Corrections Officer Retirement Plan (CORP)
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Corrections Officer Retirement Plan (CORP)
Authority
The Corrections Officer Retirement Plan (CORP) was created by Laws 1986, Chapter 325. It is one of three plans administered by the Public Safety Personnel Retirement System. Current authority can be found at A.R.S.§§38-881 et seq.
Function
CORP provides retirement and disability benefits for specific designated positions defined in statute, which includes State of Arizona correctional officers and employees as well as county, city or town detention officers, dispatchers, probation officers and surveillance officers. (A.R.S.§38-881).
The Board of Trustees for the Public Safety Personnel Retirement System provides oversight for investments pursuant to A.R.S.§38-883. Although the Board is not responsible for the actions or omissions of the local boards, it has the authority to seek review or rehearing in order to protect the System as a whole. The Board of Trustees consists of nine members, appointed to five-year terms.
Statute requires each employer group participating in CORP to establish a local board and assigns numerous responsibilities to each board. Each local board determines eligibility for membership, retirement benefits based on years of service, and survivor benefits.
History
Laws 1986, Chapter 325 created CORP and authorized the fund manager for the Public Safety Personnel Retirement System (PSPRS) to manage CORP’s monies and investments. The initial formula created a pension that provided up to 75% of a member’s average annual salary, which was calculated by multiplying years of service by two. Retirement began at age 62 (requiring a minimum 10 years of service) or at age 55 (with a minimum 25 years of service). Benefits included pensions for accidental disability and survivor benefits.
NOTE: Both the retirement age and the pension formula have been modified in the years since CORP was created.
Initially, only counties could enter into a joinder agreement; in order to do so they were required to end any existing corrections officer retirement plan and submit to an actuarial review to determine the amount of money they needed to add to the fund.
Laws 1990, Chapter 272 added local boards, similar to those used by the PSPRS, to handle local administration of CORP. Local boards for the State Department of Corrections, the State Department of Juvenile Corrections, and each participating county were authorized in order to administer and implement the plan’s provisions with regard to eligibility and service credit. The measure also established requirements for serving on the local board; outlined board powers and duties; allowed up to four years of military service to be converted to service credits; provided benefit increases for members; and established a death benefit for those not yet eligible for a pension.
Laws 1991, Chapter 155 allowed municipalities to join CORP and required local boards to be established. The measure also allowed a municipality to enter into a joinder agreement in order to bring its detention officers into the plan.
Laws 1996, Chapter 282 allowed a local board to designate a position as eligible for CORP if an employee with at least five years of service filled the position.
Laws 2008, Chapter 144 allowed detention officers employed by the Department of Public Safety (DPS) to participate in CORP and included DPS in the list of agencies required to establish a local board.
Laws 2011, Chapter 357 was an omnibus measure that made changes to each of the state retirement systems (PSPRS, CORP, EORP and ASRS). Section 55, Legislative findings, stated in part: “The Legislature recognizes that in order to have a sound public retirement system that benefits this state, taxpayers and member of the retirement systems, the public retirement systems must be funded with contributions and investment earnings based on actuarial methods and assumptions that meet generally accepted actuarial standards. ... The Legislature finds the current structures of ... the plans do not achieve this goal … and intends to modify and amend these various retirement programs in order to protect the best interests of the members and beneficiaries.”
The 2011 measure made a number of significant changes, including cost of living adjustments, return to work, member’s contribution rates, compensation, calculation of retirement benefits, and purchase of credited service. The measure also created the Defined Contribution and Retirement Study Committee to study the feasibility and cost of transferring existing or new members to a defined contribution. A written report of findings and recommendations was required to be submitted to the Governor, Legislature and Secretary of State by December 31, 2012.
Laws 2017, Chapter 163 made substantial changes to CORP. New employees (hired on or after July 1, 2018) will participate in a defined contribution plan (rather than a defined benefits plan). Voters approved Proposition 125 at the 2018 general election to establish a cost of living increase for current employees (Tier 1) and current retirees (Tier 2) members, instead of a permanent benefit increase. See SCR 1023, 53rd Legislature, First Regular Session.
The 2017 measure also allows probation officers and surveillance officers to choose to participate in either a defined contribution plan or a defined contribution plan and establishes a cost of living adjustment for new probation and surveillance officers, rather than a permanent benefit increase. In addition, the measure set the unfunded liability amortization period under CORP to not more than 20 years, and provided an allowance for a one-time election to use a closed period of not more than 30 years.
Sources
- A.R.S.§§38-881 et seq.
- Session Laws
- Laws 1986, Chapter 325
- Laws 1990, Chapter 272
- Laws 1991, Chapter 155
- Laws 1996, Chapter 282
- Laws 2008, Chapter 144
- Laws 2011, Chapter 357
- Laws 2017, Chapter 163
Senate Concurrent Resolution 1023, 53rd Legislature, First Regular Session
