Ariz. Admin. Code § 2-8-126

Current through Register Vol. 30, No. 20, May 17, 2024

Section R2-8-126 - Retirement Application

A. For the purposes of this Section, the following definitions apply, unless stated otherwise:

1. "Acceptable documentation" means any written request containing all the accurate, required information, dates, and signatures necessary to process the request.

2. "Acceptable form" means any ASRS form request containing all the accurate, required information, dates, and signatures necessary to process the form request.

3. "Applicable retirement date" means the later of:

a. The date a member retires from the ASRS for the first time; or

b. The date a member re-retires from the ASRS after returning to active membership.

4. "Conservator" means the same as in A.R.S. § 14-7651.

5. "DRO" means the same as in R2-8-115.

6. "Joint and survivor retirement benefit option" means an optional form of retirement benefits described in A.R.S. § 38-760(B)(1).

7. "Legal documentation" means:

a. One document issued from a United States government entity; or

b. Two documents issued from one or more federal, state, local, sovereign, medical, or religious institutions.

8. "LTD" means the same as in R2-8-301.

9. "Irrevocable PDA" means the same as in R2-8-501.

10. "On File" means the same as in R2-8-115.

11. "Original retirement date" means the later of:

a. The date a member retires from the ASRS for the first time; or

b. The date a member re-retires from the ASRS after returning to active membership for 60 consecutive months or more according to A.R.S. § 38-766(C).

11. "Period certain and life annuity retirement benefit option" means an optional form of retirement benefits described in A.R.S. § 38-760(B)(2).

12. "Spouse" means the individual to whom a member is married under Arizona law.

13. "Straight life annuity" means the same as monthly life annuity according to A.R.S. § 38-757.

B. A member may retire from the ASRS by submitting a Retirement Application to the ASRS that contains 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 marital status, if not On File with ASRS;

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

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

6. A retirement date according to A.R.S. § 38-764(A);

7. The retirement option the member is electing;

8. If the member is electing to roll over a lump sum distribution amount to another retirement account, then:

a. The type of account and account number, if applicable, to which the member is electing to roll over the lump sum distribution; and

b. The name and address of the financial institution of the account to which the member is electing to roll over the lump sum distribution;

9. The following information for each primary beneficiary, unless the member is receiving a mandatory lump sum distribution under subsection (M):

a. The beneficiary's full name;

b. The beneficiary's Social Security number, if the beneficiary is a U.S. citizen;

c. The beneficiary's date of birth;

d. The beneficiary's relationship to the member; and

e. The percent of benefit the beneficiary may receive upon death of the member, if the member is designating more than one beneficiary.

10. Whether the member is electing the Optional Health Insurance Premium Benefit;

11. The following spousal consent information, if the member is married and is electing a retirement option other than a Joint and Survivor Retirement Benefit Option with at least 50% of the retirement benefit designated to the member's spouse:

a. Whether the member's spouse consents to the member making a beneficiary election that provides the member's spouse with less than 50% of the member's account balance;

b. Whether the member's spouse consents to the member electing a retirement option other than a Joint and Survivor Retirement Benefit Option;

c. The member's spouse's full name; and

d. The member's spouse's notarized signature;

12. Whether the member is electing to receive a partial lump sum distribution according to A.R.S. § 38-760 and if so:

a. How many months of annuity, up to 36 months, the member is electing to receive as a partial lump sum;

b. Whether the member is electing to directly receive the partial lump sum distribution reduced by applicable tax withholding amounts;

c. Whether the member is electing to roll over all or a portion of the partial lump sum distribution amount to one other retirement account; and

d. Whether the member is electing to use the partial lump sum distribution to purchase service credit with ASRS based on a service purchase request dated before January 6, 2013;

13. Acknowledgement of the following statements of understanding:

a. The member is aware of the member's LTD stop-payment date and any disability benefits the member is receiving shall cease upon the retirement date the member elects according to subsection (B)(6);

b. The member understands that if an overpayment exists, ASRS shall collect the remaining overpayment amount according to 2 A.A.C. 8, Article 8 and all repayment plans previously established with ASRS LTD claims administrator shall cease;

c. The member understands that if the member is submitting written notice of a changed retirement date, benefit option, or partial lump sum increment selection, ASRS shall distribute the member's benefit as of the later of:

i. The date ASRS receives the most recent Acceptable Documentation; or

ii. The retirement date contained in the most recent Acceptable Documentation.

