Res 2646 FY 27 Public Safety Personnel Retirement System Pension Funding Policy

RESOLUTION NO. 2646 
 
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE CITY OF TOLLESON, 
ARIZONA, ADOPTING A PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM 
(PSPRS) PENSION FUNDING POLICY TO CLEARLY COMMUNICATE THE COUNCIL’S 
PENSION FUNDING OBJECTIVES, ITS COMMITMENT TO ITS EMPLOYEES AND THE 
SOUND FINANCIAL MANAGEMENT OF THE CITY, AND TO COMPLY WITH A.R.S § 
38-863.01. 
 
WHEREAS, the City of Tolleson (the “City”) is a participant in the State of Arizona’s Public 
Safety Personnel Retirement System (“PSPRS”), a multiple-employer pension plan; and  
 
WHEREAS, under an agent multiple-employer plan, the City has two trust funds, one for 
police employees and one for fire employees, reflecting the City’s assets and liabilities. Under 
this plan, all contributions are deposited to, and distributions are made from the fund’s assets; 
and 
 
WHEREAS, the City Council desires to adopt a PSPRS Pension Funding Policy, in order to 
clearly communicate the pension funding objectives of the City’s PSPRS individual plan; and 
 
WHEREAS, A.R.S. § 38-863.01 requires each participating agency in PSPRS shall adopt a 
pension funding policy annually for employees who were hired before July 1, 2017 reflecting the 
pension funding objectives of the participating agency’s PSPRS individual plan; and 
 
WHEREAS, the City Council has determined that adoption of the PSPRS Pension Funding 
Policy is in the best interests of the City and its residents. 
 
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF 
TOLLESON, ARIZONA, as follows:  
 
Section 1.  The recitals above are hereby incorporated as if fully set forth herein. 
 
Section 2.  The City of Tolleson, Arizona, hereby adopts the PSPRS Pension Funding Policy 
attached hereto as Exhibit A and incorporated herein by this reference. 
 
Section 3. The City of Tolleson, Arizona, formally accepts the City’s share of the assets 
and liabilities, based on the actuarial valuation report. 
 
Section 4.  The Mayor, City Manager, City Clerk and City Attorney are hereby authorized 
and directed to take all steps necessary to carry out the purpose and intent of this Resolution. 
 
 
[SIGNATURES ON FOLLOWING PAGE]

CITY OF TOLLESON RESOLUTION NO. 2646 
JUNE 9, 2026 
PAGE 2 
 
 
 
PASSED AND ADOPTED by the Mayor and Council of the City of Tolleson, Arizona, on this 
9th day of June, 2026. 
 
 
____________________________________ 
Juan F. Rodriguez, Mayor 
 
 
                                                   ATTEST: ____________________________________ 
 
Crystal Zamora, City Clerk 
 
 
       APPROVED AS TO FORM: ____________________________________ 
 
Justin Pierce, City Attorney

CITY OF TOLLESON RESOLUTION NO. 2646 
JUNE 9, 2026 
PAGE 3 
 
 
 
EXHIBIT A 
TO 
RESOLUTION NO. 2646 
 
[Public Safety Personnel Retirement System Pension Funding Policy] 
 
See following pages.

CITY OF TOLLESON RESOLUTION NO. 2646 
JUNE 9, 2026 
PAGE 4 
 
 
 
City of Tolleson 
Public Safety Personnel Retirement System 
Pension Funding Policy 
June 2026 
 
 
The intent of this policy is to clearly communicate the Council’s pension funding objectives, 
its commitment to our employees and the sound financial management of the City, and to 
comply with Arizona Revised Statute § 38-863.01. 
 
Several terms are used throughout this policy:  
 
Unfunded Actuarial Accrued Liability (UAAL) – Is the difference between trust assets 
and the estimated future cost of pensions earned by employees. This UAAL results from 
actual results (interest earnings, member mortality, disability rates, etc.) being different 
from the assumptions used in previous actuarial valuations.  
 
