Sec. 22-36(a). Credited service generally. A member will receive credited service for purposes of determining the benefits to which the member or the member's beneficiary(ies) will be entitled. Credited service is the total of the member's accrued service and additional service. Accrued service shall be used to determine whether a member is vested, as well as to determine the member's accrued benefit. Additional service shall be considered for benefit accrual purposes only.
Sec. 22-36(b). Accrued service for city employment.
(1) Employment periods. A member shall earn 1/2080 of one (1) year of accrued service credit for each hour of regular time compensation, including authorized periods of absence for which the member receives compensation. A member who is compensated for two thousand eighty (2,080) or more hours of regular time during twelve (12) consecutive calendar months shall receive one (1) year of accrued service. A member who is compensated on less than a full-time basis shall receive credit for a proportionate part of a full year of accrued service.
(2) Periods of leave. With regard to tier I members, all periods of leave with pay, accrued and unused vacation and sick leave at the date of retirement, workers compensation and qualified military service shall be used in calculating a member's total accrued service. The accrued service of a tier I member also shall include accumulated vacation cashed out by the city; provided, however, that the member makes member contributions on the value of the vacation leave that is cashed out by the city as set forth in section 22-34(f). Notwithstanding the foregoing, vacation leave earned by a tier I member pursuant to the city's vacation leave carryover program and cashed out by the city shall not be included in the calculation of a member's accrued service under any circumstances. With regard to tier II members, all periods of leave with pay, workers compensation and qualified military service shall be used in calculating a member's total accrued service, but all accrued and unused vacation and sick leave at the date of retirement and all accumulated vacation that is cashed out by the city shall be excluded. Special rules regarding qualified military service are set forth in subparagraph three (3) below.
(3) Military leave during active employment. An active city employee who leaves employment to complete qualified military service, makes a timely return to the city following an honorable discharge (as defined below), and who makes up missed member contributions in accordance with section 22-43(e) may receive accrued service for periods of qualified military service. Accrued service credited to a member who satisfies the conditions of this section and section 22-43(e) shall not exceed sixty (60) months of accrued service for qualified military service, plus accrued service for reasonable periods of absence from employment which are necessitated by the qualified military service, except as provided by applicable federal law. The member's return to city service shall be deemed to be timely if the member is reinstated or requests reinstatement in accordance with the following time frames: (A) The first full regularly scheduled work period on the first full calendar day following completion of the qualified military service for periods of qualified military service of less than thirty-one (31) days; (B) not later than fourteen (14) days after completing qualified military service for periods of qualified military service of at least thirty (30) days and not more than one hundred eighty (180) days; or (C) not later than ninety (90) days after completing qualified military service for periods of qualified military service of more than one hundred eighty (180) days. If the member is hospitalized for, or convalescing from, an illness or injury incurred in, or aggravated during, the performance of qualified military service, the member's return to city service shall be deemed to be timely if the member returns as of the earlier of the end of the period of recovery or the date which is two (2) years after the completion of qualified military service. Notwithstanding the foregoing, an active city employee who leaves employment for military leave in accordance with Section IV of the city's Administrative Directive 2.01-7G, as amended (Paid Military Leave Not to Exceed 30 Calendar Days in any Two (2) Consecutive Federal Fiscal Years) shall be credited with accrued service for the period of military leave during which member contributions are made, regardless of the employee's subsequent return or failure to return to employment.
(4) Furlough. An active city employee who is subject to a city mandated furlough during the period beginning on July 1, 2009, and ending on June 30, 2010, shall be credited with accrued service for the furlough period(s), up to a maximum of seventy-two (72) hours of accrued service credit. This shall include reductions in pay which correlate with furlough hours.
Sec. 22-36(c). Transfers from other Arizona Systems.
(1) ASRS. A contributing member who has service credits in the Arizona State Retirement System may have such retirement service credits transferred to the system in accordance with Arizona Revised Statute Sections 38-730, as amended. In no event shall any transfer of service credit processed in accordance with this section create a significant detriment to the funded status of the system. Any service credit transferred pursuant to this section shall be accrued service hereunder.
(2) Other systems. A contributing member who has service credits in a public retirement system maintained by the State of Arizona (other than ASRS) or any municipality of the State of Arizona may have such retirement service credits transferred to the system in accordance with Arizona Revised Statute Sections 38-923 and 38-924, as amended. In no event shall any transfer of service credit processed in accordance with this section cause the system to incur any unfunded accrued liabilities as a result of the transfer. Any service credit transferred pursuant to this section shall be additional service hereunder.
