38-861. Future benefit increases; payment; cost calculation; definition

224 words·~1 min read·/az/title-38/38-861

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Any future benefit increase adopted by the legislature or any participating employer for any member of the system shall be fully paid in the year of enactment of the benefit and may not be amortized over any period of years. A benefit for members hired before July 1, 2017 shall be paid by the employer and the cost of the benefit for members hired on or after July 1, 2017 shall be split equally between the employer and the member.

B. The plan actuary shall calculate the cost of the benefit increase using all of the following:

1. A discount rate equal to the ten-year treasury constant maturity rate for the fiscal year in which the benefit is enacted.

2. An expected rate of return on assets equal to the ten-year treasury constant maturity rate for the fiscal year in which the benefit is enacted.

3. A mortality table based on the most recent proposal from the retirement plans experience committee of the society of actuaries that is not older than the RP-2014 mortality table.

4. All other actuarial assumptions approved by the board for the most recent fiscal year valuation.

C. For the purposes of this section, "future benefit increase" includes any benefit increase that leads to a change in the present value of future benefits or a change to accrued liabilities.