Section R2-8-120. Designating a Beneficiary; Spousal Consent to Designation

A.      The following definitions apply to this Section unless other- wise specified:

1.        “DRO” means the same as “domestic relations order” in A.R.S. § 38-773(H)(1).

2.        “Joint and survivor annuity” means an optional form of retirement benefits described in A.R.S. § 38-760(B)(1).

3.        “Period certain and life annuity” means an optional form of retirement benefits described in A.R.S. § 38- 760(B)(2).

4.        “Spouse” means the individual to whom a member is married under Arizona law.

B.       Effective July 1, 2013, a married member:

1.        Who is not retired shall name and maintain the member’s current spouse as primary beneficiary of at least 50 per- cent of the member’s retirement account unless:

a.         Naming or maintaining the current spouse as benefi- ciary violates another law, existing contract, or court order; or

b.        The spouse consents to an alternate beneficiary; and

2.        Who retires shall choose a joint and survivor annuity and name the member’s current spouse as contingent annui- tant of at least 50 percent of the member’s retirement ben- efit unless the spouse consents to an alternative.

C.      Application of subsection (B).

1.        The ASRS shall honor a beneficiary designation last made or a retirement election submitted before July 1, 2013, even if the beneficiary designation or retire- ment election fails to comply with subsection (B).

2.        The ASRS shall not apply subsection (B) to a lump- sum retirement authorized under A.R.S. § 38-764.

3.        The ASRS shall not apply subsection (B) if a mem- ber submits a letter to the ASRS in which the mem- ber affirms under penalty of perjury that spousal consent is not required because of one of the reasons specified in A.R.S. § 38-776(C).

D.      Changing a beneficiary designation:

1.        If a married member changes a beneficiary designation on or after July 1, 2013, the member shall ensure that the new beneficiary designation is consistent with the requirements specified in subsection (B);

2.        If a married member who retired before July 1, 2013, and:

a.         Chose a straight-life annuity wishes to change the member’s beneficiary, the member shall ensure that the new beneficiary designation is consistent with subsection (B); or

b.        Chose a period certain and life annuity or joint and survivor annuity wishes to change either the annuity option or the contingent annuitant, the member shall ensure that the new beneficiary designation is con- sistent with subsection (B).

E.       Re-retirement. A married member who re-retires, as described in A.R.S. § 38-766:

1.        Within 60 months of the member’s previous retirement date, shall elect the same annuity option and beneficiary as the member made at the time of the previous retire- ment; or

2.        More than 60 months after the member’s previous retire- ment date, shall comply with subsection (B).

F.       Involuntary cancellation of retirement. If a married member retires on or after July 1, 2013, and is issued one or more esti- mate checks but fails to comply with subsection (B) within 30 days after the member’s effective retirement date, the member shall submit a signed letter to ASRS stating that the member’s spouse refuses to consent to the chosen alternative and asking that the retirement be cancelled. The member may submit another retirement application that complies with subsection (B). The member’s new effective retirement date is the date ASRS receives the new application. ASRS shall not issue additional estimate checks to a member whose retirement was involuntarily cancelled.

G.      Survivor benefits:

1.        If a married member last made a beneficiary designation before July 1, 2013, the ASRS shall, at the time of the member’s death, honor the beneficiary designation even if the beneficiary designation is not consistent with the requirements specified in subsection (B); and

2.        If a married member made a beneficiary designation on or after July 1, 2013, that is not consistent with the requirements specified in subsection (B), the ASRS shall, at the time of the member’s death:

a.         Notify both the spouse and designated beneficiary and:

i.         Provide the spouse with an opportunity to waive the right under subsection (B); and

ii.        Provide the designated beneficiary with an opportunity to provide documentation that revokes the spouse’s right under subsection (B); and

b.        Designate 50 percent of the member’s retirement benefit to the spouse if neither the spouse nor desig- nated beneficiary respond under subsection (G)(2)(a) within 30 days after notification.

H.      Effect of legal documents. In general, a legal document such as a QDRO or prenuptial agreement will supersede the requirements in subsection (B). The ASRS shall ask the Office of the Attorney General to review the legal document before the ASRS decides how to disburse the retirement benefit.

I.        Spousal waiver and consent; consent revocation

1.        The current spouse of a member has a right to:

a.         Be designated as primary beneficiary of at least 50 percent of the member’s retirement account, and

b.        Have the member choose a joint and survivor annu- ity with the spouse as contingent annuitant of at least 50 percent of the retirement benefit.

2.        To waive the right described in subsection (I)(1) and con- sent to an alternative, the current spouse shall complete and have notarized  a spousal  consent form,  which is available from the ASRS. If the current spouse is not capable of completing the spousal consent form because of a documented incapacitating mental or physical condi- tion, a person with power of attorney or a conservator may complete the spousal consent form on behalf of the current spouse.

3.        A spouse may revoke a waiver and consent by sending written notice to ASRS and ensuring the written notice is received no later than the earlier of one day before the member dies or ASRS disburses a retirement benefit to the member.

Historical Note

Former Rule, Social Security Regulation 6; Amended effective June 19, 1975 (Supp. 75-1). Amended effective

July 13, 1979 (Supp. 79-4). Former Section R2-8-20

renumbered and amended as Section R2-8-120 effective May 21, 1982 (Supp. 82-3). Repealed effective July 24, 1985 (Supp. 85-4). New Section made by final rulemaking at 20 A.A.R. 2236, effective October 4, 2014 (Supp. 14-3). Amended by final rulemaking at 21 A.A.R.

2515, effective December 5, 2015 (Supp. 15-4).