Ariz. Admin. Code § 2-8-115

Current through Register Vol. 30, No. 45, November 8, 2024

Section R2-8-115 - Return of Contributions Upon Termination of Membership by Separation from All ASRS Employment by Other Than Retirement or Death

A. The following definitions apply to this Section unless otherwise specified:

1. "Eligible retirement plan" means the same as in A.R.S. § 38-770(D)(3).

2. "Employer Number" means a unique identifier the ASRS assigns to a member employer.

3. "Employer plan" means the types of eligible retirement plans specified in A.R.S. § 38-770(D)(3)(c), (d), (e), and (f).

4. "LTD" Means the same as in R2-8-301.

5. "On File" means ASRS has received the information.

6. "Process date" means the calendar day the ASRS generates contribution withdrawal documents to be sent to a member.

7. "Warrant" means a voucher authorizing payment of funds due to a member.

B. A member who terminates from all ASRS employment by other than retirement or death and desires a return of the member's contributions, including amounts received for the purchase of service, any employer contributions authorized under A.R.S. § 38-740, and interest on the contributions, shall request from the ASRS, in writing or verbally, the documents necessary to apply for the withdrawal of the member's contributions.

C. Upon request to withdraw by the member, the ASRS shall provide:

1. An Application for Withdrawal of Contributions and Termination of Membership form to the member, and

2. An Ending Payroll Verification - Withdrawal of Contribution and Termination of Membership form to the employer, if ASRS has received contributions for the member within the six months immediately preceding the date the member submitted the request to ASRS.

D. The member shall complete and return to the ASRS the Application for Withdrawal of Contributions and Termination of Membership form that includes the following information:

1. The member's full name;

2. The member's Social Security number or U.S. Tax Identification number;

3. The member's current mailing address, if not On File with ASRS;

4. The member's birth date, if not On File with ASRS;

5. Notarized signature of the member certifying that the member:

a. Is no longer employed by any Employer;

b. Is neither under contract nor has any verbal or written agreement for future employment with an Employer;

c. Is not currently in a leave of absence status with an Employer;

d. Understands that each of the member's former Employers will complete an ending payroll verification form if ASRS has received contributions for the member within the six months immediately preceding the date the member submitted the request to ASRS;

e. Understands that the member's most recent Employer will complete an ending payroll verification form for the member if the member has reached the member's required beginning date pursuant to A.R.S. § 38-775;

f. Has read and understands the Special Tax Notice Regarding Plan Payments the member received with the application and the member elects to waive the member's 30-day waiting period to consider a roll over or a cash distribution;

g. Understands that the member is forfeiting all future retirement rights and privileges of membership with ASRS;

h. Understands that LTD benefits will be canceled if the member elects to withdraw contributions while receiving or electing to receive long-term disability benefits;

i. Understands that if the member elects to roll over all or any portion of the member's distribution to another employer plan, it is the member's responsibility to verify that the receiving employer plan will accept the rollover and, if applicable, agree to separately account for the pre-tax and post-tax amounts rolled over and the related subsequent earnings on the amounts;

j. Understands that if the member elects to roll over all or any portion of the member's distribution to an individual retirement account, it is the member's responsibility to separately account for pre-tax and post-tax amounts; and

k. Understands that if the member elects a rollover to another employer plan or individual retirement account, any portion of the distribution not designated for roll over will be paid directly to the member and any taxable amounts will be subject to applicable state and federal tax withholding;

l. Understands that the member is not considered terminated and cannot withdraw the member's ASRS contribution if the member was called to active military service and is not currently performing services for an Employer;

m. Understands that any person who knowingly makes any false statement with an intent to defraud the ASRS is guilty of a Class 6 felony in accordance with A.R.S. § 38-793.

