Weekly report / Arizona State Retirement System Board (ASRS)

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For the Period ending Friday, May 10, 2002.

Please forward this or make it available to your employees

This Weeks News:

On Tuesday, May 7, the State Senate confirmed the nomination of James D. Bruner for reappointment

to the ASRS Board.

Thursday, May 9, the Senate concurred in the House amendments to SB 1095 (ASRS; federal

conforming changes with RTW), and passed the bill on a 27-0 vote. It has been sent to the Governor.

HB 2558 (retirees; health insurance; enhanced subsidy) passed Senate COW on Wednesday, May 8,

and awaits 3rd Reading in the Senate.

The House passed the package of budget bills for the 2003 budget year. There is no mention of any

early retirement window. The major contention on the package revolves around the elimination of the

State Board of Community Colleges and cuts in Public Safety/Corrections.

The budget package included the following:

 HB 2706 (general appropriations ; fiscal year 2002-2003) passed the House on a 33-24.

 HB 2707 (capital outlay; appropriations; 2002-2003) passed the House on a 34-23.

 HB 2708 (omnibus budget reconciliation; public finances) passed the House on a 33-24 vote.

 HB 2709 (health; budget reconciliation; 2002-2003) passed the House on a 35-22 vote.

 HB 2710 (education; omnibus budget reconciliation; 2002-2003) passed the House on a 32-

25 vote.

 HB 2711 (appropriations; biotechnology) passed the House on a 45-12 vote.

 HB 2712 (IRC conformity; revenue sharing) passed the House on a 46-10 vote.

The bills now go to the Senate for action.

Next Week:

The Senate returns to the Floor at 10 a.m., Monday, May 13; the House returns at 1 p.m. Today is the

last day for conference committees unless the Speaker and President provide an extension of time on

Monday.

Speaker Weiers is reported to be hopeful that the Legislature can adjourn by Friday, May 17.

WEEKLY REPORT

ARIZONA STATE RETIREMENT SYSTEM

LeRoy Gilbertson, Director

3300 North Central Avenue, Phoenix, Arizona 85012

ASRS Board

Mr. Jim Bruner

Chairman

Mr. Norman Miller

Vice-Chairman

Ms. Charlotte Borcher

Dr. Chuck Essigs

Ms. Bonnie Gonzalez

Mr. Alan Maguire

Mr. Karl Polen

Mr. Ray Rottas

Mr. N. Carl Tenney

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Changes are noted by: bold, italics, underscored

This Sessions Bills:

SENATE BILLS

SB 1004 (ASRS; spousal consent)

By Sens. Smith and Cirillo

As Passed the Senate: Requires a married ASRS member to take a joint and survivor option (the

default) unless the members spouse consents to the member choosing an alternative option. A 50%

joint and survivor option is the default option if the married member fails to make a choice. An

unmarried member is automatically eligible for the straight life option unless they choose otherwise.

Provides that the ASRS and its Board are not liable for payment or payments not made in reliance on

the consent or waiver of a members spouse or the affirmations of a member made in applications to

the ASRS.

Appropriates $125,558 from the ASRS administration account to implement the act, and it authorizes

1.5 FTEs. Effective July 1, 2003.

Amended in Hse. RGO to allow retires who have elected a life certain option to pop up.

Status: Passed Sen. Third Read 03/28/02, 28-0-2. Assigned Hse. RGO. Passed Hse.

RGO 04/09/02, DPA 7-0-0-3. Assigned Hse. APPROP 04/17/02. Withdrawn from

Hse. APPROP 04/29/02. Passed Hse. Rules 04/30/02, C&P 11-0. Passed Hse.

Caucus 04/30/02. Hse. RGO Amendment adopted. Failed Hse. COW 05/01/02,

DPA 9-45-6.

Admin Costs: As Passed the Senate: $125,558 for printing new forms, computer programming

costs and 1.5 new FTEs.

Actuarial Costs: As Passed the Senate: None expected

Hse. RGO Amendment: Unfunded liability of $32.1 million, an increase in the

contribution rate for all employers and employees of 0.03% each, which is a

combined cost of $469,000 more in annual contributions for 17 years.