Annual Required Contribution (ARC) – Is the annual amount required to pay into the 
pension funds, as determined through annual actuarial valuations. It is comprised of two 
primary components: normal pension cost – which is the estimated cost of pension 
benefits earned by employees in the current year; and, amortization of UAAL – which is 
the cost needed to cover the unfunded portion of pensions earned by employees in 
previous years. The UAAL is collected over a period of time referred to as the 
amortization period. The ARC is a percentage of the current payroll.  
 
Funded Ratio – Is a ratio of fund assets to actuarial accrued liability. The higher the 
ratio the better funded the pension is with 100% being fully funded.  
 
 
 
 
Intergenerational equity – Ensures that no generation is burdened by substantially 
more or less pension costs than past or future generations. 
 
The City’s police and fire employees who are regularly assigned hazardous duty participate 
in the Public Safety Personnel Retirement System (PSPRS). 
 
Public Safety Personnel Retirement System (PSPRS)  
 
PSPRS is administered as an agent multiple-employer pension plan. An agent multiple-
employer plan has two main functions: 1) to comingle assets of all plans under its 
administration, thus achieving economy of scale for more cost-efficient investments, and 
invest those assets for the benefit of all members under its administration and 2) serve as 
the statewide uniform administrator for the distribution of benefits.  
 
Under an agent multiple-employer plan each agency participating in the plan has an 
individual trust fund reflecting that agencies’ assets and liabilities. Under this plan all

CITY OF TOLLESON RESOLUTION NO. 2646 
JUNE 9, 2026 
PAGE 5 
 
 
 
contributions are deposited to and distributions are made from that fund’s assets, each fund 
has its own funded ratio and contribution rate, and each fund has a unique annual actuarial 
valuation. The City has two trust funds, one for police employees and one for fire 
employees. 
 
Council formally accepts the assets, liabilities, and current funding ratio of the City’s PSPRS 
trust funds from the June 30, 2025 actuarial valuation, which are detailed below. 
 
 
Trust Fund 
Assets      
Accrued 
Liability 
Unfunded 
Actuarial Accrued 
Liability 
Funded 
Ratio 
Tolleson Police 
22,684,482 
22,577,788 
   (106,694) 
100.5% 
Tolleson Fire 
27,001,183 
27,300,729 
   299,546 
98.9% 
City Totals 
49,685,665 
49,878,517 
   192,852 
99.6% 
 
 
PSPRS Funding Goal  
 
Pensions that are less than fully funded place the cost of service provided in earlier periods 
(amortization of UAAL) on the current taxpayers. Fully funded pension plans are the best 
way to achieve taxpayer and member intergenerational equity. Most funds in PSPRS are 
significantly underfunded and falling well short of the goal of intergenerational equity.  
 
The Council’s PSPRS funding ratio goal is 100% (fully funded) by June 30, 2036. 
Council established this goal for the following reasons:  
• 
The PSPRS trust funds represent only the City’s liability  
• 
A fully funded pension is the best way to achieve taxpayer and member 
intergenerational equity  
• 
The fluctuating cost of an UAAL causes strain on the City’s budget, affecting our 
ability to provide services 
 
Council has taken the following actions to achieve this goal:  
• 
Maintain ARC payment from operating revenues – Council is committed to 
maintaining the full ARC payment (normal cost and UAAL amortization) from 
operating funds. The estimated combined ARC for FY27 is $645,111 and will be able 
to be paid from operating funds without diminishing City services. 
• 
Additional payments above the ARC have been budgeted and will be made, if 
necessary, as follows: 
o $2.0M for FY 2026 
o $1.5M for FY 2027

CITY OF TOLLESON RESOLUTION NO. 2646 
JUNE 9, 2026 
PAGE 6 
 
 
 
Based on these actions, the Council plans to achieve its goal of 100% funding by June 30, 
2036, in accordance with the amortization timeline set forth by the PSPRS June 30, 2025 
Actuarial Valuation.