Judge Sides With Retirees on Phoenix Pension Formula Tweak


In 2012, Phoenix tweaked its pension benefit formula to reduce the amount of accrued sick leave workers could “cash in” before retirement.

The measure, in effect, reduced benefits – which was the purpose, as Phoenix was attempting to crack down on pension “spiking”.

But a judge this week reversed the city’s tweak and called it a breach of contract.

More from the Arizona Republic:

Phoenix’s effort to prevent city employees from spiking their pensions with unused sick leave received a major setback Tuesday after a Maricopa County judge ruled that the city had wrongly changed how it calculates some retirement benefits.

Superior Court Judge Mark Brain found that Phoenix did not have the legal authority to unilaterally change its formula for determining general employees’ retirement payments.

Brain cited a previous Arizona Supreme Court ruling that said the state Constitution protects public employees from changes to the pension calculation that reduce benefits after they are hired.


The ruling’s full implications weren’t immediately clear, and top city officials met Tuesday evening to begin weighing potential costs and impacts. At the least, the city expects to challenge Brain’s ruling at the Arizona Court of Appeals.

“I strongly disagree with the superior court’s decision to block some of the actions Phoenix has taken to end pension spiking.” Mayor Greg Stanton said in a statement.

Phoenix Mayor Greg Stanton said the city will be appealing the ruling.


Photo credit: “Entering Arizona on I-10 Westbound” by Wing-Chi Poon – Own work. Licensed under CC BY-SA 2.5 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Entering_Arizona_on_I-10_Westbound.jpg#mediaviewer/File:Entering_Arizona_on_I-10_Westbound.jpg

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