Bill > HB2035

This bill amends the Arizona State Retirement System (ASRS) regulations regarding termination incentive programs by clarifying the definition and financial responsibilities of employers offering such programs. The bill defines a termination incentive program as either a substantial compensation increase of 30% or more before retirement that is not related to a promotion, or anything of value provided to an employee conditional on their termination (excluding standard accrued leave payments). If such a program creates an unfunded liability for ASRS, the employer must pay the full cost of that liability, which will be calculated by ASRS actuaries based on specific methods: for compensation increases, the liability is calculated using the portion of the benefit exceeding the 30% threshold, and for other incentives, the liability is calculated by comparing the member's accrued liability under retirement versus active member assumptions. Employers must notify ASRS before implementing such programs, and if they do not pay the assessed unfunded liability within 90 days, the unpaid amount will accrue interest at the board-approved actuarial equivalency rate.

Budget and Finance

https://apps.azleg.gov/BillStatus/BillOverview/81692