GPCC’s Public Affairs Committee voted to support legislation containing the pension reform package, as the Chamber has been a longtime advocate for common sense reforms to all public retirement systems that ensure long-term financial and actuarial stability of the systems.
The Chamber supported City of Phoenix’s Proposition 103 last year which made incremental reforms to Phoenix’s non-public safety employee pension plan. The three piece legislative package, brought forward by Senator Debbie Lesko, includes many aspects similar to Prop 103 and was crafted by various stakeholders over the past year. The rising cost of the public safety personnel retirement system to the City of Phoenix, their taxpayers along with other cities and public agencies in Arizona, is simply unsustainable. In FY 2017, Phoenix alone is expected to see their costs for PSPRS rise by over $25 million, putting other municipal services at risk.
Last Thursday the Senate passed a long-awaited and hard-bargained package with unanimous support. It is now headed to the House of Representatives, where 39 members are listed as co-sponsors. If the legislation passes by February 15 it will be included on the special election ballot in May.
PSPRS Reform Bill Breakdown:
- SB1429: Expands the special election slated in May to include a constitutional amendment to facilitate the PSPRS reform package.
- SCR1019: Constitutional amendment portion of the legislation to allow for the diminishment of benefits under the proposed agreement outlined in SB1428.
- SB1428: Contains the meat of the proposed changes and would tie cost-of-living increases paid to retirees to the increase to the Consumer Price Index rate and cap the increases at a maximum of 2 percent. Permanent benefit increases have been paid out annually at 4 percent for over 20 years, regardless of the pension system’s funded status. New hires would have the option of choosing a defined contribution plan or a hybrid plan that has defined benefit and defined contribution components. New employees would split the cost of pensions with employers and see a $110,000 per year cap on their pension payouts in addition to being required to serve 25 years and reach age 55 before being eligible for full pension benefits.