer responsible for the direct custodial supervision of juveniles who are detained in a county juvenile detention center.
279+
280+26. "Local board" means the retirement board of the employer that consists of persons appointed or elected to administer the plan as it applies to the employer's members in the plan.
281+
282+27. "Member":
283+
284+(a) Means any employee who meets all of the following qualifications:
285+
286+(i) Who is a full-time paid person employed by a participating employer in a designated position.
287+
288+(ii) Who is receiving salary for personal services rendered to a participating employer or would be receiving salary except for an authorized leave of absence.
289+
290+(iii) Whose customary employment is at least forty hours each week.
291+
292+(b) Includes an employee who meets the requirements of subdivision (a) of this paragraph, and who meets one of the following:
293+
294+(i) Is hired on or after July 1, 2018, who is in a designated position as defined in paragraph 13, subdivision (g) of this section and who makes the irrevocable election to participate in the plan pursuant to section 38-881.01.
295+
296+(ii) Is hired on or after July 1, 2026 and who makes the irrevocable election to participate in the plan pursuant to section 38-881.01.
297+
298+(iii) Is hired on or after July 1, 2018 and before the effective date of this amendment to this section and who makes the irrevocable election to participate in the plan pursuant to section 38-881.02.
299+
300+(c) Except as provided in subdivision (b) of this paragraph, does not include an employee who is hired on or after July 1, 2018, unless the employee was an active, an inactive or a retired member of the plan or a member of the plan with a disability on June 30, 2018.
301+
302+28. "Normal retirement date" means:
303+
304+(a) For an employee who becomes a member of the plan before January 1, 2012, the first day of the calendar month immediately following the employee's completion of twenty years of service or, in the case of a dispatcher, twenty-five years of service, the employee's sixty-second birthday and completion of ten years of service or the month in which the sum of the employee's age and years of credited service equals eighty.
305+
306+(b) For an employee who becomes a member of the plan on or after January 1, 2012 and before July 1, 2018, the first day of the calendar month immediately following the employee's completion of twenty-five years of service if the employee is at least fifty-two and one-half years of age or the employee's sixty-second birthday and completion of ten years of service.
307+
308+(c) For an employee who becomes a member of the plan on or after July 1, 2018, the first day of the calendar month immediately following the employee's completion of ten years of credited service if the employee is at least fifty-five years of age.
309+
310+29. "Notice of receipt" means a written document that is issued by the plan to a participant and alternate payee and that states that the plan has received a domestic relations order and a request for a determination that the domestic relations order is a plan approved domestic relations order.
311+
312+30. "Ordinary disability" means a physical condition that the local board determines will totally and permanently prevent an employee from performing a reasonable range of duties within the employee's department or a mental condition that the local board determines will totally and permanently prevent an employee from engaging in any substantial gainful activity.
313+
314+31. "Participant" means a member who is subject to a domestic relations order.
315+
316+32. "Participant's portion" means benefits that are payable to a participant pursuant to a plan approved domestic relations order.
317+
318+33. "Participating employer" means an employer that the board has determined to have one or more employees in a designated position or a county, city, town or department of this state that has entered into a joinder agreement pursuant to section 38-902.
319+
320+34. "Pension" means a series of monthly payments by the retirement plan but does not include an annuity that is payable pursuant to section 38-911.
321+
322+35. "Personal representative" means the personal representative of a deceased alternate payee.
323+
324+36. "Physician" means a physician who is licensed pursuant to title 32, chapter 13 or 17.
325+
326+37. "Plan approved domestic relations order" means a domestic relations order that the plan approves as meeting all the requirements for a plan approved domestic relations order as otherwise prescribed in this article.
327+
328+38. "Plan year" or "fiscal year" means the period beginning on July 1 of any year and ending on June 30 of the next succeeding year.
329+
330+39. "Probation or surveillance officer" means an officer appointed pursuant to section 8-203, 12-251 or 12-259 but does not include other personnel, office assistants or support staff.
331+
332+40. "Retired member" means an individual who terminates employment and who is receiving a pension pursuant to either section 38-885 or 38-886.
333+
334+41. "Retirement" or "retired" means termination of employment after a member has fulfilled all requirements for a pension or, for an employee who becomes a member of the plan on or after January 1, 2012, attains the age and service requirements for a normal retirement date.
335+
336+42. "Retirement plan" or "plan" means the corrections officer retirement plan established by this article.
337+
338+43. "Salary" means the base salary, shift differential pay, military differential wage pay and holiday pay paid a member for personal services rendered in a designated position to a participating employer on a regular monthly, semimonthly or biweekly payroll basis. Salary includes amounts that are subject to deferred compensation or tax shelter agreements. Salary does not include payment for any remuneration or reimbursement other than as prescribed by this paragraph. For the purposes of this paragraph, "base salary" means the amount of compensation each member is regularly paid for personal services rendered to an employer before the addition of any extra monies, including overtime pay, shift differential pay, holiday pay, fringe benefit pay and similar extra payments.
339+
340+44. "Segregated funds" means the amount of benefits that would currently be payable to an alternate payee pursuant to a domestic relations order under review by the plan, or a domestic relations order submitted to the plan that failed to qualify as a plan approved domestic relations order, if the domestic relations order were determined to be a plan approved domestic relations order.
341+
342+45. "Service" means employment rendered to a participating employer as an employee in a designated position. Any absence that is authorized by an employer, including any periods during which the employee is on an employer-sponsored long-term disability program, is considered as service if the employee returns or is deemed by the employer to have returned to a designated position within the period of the authorized absence.
