2005 Arizona Revised Statutes - Revised Statutes §38-749  Employer termination incentive program; employer payment of actuarial cost; definition

A. If a termination incentive program that is offered by an employer results in an actuarial unfunded liability to ASRS, the employer shall pay to ASRS the amount of the unfunded liability. ASRS shall determine the amount of the unfunded liability in consultation with its actuary.

B. An employer shall notify ASRS if the employer plans to implement a termination incentive program that may affect ASRS funding.

C. If ASRS determines that an employer has implemented a termination incentive program that results in an actuarial unfunded liability to ASRS, ASRS shall assess the cost of the unfunded liability to that employer. If the employer does not remit full payment of all monies due within ninety days after being notified by ASRS of the amount due, the unpaid amount accrues interest until the amount is paid in full. The interest rate is the interest rate assumption that is approved by the board for actuarial equivalency for the period in question to the date payment is received.

D. For the purposes of this section, " termination incentive program":

1. Means a total increase in compensation of thirty per cent or more that is given to a member in any one or more years of the last three years before termination if that increase in compensation is used to calculate the member's retirement benefit and that increase in compensation is not attributed to a:

(a) Promotion.

(b) Reclassification of the position.

(c) Merit or a cost of living increase.

2. Means any monies, credited service or points that the employer provides to a member in exchange for a member's written agreement to terminate on or before a date certain.

3. Does not include payments to an employee for:

(a) Compensation for accrued vacation.

(b) Compensation for accrued sick leave.

(c) Compensatory time.