Dec. 23, 2013
An actuarial analysis finds that anti-pension spiking measures approved by Mayor Greg Stanton and the City Council are expected to save taxpayers $233 million over the next 25 years.
The Segal Company, a New York City-based private actuarial and consulting firm, provided the City of Phoenix with its final analysis late last week.
Stanton and the Council eliminated the ability of current and future city employees to collect lifetime payments on future leave accruals as well as phone and car allowances on Oct. 31. The anti-spiking rules were recommended by the Council-led Pension Fairness and Spiking Elimination Ad Hoc Subcommittee, which was chaired by Vice Mayor Bill Gates.
Pension reforms passed in 2013 – the anti-spiking measures and combined with the Stanton-backed pension changes approved by voters in March – now provide a total savings of $829 million over the next 25 years.
“Through a careful process, we did the right thing to end pension spiking in Phoenix,” said Councilwoman Thelda Williams, a member of the ad hoc subcommittee. “The $233 million savings taxpayers will see from that effort demonstrate our commitment to building a sustainable compensation system that works for everyone.”
Phoenix’s are among the toughest passed in the nation. Most other state and city governments have sought only to end spiking for new employees – but Phoenix’s measures will affect all employees. Specifically, they:
- Eliminate counting future sick and vacation leave compensation toward a pension for all employees.
- End the use of allowances, such as communications and travel allowances, for pension calculation for all employees.
- Begin to overhaul our leave system to stop the practice of allowing unlimited sick leave accrual.
Christian Palmer 602-534-6051