Arizona LEO Voice

Let’s Take a Look at the Record
A History of Arizona Fraternal Order of Police Legislative Activity

1937

• The Arizona Fraternal Order of Police obtained a 20 year law enforcement officer retirement plan for cities with a population of 20,000 or more, Phoenix and Tucson. Officers were entitled to be retired with a monthly pension equal to one-half of their average monthly compensation for the year immediately prior to the date of retirement.

1938

• The Arizona Fraternal Order of Police met with law Professors at U of A to discuss proposed measures to provide statewide civil service for police officers.

1940 to 1949

• FOP achieved 5 ½ day 44 hour work week for law enforcement officers. Previously the law allowed a 6 day 48 hour work week.
• Increased vacation from 1 week to 12 days per year after 5 years of service, then 15 days up to 15 years, and 21 days annually after that. (Tucson Lodge #1 / Phoenix Lodge #2)
• Paid sick leave achieved at 1.125 days per month.

1950

• The FOP filed a lawsuit naming the City of Phoenix for not putting any money into retirement fund established in 1937. FOP lost lawsuit with Phoenix in 1951. Business Associations convinced the legislature in 1952 to change the law enforcement officers’ retirement benefit to 25 years and age 55.

1951 - 1956

• FOP achieved 40 hour work week.
• FOP achieved cost of living pay overcoming outrage caused by firefighters trying to get the same pay raise.
• FOP achieved hospitalization coverage paid for by employer.

1957 – 1962

• FOP defeated an attempt to wipe out existing 25 year retirement plan.

1963 - 1964

• Fraternal Order of Police obtained legislative approval to place an FOP memorial in Wesley Bolin Plaza and celebrated first Peace Officers Memorial on May 15, 1964.

1965 - 1969

• HB108 Merit System passed and signed by Governor Jack Williams.

1971

• FOP and Fire joined together to get the 20 year retirement passed.

1987

• Dedicated NEW Arizona Police Memorial in Wesley Bolin Plaza. Significant money raised by the FOP to create the memorial.

1988 – 1990

• State Lodge PAC Committee registered with the Arizona Secretary of State.
• Excess Earnings bill passed. Allowed retirees a regular pay raise.

1991 – 2003

• FOP introduced bill which was passed to include one Police Officer and one Deputy Sheriff as an appointed member of the ALEOAC – Arizona Law Enforcement Officers Advisory Council – later renamed to AZPOST Arizona Peace Officer Standards & Training.
• FOP backed Legislation to revise State Constitution to prohibit use of Public Safety Retirement System funds for the use by the Legislature or any other entity for any use other then what they were intended for.
• Revised the state death benefit for the survivors of fallen officers.
• FOP legislation to pay tuition to any Arizona University for family of officers killed in the line of duty.

2004

• HB2383 public information; confidentiality — Signed into law 05/03/04
  Prohibits the disclosure of a peace officer’s photograph from his or her personnel file. Legislation enacted in 2004 was significant in setting the basic rules for when a police agency could release a photograph of a law enforcement officer. The final bill achieved a compromise between the Arizona Newspaper Association and the Arizona Fraternal Order of Police and achieved a balance in protecting the officer and protecting the public’s need for information. Both the FOP and the Arizona Newspaper Association endorsed the final version of the Legislation.
• SB1247 police officer discipline; evidence; discovery — Signed into law 4/19/04
  Specifies a time frame for the exchange of documents and witness lists relevant to any appeals hearing resulting from disciplinary action taken against a law enforcement officer, allows the employer or law enforcement officer to seek a determination regarding any evidence that should not be disclosed because the risk of harm involved in the disclosure outweighs any usefulness of the disclosure and provides that the request by an employer or officer to change hearing officer or administrative law judge shall be granted on the first request for specific cases.
• HB2080: CORP; prior service redemption — Signed into law 4/5/04
  Allows members of the Corrections Officer Retirement Plan (CORP) to purchase out-of-state prior service time for correctional officer or certified peace officer service and outlines the redemption calculation methodology.
• HB2081 PSPRS; disability offset — Signed into law 4/12/04
  Allows a Public Safety Personnel Retirement System (PSPRS) member receiving an accidental disability pension to continue receiving full disability pension benefits if that member returns to work.
• HB2109 contribution rate; CORP — Signed into law 5/14/04
  Raises the minimum employer contribution rate for CORP from 2% to 4% of salary beginning in fiscal year 2005-06.

