Arizona Senate Bill SB1085

Arizona 2022 Regular Session

• Introduced: 1/10/22
• Report Pass: 1/19/22
• Report Pass: 1/24/22
• Engrossed: 1/28/22
• Report Pass: 3/2/22
• Report Pass: 4/11/22
• Enrolled: 5/2/22
• Passed: 5/6/22
• Chaptered: 5/6/22

Caption

PSPRS; funded ratio; asset transfers

Impact

SB1085 directly impacts local government employers participating in the PSPRS by establishing clear guidelines for managing unfunded liabilities and ensuring that contribution rates are adequate to cover both normal costs and past accrued liabilities. By instituting requirements for actuarial reviews and stabilizing funding levels, the bill seeks to strengthen the fiscal health of the retirement system. This has implications for how local jurisdictions budget for retirement obligations, potentially altering their financial planning and resource allocation.

Summary

Senate Bill 1085, known as the Arizona PSPRS Funded Ratio and Asset Transfers Act, amends section 38-843 of the Arizona Revised Statutes to reform the public safety personnel retirement system (PSPRS). The bill mandates that all participating employers are required to transfer assets attributable to a prior public retirement system to the PSPRS fund, enhancing transparency and accountability in the retirement funding process. The new provisions aim to provide more stability within the retirement system by ensuring that the actuarial valuations are updated and adhered to by the participating employers, which is critical to maintaining a funded status that supports future benefits.

Sentiment

The sentiment surrounding SB1085 appears to lean towards support from those advocating for robust pension funding and transparency. Proponents argue that the bill is a step towards securing the financial future of public safety personnel, ensuring they receive the benefits they are entitled to. However, there may also be concerns regarding the additional immediate financial burdens placed on local governments that must comply with the new contribution and transfer requirements. Overall, the dialogue surrounding the bill suggests a recognition of the importance of pension stability, despite concerns about short-term fiscal impacts.

Contention

Notable points of contention include the balancing of immediate fiscal constraints on local governments versus the long-term success and stability of the retirement system. Critics may argue that placing further contribution requirements on employers could strain budgets, especially for smaller municipalities. However, supporters assert that without addressing the unfunded liabilities now, local entities may face even greater financial repercussions in the future. The ongoing challenge lies in reaching a consensus on how to effectively manage and fund retirement benefits while maintaining financial stability within local governments.