Final Task Force Recommendations
Pension Reform Task Force Chairman Rick DeGraw and Deputy City Manager Rick Naimark presented these recommendations to the Phoenix City Council at the Feb. 14, 2012 Policy Session.
The reports are available for viewing at the City Council Reports section below. You may also view the Policy Session video on demand at the Phoenix Channel 11 website.
Task Force Work Completed
The Pension Reform Task Force completed its work on Dec. 6, 2011.
After evaluating the two alternative options developed over the past several months, they voted to recommend to the Council what has been referred to as Option 2, with some minor modifications.
View the recommendations in a downloadable format
Option 2 as modified would, if adopted, change things in the following manner.
New Hires Only
| 1. | Modify retirement eligibility: |
| -- Eliminate Rule of 80 and other current age/time worked retirement provisions | |
| -- Establish Normal Retirement Age of 63 with a minimum of 10 years of service | |
| -- Establish an Early Retirement Age of at least 55 with 10 years of service | |
| -- Early Retirement benefit amount would be actuarially reduced from Age 63 | |
| 2. | Change the pension multiplier to a graduated multiplier based on years of service. These are cumulative multipliers applying to all prior years of service. |
| -- Up to 14.99 years of service: 1.85% | |
| -- 15-19.99 years of service: 1.90% | |
| -- 20-24.99 years of service: 1.95% | |
| -- 25-29.99 years of service: 2.00% | |
| -- 30 or more years of service: 2.10% | |
| 3. | Vacation and Sick payments made at retirement cannot be used in pension final average compensation. |
| 4. | Final Average Compensation for pension calculations will exclude travel, communications, and technical allowances. |
| 5. | Time of service calculations shall reflect actual service time with 20 days of service required before a month of service is credited and 240 days of service required before a year of service is credited. |
| 6. | Minimum Pension: Terminate any existing minimum pension requirements. |
New Hires and Existing Employees
Institute a floating contribution rate for all new and existing employees with no grandfathered group. The actuarially determined rate shall be split evenly between employees and the city as determined officially each year. The city/employee rate will vary as the determined rate varies, but will be split evenly.
The new rate would be implemented immediately for NEW employees and would be phased-in for EXISTING employees beginning with the effective date, with the employee rate rising no more than 2% of salary per year until it reaches the equal split amount.
These recommendations and a full report will be forwarded to the City Council for consideration and discussion in January 2012.
To continue to receive updates on this topic, please subscribe to the Pension Reform Task Force mailing list.
City Council Reports
This report provides additional information on potential pension reform requested by the Mayor and City Council at the Feb. 14, 2012 Policy Session. Specifically, the answer to Question #15 was expanded to include additional detail, and the key dates for consolidated election dates was corrected.
- CCR - March 8, 2012
This report provides additional information on potential pension reform requested by the Mayor and City Council at the Feb. 14, 2012, Policy Session.
- CCR - Feb. 14, 2012
Meeting Minutes
These reports transmit the recommendations of the Pension Reform Task Force to the Mayor and City Council.
This report provides the Finance, Efficiency and Innovation (FEI) Subcommittee with an update on the work of the Pension Reform Task Force since the May 25, 2011 FEI Subcommittee meeting.
This report provides information on the Pension Reform Task Force and requests that the Finance, Efficiency and Innovation Subcommittee recommend City Council approval to authorize the City Manager, or his designee, to enter into a contract with The Segal Company for consulting and actuarial analysis for the Pension Reform Task Force.
Requests for Council Action
This report requests authorization for the City Manager, or his designee, to enter into a contract with The Segal Company in an amount not to exceed $200,000. Further authorization is requested for the City Controller to disburse funds for this contract.