The state government’s main retirement system’s financial underpinnings appear sound but more study is needed before the same can be said about several smaller retirement programs for law enforcement personnel and elected officials, according to reports released Oct. 17.
Actuarial reports on the Arizona State Retirement System (ASRS) produced generally favorable findings. However, similar reports on the Public Safety Personnel Retirement System and its plans for corrections officers and elected officials noted “serious concerns” on such things as the calculation of liabilities.
The Public Safety Personnel System expressed concern with some of the outside firms’ findings but plans to commission new audits to explore the issues raised.
The reports on the state retirement systems are among a series of studies commissioned by the Legislature into state government funds that involve actuarial services.
Reports on the Arizona Health Care Cost Containment System and state government’s own employee health care plan were generally favorable.
On May 25, ASRS issued a special notice informing retirees that they would not receive a benefit increase in fiscal 2007, which began last July 1. ASRS explained that a Permanent Benefit Increase (PBI) is generated by excess earnings on the actuarial value of assets of the ASRS fund.
“The method of applying gains and losses to the ASRS fund currently includes three recent years when earnings were less than the ASRS assumed earnings rate of 8 percent,” the statement read. “As a result, there are no new funds to provide for a new PBI for the 2006-07 fiscal year” The statement noted that there would be no increase or decrease in pension checks this fiscal year.
Arizona Capitol Times contributed to this article.
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