PSPRS Pension Fund Policy FY 2027.docx

Public Safety Personnel Retirement System Pension Fund Policy 
Fiscal Year 2027 
1 
 
 
 
Policy 
 
The intent of this Policy is to communicate the Council’s pension funding objectives and to comply with 
the statutory requirements of Ariz. Rev. Stat. § 38- 863.01, as amended. It is the policy of the City of 
Buckeye (“City”) to maintain stability of the City’s contributions to the Public Safety Personnel Retirement 
System (“PSPRS” or “System”); to outline how and when the City’s funding requirements of the system will 
be met; and, to define the City’s funded ratio target under the System and the timeline for reaching the 
targeted funded ratio. This Policy shall be updated annually. 
Purpose 
 
The purpose of this Policy is to comply with Ariz. Rev. Stat. § 38-863.01, as amended, and 
set forth the steps in the annual budgeting process to meet objectives for funding the City 
of Buckeye Police and Fire Departments’ defined benefit plans managed by the Arizona 
PSPRS for members who joined the system prior to July 1, 2017. The objectives are to 
establish a timeline for reaching a targeted funding ratio, identify how the City plans to 
meet the timeline, and how the City will maintain stability of City contributions to fulfill 
that plan. 
This Policy further complies with GASB Statement No. 67 (Financial Reporting for Pension Plans) and GASB 
Statement No. 68 (Accounting and Financial Reporting for Pensions) in order to more accurately reflect 
the assets and liabilities of the City’s plan balance for its members who joined PSPRS prior to July 1, 2017. 
Under Senate Bill 1063, a new employer risk pool was formed for members hired on or after July 1, 2017, 
in an effort to minimize the future unfunded liabilities of the current plan. 
 
Goals – Stability of Contributions 
 
Budgeting 
 
The salaries of all PSPRS members will be utilized to calculate the annual budgeted contribution. This will 
include: 
 
Employer amounts for all defined-benefit PSPRS member employees 
 
Employer amounts for all PSPRS employees enrolled in the Deferred Retirement Option Plan 
(DROP) 
 
An annual lump sum contribution as determined during each fiscal year budget process, when 
financially feasible. 
 
Remittance 
 
The payment of the current fiscal year’s general fund budgeted PSPRS contributions (as outlined above) 
will be determined at the beginning of each fiscal year. Management will determine amount and frequency 
of payment based on the City’s available cash balances. If lump sum contributions are made, any required 
employer payroll contributions during the year will be drawn against the deposit. Following the final draw 
for the fiscal year, the remaining balance (if any) will be allocated to the City’s PSPRS unfunded liability.

Public Safety Personnel Retirement System Pension Fund Policy 
Fiscal Year 2027 
2 
 
 
At the close of each fiscal year, any remaining general fund personnel and operating budget of the Police 
and Fire Departments may be paid directly to PSPRS in order to reduce the City’s unfunded liability.  
 
Funding Requirements 
 
The PSPRS Actuarial Valuation Report dated June 30, 2025, identifies of the following: 
 
Pension 
Police 
Fire 
Total 
Liability 
67,108,041 
74,971,274 
142,079,315 
Assets 
53,452,728 
67,359,075 
120,811,803 
Unfunded Liability 
13,655,313 
7,612,199 
21,267,512 
Funded Ratio 
79.7% 
89.8% 
85.0% 
 
 
 
 
Health 
Police 
Fire 
Total 
Liability 
733,627 
847,887 
1,581,514 
Assets 
1,111,748 
1,103,692 
2,215,440 
Unfunded Liability 
(378,121) 
(255,805) 
(633,926) 
Funded Ratio 
151.5% 
130.2% 
140.1% 
 
 
 
 
Total 
Police 
Fire 
Total 
Liability 
67,841,668 
75,819,161 
143,660,829 
Assets 
54,564,476 
68,462,767 
123,027,243 
Unfunded Liability 
13,277,192 
7,356,394 
20,633,586 
Funded Ratio 
80.4% 
90.3% 
85.6% 
 
The employer contribution for FY 2027 includes the actuarily determined normal cost and an unfunded 
amortization rate. The unfunded amortization rate is determined by amortizing unfunded liabilities over 15 
years. The employer contribution rates are as follows: 
 
Pension 
Police 
Fire 
Normal Cost 
14.98% 
17.25% 
Unfunded Amortization 
11.78% 
5.52% 
Total Pension 
26.76% 
22.77% 
 
 
 
Health 
Police 
Fire 
Normal Cost 
0.30% 
0.31% 
Unfunded Amortization 
(0.23%) 
(0.04%) 
Total Health 
0.07% 
0.27% 
 
 
 
Total 
Police 
Fire 
Normal Cost 
15.28% 
17.56% 
Unfunded Amortization 
11.55% 
5.48% 
Total 
26.83% 
23.04%

Public Safety Personnel Retirement System Pension Fund Policy 
Fiscal Year 2027 
3 
 
 
 
 
Funded Ratio Target 
 
The City’s targeted funded ratio is 100% in fifteen years. At a funded status of 100% the plan is considered 
fully funded and the assets equal the liabilities of the plan (meaning the current taxpayers and members 
have paid their fair share of the costs of the plan). 
 
Although an actuarial valuation is performed separately for each PSPRS employer, the health of the entire 
PSPRS system has an impact on our contribution rates and funded ratio. Factors affecting our funded ratio 
include asset gains and losses. Other factors, such as an increase or decrease in membership size, total 
dollars contributed, and number of retirees in the system, also play into our funded ratio. 
Each year, as part of the budget adoption process, the City will adopt a resolution to formally accept the 
current City share of the assets and liabilities under PSPRS as identified in the most recent Actuarial 
Valuation Report.