d. The member has received the Special Tax Notice Regarding Plan Payments;

e. The member has received the Return to Work information and will comply with the laws and rules governing the member's return to work;

f. The member authorizes ASRS and the banking institution identified in subsection (W) to debit the member's account for the purposes of correcting errors and returning any payments inadvertently made after the member's death;

g. The member understands that the member may have a one-time option to rescind a Joint and Survivor Retirement Benefit Option or a Period Certain and Life Annuity Retirement Benefit Option according to R2-8-130;

h. The member understands that any person who knowingly makes any false statement with the intent to defraud ASRS is guilty of a Class 6 felony in accordance with A.R.S. § 38-793; and

i. The member acknowledges that the member has complied with A.R.S. §§ 38-755 and 38-776 regarding spousal consent; and

14. The member's notarized signature.

C. If a Retirement Application is completed through the member's secure ASRS account, the member's notarized signature is not required under subsection (B)(14).

D. If the retirement date the member elects according to subsection (B)(6) is not allowed, the ASRS shall change the retirement date to the earliest eligible date according to A.R.S. 38-764(A), unless the member is not eligible to retire.

E. A member who elects to roll over all or a portion of the partial lump sum distribution amount according to subsection (B)(12)(c), shall submit the following written information to the ASRS:

1. The type of account and account number to which the member is electing to roll over;

2. The name and address of the financial institution of the account to which the member is electing to roll over; and

3. If the member is electing to roll over a portion of the partial lump sum distribution, then the amount the member is electing to roll over.

F. If the member elects to roll over all or a portion of their lump sum or partial lump sum distribution, the ASRS shall only roll over the distribution to one retirement account.

G. Any portion of the partial lump sum distribution that is not rolled over to another retirement account according to subsection (B) shall be distributed directly to the member.

H. If the member elects to use the partial lump sum distribution to purchase service credit according to subsection (B)(12)(d) the member shall submit the following written information to the ASRS:

1. The number of the service purchase invoice;

2. Whether the member is electing to apply the partial lump sum distribution to all eligible service on that invoice;

3. If the member is not electing to apply the partial lump sum distribution to all eligible service on that invoice, then:

a. The amount of the partial lump sum distribution to be applied to that invoice; or

b. The number of years on that invoice the member is electing to purchase with the partial lump sum distribution;

4. If the member is electing to make a payment on that service purchase invoice with after-tax payments, a rollover, or termination pay according to A.R.S. § 38-747;

5. Whether the member is electing to authorize the ASRS to increase the number of months of annuity, not to exceed 36 months, to purchase the eligible service on that service purchase invoice, if the member elected an insufficient number of months of annuity to receive as a partial lump sum according to subsection (G) to complete the service purchase invoice;

6. If the member does not have eligible service to purchase on that invoice, whether the member is electing to cancel the member's election to receive a partial lump sum distribution.

I. A member who elects to receive a partial lump sum distribution shall receive an actuarially reduced annuity retirement benefit according to A.R.S. § 38-760.

J. ASRS shall disburse any partial lump sum amount that is not applied to a service purchase invoice according to subsection (G) directly to the member after withholding applicable taxes.

K. After submitting a Retirement Application according to subsection (B), a member may make changes to the member's Retirement Application by submitting written notice to the ASRS of the specific changes according to A.R.S. § 38-764(G).

L. If ASRS has received contributions for the member within the three years immediately preceding the member's retirement date, the ASRS shall send a New Retirement Ending Payroll Verification form to the Employer. If ASRS has received contributions for the member within the six months immediately preceding the member's retirement date and the member shall receive a one-time lump sum payment according to subsection (P), the ASRS shall send a New Retirement Ending Payroll Verification form to the Employer.

M. If the member has reached the age for minimum required distribution according to A.R.S. § 38-775(H)(4), the ASRS shall send a New Retirement Ending Payroll Verification form to the member's most recent Employer.

N. The Employer shall submit the completed New Retirement Ending Payroll Verification form to ASRS with the following information:

1. The member's Termination date or last day of ASRS membership with that Employer, if applicable;

2. The member's total salary paid during their last fiscal year;

3. The member's compensation for the last pay period;

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

5. Certification by the authorized Employer representative that:

a. 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

b. The authorized Employer representative certifies that they are the Employer user named on the New Retirement Ending Payroll Verification form and their title and contact information is current and correct.

O. The ASRS shall cancel a member's Retirement Application if ASRS does not receive all forms and information required under this Section within six months immediately after the member's retirement date.

