HB 2028
Initials VP/AA Page 1 Caucus & COW
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
House: WM DP 10-0-0-0
HB 2028: PSPRS; contribution rates
Sponsor: Representative Livingston, LD 28
Caucus & COW
Overview
Sets Public Safety Personnel Retirement System (PSPRS) employee contributions to 7.65% of
their compensation effective beginning FY 2024. Additionally, beginning FY 2024, PSPRS will
include the excess contribution rates collected into consideration when determining the employer
contribution rates.
History
Current statute requires employers to make contributions sufficient to meet both the normal cost
for members hired before July 1, 2017, plus the determined amount required to amortize the
unfunded accrued liability for all employees of the employer who are members of the system.
For members hired prior to hired prior to July 20, 2011, the employee contribution rate was set at
a fixed rate of 7.65%. SB1609 in the 2011 legislative session attempted to increase that set rate
to a variable rate that was capped at 11.65% for all employees. However, the Supreme Court
ruled that unconstitutional in 2016 for existing members and only applied it to members hired after
the general effective date.
The Legislature passed SB1468 in 2016 that dictated that for members hired on or after July 1,
2017, the member and employer contributions are determined in two categories. There are
employers and members who are in the public safety risk pool, and those not in the public safety
risk pool. For members and employers in the public safety risk pool, each employer must pay
50% of both the normal cost plus the determined amount required to amortize the total unfunded
accrued liability within the risk pool. The remaining 50% is divided by the total number in the risk
pool. For those not in the public safety risk pool, each employer must pay 50% of both the normal
cost plus the determined amount required to amortize the total unfunded accrued liability for each
employer attributable only to member's hired on or before July 1, 2017. The remaining 50% will
be divided by the total number of the employers' members who were hired on or after July 1,
2017. (A.R.S. § 38-843)
Provisions
1. Designates that for FY 2024 and each year thereafter, the employee's contribution rate will be
7.65% of their compensation for members hired prior to July 1, 2017. (Sec. 1)
2. Strikes statute which states that member's contributions above 7.65% must accumulate and
cannot be used to reduce the employer's contribution rate until the employer becomes 100%
funded. (Sec. 1)
3. Adds that from and after June 30, 2023, member's contribution that exceeds 7.65% and that
was collected from July 1, 2011 through June 30, 2023 may be used when calculating
employer contribution rates. (Sec. 1)
HB 2028
Initials VP/AA Page 2 Caucus & COW
4. Makes technical and conforming changes. (Sec. 1)
5. Contains a retroactive provision. (Sec. 2)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note