The Pioneer’s July 1, 2019 story, “Public safety pension plan costs hurting county” hits home for me. As the chairman of the state’s Public Safety Personnel Retirement System (PSPRS) and an 18-year public safety veteran, I understand full well the challenges rising pension costs have created for La Paz County and for public sector employers across Arizona.
Returning PSPRS to full funding, securing retirement for our more than 60,000 members and taking the pressure off taxpayers is exactly why the nine PSPRS trustees – each of us new to the system in the past three years – accepted our nominations to serve. It’s also why PSPRS’s new leaders have taken steps to remake the system during our tenure.
What’s different about PSPRS these days?
For starters, the state’s public safety organizations – together with PSPRS trustees, Gov. Doug Ducey and a bipartisan group of legislative leaders – led the way on two statewide ballot measures that drastically changed the face of public safety. Prop 124 and 125, passed in 2016 and 2018 respectively, will save taxpayers an estimated $1 billion-plus over the next 30 years. These and other measures require cops and firefighters to contribute more to retirement and work longer to qualify for benefits. These measures also overhauled PSPRS’s retiree cost-of-living increase to prevent it from hindering the system’s financial recovery and creating disproportionate burdens for small and rural employers.
Independent analysis of these measures tells us that, given time, these two propositions will make a massive impact on the system, returning PSPRS back to full funding.
Even so, we understand that counties like La Paz need help now. That’s why PSPRS is doing all we can to efficiently steward the $10.5 billion entrusted to the system by public safety workers and taxpayers. Legal and policy changes were necessary to recalibrate PSPRS’s investment strategy, making changes to better balance the need for short-term profit without creating too much long-term risk that could threaten employers like La Paz. Those changes are now largely complete. The new board also has an unprecedented depth and diversity of experience, from venture capitalists and investment professionals with decades of financial sector success, to public safety leaders who combine leadership with financial acumen.
The Pioneer story had a quote from La Paz Finance Director Terry Krukemeyer that stuck with me. “I don’t believe in complaining,” he said, “if you can’t offer a solution.” While Mr. Krukemeyer’s recommendation of rolling PSPRS into the Arizona State Retirement System is neither legal nor practical, I agree that solutions must be primary as PSPRS moves forward.
To that end, PSPRS must work more closely with La Paz and other municipalities to find new, more efficient solutions to their pension debt, solutions that offer peace of mind to the police officers and fire fighters whose retirement funds we care for daily. I hear it from my colleagues in uniform all the time: They want the middle-class retirement they have earned to be safe, but not at the expense of the cities they serve and protect.
At PSPRS, we have new laws and leadership, new strategies and a new mindset. We hope you will judge their success not by old studies and decade-old investment results, but by the system’s performance on our watch.