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Message from the Executive Director

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    Posted on: April 28th, 2015

    PENSION NEWS

    As many of you are probably aware, there has been a gradual “drum beat” from the public , the media and conservative think tanks to change our Defined Benefit retirement system in PSPRS due to the rising employer cost of funding the pension. This was crystalized with the changes made to the system in 2011 with the passage of SB1609; despite admonitions relating to diminishment of benefits as stated in the Arizona Constitution, Article 29 which reads :

    1. “Membership in a public retirement system is a contractual relationship that is subject to article II, section 25, and public retirement system benefits shall not be diminished or impaired.”

    On April 17th Glendale Law Enforcement Association (GLEA) President Justin Harris and I attended a stakeholders meeting to discuss the “Firefighters Pension Proposal”. We were representing not only the APA interest but the interests of Glendale and CLEAA respectively. This meeting was a continuation of pension meetings that had been ongoing since the summer of 2014. Senator Debbie Lesko (LD 21) has taken the lead in this venture and hosted the discussion which included about 45 participants. Lead attorney for the firefighters, Roopali Desai (Coppersmith & Brockelman) presented the firefighters proposal which advocates “opening” the state constitution through a voter referendum for a conditional enactment of Statutory amendments to Title 38 (to adjust/diminish employee benefits.) Her often repeated statement was that this legal maneuver was defensible, unlike what has happened in the reversal of the changes to PSPRS in 2011 with respect to SB1609 (Fields v EORP) . Of note, there is still a pending decision in the Arizona Supreme Court that is expected to reverse / restore the employee contribution rate to pre – SB1609 levels (Hall). Many in the stakeholders meeting were concerned this change (via opening the AZ Constitution) will similarly not pass the legal challenge that is currently in motion in the Arizona Supreme Court.

    Chuck Grube, Attorney for the attorney Generals Office, followed with his own thoughts on the “Firefighters proposal”. Mr. Grube has a great deal of experience in this area in that he defended (unsuccessfully in Fields) the Arizona Legislature and the changes brought by SB 1609. Although taking a neutral stance, Mr. Grube spoke with a cautionary tone, reminding the audience that the “Pension is Different “ when viewed through the prism of the court. In other words, a diminishment of benefits is sacrosanct when it comes to the court protecting members of our Arizona pensions through the Arizona Constitution.

    So what is the next strategically sound move to protect your pension?   In 2011 the only changes that could not be legally reversed were those made to new hires following enactment of SB1609. This became the 2nd tier of the PSPRS pension. Glendale President Justin Harris is a firm believer of protecting the pension benefits of current PSPRS members and placing the burden on future employees as was the case (in part) with tier 2 employees in 2011. He believes that this correction can gradually bring employer contributions to manageable levels by creating a 3rd tier with a sliding employee contribution scale (actuarials have been ordered) . This strategy is utilized by the ASRS system, which is currently the healthiest /largest pension system in the state.

    In the final Analysis, it is believed by both Justin Harris and I that opening the constitution to a one time event is risky at best, considering the varied opinions of 90 Arizona legislators, the Governor and his advisors, the public and last but not least the challenge that will undoubtedly be brought by any one of the members of the PSPRS system if, in their view, benefits are being diminished by the “Firefighter’s Pension Plan” (called the “Pension Clause”). The net effect, we believe , of these risky maneuvers is to put the current pension at further risk without a truly timely and defensible option.

    Considering the aforementioned, on April 24th, the APA board of Directors, to include your CLEAA Executive Director, unanimously voted to sever ties with the Firefighter’s Pension Reform plan and pursue alternatives to include a 3rd tier option for new employees to improve and secure your pension. Please stay tuned for updates on this important topic.

    Lu Ebratt, Executive Director /CLEAA