Byron Schlomach

Support Public Pension Reform

Posted on March 13, 2012 | Author: Byron Schlomach
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I’ll be blunt. Last year’s tepid reforms to the state’s pension systems were not enough.

Those reforms were probably about as far as the legislature could go and keep the pension systems in place for all future and existing public employees. But the only reform that can begin to dig us out of the financial hole pension systems represent would move all new employees to 401(k) plans. So far, that has been more than the legislature has wanted to bite off.

In the meantime, even the modest reforms passed last year have been under legal assault. The state recently lost a lawsuit in its bid to require employees in the Arizona State Retirement System (ASRS) to contribute a greater share of the pension system’s costs. Another lawsuit by judges would block any increases in their share of pension system costs and block modest limits on cost of living adjustments.

Judges participate in the Elected Official Retirement Plan (EORP) where employee contributions have been held to 7 percent of salary for at least a decade. Meanwhile, taxpayers are now contributing an average rate of almost 30 percent of salary, up from 7 percent a mere 10 years ago.

At least ASRS participants see their contributions rise and fall with taxpayers’. These judges are insisting that they not face any of the risk of their own retirements, even while they are still working.

Representative Kavanagh has proposed HCR 2060, a constitutional amendment to explicitly allow increases in EORP member pension fund contributions and to allow reductions in cost of living adjustments. This is minimal protection for taxpayers, especially when the judges who decide whether reforms are legal have a conflict of interest with the taxpayers they are sworn to protect.

Learn more:

Arizona Capitol Times: Judge overturns Arizona pension law change

Arizona Republic: Put-upon judges to defend their cushy pensions -- in court

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