Arizona State Retirement System Arizona Association of School

Arizona State Retirement System Arizona Association of School Business Officials September Bi-Monthly Meeting September 9, 2009 1

Discussion Topics • Fund Status • Enacted Legislation • HI Open Enrollment • Retirees Returning to Work 2

ASRS Trust Fund Activity 3

ASRS Total Fund (in billions) ASRS Trust Fund Assets $28. 0 $26. 0 $24. 0 $22. 0 $20. 0 $18. 0 6/30/2006 6/30/2007 6/30/2008 12/31/2008 6/30/2009 7/30/2009 8/31/2009 4

House Bill 2118 Signed by Governor on July 10, 2009 DB Plan Design • Removes 80% cap on retirement benefits. Dual Employment • Requires 20/20 criteria for membership on second employer. 5

House Bill 2118 (continued) Return to Work • Permits the election of a different retirement option if retiree suspends benefit and works for at least 60 consecutive months. • Eliminates the requirement that a returning teacher be certified. Service Purchase • Requires, beginning July 1, 2010, a member to have 5 years of service credit before initiating any service purchase. 6

House Bill 2118 (continued) Employee Termination Incentive Programs • Limits exceptions to increases in compensation to promotion only (eliminates reclassifications and merit increases. • Eliminates the requirement the termination agreement be in writing. • Requires an employer to pay any unfunded liability for persons who would not have qualified for ASRS membership but for whom contributions were made. 7

Senate Bill 1196 Signed by Governor on July 10, 2009 A Strike Everything Education Omnibus Salary Deferral Plan • Authorizes the ASRS to establish a supplemental employee salary deferral plan [403(b) or 457] for public employees, other than State employees, to save additional tax deferred money for retirement. 8

HI Open Enrollment • October 19 – November 13, 2009 • No change in medical or dental plan carriers • Passive enrollment • Plan improvements, but with premium increases • January 1, 2010 – effective date 9

Return to Work A. R. S. § 38 -766 • Requires a retired member to suspend benefit if 20/20 criteria for membership is met. 10

Return to Work (continued) A. R. S. § 38 -766. 01 • Allows a retired member to return to work and receive a benefit if: – member has attained NRA. – member terminated employment at least 12 months before returning to work. 11

Return to Work (continued) There are some exceptions to this general rule: 1. 2. 3. 4. Retiring without terminating employment. Returning to work with reduced hours. Returning to work after 12 month. Returning to work in a position that requires participation in another state retirement plan. 5. Returning to work as a leased employee or independent contractor. 6. Returning to work in a position that is not included under the employer’s Social Security coverage agreement. 12

Questions? 13