Ariz. Admin. Code § 2-8-131

Current through Register Vol. 30, No. 24, June 14, 2024

Section R2-8-131 - Designating a Beneficiary; Spousal Consent to Beneficiary Designation

A. The definitions in R2-8-126 apply to this Section.

B. In order to designate a beneficiary, a member shall submit an Acceptable Form containing the following information:

1. The Member's full name and one or more of the following information:

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

b. The Member's address; or

c. The Member's date of birth;

2. The following information for the beneficiary:

a. The full name of the person or entity the member is designating as beneficiary;

b. Whether the beneficiary is being designated as primary or secondary beneficiary;

c. The percentage of the benefit the member is allocating to the beneficiary; and

3. The member's notarized signature.

C. If a change in a designated beneficiary is completed through the member's secure ASRS account, the member's notarized signature is not required under subsection (B)(3).

D. If a member submits an Acceptable Form designating a beneficiary without indicating the percentage of the benefit the member is allocating to the beneficiary, the ASRS shall determine that each beneficiary is designated to receive an equal amount of the benefit.

E. Effective July 1, 2013, a married member:

1. Who is not retired shall name and maintain the member's current spouse as primary beneficiary of at least 50% of the member's retirement account unless:

a. Naming or maintaining the current spouse as beneficiary violates another law, existing contract, or court order; or

b. The spouse consents to an alternate beneficiary;

2. Who retires shall choose a Joint and Survivor Retirement Benefit Option and name the member's current spouse as contingent annuitant unless:

a. Naming or maintaining the current spouse as contingent annuitant violates another law, existing contract, or court order; or

b. The spouse consents to an alternate contingent annuitant; or

c. The spouse consents to an alternate annuity option under A.R.S. §§ 38-757 or 38-760.

F. The ASRS shall honor a beneficiary designation last made or a retirement election submitted before July 1, 2013, even if the beneficiary designation or retirement election fails to comply with subsection (E).

G. Subsection (E) does not apply to a member who is receiving a mandatory lump sum distribution according to A.R.S. § 38-764.

H. Subsection (E) does not apply to a member who submits a Spousal Consent Exception form that contains the member's notarized signature to the ASRS affirming under penalty of perjury that the member's spouse's consent is not required because of one of the reasons specified in A.R.S. § 38-776(C).

I. In order to change a beneficiary designation, a member shall submit the information contained in subsection (B) and:

1. A married member who changes a beneficiary designation on or after July 1, 2013, shall ensure the new beneficiary designation is consistent with subsection (E); or

2. A married member who retired before July 1, 2013, and who wishes to change the contingent annuitant or beneficiary, shall ensure that the new designation is consistent with subsection (E).

J. A married member who re-retires according to A.R.S. § 38-766:

1. Within less than 60 consecutive months of active membership from the member's previous retirement date, is not eligible to elect a different annuity option or different beneficiary than the member elected at the time of the previous retirement; or

2. At least 60 consecutive months of active membership after the member's previous retirement date, may elect a different annuity option and different beneficiary than the member elected at the time of the previous retirement, and the election shall comply with subsection (E).

K. If a married member submits a retirement application that fails to comply with subsection (E), the member shall submit a new retirement application or written notice of new retirement elections that comply with subsection (E) within six months of the member's Original Retirement Date. The member's new Original Retirement Date is the date ASRS receives the new application or written notice unless the member elects a later date according to A.R.S. § 38-764.

L. If a married member made a beneficiary designation on or after July 1, 2013 that is not consistent with the requirements specified in subsection (E), the ASRS shall, at the time of the member's death:

1. Notify both the spouse and designated beneficiary and:

a. Provide the spouse with an opportunity to waive the right under subsection (E); and

b. Provide the designated beneficiary with an opportunity to provide documentation that revokes the spouse's right under subsection (E); and

2. Designate 50% of the member's retirement benefit to the spouse if neither the spouse nor designated beneficiary respond to notification according to subsection (L)(1) within 30 days after notification.

M. If a married member designated a beneficiary before July 1, 2013 that does not comply with subsection (E), upon the death of the member, the member's spouse may submit written notice to the ASRS prior to disbursement of the member's account with the following information:

1. The member's full name;

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

3. The spouse's assertion to the spouse's right to community property;

4. An original or copy of the marriage certificate; and

5. An original or certified copy of the member's death certificate.

N. If a spouse submits written notice according to subsection (M), the ASRS shall designate the spouse as beneficiary of a percentage of the member's account according to A.R.S. §§ 25-211 and 25-214 and notify the member's designated beneficiary of the spouse's assertion.

O. The ASRS shall determine a spouse's percentage of the member's account according to subsection (L) based on the amount of service credit the member acquired during the marriage divided by the total amount of service credit the member acquired, multiplied by 50%.

P. If a beneficiary is notified of a spouse's assertion according to subsection (N), then before ASRS disburses a survivor benefit, the beneficiary may notify ASRS of the beneficiary's intent to appeal the spouse's right to a survivor benefit.

Q. Within 30 days, a beneficiary who has notified ASRS of the beneficiary's intent to appeal a survivor benefit disbursement according to subsection (P), shall submit an appeal to ASRS according to 2 A.A.C. 8, Article 4.

R. A DRO may supersede the requirements in subsection (B).

S. To consent to an alternative retirement benefit option or beneficiary designation, a member's spouse shall complete and have notarized a Spousal Consent form containing the following information:

1. Member's full name;

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

3. Whether the member's spouse is consenting to one or more of the following:

a. The member making a beneficiary designation that provides the spouse with less than 50% of the member's account balance;

b. The member electing a retirement option other than a Joint and Survivor Retirement Benefit Option;

c. The member naming a contingent annuitant other than the spouse; and

d. The spouse's notarized signature.

T. A member's spouse may revoke the spouse's consent to an alternative retirement benefit option or beneficiary designation by sending written notice to ASRS with the following information:

1. The member's full name

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

3. The spouse's full name;

4. The spouse's dated signature indicating the spouse is revoking all previous Spousal Consent forms.

U. A spouse who is revoking a Spousal Consent form shall ensure the written notice is received no later than the earlier of one day before the member dies or ASRS disburses a retirement benefit to the member.

Ariz. Admin. Code § R2-8-131

Adopted 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.