taken from the May 2002 AAUP AZ Advocate

Retirement – Some New Rules

New options for those in the Arizona State Retirement System (ASRS) require new thought about retirement planning. The ASRS retirement program is given to community college full time faculty and university faculty members who did not take the optional retirement plan.

In all years prior to 2001, a participant who left employment had two choices. In one choice, the participant could leave assets in the Plan and opt for a defined monthly income (i.e. an annuity-type option). In this choice the state controlled the money deposited and doled out the money monthly (with some increases decided sporadically by the legislature). A second choice had been that the participant could take distribution of the employee-contributed portion of their retirement assets while releasing the employer-contributed half back to the plan for the state-controlled annuity-like disbursement. The distribution of the employee-contributed portion of funds could be rolled over into an IRA or just put into a bank account with the payment of taxes.

Now, thanks in large measure to the persistent efforts of the Coalition of Arizona State Retiree Associations, the participant has the option to take full distribution of the employer-contributed portion as well as the employee-contributed portion (or 100% if the capital value).

Thus, a participant now has the choice of level of risk and return on their retirement money, or a state-controlled annuity-type plan. The choices made could have a large effect on retirement, with substantial differences in projected income and risk.