ALJDEC decisions subject to certification as final

26F-002-ARB · Arizona State Retirement System · 2026-02-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Victoria Ellis

Appellant

Arizona State Retirement System

Respondent

No. 26F-002-ARB

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 5, 2026.

APPEARANCES: Appellant Victoria Ellis appeared on her own behalf. Respondent Arizona State Retirement System was represented by Assistant Attorney General Cassie Adams.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

EXHIBITS ADMITTED INTO EVIDENCE: Appellant’s exhibits 1-9 and Respondent’s exhibits 1-13 were admitted into evidence.

_____________________________________________________________________

FINDINGS OF FACT

This hearing was noticed due to the Arizona State Retirement System (“ASRS”) Director’s determination that ASRS has paid Appellant Victoria Ellis all benefits to which she was lawfully entitled, and Appellant has appealed such determination.

2. Ms. Ellis first became an ASRS member on January 27, 2022. She forfeited her ASRS membership on June 30, 2023, and was no longer an ASRS member at the time under A.R.S. §38-740(C).

3. Ms. Ellis again became an ASRS member on October 8, 2023, via her employment with ASRS employer Prescott Unified School District #1 (“PUSD”).

4. On June 2, 2025, Ms. Ellis was terminated from her employment at PUSD via a Reduction in Force (“RIF”).

5. At the time Ms. Ellis was separated from her PUSD employment due to a RIF, she had accrued 2.0 years of credited service with the ASRS.

6. On May 13, 2025, Ms. Ellis contacted the ASRS twice seeking clarification related to your eligibility for the employer contributions. Ms. Ellis was providing conflicting information as to whether she was eligible for a return of employer contributions.

7. On June 16, 2025, Ms. Ellis applied for a refund of her ASRS account.

8. On June 20, 2025, Ms. Ellis again contacted the ASRS on two more occasions, concerned with the inconsistent information earlier provided. Ms. Ellis was informed by two separate ASRS employees that she was not eligible for the matching employer contributions because her years of service were below the minimum required for vesting and matching funds.

9. On June 26, 2025, the ASRS processed Ms. Ellis’s online Application for Withdrawal of Contributions and Termination of Member Summary and issued payment for her member contributions.

10. On or about July 22, 2025, Ms. Ellis appealed the decision not to refund her employer contributions.

11. On or about August 4, 2025, Respondent responded to the appeal, and again denied the refund of the employer contributions.

12. On or about August 27, 2025, Ms. Ellis appealed to the Executive Director of ASRS for a refund of her employer contributions.

13. On or about September 19, 2025, Jeremiah Scott, Respondent’s Deputy Director and Chief Operations Officer, sent Ms. Ellis a response to her correspondence and again denied the refund of the employer contributions.

14. On October 15, 2025, Appellant filed an appeal with the Board Appeals Committee of ASRS.

On November 12, 2025, a Notice of Hearing was issued referring the matter to the Office of Administrative Hearings, an independent state agency. A hearing was held on February 5, 2026.

At hearing, Allison Alvarado, ASRS Member Advocate, testified that while the misinformation provided to Appellant was unfortunate, Ms. Ellis received the amount she was entitled to under that law. Ms. Alvarado also explained that given Ns. Ellis’ years of service, she was not eligible for a return of her employer’s contributions even though she was terminated due to a RIF.

Ms. Ellis testified that she believed that she was fully informed by her employer of her rights to receive the refund of the employer’s contributions. Ms. Ellis also testified that it was Respondent’s responsibility to keep their website up to date with correct information and ensure that customer service representatives provided the correct information to members.

CONCLUSIONS OF LAW

Appellant bears the burden of proof and the standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code R2-19-119.

A preponderance of the evidence is:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014).

The primary goal when construing statutes is to fulfill the intent of the legislature. Backus v. State of Ariz., 220 Ariz. 101, 203 P.3d 499 (2009).

An agency’s authority is limited to that which is found in its enabling legislation. Ariz. State Bd. of Regents v. Ariz. State Pers. Bd., 195 Ariz. 173, 985 P.2d 1032 (1999).

The tribunal may not expand or extend a statute to include that which is not within its provisions. State ex rel. Morrison v. Anway, 87 Ariz. 206, 349 P.2d 774 (1960).

A.R.S. § 38-740 governs a member’s return of contributions as follows, in pertinent part:

A. A member whose membership commenced before July 1, 2011 and who leaves employment other than by retirement or death may elect to receive a return of the contributions as follows:

1. If the member has less than five years of credited service, ASRS shall disburse all of the member's contributions.

2. If a member has five or more years of credited service, ASRS shall disburse the member's contributions and an amount equal to a percentage of the employer contributions paid on behalf of the member. This amount excludes payments made by an employer pursuant to section 38-738, subsection B, paragraph 3, unless the member has made the payment required by section 38-738, subsection B, paragraph 1. The percentage of employer contributions paid on behalf of the member shall be as follows:

(a) 5.0 to 5.9 years of credited service, twenty-five percent.

(b) 6.0 to 6.9 years of credited service, forty percent.

(d) 8.0 to 8.9 years of credited service, seventy percent.

(e) 9.0 to 9.9 years of credited service, eighty-five percent.

(f) 10.0 or more years of credited service, one hundred percent.

3. Interest on the returned contributions as determined by the board.

B. A member whose membership commenced on or after July 1, 2011 and who leaves employment other than by retirement or death may elect to receive a return of all of the member's contributions with interest as determined by the board.

C. Notwithstanding subsection B of this section, if a member has five or more years of credited service and the member is terminated solely because of an employer reduction in force by reason of a lack of monies or elimination of the member's position, the member is entitled to receive the amounts prescribed in subsection A of this section. . .

Further, A.R.S. § 38-765 provides as follows:

If any change or error in the records results in any member or beneficiary receiving from ASRS more or less than the member or beneficiary would have been entitled to receive if the records had been correct, ASRS shall correct the error and as far as practicable shall adjust the payments in a manner so that the actuarial equivalent of the benefit to which the member or beneficiary was correctly entitled is paid. ASRS shall correct any change or error and shall pay the appropriate monies to a member or beneficiary or shall recover monies from the member or beneficiary if the member or beneficiary is overpaid. ASRS shall recover monies by reducing any benefit otherwise payable by ASRS or the LTD program established by article 2.1 of this chapter to an active, inactive, person with a disability or retired member, survivor, contingent annuitant, beneficiary or alternate payee.

While the Administrative Law Judge is sympathetic to Appellant’s position and the fact that ASRS provided erroneous information to Appellant, the fact remains that ASRS is required to abide by the statutes by which it is governed. In this case, from the evidence presented, ASRS correctly calculated the return of Ms. Ellis’ contributions. Therefore, the preponderance of the evidence shows that ASRS refunded Ms. Ellis the correct amount upon her request.

The Administrative Law Judge concludes that in the absence of controlling authority to the contrary, Ms. Ellis failed to establish by a preponderance of the evidence that ASRS improperly denied Appellant’s appeal.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the ASRS Board affirm its denial of Appellant’s appeal.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, February 20, 2026.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Paul Matson, Director

Arizona State Retirement System

Victoria Ellis

[email redacted]

Cassie Adams

Office of the Attorney General

[email redacted]

By: OAH Staff