2005

• SB1042 officer organizations; DPS — Signed into law 4/12/05
  Allows employees of the Department of Public Safety to form and join employee organizations, establishes meet and confer processes between the Department and employees, and prescribes rules for mediation.
• SB1367: PSPRS; deferred retirement; election — Signed into law 4/19/05
  Includes active military service as eligible service for the Deferred Retirement Option Plan (DROP) within the Public Safety Personnel Retirement System (PSPRS), retroactive to July 1, 2002.
• SB1426: overtime pay; CORP — Signed into law 5/13/05
  This bill conforms for the CORP Program what is already done for all other Arizona retirement systems with respect to overtime pay; it would include overtime pay for calculation purposes in establishing a correction officer’s retirement benefit.
• HB2254: MVD records; peace officer photographs — Signed into law 4/19/05
  Makes a conforming change in the MVD statutes to legislation passed in the 2004 legislative session. Last year’s legislation set standards for the release of peace officer photos from police agencies.
• SB1418 law enforcement officers; due process — Signed into law 4/13/05
  Holds harmless an officer requesting representation or acting as a representative during an interview that could result in dismissal or suspension and modifies the time period in which information for an appeal hearing shall be exchanged between an employer and officer. Asserts that an employer shall not discipline, retaliate against, or threaten to retaliate against an officer for requesting a representative be present or for acting as a representative during an interview that could result in dismissal, demotion, or suspension of an officer.

2006

• SB 1139 DPS; officer organizations — Signed into law 4/17/06
  Revised the “DPS meet and Confer” law passed in 2004. Allows the Department of Public Safety to recognize an employee organization by a majority vote in an election where the majority of eligible employees vote. When the election was held, the number of DPS employees who voted fell short majority required to implement meet and confer in DPS.
• HB2482; CORP; return to work and CORP; Reverse DROP program — Signed into law 5/2/06
• SB1258 Law Enforcement agencies; retirement credentials — Signed into law 3/31/2006
  Requires law enforcement agencies to issue certificates or identification to officers who retire honorably.
  • Return to Work:
    Allows a retired CORP member, who retired before January 1, 2006, to become employed by a CORP employer in a designated position and still receive their pension, if employment occurs at least 90 days after retirement and the employment involves substantial direct inmate contact.
  • Reverse DROP:
    Establishes a voluntary Reverse DROP (Deferred Retirement Option Plan) as an alternative benefit accrual method in CORP beginning July 1, 2006 through June 30, 2011.
• Pay Raise for Corrections employees:
  The FOP Strongly advocated a pay raise for Corrections Officers in the budget. In June 2006, the legislature passed a budget which included the largest pay raise given to state corrections employees. The Director of Corrections cited the strong and “effective” FOP legislative efforts as one of the reasons the pay raise was approved by the legislature. FOP members sent more than 30,000 individual emails to legislators using our web based email program.
• HB 2142 CORP; membership; ordinary disability Added to a CORP Omnibus bill and signed into law.
  Adds the benefit of ordinary disability to CORP members. The cost of this benefit was of the benefit was be conditional upon the CORP fund being well funded (later enacted in 2009 after an additional employee contribution was imposed).

