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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
pensions; unfunded liability; expenditure limits
Purpose
Requires a city, town or county's unfunded accrued liability for a state retirement system to be considered a long-term obligation required by a contract.
Background
A city, town or county's expenditures are subject to a limit as prescribed by the Arizona Constitution and determined by the Economic Estimates Commission. Expenditures are any authorization for the payment of local revenues. Local revenues includes monies and property received by or for the account of a political subdivision and excludes lawful long-term obligations issued or incurred for a specific purpose, or collected or segregated to make payments of deposits required by a contract concerning bonds or obligations (Ariz. Const. art. 9 § 20).
The Arizona State Retirement System (ASRS) provides retirement benefits, long-term disability, retiree health insurance, survivor and other benefits. ASRS is funded through equal contributions from member and employer partners. Contribution rates are actuarially determined and set each year.
The Public Safety Personnel Retirement System (PSPRS), Elected Officials Retirement Plan (EORP) and Corrections Officer Retirement Plan (CORP) provide pensions to state employees in a wide variety of capacities. The PSPRS Board of Trustees is responsible for overseeing the PSPRS, EORP and CORP.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a city, town or county's unfunded accrued liability for ASRS, EORP, PSPRS and CORP to be considered a constitutionally outlined long-term obligation required by a contract.
2. Becomes effective on the general effective date.
Prepared by Senate Research
January 27, 2020
MG/gs