Arizona Laws 38-849. Limitations on receiving pension; violation; classification; reemployment after severance; reinstatement of service credits; reemployment of retired member or member with a disability; definition
A. If a member is convicted of, or discharged because of, theft, embezzlement, fraud or misappropriation of an employer’s property or property under the control of the employer, the member shall be subject to restitution and fines imposed by a court of competent jurisdiction. The court may order the restitution or fines to be paid from any payments otherwise payable to the member from the retirement system.
Attorney's Note
Under the Arizona Laws, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| Class 5 felony | up to 2 years | up to $150,000 |
Terms Used In Arizona Laws 38-849
- Accidental disability: means a physical or mental condition that the local board finds totally and permanently prevents an employee from performing a reasonable range of duties within the employee's job classification and that was incurred in the performance of the employee's duty. See Arizona Laws 38-842
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Actuarial equivalent: means equality in present value of the aggregate amounts expected to be received under two different forms of payment, based on mortality and interest assumptions adopted by the board. See Arizona Laws 38-842
- 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 board of trustees of the system, who are the persons appointed to invest and operate the fund. See Arizona Laws 38-842
- Catastrophic disability: means a physical and not a psychological condition that the local board determines prevents the employee from totally and permanently engaging in any gainful employment and that results from a physical injury incurred in the performance of the employee's duty. See Arizona Laws 38-842
- Compensation: means , for the purpose of computing retirement benefits, base salary, overtime pay, shift differential pay, military differential wage pay, compensatory time used by an employee in lieu of overtime not otherwise paid by an employer and holiday pay paid to an employee by the employer for the employee's performance of services in an eligible group on a regular monthly, semimonthly or biweekly payroll basis and longevity pay paid to an employee at least every six months for which contributions are made to the system pursuant to section 38-843, subsection D. See Arizona Laws 38-842
- Credited service: means the member's total period of service before the member's effective date of participation, plus those compensated periods of the member's service thereafter for which the member made contributions to the fund. See Arizona Laws 38-842
- Determination: means a written document that indicates to a participant and alternate payee whether a domestic relations order qualifies as a plan approved domestic relations order. See Arizona Laws 38-842
- Embezzlement: In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
- Employee: means any person who is employed by a participating employer and who is a member of an eligible group but does not include any persons compensated on a contractual or fee basis. See Arizona Laws 38-842
- Fraud: Intentional deception resulting in injury to another.
- Fund: means the public safety personnel retirement fund, which is the fund established to receive and invest contributions accumulated under the system and from which benefits are paid. See Arizona Laws 38-842
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Local board: means the retirement board of the employer, who are the persons appointed to administer the system as it applies to their members in the system. See Arizona Laws 38-842
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Ordinary disability: means a physical condition that the local board determines will prevent an employee totally and permanently from performing a reasonable range of duties within the employee's department or a mental condition that the local board determines will prevent an employee totally and permanently from engaging in any substantial gainful activity. See Arizona Laws 38-842
- Pension: means a series of monthly amounts that are payable to a person who is entitled to receive benefits under the plan but does not include an annuity that is payable pursuant to Section 38-846. See Arizona Laws 38-842
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
- Property: includes both real and personal property. See Arizona Laws 1-215
- Prosecute: To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- retired: means termination of employment after a member has fulfilled all requirements for a pension, for an employee who becomes a member of the system on or after January 1, 2012 and before July 1, 2017, attains the age and service requirements for a normal retirement date or for an employee who becomes a member of the system on or after July 1, 2017 attains the age and credited service requirements for a normal retirement date. See Arizona Laws 38-842
- Service: means the last period of continuous employment of an employee by the employers before the employee's retirement, except that if such period includes employment during which the employee would not have qualified as a member had the system then been effective, such as employment as a volunteer firefighter, then only twenty-five percent of such noncovered employment shall be considered as service. See Arizona Laws 38-842
- System: means the public safety personnel retirement system established by this article. See Arizona Laws 38-842
- Temporary disability: means a physical or mental condition that the local board finds totally and temporarily prevents an employee from performing a reasonable range of duties within the employee's department and that was incurred in the performance of the employee's duty. See Arizona Laws 38-842
- Writing: includes printing. See Arizona Laws 1-215
B. A person who knowingly makes any false statement or who falsifies or allows to be falsified any record of the system with an intent to defraud the system is guilty of a class 5 felony. If any change or error in the records results in any member or beneficiary receiving from the system more or less than the member or beneficiary would have been entitled to receive had the records been correct, the local board shall correct such error, and as far as practicable shall adjust the payments in such manner that the actuarial equivalent of the benefit to which such member or beneficiary was correctly entitled shall be paid. If a member is convicted of a crime specified in this subsection, section 13-713 applies.
C. If a member who received a severance refund on termination of employment pursuant to Section 38-846.02 becomes reemployed with the same employer within two years after the former member’s termination date, the member may have forfeited credited service attributable to service rendered during a prior period of service as an employee restored on satisfaction of each of the following conditions:
1. The member files with the system a written application for reinstatement of forfeited credited service within ninety days after again becoming an employee.
2. The retirement fund is paid the total amount previously withdrawn pursuant to Section 38-846.02 plus compound interest from the date of withdrawal to the date of repayment. Interest shall be computed at the rate of nine percent for each year compounded each year from the date of withdrawal to the date of repayment. Forfeited credited service shall not be restored until complete payment is received by the fund.
