Increases

As a participant in the PSPRS as a Tier 1, 2 or 3 DB Member, the benefits that are available to you vary depending on your Membership Tier:

Increases for Tier 1, 2 and 3 DB Members

In accordance with Proposition 124 passed by the State of Arizona voters in May 2016, the Cost of Living Adjustment (COLA) increases for public safety retirees and survivors will be determined based on the Consumer Price Index (CPI) for the metropolitan Phoenix-Mesa area for the calendar year ending prior to each July payout and will be capped at 2%.  Since this proposition became law, it overrides all prior increase calculation methods for public safety retirees.  The law also stated that PSPRS must prefund this COLA, which meant that the first time that a COLA may be granted, could occur with the July 1, 2018 benefit check.  The law also specified that the COLA will be prorated for members in their first year of retirement based on their retirement date.  

Therefore, based on the CPI published by the U.S. Bureau of Labor Statistics ending December 2017, there will be a 2% increase for all public safety retirees and surviving beneficiaries with an effective retirement date on/before July 1, 2017 based on the gross amount of their July 1, 2018 benefit payment.  For new retirees and survivors with an effective retirement date on/after August 1, 2017, they will receive a prorated increase beginning from the effective date of their benefits. 

Please note that when an increase is granted, since Federal income tax withholding elections are calculated based on the gross (taxable) amount, it may result in a change to the tax withholdings, which ultimately would affect the amount that you may be expecting to receive.  As a result, we encourage you to visit your Members Only account to view your Direct Deposit Notices for a break-down of your benefit payments (i.e., gross, deductions and net check).

The following table provides examples of how the increase is calculated for members in their first year of retirement:

Example 1: Effective retirement date 7/1/2017

# of months retired: 12

Example 2: Effective retirement date 1/1/2018

# of months retired: 6

Example 3: Effective retirement date 6/1/2018

# of months retired 1

Example 4: Effective retirement date  7/1/2018

Base benefit

$1,000.00

Base benefit

$1,000.00

Base benefit

$1,000.00

Not eligible for the increase this year since the member was not retired prior to the effective date of the increase

2% COLA

     $20.00

2% COLA

    $20.00

2% COLA

     $20.00

Eligible for the full increase

Eligible for 6 months of the increase

Formula: $20 / 12 (months) x 6 (months) = $10.00

Eligible for 1 month of the increase

Formula: $20 / 12 (months) x 1 (month) = $1.67

New base

$1,020.00

New base

$1,010.00

New base

$1,001.67

Additional Increase Requirements for Tier 3 DB Members

The increase will be payable after 7 years of retirement, or at age 60, whichever comes first, and will be determined based on the funding level of the PSPRS.

 Funding Level

Increase 

 70% to < 80% 

1.0% cap 

  80% to < 90% 

1.5% cap

90% or more

2.0% cap

Funding Levels

To help you understand the factors and investment methodologies, you may view current and prior fiscal year information in the CAFR (Comprehensive Annual Financial Report), or the Actuarial Valuations under Annual Reports.

Additional Services

For additional benefit information, you may access the PSPRS Member Handbook. For personal account information, you may Create a Members Only Account and access at Members Only.