SB 1095 (ASRS; federal conforming changes)

By Sen. Cirillo

As Passed the Senate: Repeals the scheduled June 30, 2003, Sunset of the Return to Work

Program. The Return to Work Program allows all ASRS retired members who have achieved normal

retirement to return to work one year after terminating employment. The member continues to receive

all retirement benefits, but does not make any retirement or LTD contributions to the ASRS. The

member receives a salary they negotiate with the ASRS employer, but the member does not accrue

any additional benefits in the ASRS, nor is the member eligible for LTD benefits.

Additionally, SB 1095 conforms state law to changes in federal law resulting from the passage of the

Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTERRA). The law:

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 Increases the annual benefit limit for defined benefit plans to $160,000.

 Increases the annual contribution limits under 415(c) to the lesser of 100% of compensation

or $40,000, indexed in $1,000 increments.

 Increases the amount of compensation that may be taken into account under qualified

retirement plans to $200,000, indexed in $5,000 increments.

 Repeals coordination requirements for 457 plans, so that 457 contributions are not limited by

401(k)/403(b) contributions.

 After December 31, 2001, permits funds from IRAs, 403(b) and 457 plans to be transferred

on a pre-tax basis to purchase permissive service credit, or to repay prior cash outs, in

governmental defined benefit plans.

Appropriates $270,342 from the ASRS administration account to implement the act, and it authorizes 5

FTEs.

Status: Passed Sen. Third Read 03/28/02, 28-0-2. Passed Hse. Third Read 05/02/02, 57-

0-3. Transmitted to the Senate 05/02/02. Senate Concur 05/07/02. Passed

Senate Final Read 05/09/02, 27-0-3. Transmitted to Governor Hull 05/09/02.

Admin Costs: As Passed the Senate: $270,342 to include 5 FTEs.

Actuarial Costs: As Passed the Senate: Actuarial letter has been received stating no cost.

SB 1120 (ASRS; retirees; graded multiplier increase)

By Sens. Hamilton and Gerard

As Passed the Senate: Provides members or their beneficiaries who were receiving benefits on May

8, 2001, under the ASRS defined benefit program, a one-time permanent benefit increase based on

years of service, from 2.38% to 9.52%, matching the graded multiplier passed in the 2001 session.

Amended in Hse. RGO to appropriate $255,000 to the ASRS for the implementation of this act.

Status: Passed Sen. Third Read 03/28/02, 17-11-2. Assigned Hse. RGO and Hse.

APPROP. Passed Hse. RGO 04/09/02, DPA 8-0-0-2. DEAD()

Admin Costs: As Passed the Senate: $255,428 for mailing, equipment and professional outside

services.

Actuarial Costs: As Passed the Senate: Unfunded liability of $328.5 million, an increase in the

contribution rate for all employers and employees of 0.26% each, which is a

combined cost of $33 million more in annual contributions for 17 years.

SB 1239 (retirees; health insurance; enhanced subsidy)

By Sen. Arzberger and 7 co-sponsors

As Passed the Senate: Extends the enhanced health insurance premium benefit to ASRS retirees

and LTD recipients who live outside of Arizona. Clarifies the definition of non service areas.

Retroactively effective to June 30, 2001.

Amended in Hse. RGO to be the same as HB 2558, including extending the program from 2003 to

2004.

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Status: Passed Sen. Third Read 04/01/02, 27-0-3. Assigned Hse. RGO and Hse.

APPROP. Passed Hse. RGO 04/09/02, DPA 7-0-0-3. Scheduled Hse. APPROP

04/16/02. Passed Hse. APPROP 04/16/02, DP 8-2-0-6. Not yet heard in Hse.

Rules.

Admin Costs: As Passed the Senate: $370,000.

Actuarial Costs: As Passed the Senate: Unfunded liability of $1.58 million, an increase in

contribution rate for all employers and employees of 0.0013% each which is a

combined cost of $160,848 more in annual contributions for 17 years.

As Amended in Hse. RGO: Unfunded liability of $11.6 million, an increase in

contribution rate for all employers and employees of 0.0113% each which is a

combined cost of $1.16 million more in annual contributions for 17 years.