2007

• SB1006; Public records; confidentiality — Signed into law on 4/27/07
  Over the past decade, the Arizona Fraternal Order of Police has sought and received changes to statutes governing the public’s access to records containing law enforcement personal information. In 2007, the Fraternal Order of Police sought a further change in to expand the list of persons who may request that their personal identifying information, including home address and telephone numbers, be redacted from county recorder, county assessor and county treasurer records. Under SB1006, law enforcement support staff, adult or juvenile corrections officers, corrections support staff, probation officers, parole board members, National Guard members acting in support of a law enforcement agency, and firefighters assigned to the Arizona Counterterrorism Center in the Arizona Dept. of Public Safety, may request that their personal information be redacted.

2008

• HB2058; PSPRS; local boards; procedures – Signed into law 4/17/08
  The Public Safety Personnel Retirement System (PSPRS) administers the statewide retirement program for public safety personnel employed by approximately 210 state, county, municipal, and special districts in Arizona. Each employer has its own local board. Requires local boards to commence a hearing within 90 days and places no time limit on when the board must render its decision. Grants automatic adjudication in favor of the officer, if the local board fails to adjudicate within ninety days. Requires the employers to pay the legal fees for any independent counsel retained by the local board.
• SB 1339 law enforcement; probation; officers; investigations — Signed into law 5/7/2008
  A.R.S. § 38-1101 provides procedures for the exchange and dissemination of information in any appeal of a disciplinary action by a law enforcement officer or probation officer and also defines disciplinary action as the dismissal or demotion or the suspension. Limits the ability of an agency to require an officer to take a polygraph test. Allows for the change of a hearing officer or administrative law judge upon a first request and upon all other requests, on a showing that a fair and impartial hearing cannot be obtained due to the prejudice of the assigned hearing officer. Mandates that the employer has the burden of proof in an appeal of a disciplinary action by a law enforcement officer or probation officer. Allows an officer to appeal for a suspension for more than 24 hours (previously 40 hours).

2009

• SB 1062; law enforcement officers; discipline procedures
  Established additional rights of law enforcement and probation officers regarding interviews the employer reasonably believes could result in dismissal, demotion or suspension.
  • Specifies that at the conclusion of an interview in which an employer reasonably believes could result in dismissal, demotion or suspension of the law enforcement officer or probation officer, the officer is entitled to the following:
  • A period of time to consult with the officer’s representative.
  • A statement not to exceed five minutes, addressing specific facts or policies that are related to the interview.
  • Allows an employer or person acting on behalf of an employer, except where a statute or ordinance makes the administrative evidentiary hearing the final administrative determination, to amend, modify, reject or reverse a decision made by a hearing officer, administrative law judge or appeals board after a hearing if the following occur:
    • The officer and employer were equally allowed to call and examine witnesses, cross-examine witnesses, provide documentary evidence and otherwise fully participate in the hearing.
    • The decision was arbitrary or without reasonable justification.
    • The employer or person acting on behalf of the employer states the reason for the amendment, modification, rejection or reversal.
  • Prohibits an employer from including any information about an investigation in the portion of the personnel file of an officer that is available for public inspection and copying until one of the following occurs:
    • The investigation is complete.
    • The employer has discontinued the investigation.
    • Specifies that if the officer has timely appealed a disciplinary action, the investigation is not complete until the conclusion of the appeal process.

2010

• SB-1325 polygraph examinations; interviews; law enforcement
  As background, ARS 38-1101 is the law that provides due process rights for law enforcement officers during administrative investigations. The FOP has been making improvements to this law for many years. In 2010, SB1325, sponsored by Senator Linda Gray, made several important changes to our law enforcement due process rights.
• States that statutory guidelines apply to employer interviews of law enforcement officers or probation officers if the law enforcement officer or probation officer reasonably believes the investigation could result in a dismissal, demotion or suspension. Previously, only the agency could invoke the provisions of ARS 38-1101.
• Specifies that if a representative from the same agency of the law enforcement officer is not reasonably available to be present during the interview, with the employer’s permission, the representative may be from the law enforcement officer’s professional membership organization.
• Specifies that the written notice informing the law enforcement officer or probation officer of the specific nature of the investigation contain the following:
  • Alleged facts that are the basis of the investigation.
  • Copies of all complaints that are reasonably available which contain the alleged facts, except for copies of complaints that involve matters pursuant to federal laws under the jurisdiction of the Equal Employment Opportunity Commission.
  • Specifies that all data and reports from a polygraph examination of a law enforcement officer or probation officer are confidential and may only be used for the purposes of employment, certification or reactivation of certification or the administrative matter for which a polygraph was administered, including other ancillary matters. Requires the data and reports from a polygraph examination of a law enforcement officer or probation officer be destroyed, as soon as practicable, three years after the date of appointment or employment but not more than 90 days after that date, except for a pre-employment polygraph in which an applicant was not hired or in the case of an active investigation or an appeal.
  • Allows an officer to appeal a suspension for more than 16 hours (reduced from 24 hours).

