The City of Prescott has $70 million in PSPRS unfunded liabilities
It’s no secret that the Public Safety Personnel Retirement System (PSPRS) pension has a serious financial issue. As of the end of 2013, PSPRS claimed a Net Unfunded Accrued Liability of $4,654,534,525.
By the end of October, 2014, in an Arizona Republic article titled, “More financial trouble for public safety pension plan” by Craig Harris, they used a figure of $7.78 B for the unfunded liability, stating, “The state pension system for police officers and firefighters has less than half of the money it needs to fund current and future retirement payments…”
Whatever figure you choose to believe, in the most recent computations, $70M of that unfunded liability belongs to the City of Prescott.
See: PSPRS 2014 Actualrial Reports, Prescott Police Department
PSPRS 2014 Actualrial Reports, Prescott Fire Department
Add that all up, divide by Prescott’s population, and that’s a whopping bill of $1,735.43 for each person – man, woman and child – residing in the city limits.
Prescott’s not the only city with a gigantic unfunded liability – Flagstaff totes a $78.7M bill, Phoenix has a (gulp) $2B ledger of unfunded liabilities for their police and fire pensions.
Prescott Valley, on the other hand, has a much more modest amount of $6,592,682 of unfunded liabilities for their police department. Of course, PV doesn’t have it’s own fire department, they rely on Central Yavapai for fire service. And yes, there’s some $21M in unfunded liabilities at CYFD, too.
Today, the Prescott City Council will start their 2016 budget discussions, which will surely be affected by these numbers. Stay tuned as we continue to cover this issue in the days and weeks to come. How did this happen? More importantly, what can be done about it?
In the meantime, just remember the figure of $70M in the red.
One more thing: The local PSPRS board decisions to give retirement benefits to three of the Granite Mountain Hotshot widows has not been calculated in yet. So, that isn’t reflected in the $70 M figure. However, once it is figured in, the amount can be expected to rise.