SB 1241 (retirees; health insurance; subsidies)

By Sen. Arzberger and 11 co-sponsors

Extends the enhanced health insurance premium benefit to ASRS retirees and LTD recipients who live

outside of Arizona, clarifies the definition of non service areas,  and makes technical changes. This

bill is retroactively effective to June 30, 2001.

Status: Assigned to Sen. FIN. DEAD ()

Admin Costs: $370,260.

Actuarial Costs: Unfunded liability of $1.58 million, an increase in contribution rate for all employers

and employees of 0.0013% each which is a combined cost of $160,848 more in

annual contributions for 17 years.

SB 1328 (transportation peace officers; retirement)

By Sen. Mitchell and 19 co-sponsors

Transfers Department of Transportation certified peace officers from the ASRS to PSPRS.

Status: Assigned to Sen. FIN. DEAD ()

Admin Costs: None expected.

Actuarial Costs: None expected.

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HOUSE BILLS

HB 2211 (ASRS; retirees; graded multiplier increase)

By Reps. Brimhall and Graf

Amended in Hse. RGO to provide that members or their beneficiaries who were receiving benefits on

May 8, 2001, under the ASRS defined benefit program, a one-time permanent benefit increase based

on years of service from 2.38% to 9.52%, matching the graded multiplier passed in the 2001 session.

As introduced, this bill is identical to SB 1120. As amended, this bill is identical to HB 2379.

Status: Assigned to Hse. RGO and Hse. APPROPS. Passed Hse. RGO 03/22/02, DPA 6-

0-0-4. DEAD ()

Admin Costs: $255,428 for mailing, equipment and professional outside services.

Actuarial Costs: Unfunded liability of $328.5 million, an increase in the contribution rate for all

employers and employees of 0.26% each which is a combined cost of $33 million

more in annual contributions for 17 years.

HB 2215 (ASRS; actuarial computation method)

By Reps. Brimhall and Graf

Changes the method of valuing the ASRS assets from the Projected Unit Credit (PUC) method to the

Entry Age Normal (EAN) method beginning June 30, 2003. Amended in Hse. RGO to provide that

commencing July 1, 2007, employer contributions are to be determined by EAN. HB 2215 also

changes the valuation period from 30 years to 20 years. Note: The Governor vetoed a similar bill last

session.

Status: Assigned to Hse. RGO and Hse. APPROPS. Passed Hse. RGO 03/19/02, DPA 6-

1-2-1. DEAD ()

Admin Costs: None expected.

Actuarial Costs: Unfunded liability of $228 million in 2011, an increase in contribution rate for all

employers and employees ranges from 2.08% to 5.94%.

HB 2219 (ASRS; retirement window; teachers)

By Reps. Brimhall and Graf

Provides an early retirement window for Tier 1 (educational) employees who retire between June 30

and September 1, 2002. Allows employees to add six years of age to reach normal retirement age or

early retirement at 77 points, and add three years of credited service for the purpose of calculating their

retirement benefit.

Status: Assigned to Hse. Education, Hse. RGO, Hse. APPROPS. DEAD ()

Admin Costs: First year cost of $3.6 million and $529,000 per year thereafter.

Actuarial Costs: Unfunded liability of $2.18 billion which reduces the Fund to only 96.5% funded, an

increase in contribution rate for all employers and employees of 2.83% each which

is a combined cost of $209.9 more in annual contributions for 17 years.

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HB 2225 (ASRS; conforming changes; federal law)

By Reps. Brimhall and Graf

(STRIKE EVERYTHING AMENDMENT SUBJECT: abortion; fetal pain)

Conforms state law to the recent changes in federal law passed in the EGTERRA. It provides:

 Increases the annual benefit limit for defined benefit plans to $160,000.

 Increases the annual contribution limits under 415(c) to the lesser of 100% of compensation

or $40,000, indexed in $1,000 increments.

 Increases the amount of compensation that may be taken into account under qualified

retirement plans to $200,000, indexed in $5,000 increments.

 Repeals coordination requirements for 457 plans, so that 457 contributions are not limited by

401(k)/403(b) contributions.

