A. Notwithstanding any other provision of this article that would limit a distributee’s election under this section, a distributee may elect, at any time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

Terms Used In Arizona Laws 38-770

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • ASRS: means the Arizona state retirement system established by this article. See Arizona Laws 38-711
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • 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.
  • including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
  • Internal revenue code: means the United States internal revenue code of 1986, as amended. See Arizona Laws 38-711
  • Political subdivision: means any political subdivision of this state and includes a political subdivision entity. See Arizona Laws 38-711
  • State: means this state, including any department, office, board, commission, agency, institution or other instrumentality of this state. See Arizona Laws 38-711

B. An eligible rollover distribution may commence less than thirty days after the notice required under section 402(f) of the internal revenue code is given to the distributee, provided that both:

1. ASRS clearly informs the distributee that the distributee has a right to a period of at least thirty days after receiving the notice to consider the decision of whether or not to elect a direct rollover.

2. The distributee, after receiving the notice, affirmatively elects a distribution.

C. In addition to the other elections allowed in this section, effective for distributions made from and after December 31, 2006, a designated beneficiary of a member who is not the member’s surviving spouse may elect, at any time and in the manner prescribed by ASRS, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan described in subsection D, paragraph 3, subdivisions (a) and (b) of this section. For the purposes of this subsection, "designated beneficiary" has the same meaning prescribed in section 38-775.

D. For the purposes of this section:

1. "Direct rollover" means a payment by ASRS to the eligible retirement plan specified by the distributee.

2. "Distributee" means a member, a member’s surviving spouse or a member’s spouse or former spouse who is the alternate payee under an acceptable domestic relations order as defined in section 38-773.

3. "Eligible retirement plan" means any of the following that accepts a distributee’s eligible rollover distribution:

(a) An individual retirement account described in section 408(a) of the internal revenue code.

(b) An individual retirement annuity described in section 408(b) of the internal revenue code.

(c) An annuity plan described in section 403(a) of the internal revenue code.

(d) A qualified trust described in section 401(a) of the internal revenue code.

(e) An annuity contract described in section 403(b) of the internal revenue code.

(f) An eligible deferred compensation plan described in section 457(b) of the internal revenue code that is maintained by a state, a political subdivision of a state or any agency or instrumentality of a state or a political subdivision of a state and that agrees to separately account for amounts transferred into the eligible deferred compensation plan from ASRS.

(g) Beginning January 1, 2008, a Roth individual retirement account described in section 408A of the internal revenue code.

(h) For distributions made after December 18, 2015, a simple retirement account that satisfies the requirements of section 408(p) of the internal revenue code.

4. "Eligible rollover distribution" means distribution of all or any portion of the balance to the credit of the distributee but does not include any of the following:

(a) Any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the member or the joint lives or joint life expectancies of the member and the member’s designated beneficiary or for a specified period of ten years or more.

(b) Any distribution to the extent the distribution is required under section 401(a)(9) of the internal revenue code.

(c) Except as provided in this paragraph, the portion of any distribution that is not includable in gross income. A distribution does not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includable in gross income if the portion is paid only to an individual retirement account or annuity described in section 408(a) or 408(b) of the internal revenue code, to a qualified plan described in section 401(a) of the internal revenue code or an annuity contract described in section 403(b) of the internal revenue code that agrees to separately account for amounts so transferred, and earnings on those amounts, including separately accounting for the portion of the distribution that is includable in gross income and the portion of the distribution that is not includable in gross income.

(d) Any distribution that is made due to hardship of the member.

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