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

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

ASRS Trust Fund Activity 3

ASRS Trust Fund Assets ASRS Total Fund (in billions) 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

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 HI Open Enrollment

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

Return to Work (continued) A.R.S. § 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.Retiring without terminating employment. 2.Returning to work with reduced hours. 3.Returning to work after 12 month. 4.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