38-953

38-953. Supplemental option

A. A supplemental defined contribution plan is in addition to and does not replace
an employee's existing state defined benefit retirement plan.

B. Except as provided in subsection C, any contributing member of an eligible group
that establishes a supplemental defined contribution plan as authorized by this article
may participate in the supplemental defined contribution plan. Participation in any plan
established by an eligible group authorizes the member's employer to make reductions or
deductions in the member's compensation. The employer shall submit any reports required
by the plan. Any compensation deferred under the plan shall be included as regular
compensation or compensation for the purpose of computing the retirement and pension
benefits earned by any employee participating in the plan.

C. If the Arizona state retirement system establishes a supplemental defined
contribution plan and an employer member of the Arizona state retirement system elects to
participate in the supplemental defined contribution plan, any employee member of the
employer who meets the eligibility requirements that are prescribed by the board for
participation in the supplemental defined contribution plan and that are selected by the
member's employer may participate in the supplemental defined contribution plan.

D. An employee shall make an election to participate in a supplemental defined
contribution plan within two years after the employee first meets the eligibility
requirements to participate in the plan. An election to participate in a plan is
irrevocable and continues for the remainder of the employee's employment with the
employer.

E. If an employee elects to participate in a plan pursuant to this section, the
employee shall contribute a prescribed amount of the employee's gross compensation, which
shall be a percentage of the employee's gross compensation, a fixed dollar amount, an
amount prescribed in the plan or some other definitive amount that may not be modified or
revoked by the employee. As the plan prescribes, an employer may annually increase or
decrease the employee contributions in increments of one per cent up to the maximum
allowed by law or the employee may make a one-time irrevocable election of the employee's
contribution amount. An employee is not required to contribute under this subsection in
order to qualify for an employer match under subsection F or G. The employer match may
accrue from any program established by the employer.

F. An employer may elect to match the contributions made by the employee to the
supplemental defined contribution plan at a rate determined by the employer. The employer
shall pay this amount to the supplemental defined contribution plan in which the employee
participates.

G. An employer may elect to match the contributions made by the employee to any
other program established by the employer under the internal revenue code, including any
plan established under internal revenue code section 401(a), 403(b) or 457, at a rate
determined by the employer. The employee shall determine whether the employer pays the
matching contribution to the 401(a), 403(b), or 457 plan in which the employee
participates, to the supplemental defined contribution plan in which the employee
participates or to any other plan established by the employer.

H. The rate of the employer match under subsection F or G shall be determined at
the beginning of that employer's budget cycle and shall terminate at the end of that
budget cycle. If an employer elects to match under subsection F or G, the employer shall
make the contributions.