March 29, 2017
The Arizona Supreme Court issued its mandate in the Hall v. EORP lawsuit for the Superior Court to begin implementing the remedies afforded by the ruling and it has been determined by the Board of Trustees that those remedies will also apply to the Parker lawsuit.
Therefore, effective immediately by Board action this afternoon, the employee contribution rates for all members hired on or before July 19, 2011, are to revert to the following rates at the beginning of the first complete pay period on or after April 1, 2017, or as soon as practicable after that.
• EORP (Hall): 7.00%
• PSPRS (Parker): 7.65%
Please notify our Active Member Department (ActiveMembersGroup@psprs.com) of which pay period will feature the lower contribution rates for impacted members. It is crucial that the rate revert at the beginning of a complete pay period as we will not be able to determine any excess contributions that would need to be refunded if the employee contribution rate is not reverted for an entire pay period.
It is still unknown as to when the excess contributions will be returned to impacted members but it cannot happen before the parties agree in Superior Court to a rate of interest, the time period for which that interest applies, and the methods for which the contributions may be returned.
However, reverting the contribution rates to the above amounts is the crucial first step before any calculation of excess contributions can be calculated. We will work with each employer, on an individual basis as necessary, to that successful end. Therefore, please contact PSPRS if you need help identifying those members who are affected.
Please remember that all EORP members hired on or after July 20, 2011, will continue to contribute at 13.00% and the employer will continue to contribute at 23.50% for all elected officials. Also, this change does not affect any of your members in the Elected Officials' Defined Contribution Retirement System.
For PSPRS members hired on or after July 20, 2011, the employee contribution rate will remain at 11.65% while employers must continue to pay their current individual employer contribution rate.
For any employers who may have members in the Corrections Officer plan, their employee contribution rate was never increased, so they are not affected by either lawsuit or entitled to refunds of excess contributions.
The Hall and Parker lawsuits will also result in retroactive permanent benefit increases (PBI) for impacted retirees in all three plans. However, the issue of interest must also be settled at the trial court level before retroactive payments can be made.
We will continue to provide information regarding the return of excess contributions to impacted members and the payment of retroactive PBIs to retirees as updates continue to develop.
Thank you for your help,
PSPRS Administrator Jared Smout