from the Superior Court in Maricopa County No.
LC2015-000048-001 The Honorable Crane McClennen, Judge
Robaina & Kresin, PLLC, Phoenix By Thomas T. Griffin
Counsel for Appellant
Arizona State Retirement System, Phoenix By Jothi Beljan
Counsel for Appellee Arizona State Retirement System
Richard Hillis, Peoria Appellee
Presiding Judge Peter B. Swann delivered the opinion of the
court, in which Judge Kent E. Cattani and Judge Donn Kessler
In this appeal, we hold that A.R.S. § 38-775 requires a
former spouse of an Arizona State Retirement System ("
ASRS") retiree to be treated as a "spouse" for
purposes of survivor benefits awarded under a domestic
relations order ("DRO"). Because of this
requirement, we further hold that the age limits on
non-spousal contingent annuitants contained in Arizona
Administrative Code R2-8-126(H) do not apply to former
spouses whose payments are ordered by Qualified DROs
Sharon Di Giacinto appeals a judgment holding that ASRS could
terminate her survivorship rights in her ex-husband, Richard
Hillis's, retirement annuity that the superior court
ordered as part of a decree of dissolution. A.A.C.
R2-8-126(H) provides that "[a] member who is ten years
and one day, or more, older than the member's non-spousal
contingent annuitant is not eligible to participate in a 100%
joint-and-survivor option." The superior court ruled
that the divorce decree and final DRO were not acceptable
under A.R.S. § 38-773(B), because Di Giacinto, as a
former spouse, is a "nonspouse" under A.A.C.
R2-8-126(H) and because she is more than ten years younger
than her former husband. We disagree. Because the final DRO
complied with all statutory requirements necessary to qualify
Di Giacinto as a spousal contingent annuitant, we reverse and
remand for an entry of judgment.
AND PROCEDURAL HISTORY
The relevant facts are undisputed. Di Giacinto and Hillis were
married in 1983. In 2003, Hillis retired after working almost
39 years with an ASRS employer. Under A.R.S. §
38-760(B)(1) and A.A.C. R2-8-120(A)(2), Hillis elected a 100%
joint and survivor annuity, which provided a reduced monthly
benefit amount but continued payments until Di Giacinto's
death if she outlived him ("the plan").
In February 2006, Hillis (then age 69) and Di Giacinto (then
age 45) divorced, and the superior court issued a decree of
dissolution with orders that a third party prepare a
supplemental DRO. ASRS approved a draft DRO. In June 2007,
the court issued the final DRO which awarded Di Giacinto
48.75% of the monthly annuity benefit and 100% survivor
benefits as a contingent annuitant. ASRS agreed to comply
with the final DRO, designating it a QDRO.
In June 2014, Hillis requested a review of the final
DRO's distribution allocation, invoking ASRS's
authority to correct errors under A.R.S. § 38-765. ASRS
nominally denied his "request . . . to facilitate any
legal review of the current DRO[, because] any formal
amendment to the [final] DRO must be done in the Superior
Court of Arizona." Nonetheless, under A.R.S. §
38-773(A), ASRS determined that the final DRO was "not
acceptable, " because it preserved Di Giacinto's
survivor benefits, which it concluded violated A.A.C.
In July 2014, Di Giacinto requested a hearing on the issue.
After the hearing, an ALJ issued a proposed ruling for the
ASRS Board concluding that when the decree was entered, Di
Giacinto "was automatically removed as the [contingent
annuitant on the plan] by operation of law." The ALJ
recommended that Di Giacinto's appeal be dismissed, and
the Board did so.
Di Giacinto appealed to the superior court, which affirmed.
The superior court did not directly address the statutory or
equitable issues Di Giacinto raised except to adopt the view
that A.R.S. § 38-773(D) removed Di Giacinto as a
beneficiary by operation of law. Di Giacinto
We review questions of statutory interpretation de novo.
J.L.F. v. Ariz. Health Care Cost Containment Sys.,208 Ariz. 159, 161, ¶ 10 (App. 2004). Under A.R.S.
§ 12-910(E), we must reverse an administrative decision
if it is contrary to law. When a statute is part of a broader
statutory scheme concerning a single subject, we construe it
in conjunction with related statutes, giving effect to each
provision. Johnson v. Mohave County,206 Ariz. 330,
333, ¶ 11 (App. 2003). In interpreting statutes, we
"give meaning to 'each word, phrase, clause, and
sentence . . . so that no part of the ...