 After December 31, 2001, permits funds from IRAs, 403(b) and 457 plans to be transferred

on a pre-tax basis to purchase permissive service credit, or to repay prior cash outs in

governmental defined benefit plans.

Status: Assigned to Hse. RGO. Hse. RGO 03/22/02, S/E FAILED 4-4-0-2. DEAD ()

Admin Costs: $270,342 to include 5 FTEs. An amendment for the administrative costs has been

requested.

Actuarial Costs: Actuarial letter has been received stating no cost.

HB 2226 (ASRS; separate account; teachers)

By Reps. Brimhall and Graf

(STRIKE EVERYTHING AMENDMENT SUBJECT: credit reports; consumer copy)

Divides the ASRS employers into two groups. Tier 1 employers are each state university, each school

district, each charter school, each community college district and the AZ School for the Deaf and Blind.

Tier 2 employers are the state and all political subdivisions that are not included in the Tier 1 definition.

HB 2226 requires the ASRS to account Tier 1 employers separately, and provide them with an

actuarially determined contribution rate. Employees are allowed to transfer between employers.

Status: Assigned to Hse. RGO. Hse. RGO 3/19/02, S/E FAILED 5-4-0-1. DEAD ()

Admin Costs: First year cost of $4.1 million and $964,000 per year thereafter including 14 new FTEs.

Actuarial Costs: An increase in the contribution rate for all employers and employees in the Tier 2

group of 0.40%, a decrease in contribution rate for all employers and employees in

the Tier 1 group of 0.14%. Rate changes assume 0% return on investments for the

current year.

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HB 2354 (deferred retirement option plans)

By Reps. Voss, Brotherton, and Sen. Richardson

Establishes a second voluntary DROP program for ASRS, EORP and CORP members that would start

July 1, 2003, and extend through July 1, 2008. Generally, this DROP would allow an ASRS member,

who has attained normal retirement age, to opt to extend employment up to five years, but not accrue

additional benefits in the defined benefit plan. Instead the members pension would be paid into a

separate account and invested. At the end of the period chosen by the employee, the benefit from the

separate account would be paid in a lump sum or as an annuity.

Status: Assigned to Hse. RGO and Hse. APPROPS. Passed Hse. RGO 2/05/02, DPA 8-

1-1-0. DEAD ()

Admin Costs: $793,846.

Actuarial Costs: Unfunded liability of $135.2 million, an increase in contribution rate for all

employers and employees of 0.28%.

HB 2379 (ASRS; retirees; graded multiplier increase)

By Rep. McClure

Amended in Hse. RGO to provide that members or their beneficiaries who were receiving benefits on

May 8, 2001, under the ASRS defined benefit program, a one-time permanent benefit increase based

on years of service from 2.38% to 9.52%, matching the graded multiplier passed in the 2001 session.

As amended, this bill is identical to HB 2211. As introduced this bill is identical to SB 1120.

Status: Assigned to Hse. RGO and Hse. APPROPS. Passed Hse. RGO 3/19/02, DPA 9-

0-0-1. DEAD ()

Admin Costs: $255,428 for mailing, equipment and professional outside services.

Actuarial Costs: Unfunded liability of $328.5 million, an increase in the contribution rate for all

employers and employees of 0.26% each which is a combined cost of $33 million

more in annual contributions for 17 years.

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HB 2558 (retirees; health insurance; enhanced subsidy)

By Rep. Carruthers and 7 co-sponsors

As Passed the House: Extends the enhanced health insurance premium benefit for rural (nonservice)

areas from June 30, 2003 to June 30, 2004. Clarifies that the enhanced health insurance

premium benefit is in addition to the permanent health insurance premium benefit, applies the

incremental health insurance premium benefit percentage increase based on years of service between

5 to 10 years to the enhanced health insurance premium benefit, and clarifies the definition of nonservice

area.

Status: Passed Hse. Third Read 04/08/02, 49-0-11. Transmitted to the Senate 4/10/02.

Assigned Sen. FIN. Discharged Sen. FIN 04/18/02. Discharged Sen. Rules

04/18/02. Passed Sen. Caucus 05/06/02. Passed Sen. COW 05/08/02, DP.

