AZ HB2335

Allows members who reach normal retirement age or age 59½ to retire without terminating employment through December 31, 2028, removing the previous requirement to work less than minimum active membership hours.

Creates a temporary return-to-work provision through December 31, 2028, allowing retired members under normal retirement age to return to work without benefit suspension if they: work for a different employer, wait 90 days between jobs with the same employer, or certify they didn't retire with an understanding to remain employed.

Requires benefit suspension and resumed active membership for all retired members returning to work on or after January 1, 2029, unless they meet specific exemptions related to employer changes or job separation periods.

Establishes that any unfunded liability created by members retiring earlier than expected and returning to work shall be included in the alternate contribution rate paid by employers.

Modifies section 38-766.01 to allow retired members returning to work with a new employer to elect to suspend benefits and resume active membership rather than automatically suspending benefits.