343+
344+46. "Total and permanent disability" means a physical or mental condition that is not an accidental disability, that the local board finds totally and permanently prevents a member from engaging in any gainful employment and that is the direct and proximate result of the member's performance of the member's duty as an employee of a participating employer. END_STATUTE
345+
346+Sec. 3. Section 38-881.01, Arizona Revised Statutes, is amended to read:
347+
348+START_STATUTE38-881.01. Employees hired on or after July 1, 2018; employees hired on or after July 1, 2026; defined contribution plan; benefit election; disability
349+
350+A. Except as provided in subsection subsections B and C of this section, an employee who is hired on or after July 1, 2018 and before July 1, 2026, who is a member as defined in section 38-881, paragraph 27, subdivision (a) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018 shall participate in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter. For an employee who is hired on or after September 1, 2019, the employee's participation in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired.
351+
352+B. An employee who is hired on or after July 1, 2018, who is in a designated position as defined in section 38-881, paragraph 13, subdivision (g) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2018 is eligible to participate in the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter, depending on the employee's election under this section. During the first sixty days of an employee's employment and before the employee makes a decision regarding the individual's retirement plan, the board shall provide each probation and surveillance officer who is hired on or after July 1, 2018 interactive, objective educational training, counseling and participant-specific plan information about both the corrections officer retirement plan and the public safety personnel defined contribution retirement plan options. The employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired. Unless the elections made under this section are made before the ninetieth day after the date of employment, the employee is automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment. Any election made under this section is irrevocable and is the employee's election for the remainder of the employee's employment, unless the employee is subsequently in a position that allows for an election under this section. If an employee is subsequently rehired after a bona fide termination of employment from the employee's employer of not less than six months with no prearranged reemployment agreement with the employer or hired by a new employer, the employee may make a new election under this section before the ninetieth day after the date of hire. If the employee does not make a new election within that time frame, the employee's previous election will continue. The employee may make one of the following irrevocable elections:
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354+1. To participate solely in the corrections officer retirement plan.
355+
356+2. To participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter.
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358+C. An employee who is hired on or after July 1, 2026, who is a member as defined in section 38-881, paragraph 27, subdivision (a) and who was not an active, an inactive or a retired member of the corrections officer retirement plan or a member of the corrections officer retirement plan with a disability on June 30, 2026 is eligible to participate in the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter, depending on the employee's election under this section. During the first sixty days of an employee's employment and before the employee makes a decision regarding the individual's retirement plan, the board shall provide each employee who is hired on or after July 1, 2026 interactive, objective educational training, counseling and participant-specific plan information about both the corrections officer retirement plan and the public safety personnel defined contribution retirement plan options. The employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter begins ninety days after the date the employee is hired. Unless the elections made under this section are made before the ninetieth day after the date of employment, the employee is automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment. Any election made under this section is irrevocable and is the employee's election for the remainder of the employee's employment, unless the employee is subsequently in a position that allows for an election under this section. If an employee is subsequently rehired after a bona fide termination of employment from the employee's employer of not less than six months with no prearranged reemployment agreement with the employer or hired by a new employer, the employee may make a new election under this section before the ninetieth day after the date of hire. If the employee does not make a new election within that time frame, the employee's previous election will continue. The employee may make one of the following irrevocable elections:
359+
360+1. To participate solely in the corrections officer retirement plan.
361+
362+2. To participate solely in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter.
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364+C. D. If an employee specified in subsection subsections B and C of this section in the employee's first ninety days of employment is determined to be eligible for an accidental or total and permanent disability pension pursuant to section 38-886, the employee shall be automatically enrolled in the corrections officer retirement plan for the remainder of the employee's employment with any employer under the plan commencing on the employee's date of disability and shall receive an accidental or total and permanent disability pension as prescribed in this article.
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366+D. E. If an employee specified in subsection subsections B and C of this section in the employee's first ninety days of employment is killed in the line of duty or dies from injuries suffered in the line of duty, the employee shall be considered as having been enrolled in the corrections officer retirement plan and the surviving spouse of the deceased employee is eligible for survivor benefits as prescribed in this article.
367+
368+E. F. Notwithstanding subsection subsections B and C of this section, if an employee who is hired on or after July 1, 2018 and who is an active or inactive member of the plan or a participant in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter is subsequently rehired by the employee's previous employer or another employer under the corrections officer retirement plan, the employee's participation in either the corrections officer retirement plan or the public safety personnel defined contribution retirement plan, for which the employee had elected to participate, begins on the date the employee is rehired or hired by another employer. If the employee makes a new election pursuant to subsection subsections B and C of this section, the employee's participation in the previous plan continues until the date in on which the employee makes a different election, not to exceed ninety days after the date of hire for the eligible position. END_STATUTE
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370+Sec. 4. Title 38, chapter 5, article 6, Arizona Revised Statutes, is amended by adding section 38-881.02, to read:
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372+START_STATUTE38-881.02. Employees hired on and after July 1, 2018 and before the effective date of this section; benefit election
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374+A. Notwithstanding section 38-881.01, subsection A, a person who is a member as defined in section 38-881, paragraph 27, subdivision (a), who was hired on or after July 1, 2018 and before the effective date of this section and who participates in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter has ninety days after the effective date of this section to make one of the following elections:
375+
376+1. To continue participating in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter.
377+
378+2. To participate solely in the corrections officer retirement plan.
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380+B. If an election is not made under this section before the ninetieth day after the effective date of this section, the employee shall continue to be enrolled in the public safety personnel defined contribution retirement plan established pursuant to article 4.1 of this chapter for the remainder of the employee's employment.END_STATUTE