Arizona State Retirement System

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Arizona Association of School Business Officials

September Bi-Monthly Meeting

September 9, 2009

Discussion Topics

• Fund Status

• Enacted Legislation

• HI Open Enrollment

• Retirees Returning to Work

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ASRS Trust Fund Activity

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ASRS Defined Benefit Plan 1996 – 2009

Fiscal Year End June 30

Market Return

Market Value of Assets

(in millions)

Excess Actuarial

Return

Actuarial Funded Status

Contribution Rate* EE & ER Contri-butions

(in millions)

Benefit Payments (in millions)

# of New Retirees

by Year**

Avg. Monthly

Benefit*** Actual

Normal Cost

1996 13.2% $13,917.6 5.2% 113.2% 3.36% 5.44% $299.7 $536.5 3,845 $ 920

1997 14.8% $16,397.9 6.8% 114.4% 3.20% 5.20% $309.4 $580.9 3,578 $ 945

1998 16.2% $19,390.0 8.2% 118.6% 3.05% 5.21% $321.3 $628.6 3,353 $ 982

1999 14.1% $21,836.4 6.1% 116.4% 2.85% 5.24% $348.0 $678.9 4,380 $1,024

2000 8.8% $23,187.6 0.8% 120.4% 2.17% 5.24% $283.8 $788.6 4,822 $1,125

2001 (6.7%) $21,872.9 (14.7%) 112.8% 2.17% 5.48% $367.2 $920.4 4,224 $1,211

2002 (11.3%) $18,594.9 (19.3%) 104.6% 2.00% 5.36% $321.8 $1,029.1 3,954 $1,371

2003 1.8% $18,116.8 (6.2%) 96.8% 2.00% 5.88% $375.5 $1,162.8 5,955 $1,401

2004 17.3% $20,758.6 9.3% 91.2% 5.20% 5.95% $866.0 $1,326.4 6,430 $1,487

2005 8.4% $21,901.0 0.4% 85.3% 5.20% 6.52% $946.7 $1,510.7 7,005 $1,508

2006 9.8% $23,641.1 1.8% 83.7% 6.90% 6.51% $1,265.2 $1,652.6 7,143 $1,566

2007 17.7% $27,639.0 9.7% 82.8% 8.60% 6.58% $1,631.2 $1,784.0 7,393 $1,584

2008 (7.5%) $25,296.1 (15.5%) 82.2% 9.10% 6.71% $1,805.7 $1,931.1 7,784 $1,596

2009 (est) (19.1%) $20,372.5 (27.1%) 79.3% 8.95% 6.46%

* The actual contribution rate is what each active member contributes during a fiscal year. The normal cost rate is what the contribution rate would be

if there was no surplus or deficit to amortize.

** Over the 12-year period, the numbers of new retirees by year have increased 102%

ASRS Trust Fund Assets

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House Bill 2118Signed by Governor on July 10, 2009

DB Plan Design• Removes 80% cap on retirement benefits.

Dual Employment• Requires 20/20 criteria for membership on second

employer.

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House Bill 2118 (continued)

Return to Work• Permits the election of a different retirement

option if retiree suspends benefit and works for at least 60 consecutive months.

• Eliminates the requirement that a returning teacher be certified.

Service Purchase• Requires, beginning July 1, 2010, a member to have

5 years of service credit before initiating any service purchase.

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House Bill 2118 (continued)

Employee Termination Incentive Programs• Limits exceptions to increases in compensation to

promotion only (eliminates reclassifications and merit increases.

• Eliminates the requirement the termination agreement be in writing.

• Requires an employer to pay any unfunded liability for persons who would not have qualified for ASRS membership but for whom contributions were made.

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Senate Bill 1196Signed by Governor on July 10, 2009

A Strike Everything Education Omnibus

Salary Deferral Plan•Authorizes the ASRS to establish a supplemental employee salary deferral plan [403(b) or 457] for public employees, other than State employees, to save additional tax deferred money for retirement.

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• October 19 – November 13, 2009• No change in medical or dental plan carriers• Passive enrollment•Plan improvements, but with premium increases• January 1, 2010 – effective date

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HI Open Enrollment

Return to Work

A.R.S. § 38-766• Requires a retired member to suspend

benefit if 20/20 criteria for membership is met.

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Return to Work(continued)

A.R.S. § 38-766.01• Allows a retired member to return to work

and receive a benefit if:– member has attained NRA.– member terminated employment at

least 12 months before returning to work.

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Return to Work(continued)

There are some exceptions to this general rule:1. Retiring without terminating employment.2. Returning to work with reduced hours.3. Returning to work after 12 month.4. Returning to work in a position that requires

participation in another state retirement plan.5. Returning to work as a leased employee or

independent contractor.6. Returning to work in a position that is not included

under the employer’s Social Security coverage agreement. 12

Questions?

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