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Senior Retirement Tips :: Arizona State Retirement System
Arizona State Retirement System: Frequently Asked Questions about the Retirement System in Arizona State
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To learn more about the ASRS (Arizona State Retirement System), including how it works, who is eligible and how benefits are determined, keep reading.
What is the ASRS?
The Arizona State Retirement System is an Arizona state agency (created in 1953) that provides retirement benefits, disability benefits and other health and related benefits to employees of the state, local counties or municipalities, universities, colleges, political entities and local school districts.
Once an employer, for example the Phoenix Water Authority, becomes a member of the ASRS, all employees must also become members. It's mandatory for all public employees.
What are the membership categories for the ASRS?
First there is the Active Member – this is a member that is working at a member employer and making regular contributions to the ASRS. An active member is anyone who works or is hired to work more than 19 hours per week for 21 or more weeks in a year.
Inactive members are those who were once contributing members to the ASRS, but now no longer work for an ASRS member employer. These former employees can carry an ASRS account balance, but are no longer required to contribute to the plan.
Finally, the last membership category are retirees – these are former employees of ASRS employers who are now receiving a lifetime retirement benefit and income from the ASRS.
How much must an ASRS member contribute?
ASRS active members are required to contribute 8.95% of their gross income to their retirement pension and health insurance benefits. This is a pre-tax deduction. They must also contribute 0.5% to the long-term disability income plan. However, this is a post-tax deduction.
Meanwhile, ASRS employers must match these contributions.
What are the retirement benefits with the ASRS?
The ASRS pays its retirement benefits based on a set formula. Basically the retirement benefit equals the employee's average monthly compensation multiplied by their total service credit and then multiplied by a multiplier defined by the state (multiplier raises with inflation).
The average monthly compensation is the average income paid to the employee over the best 3 or 5 years of service. The service credit refers to the length of time the employee was employed and the multiplier is based on the number of years of service.
For example, an employee with over 30 years of service would have a multiplier of 2.3% while an employee with less than 20 years of service would have a multiplier of 2.1%.
Do I have to participate?
Yes, it is the law that all state and government employees in the state of Arizona must participate in the Arizona state retirement system.
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SeniorRetireTips.com :: Arizona State Retirement System