Admin Costs: As Passed the House: $370,000.

Actuarial Costs: As Passed the House: Unfunded liability of $11.6 million, an increase in the

contribution rate for all employers and employees of 0.0113% each which is a

combined cost of $1.16 million more in annual contributions for 17 years.

TIER 2 (BILL NOT YET FILED)

This proposal may be introduced in an omnibus budget reconciliation bill. It would provide three years

of age to bring a state or local government employee to a normal retirement age or early retirement

under the point system (77 points), and add three years of credited service to the account of qualified

employees for the purpose of calculating the employees retirement benefit. The window would be

open from July 1, 2002 though September 30, 2002. This proposal is subject to change.

Status: Not yet introduced. The original supporters of this proposal appear to support it no

longer due to the high cost. ISSUE may be DEAD for this session.

Admin Costs:

Actuarial Costs: Unfunded liability of $654.2 million, an increase in the contribution rate for all

employers and employees of 1.76% each which is a combined cost of $1.18

billion.

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OTHER SYSTEM BILLS

(Summaries as Introduced)

HB 2023 (PSPRS; deferred retirement date) DEAD ()

By Reps. Carpenter and OHalleran

A technical amendment to provide that a PSPRS member entering the DROP stops accruing benefits in the

PSPRS the day after he or she enters the DROP.

HB 2024 (fire fighters' pension; technical correction) DEAD ()

By Reps. Carpenter and OHalleran

A technical amendment to Title 9 to ensure that distribution of insurance premium taxes that are designated for

fire districts go to fire districts.

HB 2081 (PSPRS; prior service; redemption)Signed by Governor Hull 04/09/02, Ch. 13.

By Reps. Cannell, Carruthers, and Sen. Guenther and 2 co-sponsors

Allows PSPRS members to redeem prior service with an employer member of PSPRS by paying the amount of

the employer and employee contributions plus interest and any additional actuarial costs as determined by the

PSPRS actuary.

HB 2118 (PSPRS; CORP; EORP; retirement benefits)

By Rep. Blendu and 17 co-sponsors

Increases survivor benefits for the PSPRS, CORP, and the EORP. Makes the PSPRS DROP permanent and

modifies disability requirements within DROP and applies a 2% tax equity benefit for PSPRS and EORP

members.

HB 2288 (Retirement; PSPRS disability) DEAD ()

By Rep. Carruthers

The multiplier governing disability payments under the PSPRS is revised, apparently to increase payments.

HB 2372 (Retirement; PSPRS)

By Rep. Marsh

Allows PSPRS members to purchase credited service in the PSPRS based prior public service for which they

are not receiving a benefit. The member must pay the amount of employer and employee contributions plus

interest on the previous public service, if any, and an actuarial amount calculated by the PSPRS actuary for the

cost of the service to be purchased.

HB 2373 (county employee insurance; payment)Signed by Governor Hull 05/06/02, Ch. 143.

By Reps. Marsh and Avelar and 3 co-sponsors

Allows public funds to be expended to pay all or any part of the insurance premiums for former county

employees who are retired and receiving income from a retirement program of the State of Arizona and their

dependents.

HCR 2022 (Judge Retirement Age) (DEAD)

By Rep. Camarot

The 2002 general election ballot is to carry the question of amending the state constitution to raise the

mandatory judicial retirement age from 70 to 75.

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LEGEND

AMEND C&P Constitutional and Proper as Amended by the House Rules Committee

ASRS Arizona State Retirement System

C&P Constitutional and Proper

CORP Corrections Officer Retirement Plan

COW Committee of the Whole

DP Do Pass

DPA Do Pass as Amended

DROP Deferred Retirement Option Plan

EAN Entry Age Normal

EORP Elected Officials Retirement Plan

FIN Finance Committee

FII Financial Institutions and Insurance Committee

IRS Internal Revenue Service

LTD Long Term Disability

PBI Permanent Benefit Increase

PIRA Public Institutions and Rural Affairs Committee

PFC Proper for Consideration

PFCA Proper for Consideration as Amended by the Senate Rules Committee

PUC Projected Unit Credit

PSPRS Public Safety Personnel Retirement System

RGO Retirement and Government Operations Committee

S/E Strike Everything Amendment

W&M Ways and Means Committee

The ASRS External Operations Division and the Legislative Board Committee usually meets each

Friday during the legislative session. The meetings are held in the 14th floor conference room of the

ASRS office located at 3300 North Central Avenue, Phoenix, AZ., and are open to the public. The

purpose of these meetings is to review legislative activity on retirement bills from the previous week,

and to review the scheduled bill activity in committees and on the floor for the upcoming week.

