38-849. Limitations on receiving pension;
violation; classification; reemployment after severance;
reinstatement of service credits; reemployment of retired or
disabled member
(L10, Ch. 200, sec. 45)
A. If a member is convicted of, or discharged because of, theft, embezzlement,
fraud or misappropriation of an employer's property or property under the control of the
employer, the member shall be subject to restitution and fines imposed by a court of
competent jurisdiction. The court may order the restitution or fines to be paid from any
payments otherwise payable to the member from the retirement system.
B. A person who knowingly makes any false statement or who falsifies or permits to
be falsified any record of the system with an intent to defraud the system is guilty of a
class 6 felony. If any change or error in the records results in any member or
beneficiary receiving from the system more or less than the member or beneficiary would
have been entitled to receive had the records been correct, the local board shall correct
such error, and as far as practicable shall adjust the payments in such manner that the
actuarial equivalent of the benefit to which such member or beneficiary was correctly
entitled shall be paid. If a member is convicted of a crime specified in this subsection
the member shall be entitled to receive a lump sum payment of the member's accumulated
contributions but forfeits any future compensation and benefits that would otherwise
accrue to the member or the member's estate under this article.
C. If a member who received a severance refund on termination of employment, as
provided in section 38-846.02, is subsequently reemployed by an employer, the member's
prior service credits shall be cancelled and service shall be credited only from the date
the member's most recent reemployment period commenced. However, if the former member's
reemployment with the same employer occurred within two years after the former member's
termination date, and, within ninety days after reemployment the former member signs a
written election consenting to reimburse the fund within one year, the former member
shall be required to redeposit the amount withdrawn at the time of the former member's
separation from service, with interest thereon at the rate of nine per cent for each year
compounded each year from the date of withdrawal to the date of repayment. On
satisfaction of this obligation the member's prior service credits shall be reinstated.
D. If a retired member becomes employed in any capacity by the employer from which
the member retired before sixty consecutive days after the member's date of retirement,
the system shall not make pension payments to the retired member during the period of
reemployment. If a retired member is reemployed by an employer, no contributions shall be
made on the retired member's account, nor any service credited, during the period of the
reemployment. Notwithstanding this subsection, if a retired member subsequently becomes
employed in the same position by the employer from which the member retired, the system
shall not make pension payments to the retired member during the period of reemployment.
On subsequent termination of employment by the retired member, the retired member is
entitled to receive a pension based on the member's service and compensation before the
date of the member's reemployment. If a member who retired under disability is reemployed
by an employer as an employee, that member shall be treated as if the member had been on
an uncompensated leave of absence during the period of the member's disability retirement
and shall be a contributing member of the system. the board shall review all reemployment
determinations. For the purposes of this subsection, "same position" means the member is
in a position where the member performs substantially similar duties that were performed
and exercises substantially similar authority that was exercised by the retired member
before retirement.
E. A person who defrauds the system or who takes, converts, steals or embezzles
monies owned by or from the system and who fails or refuses to return the monies to the
system on the board's written request is subject to civil suit by the system in the
superior court in Maricopa county. On entry of an order finding the person has defrauded
the system or taken, converted, stolen or embezzled monies owned by or from the system,
the court shall enter an order against that person and for the system awarding the system
all of its costs and expenses of any kind, including attorney fees, that were necessary
to successfully prosecute the action. The court shall also grant the system a judicial
lien on all of the nonexempt property of the person against whom judgment is entered
pursuant to this subsection in an amount equal to all amounts awarded to the system, plus
interest at the rate prescribed by section 44-1201, subsection A, until all amounts owed
are paid to the system.
F. Notwithstanding any other provision of this article, the board may offset
against any benefits otherwise payable by the system to an active or retired member or
survivor any court ordered amounts awarded to the board and system and assessed against
the member or survivor.
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