ASRS Refund Information

As communicated by Human Resources on May 11th, Governor Brewer signed House Bill 2264 into law on May 7, 2012. This new law reverses last year’s legislation mandating a 53/47 percent employee/employer split of the total Arizona State Retirement System (ASRS) contribution rate. ASRS contributions have now returned to the historical 50/50 percent employee/employer split.  This change was reflected in your May 18, 2012 paycheck.

House Bill 2264 also requires employers to refund employees the excess contributions paid above the 50 percent rate since the enactment of last year’s legislation. This refund was processed in a special check today, June 22nd, 2012.

For excess ASRS contribution - Because the ASRS deductions were taken pretax at the time, the refund of the excess contributions is considered taxable wages when paid. As such, the excess contribution refunds will be reported on W-2s for this calendar year, 2012.

For excess LTD contributions - Because the LTD deductions were taken after tax, the refund of the excess contributions will not be taxable.

ASRS and LTD refunds will not be subject to Social Security and Medicare taxes, nor will they be subject to any further ASRS Plan or LTD deductions.

In addition, ASRS and LTD contributions were excluded from the calculation of disposable income and reduced the amount eligible to be garnished at the time. The refund of the excess will now be included in the calculation of disposable income, which may cause an increase in the amount subject to garnishment.

Your refund, for both ASRS and LTD will be calculated as follows.

  1. Fiscal Year-To-Date ASRS or LTD Employee deduction total (Total Year-To-Date from 7/1/2011 to 4/29/2012)
  2. Fiscal Year-To-Date ASRS or LTD Employer deduction total (Total Year-To-Date from 7/1/2011 to 4/29/2012)
  3. Total of the Employee & Employer deduction
  4. Divide the total of the Employee & Employer deduction by 2; this will give the correct 50/50 split that should have processed
  5. Subtract the “Corrected” deduction amount with what was actually deducted from the employee

A complete view of your refund amount and the tax calculations can be seen in UAccess Employee > Main Menu > Self Service > Payroll and Compensation > View Paycheck > 2012-06-15

If you have any questions on how your refund was calculated please feel free to contact Payroll at 621-9097 or by email at payroll [at] fso [dot] arizona [dot] edu.