3. The required payment is completed within one year after returning to employee status.
D. If a member who received a severance refund on termination of employment, as provided in Section 38-846.02, is subsequently reemployed by an employer, the member’s prior service credits shall be cancelled and service shall be credited only from the date the member’s most recent reemployment period commenced. However, a present active member of the system who forfeited credited service, received a severance refund pursuant to Section 38-846.02 and becomes reemployed with the same employer two years or more after the member’s termination date or becomes reemployed with another employer may elect to redeem any part of that forfeited credited service by paying into the system any amounts required pursuant to this subsection. A present active member who elects to redeem any part of forfeited credited service for which the member is deemed eligible by the board shall pay into the system the amounts previously paid or transferred to the member as a severance refund plus an amount that is computed by the system’s actuary that is necessary to equal the increase in the actuarial present value of projected benefits resulting from the redemption calculated using the actuarial methods and assumptions prescribed by the system’s actuary. On satisfaction of this obligation, the member’s prior service credits shall be reinstated.
E. If a retired member becomes reemployed in any capacity by the employer from which the member retired before six months after the date of retirement or in the same position at any time following retirement:
1. The following apply:
(a) Within ten days after the retired member is reemployed, the local board shall advise the system in writing of the retired member’s reemployment.
(b) The system shall not make pension payments to the retired member during the period of reemployment.
(c) Employee contributions shall not be made on the retired member’s account, nor shall any service be credited during the period of reemployment. On subsequent termination of employment by the retired member, the retired member is entitled to receive a pension based on the member’s service and compensation before the date of the member’s reemployment. The employer shall pay the alternate contribution rate pursuant to Section 38-843.05.
(d) Any pension payments received by the retired member, who retired on or after July 1, 2009, during the period of reemployment are considered overpayments pursuant to section 38-850, unless subsection B of this section applies. If the board determines in the board’s sole discretion, for a member who retired on or after July 1, 2009, that the retired member’s reemployment during the six-month period and the failure of the employer or the local board to suspend the member’s pension were not intentional to circumvent the requirements of this subsection, the pension payments received by the retired member after the retired member’s reemployment are subject to repayment up to only the amount received between the date of the member’s reemployment and the expiration of the six-month period.
2. The retired member, who retired on or after July 1, 2009 and who is reemployed terminates employment, may be subsequently reemployed with the employer from which the member retired and resume receiving pension payments after a period of six months, less the period of time the retired member was not reemployed after retirement with the employer from which the member retired, if at least sixty days of the six months are consecutive.
3. Paragraph 1, subdivisions (a), (b) and (d) of this subsection do not apply if any of the following occurs:
(a) The retired member becomes reemployed after sixty consecutive days from the member’s retirement date as a result of participating in an open competitive new hire process except if the retired member is hired for the same position or if the retired member has a prearranged reemployment agreement with the employer.
(b) The retired member is hired as a fire inspector or arson investigator.
(c) The retired member who is receiving an accidental disability, ordinary disability, catastrophic disability or temporary disability pension accepts a job reassignment as an accommodation in accordance with the Americans with disabilities act of 1990 due to a disability that is directly related to the retired member being awarded an accidental disability, ordinary disability, catastrophic disability or temporary disability benefit.
F. If a retired member is assigned voluntary duties acting as a limited authority peace officer, pursuant to the Arizona peace officer standards and training board rules, employee contributions shall not be made on the retired member’s account, and any service shall not be credited during the period of reemployment. The employer shall not pay the alternate contribution rate pursuant to Section 38-843.05.
G. If after six months after the date of retirement a retired member becomes reemployed by the employer from which the member retired in a position other than the same position from which the member retired, employee contributions shall not be made on the retired member’s account, and any service shall not be credited during the period of reemployment. The employer shall pay the alternate contribution rate pursuant to Section 38-843.05.
H. At any time following retirement, if the retired member becomes employed by an employer, other than the employer from which the member retired, in a position ordinarily filled by an employee of an eligible group, employee contributions shall not be made on the retired member’s account, and any service shall not be credited during the period of reemployment. The employer shall pay the alternate contribution rate pursuant to Section 38-843.05.
I. If a member who retired under an accidental or ordinary disability becomes reemployed as an employee of an eligible group, section 38-844 applies and a determination shall be made by the local board as to whether subsection E, F, G or H of this section applies.
J. The local board shall review all reemployment determinations and voluntary assignments as described in subsection F of this section. If the local board or the system is not provided the necessary information required by the system to make a reemployment determination, the local board and the system shall suspend pension payments until information is received and a determination is made regarding whether the reemployment meets the requirements of subsection E, F, G, H or I of this section.
K. A person who defrauds the system or who takes, converts, steals or embezzles monies owned by or from the system and who fails or refuses to return the monies to the system on the board’s written request is subject to civil suit by the system in the superior court in Maricopa county. On entry of an order finding the person has defrauded the system or taken, converted, stolen or embezzled monies owned by or from the system, the court shall enter an order against that person and for the system awarding the system all of its costs and expenses of any kind, including attorney fees, that were necessary to successfully prosecute the action. The court shall also grant the system a judicial lien on all of the nonexempt property of the person against whom judgment is entered pursuant to this subsection in an amount equal to all amounts awarded to the system, plus interest at the rate prescribed by section 44-1201, until all amounts owed are paid to the system.
L. Notwithstanding any other provision of this article, the board may offset against any benefits otherwise payable by the system to an active or retired member or survivor any court ordered amounts awarded to the board and system and assessed against the member or survivor.
M. Notwithstanding any other provision of this article, a member who retires having met all of the qualifications for retirement and who subsequently becomes an elected official, by election or appointment, is not considered reemployed by the same employer.
N. For the purposes of this section, "same position" means a position in which the member performs substantially similar duties that were performed and exercises substantially similar authority that was exercised by the retired member before retirement.