August 31, 2017
FOR IMMEDIATE RELEASE
CONTACT: Christian Palmer
Board chairman appoints EORP subcommittee
Panel to meet Sept. 5 with stakeholders to form policy ideas for 2018
ARIZONA – Public Safety Personnel Retirement System Board Chairman Brian Tobin will lead a panel of PSPRS trustees to consult with stakeholders and evaluate potential policy proposals to help improve the solvency of the Elected Official Retirement Plan.
The subcommittee will consist of trustees Tobin, Bill Davis, Dean Scheinert and Don Smith, and it aims to sustain EORP, which has the lowest actuarially determined funding level of all three retirement plans managed by PSPRS. Currently, the plan, which serves elected officials and members of the judiciary, has less than 40 percent of the assets needed to cover retirement obligations of its current and future retirees.
The first meeting of the Board of Trustees EORP Subcommittee Working Group will occur on September 5, 2017, at 1 pm, and will be held at the PSPRS office in Phoenix.
“Time is running out to stop the implosion of the elected officials plan,” Chairman Tobin said. “This subcommittee is about reaching out to stakeholders and coming up with concrete proposals to deliver to the same policymakers at the Legislature who reformed our public safety retirement plan.”
In November, PSPRS-hired actuaries Gabriel Roeder Smith & Co., warned trustees that EORP has less than 10 years before it would go broke. The plan was closed to new membership in 2013 and is currently funded through an insufficient aggregate employer contribution rate of 23.5 percent.
The static contribution rate was deemed unconstitutional in a July decision authored by Maricopa County Superior Court Judge Timothy Thomason. As a result of the lawsuit, Fields & Porter v. EORP, Thomason ordered the state to base EORP contribution rates on actuarially determined liabilities that are consistent with generally accepted accounting standards.
The subcommittee has invited and is seeking the input of lawmakers, including Sen. Debbie Lesko and Rep. Don Shooter, and representatives from the governor’s office, the House speaker and Senate president offices, counties, cities and towns, and the judiciary.
At a minimum, the subcommittee intends to review and recommend action on the following items:
- Fields & Porter v. EORP ruling;
- Solutions for funding the plan;
- The Permanent Benefit Increase (PBI) mechanism (Prop 124 covered PSPRS not EORP);
- Potential administrative actions or policies to stabilize the plan;
- Potential legislative actions to stabilize the plan; and
- Better ways to have crafted 2013’s HB 2608