Senate Bill 1016 Summary

• Amends Arizona Revised Statutes section 38-748 to clarify employer liability when the Arizona State Retirement System (ASRS) provides benefits based on ineligible contributions or compensation.

• Employers must pay ASRS any unfunded liability resulting from benefits provided to persons ineligible for ASRS membership or benefits based on ineligible compensation, with interest accruing if payment is not made within 90 days.

• Credited service stops accruing when ASRS or a court determines it is legally obligated to provide any benefit or credit based on the ineligible contributions.

• Expands the definition of "unfunded liability" to separately address two scenarios: persons ineligible for ASRS membership and contributions on ineligible compensation, using actuarial assumptions to calculate the difference between actual and potential benefits.

• ASRS retains full account balances if they exceed the present value of benefits owed and is not required to refund or credit any excess amounts.