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Legislative Session Update: What's New?

It’s that time of year – winter is fading into spring and the Arizona Legislature is in session! The ASRS has identified a number of bills that have been introduced in the current session which, if passed into law, will enact legislative changes that affect the ASRS, members, and employers. This information is subject to change as the session progresses, so we recommend visiting the ASRS Bill Tracker and Legislation page for more details and the most current information. 

HB 2007

There are two statutes that HB 2007 seeks to amend. The first is Arizona Revised Statutes (A.R.S.) § 38-729, specifically in the area regarding the process of an employer joining the ASRS. This process may include the purchase of existing employees’ prior service with the employer. The bill aims to add language that will make this statute consistent with service purchase statutes, so that the employer can only purchase employees’ prior service that does not overlap other service credit. 

This bill also provides language to amend A.R.S. § 38-738, regarding situations where less than the correct amount of contributions is paid, commonly referred to as Contributions Not Withheld (CNW). The new language states that in the case of CNW, employers may use the adjustment process within the contribution reporting program instead of the CNW process. However, an adjustment can replace the CNW process only if the CNW is for the current fiscal year, and the employer obtains written consent from the employee to adjust their paycheck instead of using the CNW process.

SB 1010

Identical to a bill from the 2018 legislative session which passed the Legislature and was vetoed by the Governor, this bill seeks to repeal A.R.S. § 38-671, which is the law requiring a 26-week waiting period for ASRS membership for new state employees who are not already ASRS members.

SB 1016

A.R.S. § 38-748 would be amended by this bill. It is the statute regarding employer responsibility for unfunded liabilities caused by ineligible contributions. The bill would include language to clarify that ineligibility could be based in rule, in addition to statute. It would also establish a calculation for determining the unfunded liability for contributions on compensation that is not eligible by statute or rule. The intent is to protect the ASRS fund from unintended expense of additional benefits paid that should not have been reported to the ASRS.

SB 1017

This bill clarifies that the ASRS may not pay interest on amounts paid to a member, alternate payee, or employer unless it is specifically authorized by statute in A.R.S. Title 38, Articles 2 and 2.1. This will ensure that the ASRS only pays interest as the legislature intended. It also limits the risk of ASRS paying interest on monies owed for which the ASRS has not accounted actuarially. 

SB 1018

The definition of ASRS compensation in A.R.S. § 38-711 will be amended in this bill. For new members of the ASRS on and after January 1, 2020, the types of payments considered compensation for ASRS purposes are identified. The definition and interpretation of ASRS compensation will continue to be the same for current ASRS members and those who become ASRS members prior to January 1, 2020.

SB 1079

This bill will make some changes to the statutes for the ASRS Long Term Disability (LTD) program. The language in the bill is meant to clarify the definition of disability. It also includes new language which allows active surveillance during an investigation of an LTD claim. These changes will make the ASRS LTD program standards more consistent with industry standards, and enable more efficiency in the program by reducing the possibility of fraudulent claims.

by Wendy Tobin, Employer Relations

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