2010 Continued

• SB1124; CORP; reverse DROP; extension.
  In 2006, the FOP requested that a DROP program be implemented for Corrections and Detention Officers. The legislature approved a reverse DROP program, however, the law also included a sunset date of June 30, 2011. This year, we asked the Legislature and the Governor to extend the CORP reverse DROP program to June 30, 2016. Senator Al Melvin, who is a strong supporter of Corrections employees, sponsored the bill.
  
  The Department of Corrections approached us later in the session and requested permission to add an amendment to our bill which would, for one year, allow the CORP local board to designate positions that would be eligible for participation in the Corrections Officer Retirement Program. As session law, this provision will permit the Department of Corrections and Juvenile Department of Corrections to fill non-designated positions with CORP employees if the employee is currently employed in a specified designated position and has at least five years of credited service under the plan.
• FOP Amendment to HB2067 PSPRS; omnibus;
  During the session, we received information from members of Lodge 77 in San Luis and Lodge 28 in Sierra Vista describing an unfair situation created by specific language in the statutes governing buying back prior service for time spent working at another agency in Arizona, if that agency did not participate in PSPRS. Basically, a few members were unable to redeem the time they spent working for an agency in Arizona while other officers were able to buy back prior service for time spent working for out-of-state agencies. The bill expanded the redemption of prior service to include services to ALL political subdivisions of Arizona.

2011

• 2011 S.B. 1235 law enforcement officers; disciplinary procedures — Signed 4/25/2011
• SB 235, which was drafted by the FOP and sponsored by Senator Linda Gray, passed both the Senate and the House unanimously. Our bill makes several important changes and additions to the law, including:
• Requires the employer, at the request of an officer who is subject to a disciplinary interview to provide a basic summary of any discipline ordered against any other officer of similar rank and knowledge working for the employer within the preceding two years for the same or comparable infraction.
• Prohibits the employer from taking concluding action or arranging a hearing until the essential outline or file copies are provided to the officer.
• Adds the requirement for cases before the office of administrative hearing by means of an interagency agreement with another city, town or county, upon the first request of a party.
• Allows an officer to appeal a suspension for more than eight hours, instead of sixteen hours.
• Prohibits a critical incident stress management team member who acquires information in confidence from an involved officer from being compelled to disclose the information in a legal proceeding, trial or investigation before any state agency or political subdivision.

