Pension changes could save taxpayers billions

Posted at 7:00 PM, Feb 01, 2016
and last updated 2016-02-02 10:28:43-05

Retired police officers and firefighters would see smaller annual increases in their benefit checks and new hires would see a major overhaul to their state pension system reform under a bill introduced Monday in the state Senate.

In the past, there were limits on what police officers and firefighters had to pay into the state's Public Safety Personnel Retirement System. City government officials say there were no limits on them, and they say their costs ballooned as they kept the system afloat. 

"This system is not sustainable," Mesa Mayor John Giles said. He says the city's public safety pension liability increased from $31 million last year to $36 million this year.

State Sen. Debbie Lesko, R-Peoria, introduced a compromise bill Monday to reform the pension system, which has 33,000 enrolled members. It proposes a small increase to retirement age, and it reduces annual pension raises for current employees to match actual cost of living increases.

For new hires, the proposal makes the pension contribution 50/50 between employees and employers.

"The good thing about this legislation is it's going to free up money so the employers can hire more firefighters and police," Lesko said. "So for every new person they hire, they are going to save between 3 and 5.7 percent of that person's salary on the pension each and every year.

Giles says the reforms would save municipalities and counties $3.6 billion statewide over the next 30 years.

The Public Safety Personnel Retirement System's board has voted unanimously to support the reform proposal.

If approved by the legislature, the pension reforms will go on the ballot for a statewide public vote. That vote may occur on May 17.