PSPRS House Committee Hearings Begin In Flagstaff

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Board of Trustees – PSPRS 
Title Name Term Expires
Chairman Brian P. Tobin January 2019
Vice Chairman William T. Buividas January 2021
Trustee William C. Davis January 2019
Trustee Edward J. McNeill January 2019
Trustee Bryan Raines January 2019
Trustee Mike Scheidt January 2021
Trustee Dean M. Scheinert January 2021
Trustee Donald A. Smith, Jr. January 2021
Trustee Vacant January 2021

The House Ad Hoc Study Committee on the Public Safety Personnel Retirement System will hold its first meeting on Wednesday, June 28 at 5:00 p.m. at Coconino Community College in Flagstaff. Wednesday’s meeting marks the first in a series of public hearings in communities most affected by rising public safety pension costs and unfunded pension liabilities.

Members of the Ad Hoc Study Committee include: representatives Noel Campbell (chair), David Stringer (vice-chair), Bob Thorpe, David Cook, David Livingston, Charlene Fernandez, and Athena Salman.

The committee will hear from local officials, stakeholders, and pension reform experts. Members of the public are invited to attend.

“The PSPRS system went from being solvent a number of years ago to placing cities and counties into fiscal jeopardy. The Legislature and the voters successfully approved reforms, however they will not have a negligible impact upon the pension system for decades. House members are traveling around the state holding Ad Hoc public meeting in order to understand the impacts to local governments and their taxpayers, the management of the fund, and to try to find ways to turn the PSPRS pension system around,” stated Thorpe.

“In just 5 years since 2011, the total cost of fees and expenses for managing the PSPRS pension fund has increased from $25 million annually (0.44%) to $116.3 million (1.74%) in 2016,” continued Thorpe. “In comparison, the AZ State ASRS pension fees and expenses have typically been between 0.55% – 0.65% during this same period of time, and the AZ State Treasurer’s fees and expenses have remained flat at 0.02%. What is truly shocking is that for every dollar that an officer or firefighter contributes to their pension, about 60¢ is spent in management fees and expenses.”

Speaker Tobin: Union reform bills deserve debate, vote

Three reasonable reform measures that have cleared the Arizona Senate will likely not see the light of day without vigorous citizen input.

Arizona Congressmen — Trent Franks, Paul Gosar, Matt Salmon and David Schweikert — agree, and have sent a letter to Speaker Tobin urging him to allow debate and a vote on these bills. Obviously leadership takes a back seat to union allegiance with Speaker Tobin. His brother is Deputy Chief Brian Tobin, president of the Professional Firefighters of AZ union and the founding president of Phoenix Fire’s “Command Officers Association” Union. He is currently chairman of the board of trustees of Arizona Public Safety Personnel Retirement System.

Don’t be fooled by the fact that Brian’s brother Andy holds a Republican leadership position in the state legislature. In his official capacity, committed unionist Brian Tobin was a member of the steering committee for John Kerry for President.

Speaker Andy Tobin’s disappointing lack of responsible leadership earned him and his colleague Steve Pierce votes of censure from the Executive Guidance Committee (EGC) of the Maricopa County Republican Committee last November…..

Apache County District 3 Supervisor Doyel Shamley says he has heard “much feedback from constituents and the towns in his District, concerning the massive and negative impacts the system is having upon them and budgets.”

Nearly everyone agrees that something has to be done.

Ever since 2013, when then-Speaker of the House Andy Tobin blocked pension reforms, it has been clear that the issue is a hot potato for some lawmakers. Capitol insiders say not much has changed since then. They have little hope for change in light of the fact that Governor Doug Ducey lacks the fortitude to take on powerful unions heading into the next election cycle.

In April, the Arizona Republic reported on research from the Pew Charitable Trusts. After extensive research, the organization “concluded the Arizona Public Safety Personnel Retirement System was the third-worst performing government trust fund as measured over a 10-year period that ended in 2015,” according to the Arizona Republic.

“Pew, which recently released its findings, also found PSPRS paid the highest percentage of its investments in fees for outside investment management among the 73 largest public retirement systems in the country,” continued the Arizona Republic article. “In 2016, the most recent year for which information was available and a year after Pew’s findings, PSPRS spent nearly $129 million on investment management fees, while earning less than 1 percent return — or $49 million — on its investments.”

In 2016, the Legislature passed SB1428, which sent the decision on what to do about pensions to the voters. As Thorpe notes, the voters approved the reforms embodied in Prop 124, but communities need relief now. For example, committee members Campbell and Stringer represent Prescott. That community is facing financial strain due to rising pension contribution rates and an unfunded pension liability of more than $80 million.

“Many other communities, particularly in rural areas with high legacy costs, are facing similar financial crises,” said Representative Campbell. “We have to act.”

Representative Stringer agreed, “We have to find a solution. In order to protect current public safety retirees and our communities, we have to protect the solvency of the fund.”

The Ad Hoc committee is tasked with reporting to the House on their findings and make recommendations to protect the solvency of the fund and seek ways to relieve the financial strain on affected communities throughout the state.

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