Arizona Pension Reform Bills for 2014

5 pension-reform bills – and their prospects for passing

By Joanna Allhands – The Republic | – Mon Jan 27, 2014

Arizona’s public-employee pension system needs help.

It’s chronically underfunded. Taxpayers are footing an ever-larger portion of the bill. And now, the feds are investigating whether employees improperly inflated values to pad their performance bonuses.

But what’s the best way to fix it? And are lawmakers on the right track? Those remain points for debate.

More than a dozen pension-reform bills are floating around the Arizona House and Senate.

Some of them, such as bills to codify current practices and to allow the pension director to conduct criminal background checks on prospective employees, are relatively routine and likely to pass.


House Bill 2203:  Increases the number of members and changes the qualifications of members who will serve on the Arizona State Retirement System Board and the Public Safety Personnel Retirement System Board of Trustees.

Sponsor: Rep. Phil Lovas, with multiple cosponsors

Prospects:  The bill passed 5-3, with an amendment, out of the House insurance committee. Given increased scrutiny on the pension system, a bill that would add more eyes to the boards has a fair chance of passing

House Bill 2058: Limits to $150,000 the maximum annual pension payment for employees hired after the bill becomes law. The limit would apply to anyone in the Arizona State Retirement System, Public Safety Personnel Retirement System and Corrections Officer Retirement.

Sponsor:  Rep. John Kavanagh, no cosponsors

Prospects:  The bill has been referred to the House insurance committee but hasn’t yet gotten a hearing. Assuming it does, expect controversy – and one of the session’s most interesting debates on pension reforms – to follow it.

House Bill 2069: Bars any newly hired employees of state “political subdivision entities” – including cities and schools – to join the Arizona State Retirement System.

Sponsor: Rep. Michelle Ugenti, no cosponsors.

Prospects: The bill has been assigned to the House insurance committee but doesn’t have a scheduled hearing. Passage is probably unlikely this year, but it is one of the bolder attempts to blow up a chronically underfunded state retirement plan.

Senate Bill 1085: Lowers payments to those who go on long-term disability on or after Jan. 1, 2015. Employees would be limited to 60 percent, instead of the current two-thirds, of their monthly income.

Sponsor: Sen. Steve Yarbrough, no cosponsors

Prospects: This one could have a bumpier road in the full Senate than Yarbrough’s other pension-related bills. It narrowly passed the Senate finance committee

House Bill 2018: Requires public employees to be at least 62 before they can retire without first terminating their employment. The idea is to prevent younger members from retiring and continuing to work their current jobs while earning retirement benefits

Sponsor:  Rep. Phil Lovas, no cosponsors

Prospects:  No guarantees, but it has a decent chance. The bill passed unanimously out of the insurance and rules committees


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