A. If a termination incentive program that is offered by an employer results in an actuarial unfunded liability to ASRS, the employer shall pay to ASRS the amount of the unfunded liability. ASRS shall determine the amount of the unfunded liability in consultation with its actuary.

Terms Used In Arizona Laws 38-749

  • ASRS: means the Arizona state retirement system established by this article. See Arizona Laws 38-711
  • Average monthly compensation: means :

    (a) For a member whose membership in ASRS commenced before January 1, 1984 and who left the member's contributions on deposit or reinstated forfeited credited service pursuant to section 38-742 for a period of employment that commenced before January 1, 1984, the higher of either:

    (i) The monthly average of compensation that is calculated pursuant to subdivision (b) of this paragraph. 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

  • Credited service: means , subject to section 38-739, the number of years standing to the member's credit on the books of ASRS during which the member made the required contributions. See Arizona Laws 38-711
  • Employer: means :

    (a) This state. See Arizona Laws 38-711

  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Interest: means the assumed actuarial investment earnings rate approved by the board. See Arizona Laws 38-711
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC

B. An employer shall notify ASRS if the employer plans to implement a termination incentive program that may affect ASRS funding.

C. If ASRS determines that an employer has implemented a termination incentive program that results in an actuarial unfunded liability to ASRS, ASRS shall assess the cost of the unfunded liability to that employer. If the employer does not remit full payment of all monies due within ninety days after being notified by ASRS of the amount due, the unpaid amount accrues interest until the amount is paid in full. The interest rate is the interest rate assumption that is approved by the board for actuarial equivalency for the period in question to the date payment is received.

D. For the purposes of this section, "termination incentive program":

1. Means a total increase in compensation of thirty per cent or more that is given to a member in any one or more years before termination that are used to calculate the member’s average monthly compensation if that increase in compensation is used to calculate the member’s retirement benefit and that increase in compensation is not attributed to a promotion.

2. Means anything of value, including any monies, credited service or points that the employer provides to or on behalf of a member that is conditioned on the member’s termination except for payments to an employee for accrued vacation, sick leave or compensatory time unless the payment is enhanced beyond the employer’s customary payment.

 

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