1. Pension Task Force
Brought to you by the Arizona City/County Management Association Government Finance Officers Association and the League of Arizona Cities and Towns

2. Introductions

3. Overview of PSPRS

4. Overview of PSPRS

5. Overview of PSPRS

6. Formation of the Pension Task Force
Increasing Costs
GASB
Fields Decision
Need for a municipal voice
ACMA/GFOAz/League collaboration

7. Ground Rules for PTF Discretion Municipal Employer Focus No Whining
No personal attacks
You are responsible for you
Open Meetings?
Others?

8. Parameters for Reform PSPRS only
Focus on policy, statutes, constitution(s)
Both legislative and non-legislative solutions
Employers must take ownership of their mistakes
Reforms must “move the needle”
Don’t forget about Clifton Fire (5%)

9. Create a “Tier 3” within PSPRS Close PSPRS and create new DB plan
Options for PTF
Create a “Tier 3” within PSPRS
Pro
Don’t have to pay to close
Con
Less flexibility/options
Close PSPRS and create new DB plan
Pro
No debt.
Greater control over plan design
Can be more aggressive
Con
How do you pay to close?

10. Tier 3: What/When is “healthy?”
Contribution Rates?
3:1
2:1
1:1
Other
Funded Status?
80%
100%
120%
When
20 years
30 years
Multiple generations
Other

11. Tier 3: Who Goes In? New Hires Only Pro – Unquestionably legal
Con – Very slow/long recovery
Everyone
Pro – Rapid Recovery
Con
Likely need a change to AZ constitution
May still violate US constitution

12. Tier 3: Other Options Admin Elements Contribution Rates Assumptions
Maintain
Increase EE Rates
50/50
Assumptions
Growth
Pay Increases
Amortization Period
COLA/PBI
Maintain Current
Board Issued
Dedicated COLA
Indexed
None
Plan Elements
Retirement
Years of Service
Age
Both
Payout
Multipliers
Compensation Definition
Caps
DROP
Current DROP
Modified DROP
No DROP
Return to Work
Maintain/Eliminate
ACR/No ACR

13. New Plan ER/EE Contribution Rates COLA/PBI DROP
Conditions for Retirement
Pension Calculations
Return to Work
Assumptions
Local Boards vs. Pooled Plan
How do we close the old plan?

14. Next Meetings Potential Dates Potential Topics 8/1 8/15
PSPRS Presentation
PFFA Presentation
Proposals