Following her public feud with an association representing Arizona municipalities this year, a Republican from Scottsdale wants to bar the association’s new employees from joining the state’s retirement system.
Rep. Michelle Ugenti, R-Scottsdale, has introduced legislation to preclude new employees of a political subdivision entity, such as the League of Arizona Cities and Towns, from enrolling in the Arizona State Retirement System.
The bill would also affect future employees of groups such as the Central Arizona Association of Governments, Maricopa Association of Governments and the Northern Arizona Council of Governments.
Assuming House Bill 2006, is enacted, the new rule will start on the day the legislation becomes effective.
But some said they’re unsure what problem Ugenti is trying to solve, and others speculated that the House Republican might be trying to get back at the League, which opposed her proposal this year to consolidate municipal elections.
In an email, Ugenti said political subdivision entities didn’t participate in the state retirement system until the laws were changed several years ago.
“These entities are voluntary associations that were not created by statute and they do not have statutorily prescribed duties or responsibilities,” she said. “Without that accountability, I do not believe they should receive the benefits of a publicly funded retirement system.”
But Nicole Stickler, executive director of the Arizona Association of Counties, said Ugenti’s bills for the upcoming session send a mixed signal.
Another proposal by the Scottsdale Republican would subject groups formed by government entities to the same public records and open meeting laws that govern the Legislature and other political bodies.
“It seems kind of incongruent that they would hold political subdivision entities accountable for operating as if they were a public entity, but not when it comes to employment or retirement,” Stickler said. “They seem to be contradictory.”
The retirement system has more than half a million members. More than 200,000 of them are active.
Lesli Sorensen, who lobbies for the retirement system, told the Arizona Capitol Times only a fraction of their members work for political subdivision entities.
But she said any time membership decreases — either naturally or because some who are otherwise eligible would be prohibited from joining — it has a negative impact to the fund.
The system assumes that new members would replace old members and if one group of people can no longer enroll, everybody in the system will have to pay a little bit more, Sorensen said.
“It will increase contribution rates,” Sorensen said.
She said in the past, the retirement system has opposed similar proposals.
That’s also why Arizona Education Association president Andrew Morrill is wary of Ugenti’s proposal.
Morrill said he doesn’t know if Ugenti worked extensively with the retirement system on her proposal, but he lamented that legislators at times push an idea without hunkering down with representatives of the system to fine tune it.
“The caution is meddling or tinkering with ASRS and not fully understanding the amount of study and management that goes into that fund,” Morrill said.
Meanwhile, Ken Strobeck, the League’s executive director, said the difficulty is having two systems for League employees — one that is enrolled in the retirement system and the other that isn’t, even though the two groups might have the same function.
“It would be harder to recruit people because a lot of our folks who come to work here have come from the Legislature or from other public sector employers, and want to be able to remain in the public retirement system,” Strobeck said.