PowerPoint Presentation (Added on 6/24/22)
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Council Workshop Public Safety Personnel Retirement System (PSPRS) Funding Policy June 28, 2022 2 Overview • Background • Pension Funding Policy • Council Feedback & Next Steps 3 Background • Arizona House Bill 2019 passed into law on April 3, 2018 –Codified into Arizona Revised Statutes section 38-863.01 –Required municipalities to adopt a pension funding policy for PSPRS –Policy must be adopted on or before July 1, 2019, and annually each year thereafter –Policy must be posted on the city’s public website 4 Background • The pension funding policy must include funding objectives that address: –How stability will be maintained for the required employer contributions –How and when funding requirements will be met –Define the funded ratio target and a timeline for reaching the target 5 Pension Funding Policy • Funding ratio goal is 100%(fully funded) by June 30, 2037 –Based on the June 30, 2021 actuarial valuation updated after issuance of COPS. –Council plans on using the 20-year amortization period –Maintain required contribution payment from operating funds –Formally accepts assets, liabilities, and current funding ratio • Assets of $616 million • Unfunded accrued liability of $33 million • Funded ratio of 94.9% 6 Pension Funding Policy • The Council issued Certificates of Participation in FY22 –One-time payment to PSPRS to pay down unfunded liability –Achieved a 94.9% funded level as determined through an updated actuarial report by the PSPRS actuaries. • The Council established a Pension Stabilization Reserve Fund –Restricted Fund –Used only for addressing future pension and unfunded liability needs –$20M from savings over two to three-year period Current ending balance for FY22 is estimated at $6.7M • Does not preclude the City from making additional contributions 7 Council Feedback & Next Steps • Council Feedback • Next Steps –Resolution to adopt funding policy • June 28, 2022