Committee members ask technical and background questions, and reviews the latest information

gathered from the Capitol and retirement groups from around the state. The meeting is

teleconferenced to the ASRS Tucson office located at 7660 East Broadway Boulevard, Tucson, AZ.

Please call any of the numbers below for time and details of Friday Legislative Board Committee

meetings.

If you have questions relating to legislation, please call Tom Finnerty at

(602) 240-2027 in metro Phoenix, (520) 239-3100 extension 2027 in

metro Tucson, or (800) 621-3778 extension 2027 outside metro Phoenix

and Tucson.

The weekly legislative report is available on-line at the ASRS Web site:

www.asrs.state.az.us

Quick Reference

ASRS Related Retirement Legislation

(For the Period Ending Friday, May 10, 2002)

BILLS BILL STATUS ASRS ADMIN. COST ACTUARIAL COST

SENATE BILLS

SB 1004  ASRS; spousal consent

by Smith & Cirillo

As Passed the Senate: Requires a married ASRS member to

take a joint and survivor option unless the members spouse

consents to the member choosing a different option. The 50%

joint and survivor option is the default option if the married

member fails to make a choice. The straight life option is the

default option for an unmarried member unless they choose

otherwise. Appropriates $125,558 from the ASRS admin.

account, and authorizes 1.5 FTEs. Effective July 1, 2003.

Amended in Hse. RGO to allow retirees who have elected a

life certain option to pop up.

Passed Senate 28-0-2.

Assigned: Hse. RGO.

Status: Passed Hse.

RGO DPA 7-0-0-3.

Assigned Hse. APPROP

04/18/02. Withdrawn

from Hse. APPROP.

Passed Hse. Rules C&P

11-0. Passed Hse.

Caucus. Hse. RGO

Amendment adopted.

Failed Hse. COW DPA

9-45-6.

As Passed the Senate:

$125,558 for printing

new forms, computer

programming costs and

1.5 new FTEs.

As Passed the Senate: None expected.

Hse. RGO Amendment: Unfunded

liability of $32.1 million, an increase in

the contribution rate for all employers

and employees of 0.03% each, which is

a combined cost of $469,000 more in

annual contributions for 17 years.

SB 1095  ASRS; federal conforming changes

by Cirillo

As Passed the Senate: Conforms the ASRS statutes to recent

changes in federal laws and repeals the sunset of the return to

work program. Appropriates $270,342 from the ASRS admin.

account, and authorizes 5 FTEs.

Passed Senate 28-0-2.

Passed House 57-0-3.

Status: Transmitted to

the Senate 05/02/02.

Senate Concur. Passed

Sen. Final Read 27-0-3.

Transmitted to the

Governor.

As Passed the Senate:

$270,342 to include 5

FTEs.

As Passed the Senate: Actuarial letter

has been received stating no cost.

SB 1120 - ASRS; retirees; graded multiplier increase

by Hamilton & Gerard

As Passed the Senate: Provides a one-time benefit increase

that is based on years of service, to members retired on or

before May 8, 2001.

Amended in Hse. RGO to appropriate $255,000 to the ASRS

for the implementation of this act.

Passed Senate 17-11-2.

Assigned: Hse. RGO.

Hse. APPROP.

Status: Passed Hse.

RGO DPA 8-0-0-2.

Awaiting Hse. APPROP.

DEAD()

As Passed the Senate:

$255,428 for mailing,

equipment and

professional outside

services.

As Passed the Senate: Unfunded

liability of $328.5 million, an increase in

the contribution rate for all employers

and employees of 0.26% each which is a

combined cost of $33 million more in

annual contributions for 17 years.

