PSPRS Pension Contributions Force Budget Cuts
Pension funds in Arizona facing bleak future
by Craig Harris – Jun. 23, 2012 10:27 PM – The Republic | azcentral.com
The pension system for Arizona’s police officers and firefighters is in the worst shape and has little hope for a quick turnaround, its top administrator says.
“The picture is not good,” said Jim Hacking of the Public Safety Personnel Retirement System. “And there is not much of anything we can do about it. We can only hope the financial markets start improving.”
The bleak outlook comes as the Pew Center on the States, a national organization that seeks ways to make government more effective, last week released a study saying Arizona’s state pension systems remain underfunded. Arizona is among 34 states facing that problem.
But the Pew Center said Arizona’s management of its long-term liabilities for public pensions was cause for “serious concern.” The Pew Center said Arizona’s four statewide systems as of fiscal 2010 faced a $12 billion funding gap. The funding gap is the difference between assets on hand and the amount needed to pay for retirement obligations of those enrolled in the system.
As funding levels drop, additional contributions are needed from public employers and employees to keep the gap from widening. The increase in public-employer contributions forces governments to cut elsewhere or raise taxes.
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