August 22, 2016
Public Safety Personnel Retirement System
State of Arizona
August 22, 2016
Contact: Christian Palmer
IMPORTANT SERVICE PURCHASE ANNOUNCEMENT FOR MEMBERS
Members of the Public Safety Personnel Retirement System can now pay for service purchases by entering payroll deduction agreements with PSPRS and their employers. A new online cost-estimating tool is also available on the PSPRS website.
The service purchase agreements allow members to buy qualified time spent with other employers, including but not limited to the United States’ military, out-of-state public safety agencies, in-state public retirement systems, contracted public safety providers and pre-joinder employers.
The service purchases, which are available to members of PSPRS, Corrections Officer Retirement Plan (CORP) and Elected Official Retirement Plan (EORP), present members an option to retire sooner and increase their benefits.
Service purchases can be bought with cash, retirement account rollovers, and, for the first time, payroll deduction agreements.
Active members of PSPRS plans interested in purchasing retirement time are encouraged to use the new service purchase cost estimator and the payroll deduction estimator. Provided estimates from the online tool are not legally binding and will change at least once a year due to changing market conditions and actuarial assumptions. Exact figures are available by contacting PSPRS Member Services, which can provide quotes that remain valid for 90 days.
Effective August 6th, 2016, the rates used to calculate service purchases have been updated to reflect recent legislative changes. All service purchases will be calculated with the current 7.4 percent PSPRS assumed earnings rate until June 30, 2017, after which purchases will use the lower rate of either the assumed earnings rate or the rate of the 10-year United States treasury note plus two percent. Members should be aware that a lower discount rate most often produces a higher cost to purchase qualified time.
To learn more about service purchases, payroll deduction agreements and to use the price estimating tools, members may visit the following PSPRS website links specific to their retirement plans.
For PSPRS, visit:
For CORP, visit: http://www.psprs.com/sys_corp/cato_service_purchase_estimators_CO.htm
For EORP, visit: http://www.psprs.com/sys_eorp/cato_service_purchase_estimators_EO.htm