SB 1239  retirees; health insurance; enhanced

subsidy

by Arzberger, Rios, Brown & Guenther and 4

As Passed the Senate: Extends the enhanced health

insurance premium benefit to ASRS retirees and LTD recipients

who live outside of Arizona. Clarifies the definition of non

service areas. Retroactively effective to June 30, 2001.

Amended in Hse. RGO to be the same as HB 2558, including

extending the program from 2003 to 2004.

Passed Senate 27-0-3.

Assigned: Hse. RGO.

Hse. APPROP.

Status: Passed Hse.

RGO DPA 7-0-0-3.

Passed Hse. APPROP

DP 8-2-0-6. Awaiting

Hse. Rules.

As Passed the Senate:

$370,000.

As Passed the Senate: Unfunded

liability of $1.58 million, a hypothetical

increase in contribution rate for all

employers and employees of 0.0013%

each which is a combined cost of

$160,848 more in annual contributions

for 17 years.

As Amended in Hse. RGO: Unfunded

liability for $11.6 million, an increase in

contribution rate for all employers and

13

BILLS BILL STATUS ASRS ADMIN. COST ACTUARIAL COST

SENATE BILLS

employees for 0.0113% each which is a

combined cost of $1.16 million more in

annual contributions for 17 years.

SB 1241  retirees; health insurance; subsidies

by Arzberger, Guenther & Verkamp and 9

Allows the subsidy to be paid to members with 10 or more

years of service, clarifies the definition on non-service area,

clarifies the subsidy is in addition to the regular amount, and

allows members residing in a different state to receive the

subsidy.

Assigned: Sen. FIN.

Status: Awaiting Sen.

FIN. DEAD ()

$370,260. Unfunded liability of $1.58 million, a

hypothetical increase in contribution rate

for all employers and employees of

0.0013% each which is a combined cost

of $160,848 more in annual contributions

for 17 years.

SB 1328  transportation peace officers; retirement

by Mitchell and 19

Allows ADOT peace officers to contribute to PSPRS.

Assigned: Sen. FIN

Status: Awaiting Sen.

FIN. DEAD ()

None expected. None expected.

14

BILLS BILL STATUS ASRS ADMIN. COST ACTUARIAL COST

HOUSE BILLS

HB 2211  ASRS; retirees; graded multiplier increase

by Brimhall & Graf

Amended in Committee to provide members or their

beneficiaries who were receiving benefits on May 8, 2001, a

one-time benefit increase that is based on years of service.

Assigned: Hse. RGO.

Hse. APPROP.

Status: Passed Hse.

RGO DPA 6-0-0-4.

Awaiting Hse.

APPROP. DEAD ()

$255,428 for mailing,

equipment and

professional outside

services.

Unfunded liability of $328.5 million, an

increase in the contribution rate for all

employers and employees of 0.26%

each which is a combined cost of $33

million more in annual contributions for

17 years.

HB 2215  ASRS; actuarial computation method

Changes the actuarial computation method from EAN to PUC.

Reduces the amortization period from 30 years to 20 years.

by Brimhall & Graf

Amended in Committee to provide that commencing July 1,

2007, employer contributions are to be determined by EAN.

Assigned: Hse. RGO.

Hse. APPROP.

Status: Passed Hse.

RGO DPA 6-1-2-1.

Awaiting Hse.

APPROP. DEAD ()

None expected. Gradually reduces the surplus over a

ten-year period resulting in less than

100% funded by 2011. Gradually

increases the contribution rate for

employers and employees, attaining a

total increase of 2.08% each by

7/1/2011.

Note: The actuary estimates that the

fund could maintain a fully funded status

(100.4% funded) if the transition period

was shortened to seven years.

HB 2219  ASRS; retirement window; teachers

Provides an early retirement window for Tier 1 employees

between June 30 and September 1, 2002. May add 6 years to

age, and 3 years to service to attain normal retirement.

Conditionally enacted upon passage of HB2226.

by Brimhall & Graf

Assigned: Hse. ED.

Hse. RGO. Hse.

APPROP.

Status: Awaiting Hse.

