Arizona Laws 38-774. Excess benefit arrangement
A. A separate unfunded governmental excess benefit arrangement is established outside of and apart from the trust fund established by section 38-712 to pay members benefits that are otherwise payable by ASRS and that exceed the limitations on benefits imposed by section 415 of the internal revenue code. The board shall administer this excess benefit arrangement as a qualified governmental excess benefit arrangement pursuant to section 415(m) of the internal revenue code.
Terms Used In Arizona Laws 38-774
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- ASRS: means the Arizona state retirement system established by this article. See Arizona Laws 38-711
- Board: means the ASRS board established in section 38-713. See Arizona Laws 38-711
- Compensation: means :
(a) For members whose membership began on or before December 31, 2019, the gross amount paid to a member by an employer as salary or wages, including amounts that are subject to deferred compensation or tax shelter agreements, for services rendered to or for an employer, or that would have been paid to the member except for the member's election or a legal requirement that all or part of the gross amount be used for other purposes, but does not include amounts paid in excess of compensation limits established in section 38-746. See Arizona Laws 38-711
- Contract: A legal written agreement that becomes binding when signed.
- Employer: means :
(a) This state. See Arizona Laws 38-711
- Employer contributions: means all amounts paid into ASRS by an employer on behalf of a member. See Arizona Laws 38-711
- Interest: means the assumed actuarial investment earnings rate approved by the board. See Arizona Laws 38-711
- Internal revenue code: means the United States internal revenue code of 1986, as amended. See Arizona Laws 38-711
- Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
B. The board may adopt rules to implement this section subject to the following:
1. Benefits under this section are subject to section 38-773 and section 38-791, subsections D and F and are exempt from execution to the same extent as provided in section 38-792.
2. Contributions to this arrangement are not held in trust and shall not be commingled with other monies of ASRS.
C. A member is entitled to a monthly benefit under this section in an amount equal to the amount that the member’s benefit that is payable by ASRS has been reduced by the limitation on benefits imposed by section 38-769 and section 415 of the internal revenue code. The benefit that is payable by this arrangement shall be paid at such time or times and in such form as the benefit under ASRS would be paid.
D. The benefit that is payable under this section shall be paid with employer contributions that would otherwise be made to ASRS under section 38-737. In lieu of the employer contributions being paid to the trust fund established by section 38-712, an amount determined by ASRS as necessary to pay benefits under this section shall be paid on a monthly basis to a separate account established by the board for this arrangement and may include amounts needed to pay reasonable and necessary expenses of this arrangement. The director may invest the monies in this account in suitable short-term investments between receipt of the monies and disbursement of the monies. The amount shall be paid to the account at least fifteen days before a disbursement is to be made under this section.
E. A member shall not directly or indirectly elect to defer compensation to purchase benefits provided under this section.
F. This section shall not be construed as requiring an employer or ASRS to purchase any investment or any contract to secure any obligations under this section. If an employer or ASRS purchases an investment or contract that the employer or ASRS earmarks to pay benefits under this section, title to and beneficial ownership of the investment or contract remain at all times in the employer or ASRS, and the member and the member’s beneficiaries, if any, do not have any proprietary interest in any specific assets of the employer or ASRS. Any rights of the member and the member’s beneficiaries, if any, to payment of any amounts under this section shall be those of general unsecured creditors of the employer or ASRS. This section and any action taken pursuant to this section by the employer or ASRS do not create and shall not be construed to create an irrevocable trust of any kind.