AZ HB2337

Extends the deferred retirement option plan (DROP) participation period from 60 months to 84 consecutive months for members who became system members before January 1, 2012.

Limits the 84-month participation period to pre-2012 members only; members joining on or after January 1, 2012 remain limited to 60 consecutive months.

Changes interest accrual for pre-2012 members: the first 60 months accrue interest at the assumed rate of return, with the remaining 24 months accruing interest at the actual rate of return (smoothed over 7 years, capped between 0-9%).

Maintains that post-2012 members' DROP accounts accrue interest at the actual rate of return (smoothed over 7 years, capped between 0-9%) for the entire 60-month period.

Retains existing DROP provisions regarding member eligibility, mandatory employment termination at plan completion, and forfeiture of benefits and interest if employment is not terminated as required.