HB 2341 Summary

• Establishes the Arizona State Defined Contribution Retirement System as a new retirement program for all state and political subdivision employees hired on or after January 1, 2011, replacing their eligibility for the existing defined benefit retirement system (ASRS).

• Creates a defined contribution system where employees contribute 0-15% of gross compensation and employers contribute 25% of the employee contribution amount (capped at 1% of gross compensation), with all contributions deposited into individual annuity accounts.

• Allows vesting of employer contributions based on years of service: one-third vested after 6 years, two-thirds after 9 years, and 100% after 12 years of employment.

• Permits existing ASRS members to voluntarily elect membership in the defined contribution system on a prospective basis, either freezing their existing benefits or withdrawing their contributions to transfer to the new system.

• Establishes retirement eligibility at age 55 with distribution options including lump sum payments, joint and survivor annuities, and variable annuities funded solely from the member's account balance.