ED. DEAD ()

First year cost of $3.6

million and $529,000 per

year thereafter.

Unfunded liability of $2.18 billion which

reduces the Fund to only 96.5% funded,

an increase in contribution rate for all

employers and employees of 2.83%

each which is a combined cost of $209.9

more in annual contributions for 17

years.

HB 2225  ASRS; conforming changes; federal law

Conforms the ASRS statutes to recent changes in federal laws.

by Brimhall & Graf

(S/E AMENDMENT: abortion; fetal pain)

Assigned: Hse. RGO.

Status: S/E Failed Hse.

RGO 4-4-0-2.

DEAD ()

$270,342 to include 5

FTEs. An amendment

for the administrative

costs has been

requested.

Actuarial letter has been received stating

no cost.

HB 2226  ASRS; separate account; teachers

Divides the ASRS employers into two groups. Requires the

ASRS to account Tier 1 employers separately, and provide them

with an actuarially determined contribution rate. Allows

employees to transfer between employers.

by Brimhall & Graf

(S/E AMENDMENT: credit reports; consumer copy)

Assigned: Hse. RGO.

Status: S/E Failed Hse.

RGO 5-4-0-1. DEAD

()

First year cost of $4.1

million and $964,000 per

year thereafter including

14 new FTEs.

An increase in the contribution rate for all

employers and employees in the Tier 2

group of 0.25% each, a decrease in

contribution rate for all employers and

employees in the Tier 1 group of 0.17%

each.

HB 2354  deferred retirement option plans

Establishes a voluntary DROP for active members between July

1, 2003 and June 30, 2008.

by Voss & Brotherton, Richardson

Assigned: Hse. RGO.

Hse. APPROP.

Status: Hse. RGO DPA

8-1-0-1. Awaiting Hse.

APPROP.

$793,846. Unfunded liability of $135.2 million, an

increase in the contribution rate for all

employers and employees of 0.28%.

15

BILLS BILL STATUS ASRS ADMIN. COST ACTUARIAL COST

HOUSE BILLS

DEAD ()

HB 2379  ASRS; Retirees; graded multiplier

increase, aka HB 2211 as amended, SB 1120 as

introduced

Amended in Committee to provide that members or their

beneficiaries who were receiving benefits on May 8, 2001, a

one-time benefit increase that is based on years of service.

by McClure & Binder and 11

Assigned: Hse. RGO.

Hse. APPROP.

Status: Passed Hse.

RGO DPA 9-0-0-1.

Awaiting Hse.

APPROP. DEAD ()

$255,428 for mailing,

equipment and

professional outside

services.

Unfunded liability of $328.5 million, an

increase in the contribution rate for all

employers and employees of 0.26%

each which is a combined cost of $33

million more in annual contributions for

17 years.

HB 2558  retirees; health insurance; enhanced

subsidy

by Carruthers and 7

As Passed the House: Extends the rural health insurance

subsidy passed in 2001, until June 30, 2004. Clarifies that the

enhanced health insurance premium benefit is in addition to the

permanent health insurance premium benefit, applies the

incremental health insurance premium benefit percentage

increase based on years of service between 5 to 10 years to the

enhanced health insurance premium benefit, and clarifies the

definition of non-service area.

Passed House 49-0-11.

Assigned: Sen. FIN.

Status: Discharged

Sen. FIN. Discharged

Sen. Rules. Passed

Sen. Caucus. Passed

Sen. COW DP.

As Passed the House:

$370,000.

As Passed the House: Unfunded

liability of $11.6 million, an increase in

the contribution rate for all employers

and employees of 0.0113% each which

is a combined cost of $1.16 million more

in annual contributions for 17 years.

TIER 2  ASRS; retirement window; local government

and state employees. NO BILL YET FILED.

Proposal to create an early retirement window for all

employees in Tier 2 of HB 2226 and subtract salary

amounts of retiring state employees from the state

agencys budget.

The original supporters

of this proposal appear

to no longer support it

due to the high cost.

ISSUE may be DEAD

for this session.

Unfunded liability of $654.2 million, an

increase in the contribution rate for all

employers and employees of 1.76%

each which is a combined cost of $1.18

billion over 17 years.