HB 2653 Summary

• Creates Arizona State Defined Contribution Retirement System as a new retirement program for all state and political subdivision employees hired on or after January 1, 2014, with defined contribution accounts instead of defined benefit pensions.

• Establishes mandatory contributions from employees (prescribed percentage or fixed amount of gross compensation) with employers matching 100% of employee contributions, capped at 5% of gross compensation.

• Allows current ASRS members to voluntarily elect the defined contribution system on a prospective basis, either freezing existing benefits or withdrawing contributions with interest to transfer into the new system.

• Member contributions and earnings are immediately vested; employer contributions vest according to section 38-954 of the bill.

• Retirement payments are based solely on the individual member's annuity account balance at retirement, with the board authorized to purchase annuities for members upon their retirement.