Arizona Senate Considers Big Overhaul of Public Safety Pensions


A proposed overhaul of public safety pensions was introduced in the Arizona Senate on Monday.

The proposal is newsworthy because talks have been going on for months, unions have been involved in the process, and at least 25 senators have signed on as co-sponsors – although passage of the plan is far from guaranteed, as voters will have to approve a portion of the bill.

More details from the Associated Press:

That part of the proposal changes the way yearly benefit increases that are sapping the trust fund are calculated. The way the plan is now set up, excess earnings from the pension trust are put into a fund that doles out automatic increases in most years. The problem is that when the fund sees losses, as it did during the Great Recession, excess cash in flush years can’t make up the difference because it is sent to the cost-of-living-adjustment fund.

The new proposal would change the payout to just actual cost-of-living increases or two percent a year, whichever is greater. Currently, boosts can be as much as 4 percent. That should help stabilize the current fund, which has sunk to just 50 percent of its expected liabilities, with $6.2 billion in assets and $12.7 billion in liabilities.

New hires to police and fire departments statewide would be placed in a new retirement fund with higher employee contributions, minimum age and years of service before full pensions are payable and caps on maximum payouts.

New hires also would be given a choice of opting for a 401(k) style retirement plan rather than a plan with a guaranteed pension. New employees in cities and town agencies that don’t participate in the Social Security system will be given a new 3 percent match to put into a 401(k)-style account.

The bill’s backers are aiming to place the measure on the May 17 ballot. That would require smooth sailing through the Senate and then the House, which isn’t a guarantee.


Photo by: “Entering Arizona on I-10 Westbound” by Wing-Chi Poon – Own work. Licensed under CC BY-SA 2.5 via Wikimedia Commons –

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