Arizona Laws 38-833. Member and employer contributions; disability
A. Beginning January 1, 2014, the defined contribution system is the retirement program for elected officials, unless the elected official is described in section 38-727, subsection B. Elected officials shall be enrolled in the defined contribution plan established by the board pursuant to this article.
Terms Used In Arizona Laws 38-833
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Annuity account: means an account that is established for each member to record the deposit of member contributions, employer contributions and interest, dividends or other accumulations credited on behalf of the member. See Arizona Laws 38-831
- Board: means the board of trustees of the public safety personnel retirement system established by section 38-848. See Arizona Laws 38-831
- Defined contribution system: means the elected officials' defined contribution retirement system established pursuant to this article. See Arizona Laws 38-831
- Elected official: means :
(a) Every elected official of this state who was elected or appointed on or after January 1, 2014 and who was not an active, an inactive, a disabled or a retired member of the plan on December 31, 2013. See Arizona Laws 38-831
- Employer: means a department or political subdivision of this state that makes employer contributions to the defined contribution system on behalf of a member. See Arizona Laws 38-831
- Member: means an elected official under the defined contribution system. See Arizona Laws 38-831
- Plan: means the elected officials' retirement plan established by article 3 of this chapter. See Arizona Laws 38-831
B. Each elected official who is a member of the defined contribution system shall contribute eight per cent of the member’s gross compensation by salary reduction that shall be deposited in the member’s annuity account. Each member shall also contribute to the elected officials’ defined contribution retirement system disability program pursuant to article 3.2 of this chapter.
C. Although designated as employee contributions, all member contributions made to the defined contribution system 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 member’s compensation. A member participating in the defined contribution system does not have the option of choosing to receive the contributed amounts directly instead of the employer paying the amounts to the defined contribution system. All member 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 members’ gross income for federal and state income tax purposes and are includable in the gross income of the members or the members’ beneficiaries only in the taxable year in which they are distributed.
D. Each employer shall annually make a contribution equal to six per cent of each member’s gross compensation. The pro rata share of this amount shall be paid on each date that a member contribution is made and shall be credited to the member’s annuity account. Each employer shall also contribute to the elected officials’ defined contribution retirement system disability program pursuant to article 3.2 of this chapter.
E. Member and employer contributions and earnings on those contributions are immediately vested. A member may receive benefits pursuant to article 3.2 of this chapter if the member develops a total disability.