6. Specify that:

a. The entire amount of the distribution be paid directly to the member,

b. The entire amount of the distribution be rolled over to an eligible retirement plan, or

c. An identified amount of the distribution be rolled over to an eligible retirement plan and the remaining amount be paid directly to the member; and

7. If the member selects all or a portion of the withdrawal be rolled over to an eligible retirement plan, specify;

a. The type of eligible retirement plan; and

b. The name and mailing address of the eligible retirement plan.

E. If ASRS has received contributions for the member within six months immediately preceding the date the member submitted the request to ASRS each Employer shall complete an Ending Payroll Verification - Withdrawal of Contributions and Termination of Membership form electronically that includes the following information:

1. The member's full name;

2. The member's Social Security number or U.S. Tax Identification number;

3. The member's termination date;

4. The member's final pay period ending date;

5. The final amount of contributions, including any adjustments or corrections, but not including any long-term disability contributions;

6. The Employer's name and telephone number;

7. The Employer Number;

8. The name and title of the authorized Employer representative;

9. Certification by the authorized Employer representative that:

a. The member Terminated Employment and is neither under contract nor bound by any verbal or written agreement for employment with the Employer;

b. There is no agreement to re-employ the member;

c. Any person who knowingly makes any false statement or who falsifies any record of the retirement plan with an intent to defraud the plan, is guilty of a Class 6 felony according to A.R.S. § 38-793; and

d. The authorized Employer representative certifies that they are the Employer user named on the Ending Payroll Verification - Withdrawal of Contributions and Termination of Membership form and their title and contact information is current and correct.

F. If the member has attained a required beginning distribution date as of the date the member submitted the request to ASRS, the most recent Employer shall complete an Ending Payroll Verification - Withdrawal of Contributions and Termination of Membership form electronically that includes the information contained in subsection (E).

G. If the member requests a return of contributions and a Warrant is distributed during the fiscal year that the member began membership in the ASRS, no interest is paid to the account of the member.

H. If the member requests a return of contributions after the first fiscal year of membership, the ASRS shall credit interest at the rate specified in Column 3 of the table in R2-8-118(A) to the account of the member as of June 30 of each year, on the basis of the balance in the account of the member as of the previous June 30. The ASRS shall credit interest for a partial fiscal year of membership in the ASRS on the previous June 30 balance based on the number of days of membership up to and including the day the ASRS issues the Warrant divided by the total number days in the fiscal year. Contributions made after the previous June 30 are returned without interest.

I. Upon submitting to the ASRS the completed and accurate Application for Withdrawal of Contributions and Termination of Membership form and, if applicable, after the ASRS has received any Ending Payroll Verification - Withdrawal of Contributions and Termination of Membership forms, a member is entitled to payment of the amount due to the member as specified in subsection (G) or (H) unless ASRS has received a DRO before the ASRS returns the contributions as specified by the member.

J. A member may cancel an Application for Withdrawal of Contributions and Termination of Membership form at any time before the return of contributions is disbursed by submitting written notice to ASRS to cancel the request.

K. If an Application for Withdrawal of Contributions and Termination of Membership form is completed through the member's secure ASRS account, the secure login and successful submission of the knowledge based answers shall serve as the member's notarized signature required under subsection (D)(5).

Ariz. Admin. Code § R2-8-115

Former Rule, Social Security Regulation 1; Amended effective Dec. 20, 1979 (Supp. 79-6). Former Section R2-8-15 renumbered as Section R2-8-115without change effective May 21, 1982 (Supp. 82-3). Amended by final rulemaking at 11 A.A.R. 1416, effective April 5, 2005 (Supp. 05-2). Amended by final rulemaking at 12 A.A.R. 644, effective February 7, 2006 (Supp. 06-1). Amended by final rulemaking at 21 A.A.R. 2515, effective 12/5/2015. Amended by final rulemaking at 22 A.A.R. 79, effective 3/6/2016. Amended by final rulemaking at 26 A.A.R. 2036, effective 11/8/2020. Amended by final rulemaking at 28 A.A.R. 1746, effective 9/4/2022.