Can I Redraw My Money From the Arizona State Retirement System Even After I Retire?
The Arizona State Retirement System provides state employees with retirement annuity payments after reaching minimum retirement age. A pension annuitant's payment depends on the total number of years worked as a state employee, average monthly compensation, personal contributions and employer contributions. An annuitant who reaches retirement age is eligible for a lump-sum distribution or monthly pension benefits. Eligible employees can redraw their monthly pension benefits by requesting a "buy back" of their previously credited service years pursuant to the Service Purchase Program.
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Overview
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Arizona state employees and their beneficiaries are eligible to receive annuity payments when they reach legal retirement age. Governed by Arizona Revised Statute Section 38-712, the Arizona State Retirement System administers the state's pension plan for state government employees. Pursuant to Arizona law, all participating state employees are required to make lifetime minimum contributions to their retirement plans, and their employers must also make pretax contributions based on annual contribution rates.
State Service Purchase Program
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The Service Purchase Program allows Arizona State Retirement System participants to request a buyback of their previously credited service years. Because a pension beneficiary's monthly annuity or retirement benefit depends on average salary calculations over a three- or five-year period of employment, the Arizona legislature enacted a Service Purchase Program allowing a retiree to request an alternate benefit calculation period. By changing the benefit period, a state employee can increase or maximize her monthly pension benefits. The state's three- or five-year pension contribution formula averages a retiree's highest months of employment compensation over the last three years or five years, depending on when the pension contributions accrued.
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Benefits
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To participate in the State Service Purchase Program, retirees must have at least 10 years of employment service credited to their retirement accounts. Redrawing retirement benefits through the program allows retirees to continue making retirement contributions to increase their monthly pension payments by substitution. An employee can substitute his credits with alternate credits from previous years of state employment, including military employment, employment through the state's correctional programs or employment as a public teacher.
Retirement Age
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Retirees are eligible for early retirement once they reach age 50 and have accrued at least five years of retirement service or credits. However, early retirees receive less than their counterparts who retire after age 65. Some state employees with over 10 years of qualified service can retire with full benefits at age 62. Furthermore, in limited circumstances, employees who are age 55 or older can retire with full benefits if they have at least 30 years of credit service contributions.
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