Sec. 22-36(d). Additional service--Unpaid authorized leave from city employment. A member who has not requested a refund from the system in accordance with section 22-41 may purchase up to one (1) year of additional service for any period of unpaid authorized leave from city employment (excluding furloughs). To purchase such additional service, a member shall pay to the system the contribution cost associated with the leave period, determined based on the compensation imputed in accordance with section 22-43(c) and the member and employer contribution rates in effect during the leave period. Any election to purchase additional service pursuant to this section must be completed within six (6) months of the termination of the leave period. A member may pay the costs associated with a purchase of additional service under this section by any method described in section 22-36(g) below.
Sec. 22-36(e). Additional service – Prior government or military service. Subject to the provisions of section 22-36(g), a member who has not requested a refund of the member's accumulated contribution account or filed a retirement application may elect to purchase additional service in the system for periods of prior government or military service. Additional service will be used for benefit accrual purposes only, and will not be considered in the determination of whether a member is vested. Any member wishing to purchase additional service shall furnish all documentation required by the system administrator, in its discretion, to substantiate the prior service at the time of making an application to purchase the additional service. This provision shall govern the repurchase of prior city service credit forfeited upon receipt of a refund pursuant to section 22-41, subject to the special redeposit rules of section 22-36(h). It is the stated and declared purpose of this section to allow for the purchase of all prior government or military service for which a member is not entitled to receive, presently or in the future, a benefit from another retirement system. To this end, the provisions of this section shall be liberally construed.
Sec. 22-36(f). Additional service – Nonqualified permissive service credit. Subject to the provisions of section 22-36(g), any vested member who is actively contributing to the system may purchase additional service for nonqualified service in accordance with Code Section 415(n)(3). Effective January 1, 2011, the purchase of nonqualified permissive service shall be limited to a total of five (5) years, regardless of the member's payment method and notwithstanding the special rules set forth in Code Section 415(n) regarding direct rollovers and transfers from Code Section 403(b) and 457 plans. For purposes of the foregoing five (5) year limitation on permissive service purchases, additional service purchased by a member prior to January 1, 2011, shall be taken into account.
(1) Cost to purchase. Purchases of additional service are designed and administered in a manner intended to prevent the system from incurring any unfunded accrued liability as a result of the purchase. The cost for each year of additional service purchased shall equal a percentage of the member's highest annual salary, as determined in accordance with a purchase of service credit table designed by the system's actuary and approved by the board. An administrative fee as determined by the board shall be imposed for the processing of purchase of service requests. The date of purchase shall be the day the member delivers to the system administrator an executed irrevocable purchase of service agreement.
(2) Payment for time purchased. A member may fund the purchase of additional service with one or a combination of the following payment methods: (A) payment of after-tax cash lump sum; (B) tax-deferred rollover contribution from a tax-qualified retirement plan or individual retirement account(s) as authorized by the Code; (C) after-tax payroll deduction agreement; or (D) irrevocable pre-tax payroll deduction agreement designed to comply with the employer pick-up arrangement requirements of Code Section 414(h)
Sec. 22-36(h). Reentry into service. A former member who reenters service shall become a member of the system in accordance with section 22-33(e). If the member's accumulated contributions account has not been refunded and his accrued benefit has not been transferred in accordance with section 22-41, credited service shall be given for all prior accrued and additional service. A former member who reenters service within twenty-four (24) months and who received a refund of his accumulated contributions account pursuant to section 22-41 shall, upon redeposit of the amount withdrawn plus applicable interest, as determined by the system administrator, be credited with all prior credited service. Any redeposit made in accordance with this provision must be completed within six (6) months of the former member's reentry into service.
(Ord. No. 10657, § 2, 4-28-09, eff. 7-1-09; Ord. No. 10696, § 2, 8-5-09, eff. 7-1-09; Ord. No. 10775, § 1, 4-6-10; Ord. No. 10915, § 4, 6-21-11, eff. 7-1-11; Ord. No. 11327, §§ 6, 7, 12-8-15, eff. 1-1-16; Ord. No. 11795, § 2, 10-20-20)
Editor's note – Section 8 of Ord. No. 10915, adopted June 21, 2011, provides that the amendments made to Sec. 22-36(f) are effective retroactively to July 1, 2009.