2011 Continued

• Starting well before the Arizona Republic printed a slanted series of stories, the FOP PR firm was fully engaged, ensuring the FOP had the opportunity to respond to media reports attacking law enforcement retirement benefits. Quickly, it became apparent that the FOP and the firefighters were among the few defenders of our retirement benefits.
• After the legislature drafted extraordinarily punitive legislation, the Governor’s Office contacted the FOP. We were given the opportunity to offer a proposal to modify some of the more harmful SB 1609 provisions. The offer was heavily conditioned, which prevented a total remake of the bill.
• We told the governor’s office that the conditions placed on our proposal made the amended bill, in our opinion, just as unconstitutional as the original SB1609.
• All of the public safety organizations who were invited to work on proposals, FOP, Fire, APA and PLEA (AZCOPS was not invited) jointly agreed upon amendments that were accepted by the governor’s office. The governor’s office asked us to change our position on SB 1609 to “neutral” because our proposal was accepted, however, we politely refused, advising that we felt some of the changes, although better than the original language, remained unconstitutional.
• We complied with the governor’s condition that we cease “active” opposition to SB 1609 in order to preserve DROP, allow military service purchases, extend the number of years to phase in the contribution rate increase, eliminate an unnecessary contribution rate increase for CORP participants and retain 2 years worth of retiree benefit increases for PSPRS participants.
• The heavily amended SB 1609 passed the House and the Senate; however, it did not have the necessary number of votes to enact the “emergency clause.” As a result, many members had more time to plan service purchases.

2012

• SB1186; Law Enforcement Omnibus, which was drafted by the FOP and sponsored by Senator Linda Gray, passed both the Senate and the House unanimously. Our bill makes several important changes and additions to the law, including;
  • Allows a petition for an order authorizing disease testing of another person to be submitted to a court if the person is arrested, charged, or in custody and the public safety employee or volunteer alleges, by affidavit, that the person interfered with the official duties of the public safety employee or volunteer by biting, scratching, spitting, or transferring blood or other bodily fluids on or through the skin or membranes of the employee or volunteer.
  • Officers, who are also fire origin and cause investigators, are exempt from the prohibition against the licensing of peace officers and reserve peace officers as private investigators.
  • New statute sets the standards for fitness for duty examinations, including that an employer may order a law enforcement officer to submit to a physical examination only if the officer has acted or failed to act in an observable manner that indicates there is a physical condition materially limiting the officer’s ability to perform essential job functions. Sets time limits and officer’s rights for the process.
  • Modifies the definition of peace officers to include special agents from the attorney general’s office or a county attorney’s office who are certified by the AZPOST.
  • Specifies that certain cities, towns, and counties must only enter into an interagency agreement to provide for an alternate hearing officer for disciplinary action appeals if necessary to comply with the requirement to provide an alternate hearing officer on a party’s first request.
  • Clarifies the “just cause” statute that an officer may bring action in a superior court for a hearing de novo (as if it were a new hearing independent of the previous results of the appeal process) regarding their termination.
• The session was dominated by two issues; anti-union bills, all of which failed to pass, and state government personnel reform, implementing at-will employment for state workers, which passed heavily amended. Our team of professional lobbyists, Don Isaacson and Norm Moore, along with FOP President, John Ortolano, and ALC Executive Director, Jim Mann, worked long hours every day during the session, representing the interests of our members. Our team worked closely with legislators, legislative staff, bill sponsors, other stakeholder groups and the Governor’s office to ensure that we had the support necessary to deflect the anti-union bills and achieve major amendments to the state personnel reform bill.

2013 - Legislation

• SB1186; Law Enforcement Omnibus, which was drafted by the FOP and sponsored by Senator Linda Gray, passed both the Senate and the House unanimously. Our bill makes several important changes and additions to the law, including;
  • Confidential Information
    • Permits the following people to request that certain records containing personal information be restricted from public access:
      • the spouse or minor child of a deceased peace officer; and
      • a former public official who ceased serving in that capacity within the previous four years and was the victim of a violent crime.
        • Adds a spouse or minor child’s home address or telephone number as confidential information in the officer’s personnel file and applies related penalties to a person who knowingly releases such information.
    • Lease Terminations
      • Allows a law enforcement officer to terminate a rental agreement if the officer provides the landlord a written notice that the officer is protected under an injunction against harassment.
      • Requires the officer, before vacating the dwelling, to repay any lease concession or benefit the officer actually received.
    • Health Insurance Benefits for spouse and minor children of fallen officers
      • Corrects a bill previously signed into law which provides that the agency must fund health insurance benefits  for the spouse and minor children of officers killed in the line of duty. Provides a 50 year retroactive provision.  The original bill was prospective only.
    • Miscellaneous
      • Requires the state agency head or designee to accept LEMSC’s recommendation regarding an appeal of disciplinary action unless it is arbitrary or without reasonable justification – corrects a provision in last year’s personnel reform bill – applies to all State law enforcement officers under LEMSC, instead of just DPS.
        • Requires the state agency head or designee, if that person does not accept the recommendation, to state the reasons for rejecting it.

