Staff Personnel Manual (SPP)

Effective: 7/1/1978

Revised: 7/1/2001

SPP 501–01: Retirement Programs

Purpose

To define participation in and explain the types of retirement plans and benefits provided for eligible employees

Sources

29 United States Code § 621, Age Discrimination in Employment Act (1986) and amendments

Arizona Revised Statutes §§ 38–781.01 to .03, .07 to .10; –841 to –855; 15–1628

Arizona Board of Regents Policy Manual - 6–601; –604; –605

Applicability

Regular and retirement-eligible employees

Policy

All eligible classified staff and university police officers over age 50 who are not members of the Public Safety Personnel Retirement System are required to participate in the Arizona State Retirement System (ASRS).

All administrative and service professional employees who are not university police officers are required to contribute to the ASRS or the Optional Retirement Plan.

All university police officers, eligible police administrative employees, and eligible police service professionals who are under age 50 and are regularly assigned hazardous duty are required to contribute to the Public Safety Personnel Retirement System.

Both the employee and the state contribute to the plan as prescribed by law.

An eligible classified employee will begin to contribute to ASRS on the effective date of employment. An employee originally hired for a period that did not meet the 20-week and 20-hour criteria, but whose employment is extended, will begin to contribute to a retirement plan when he or she begins the 20th week of the fiscal year working 20 or more hours per week.

The plans in effect at the university are:

Arizona State Retirement System (ASRS)

The Plan—A defined benefit plan. Monthly retirement payments are calculated by a formula that includes the years of service, multiplied by a percentage factor, multiplied by the average of the employee’s three highest consecutive salaries earned in the last ten years while contributing to the plan. Provisions for early retirement begin at age 50, with contributions to the plan having been made for at least five years (waived if age 65 or older); and for normal retirement upon attaining age 65, age 62 with 10 years of service, or having 80 points (a combination of age and years of service).

The System—A defined contribution plan. Monthly retirement payments are calculated based on an annuity rate applied to an individual’s total deposit in the system. Provision for retirement begins at age 60. Normal retirement is age 65. This plan includes a subsidy for ASRS retirees who participate in State of Arizona Department of Administration or ASRS health/dental insurance. Retirees must have five years of credited service to be eligible for the subsidy.

Optional Retirement Plan (ORP)

A defined contribution plan. Monthly retirement payments are calculated based on annuity rate applied to an individual’s total deposit. Provision for early retirement begins at any age, and for normal retirement, at age 65. This plan does not have a provision for a health insurance subsidy at retirement.

Public Safety Personnel Retirement System

A defined benefit plan. Monthly retirement payments are calculated by formula, which includes the average of an employee’s three highest consecutive salaries (earned while contributing to the plan), years of service (at least 20 years), and a percentage multiplier. Provisions exist for early and normal retirement.

Options upon Termination under ASRS and ORP

Upon termination while under ASRS and ORP, an employee has the options to:

1. receive a monthly benefit if the qualifying provisions of the plan are met
2. remain a noncontributing member until the eligibility requirements for an early or normal retirement benefit are met
3. request a return of individual and employer contributions with credited earnings based on vesting and service provisions

   or

4. roll individual and any vested employer contributions with credited earnings into an IRA if the plan permits.

More information is available in the Arizona State Retirement System Member Handbook at http://www.asrs.state.az.us/members/memhb/index.htm.

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