P. As authorized under A.R.S. § 38-764(F), if a member's Straight Life Annuity, after any applicable early retirement reduction factor, is less than a monthly amount of $100, the ASRS shall not pay the annuity. Instead, the ASRS shall make a one-time mandatory lump sum payment in the amount determined by using appropriate actuarial assumptions.

Q. For purposes of calculating a member's retirement benefit according to A.R.S. §§ 38-758 and 38-759, ASRS shall calculate age to the nearest day as of the member's retirement date.

R. Based on the retirement option the member elects according to A.R.S. § 38-760, the ASRS shall calculate a member's actuarially reduced benefits, based on the attained age of the member, and if necessary, the attained age of the contingent annuitant as of the date of the member's retirement as follows:

1. For a partial lump sum retirement benefit option, ASRS shall calculate age to the nearest day as of the member's retirement date;

2. For a Joint and Survivor Retirement Benefit Option, ASRS shall calculate age to the nearest day as of the member's retirement date; and

3. For a mandatory lump sum payment according to subsection (O) or a Period Certain and Life Annuity Retirement Benefit Option, ASRS shall calculate age to the nearest full month in addition to calculating age according to subsection (P) as necessary.

S. If the ASRS is unable to verify the age of the member or a contingent annuitant, the member or contingent annuitant shall provide Legal Documentation showing the member's or contingent annuitant's age.

T. If a member does not retire by the date minimum distribution payments are required according to A.R.S. §§ 38-759 and 38-775, the required minimum distribution payments will accrue interest at the Assumed Actuarial Investment Earnings Rate specified in R2-8-118(A) and in effect on the date the required minimum distribution payments should have begun.

U. The ASRS shall distribute any required minimum distribution payments with interest according to subsection (T) with the member's first finalized benefits payment.

V. If a member submits a retirement application after the member's minimum required distribution date, the ASRS shall determine that the member's Applicable Retirement Date is the date the required minimum distribution payments should have begun.

W. Notwithstanding any other Section, an inactive member who does not have contributions related to compensation is not eligible for retirement.

X. The ASRS shall issue a debit benefit card if the annuitant does not provide the following direct deposit information through the annuitant's secure ASRS account or by a notarized Direct Deposit form:

1. The member's full name;

2. The member's bank account routing number;

3. The member's bank account number; and

4. The type of the account.

Y. If the annuitant does not activate the debit benefit card the ASRS issues to the annuitant within 75 days, the ASRS shall reclaim all the retirement benefits issued on the debit benefit card and suspend the annuitant's retirement benefits until the annuitant:

1. Activates the debit benefit card or provides the direct deposit information according to subsection (X); and

2. Returns the notice of benefit suspension with the following information:

a. The annuitant's Social Security number or U.S. Tax Identification number;

b. The annuitant's address; and

c. The annuitant's notarized signature.

Z. The ASRS shall disburse benefits payments according to subsection (R), only retroactive to the later date specified in A.R.S. § 38-759(B).

AA. ASRS shall not issue additional estimate checks to a member whose retirement is canceled.

Ariz. Admin. Code § R2-8-126

Adopted effective September 12, 1977 (Supp. 77-5). Amended effective July 13, 1979 (Supp. 79-4). Former Section R2-8-26 renumbered and amended as Section R2-8-126 effective May 21, 1982 (Supp. 82-3). Amended subsections (A) through (D) effective October 18, 1984 (Supp. 84-5). Amended subsections (A) through (D) effective July 24, 1985 (Supp. 85-4). Amended by emergency effective July 6, 1993, pursuant to A.R.S. § 41-1026, valid for only 90 days (Supp. 93-3). Emergency amendments adopted again effective September 29, 1993, pursuant to A.R.S. § 41-1026, valid for only 90 days (Supp. 93-3). Permanent rule adopted effective December 22, 1993 (Supp. 93-4). Amended by emergency rulemaking at 7 A.A.R. 1621, effective March 21, 2001 (Supp. 01-1). Amended by emergency rulemaking under A.R.S. § 41-1026at 10 A.A.R. 2496, effective August 2, 2004 for 180 days (Supp. 04-2). Amended by final rulemaking at 10 A.A.R. 4012, effective November 13, 2004 (Supp. 04-3). Amended by final rulemaking at 19 A.A.R. 332, effective April 6, 2013 (Supp. 13-1). 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 22 A.A.R. 3081, effective 12/3/2016. 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. Amended by final rulemaking at 30 A.A.R. 732, effective 5/17/2024.