2014

2014 Legislation

2014 Legislation Continued

• Extends the repeal date for the supplemental benefits plan for public safety officers who are injured while on duty to October 1, 2017. Allows officers seriously injured in the line of duty to continue to receive the 100% base pay supplemental benefit which was set to expire in October 2014.
  • Allows the Department of Administration (ADOA) to establish an alternative appeal hearing process pursuant to supplemental benefits appeal procedures or alternative procedures established by ADOA.
• Allows a peace officer to request that public access be restricted to court records maintained by the clerk of the superior court which contain the officer’s personal identifying information.
• Permits ADC, or a county, city or town to voluntarily participate in the PSPRS supplemental cancer insurance program for employees who are corrections or detention officers.
• Allows a PSPRS member who has at least five years of service with the system to redeem up to 60 months of out of state prior service as a full-time paid corrections officer engaged in law enforcement duties.
• Allows a person who has been under ASRS for at least five years and who accepts a position as a detention officer to stay under ASRS at the discretion of the county, city or town.

2014 Legislation Continued

2015 Legislation

2015 Legislation Continued

2016 Legislation

The Need for PSPRS Reform

The deterioration of PSPRS’s financial health over the past 12 years has led to skyrocketing annual pension costs for the local government and state agency employers participating in PSPRS and, by extension, taxpayers. Specifically, the growing costs for many local governments are attributable to rising payments on the large unfunded liabilities for public safety pension benefits. The growth of these pension debt payments has threatened the continued delivery of public services and budgets in those jurisdictions, since the growing costs of pensions effectively crowd out other areas of the budget. Further, the courts have struck down previous legislative reforms to PSPRS enacted in recent years, and other reforms remain under litigation, creating the need for a new solution.

A number of factors have influenced PSPRS’s decline, the two biggest factors being: (1) the system’s current Permanent Benefit Increase (PBI) mechanism, and (2) underperforming investment returns.

The PBI mechanism—which is intended to adjust benefit levels for retirees upward over time to partially offset inflation—has undermined PSPRS’s solvency by skimming assets off the top of the fund in years of good market performance.

The Need for PSPRS Reform Continued

• For most retirees, 50% of PSPRS’s investment returns over 9% in a given year are deemed “excess” and diverted to a separate PBI fund to pay out PBI benefits. These diverted funds cannot be used to reduce unfunded liabilities and cannot earn interest over time, constraining PSPRS’s asset growth as a result.
• PBI benefits are not directly linked to inflation and are not distributed equitably among retirees, making it a poor method of adjusting retiree benefit levels to keep up with actual changes in the costs of living. The PBI is calculated as up to 4% of the average pension benefit in PSPRS, then distributed in a level dollar amount, regardless of the retiree’s actual pension benefit level.
• Worse, the PBI benefit has not been pre-funded like a traditional pension cost of living adjustment (COLA). Two years ago, the PSPRS board began requiring employers to make an additional contribution to offset some of the negative effects of skimming investment returns into the PBI fund, but these have been experimental and are not directly related to the actual costs of the PBI benefit.
• Until last year, most retirees in the PSPRS system have received a PBI benefit over 20 consecutive years, despite the continuing decline in PSPRS’s funding status. Now that the PBI account is empty, the plan would have to have several years of very strong returns for retirees to receive a full PBI. Given the current market conditions, it is uncertain when retirees may receive future PBI distributions.

