More and more senior citizens are choosing to remain in the workforce, and we are receiving more Age 65+ Membership Waiver forms than ever. Questions regarding the proper use of this waiver came up often during our recent ASRS Employer Conferences, which tells us some reminders are in order..
Arizona Revised Statute 38-727(A)(8) describes the conditions under which a new hire may elect not to participate in the Arizona State Retirement System (ASRS). Here's a breakdown:
- Age: The employee must be at least 65 years old when they start working for the ASRS employer.
- Membership Status: They cannot already be an active, inactive, or retired ASRS member, or receiving ASRS benefits.
- Prior Service: They must have no prior service credit with ASRS. A former member who refunded their contributions and has had no contributions since that refund would be eligible for this waiver provided they are at least age 65.
How to Opt Out
Employers must provide the Age 65+ Membership Waiver form, and the completed form must be submitted to ASRS within 30 days of starting employment.
- Offer the form if the new hire is at least age 65, even if they’re hired into a position that does not meet the 20/20 Membership Criteria. Their only opportunity to opt-out is during this 30-day window after their start date.
- If they do not opt-out during this 30-day window and their position later meets membership criteria, they no longer have the option to waive membership, and retirement contributions must begin.
- The form must be completed in its entirety and signed and dated by both the employee and the employer. Do not leave any fields blank.
Additional Important Reminders
- This decision is permanent for that specific employment period.
- By opting out, the employee waives all ASRS benefits.
- The employment period worked while opted out cannot be later purchased for service credit.
Essentially, this provision allows older individuals who are starting new employment and have no prior connection to ASRS to decline participation. This might be relevant for someone who is already receiving retirement benefits from another source and doesn't wish to participate in ASRS.
If your new hire has questions about this option, you can direct them to the 65+Membership Waiver webpage.
By Genevieve McBride, Employer Relations
Published 9/30/2024
