August 30, 2023
Public Safety Personnel Retirement System
State of Arizona
Contact: Christian Palmer
Phone: 602-296-3736
$5 billion: PSPRS surpasses pension debt payment milestone
Admin. Townsend: Employers’ “overwhelming accomplishment” to save taxpayers billions, protect benefits
ARIZONA – Additional contributions aimed at reducing unfunded pension obligations for Arizona’s police officers, firefighters and corrections officers has surpassed $5 billion. The milestone achievement has taken a little more than three years after the inception of employer outreach and education efforts launched by PSPRS.
The $5 billion mark was surpassed by recent additional contributions made by the City of Chandler, which contributed $73 million to pay down public safety pension debts, and Maricopa County, which contributed a combined $190 million to pay down its unfunded public safety and corrections pension liabilities.
To date, almost 125 employers have made additional contributions of at least $1 million to the PSPRS and CORP pension plans since the beginning of the 2021 fiscal year. Additional pension debt contributions from employers helped push combined pension debt payments to a total of $5.2 billion.
“The credit for this overwhelming accomplishment belongs to Arizona’s employers of first responders and corrections officers that struggled for years with rising pension costs,” said PSPRS Administrator Mike Townsend. “They made the difficult decisions to tackle their pension debts head on, deliver retirement security to plan members and save billions of dollars for future taxpayers.”
The additional contributions, including a record-setting $2.85 billion total in fiscal year 2022, helped PSPRS have the highest asset growth rate of all large pensions in the United States for two years in a row, according to Pensions & Investments magazine.
Funding levels for the public safety and corrections officer retirement plans have increased by 39 and 60 percent, respectively, since fiscal year 2020. Aggregate employer contribution rates have fallen by 20 percent for PSPRS and 43 percent for CORP during the same time period.
Updated financial reports detailing further system progress, including the impact of $500 million of additional contributions made by public safety and corrections employer during the fiscal year that ended June 30, 2023, will become available later this year. The Elected Officials Retirement Plan also benefitted from an additional $60 million contribution due to a legislative appropriation included in Senate Bill 1002 (Laws 2022, Chapter 323).
“Our board prioritized employer outreach about the true costs of pension debt and making conservative changes to actuarial assumptions and policies in order to protect the financial progress that employers are making,” said PSPRS Board of Trustees Chairman Scott McCarty. “We’re very pleased with the speed of the recovery of the PSPRS and CORP retirement plans, which has been a team effort, and we’re looking forward to the results of the coming fiscal year 2023 valuations.”
Arizona state, county and municipal governments, and fire districts have paid down unfunded pension debts through appropriations, low-interest debt issuances, tax measures and budgetary maneuvers. The actions save taxpayers money by eliminating unfunded obligations that add to employer pension costs.
