Arizona Administrative Code › Title 2 - ADMINISTRATION › Chapter 8 - STATE RETIREMENT SYSTEM BOARD › Article 5 - PURCHASING SERVICE CREDIT › Section R2-8-519 - Purchasing Service Credit by Termination Pay

Current through Register Vol. 30, No. 28, July 12, 2024
A. To purchase Service Credit using
				Termination Pay, an Eligible Member shall elect to use Termination Pay by the
				date payment election is due.
B. An Eligible Member who elects to use
				Termination Pay pursuant to this section, shall provide the ASRS with the
				Eligible Member's anticipated termination date which cannot be more than six
				months from the date the ASRS issues the SP Invoice and must be at least Three
				Full Calendar Months after the date the Eligible Member elects and submits
				Termination Pay as a method of payment.
C. An Eligible Member
				who elects to use Termination Pay pursuant to this section, shall provide the
				ASRS with a Termination Pay Authorization for the Purchase of Service Credit
				form with the following information:
1. The name of the Employer that will be submitting
				the Termination Pay to the ASRS;
2. Whether the Eligible
				Member elects to use all Termination Pay or a specific amount of Termination
				Pay;
3. Signature of the Eligible Member, certifying that
				the Eligible Member understands that:
a. The
				Eligible Member is required to continue working at least Three Full Calendar
				Months after the date the Eligible Member submits the Termination Pay
				Authorization for the Purchase of Service Credit form before Termination Pay
				may be used on a pre-tax basis;
b.
				If the Eligible Member terminates employment more than six months after the
				date on the SP Invoice, the Eligible Member may purchase the Service Credit at
				a newly calculated rate and possibly at a higher cost;
c. The terms elected in the Termination Pay
				Authorization for the Purchase of Service Credit form are binding and
				irrevocable;
d. The Eligible
				Member's Employer is required to make payment directly to the ASRS after
				mandatory deductions are made, and the Eligible Member does not have the option
				of receiving the funds directly from the Employer;
e. The Eligible Member's Termination Pay must
				be received and processed before the ASRS will accept any other form of
				payment;
f. It is the Eligible Member's responsibility to
				ensure that the Eligible Member's Employer properly deducts Termination Pay, as
				provided in the Termination Pay Authorization for the Purchase of Service
				Credit form; and
g. The amount of Termination Pay the Eligible Member
				elects is irrevocable pursuant to § 414(h)(2) of the IRC;
h. If the Termination Pay exceeds the balance
				due on the SP Invoice, the ASRS will return the difference to the Eligible
				Member's Employer to be distributed to the Eligible Member;
i. If the Eligible Member terminates
				employment and immediately retires, the Eligible Member's retirement processing
				may be delayed; and
j. The ASRS
				will send a notification to the Eligible Member's Employer two weeks prior to
				the Eligible Member's termination date, as indicated on the Termination Pay
				Authorization form, to notify the Employer that the Eligible Member's
				Termination Pay must be sent directly to the ASRS.