In addition to the PBI problem, PSPRS has seen underperforming investment returns relative to its expected rate of return. The historic trend of actuarially valued returns have been 5% or less since 2002, nearly 15 years straight. However, during that time PSPRS has been using an unrealistic expected rate of return, ranging from 8% down to the recently adopted 7.5%. The net result has been unfunded liabilities added every year for the past dozen years.

Goals of 2016 PSPRS Reform

• Providing retirement security for members (current and future) and retirees.
• Reducing taxpayer and pension system exposure to financial and market risk.
• Maintaining a reasonable and stable total normal cost of approximately 20% of payroll.
• Reducing long-term costs for both employers/taxpayers and employees.
• Providing new options to ensure the ability of government employers to recruit and retain 21st century employees.
• Improving PSPRS governance and transparency.

• The new COLA will be based on the changes in the consumer price index for the Phoenix region, with a cap of 2% maximum.
• The COLA will be equitable because the percentage will be applied to each PSPRS retiree’s actual benefit level (as opposed to a level dollar amount granted under the current PBI, regardless of the individual retiree’s benefit level).
• Further, the new COLA will be pre-funded and actuarially accounted for in advance as part of normal cost determination, which has historically not been the case with the current PBI.

Arizona Proposition 124

• For the first time, allow public safety employees the choice of entering a full defined contribution plan or a defined benefit hybrid plan.
• Reduce the pensionable pay cap from $265,000 per year to $110,000 per year, significantly limiting pension spiking.
• Change the pension benefit multiplier from a flat 2.5% to a graded multiplier that ranges from 1.5% to 2.5% depending on years of service.
• Increase the retirement benefit eligibility age from 52.5 years to 55 years old.
• Implement the same CPI, with a cap of 2%.
• Restrict or eliminate cost of living adjustments when the plan falls below 90% funded.
• Require employees to pay 50% of all retirement costs, including normal costs, administrative costs, and any potential future unfunded liabilities if the plan’s experience does not meet actuarial assumptions.

• Matching the PSPRS board composition to reflect the shared costs and risks. The new board will consist of five independent, outside professionals with at least 10 years experience in fields related to the board’s duties and four members that represent employees, with two of these positions open to independent professionals as well.
• Codifying comprehensive fiduciary standards for pension board members in state law.
• Prohibiting employers from taking pension holidays.
• Requiring that any future benefit increases be paid in full at the time of enactment if they create any unfunded liabilities for the plan.
• Replacing the governor’s office as sole board appointment authority with a process by which stakeholders nominate board candidates, and the appointment of board members is split between the governor, the senate president, and the speaker of the house.
• Prohibiting the removal of a board member without cause.

Expected Effects of Reform

• Government agencies will save between 20% and 43% on the normal cost of retirement for each new employee hired, relative to the status quo.
• The reduction in cost for each new hire is estimated to save taxpayers $1.5 billion over the next 30 years, relative to the status quo.
• The reform will reduce the future accrual of total PSPRS pension liabilities by at least 36%.
• The reform will reduce the taxpayer’s exposure to future market risk by more than 50%.
• The reform will reduce the volatility in employer contribution rates by more than 50%.
• All new employees will equally share costs and investment risk with taxpayers under this reform.
• The reform creates incentives for the revamped PSPRS board to set more responsible actuarial assumptions in a way that minimizes the negative effects of underperforming investment returns.
• For the first time, the reform will offer new public safety hires a choice in retirement benefits—either a 100% defined contribution plan or a defined benefit hybrid plan designed to be more sustainable than the current benefit structure.
• New employees will pay lower annual employee contributions under the reform than the status quo.

Other 2016 Legislative Issues

2016 Legislative Session Bill Summaries

2017 Legislation

• The Arizona Fraternal Order of Police obtained a 20 year law enforcement officer retirement plan for cities with a population of 20,000 or more, Phoenix and Tucson. Officers were entitled to be retired with a monthly pension equal to one-half of their average monthly compensation for the year immediately prior to the date of retirement.

2017 Legislation Continued

2017 Legislation Continued