$2.3M required for Apache Junction to keep pace with Public Safety Personnel Retirement System obligations

Councilmember Gail Evans and Vice Mayor Chip Wilson at a City Council meeting. (Independent Newsmedia/Arianna Grainey)

The City of Apache Junction will pay $2.3 million this fiscal year to maintain its annual required contribution payment for funding police employees retirement.

The City Council this past June voted to approve a policy for Public Safety Personnel Retirement System pension funding.

Some of the objectives of the policy include how the city plans to maintain the stability of its contributions and how and when the city’s funding requirements will be met, Donna Meinerts, the city’s finance director, said at the council’s June work session.

“Annual requirements of the policy are to adopt the pension-funding policy that is formally going to accept our share of the PSPRS assets and liabilities,” she said to the council.

“The annual required contribution and the unfunded portion — unfunded liability — are both paid biweekly through payroll deductions, so that’s how we’re meeting the city’s funding requirements,” Ms. Meinerts said.

House Bill 2097 requires cities and towns to establish a pension-funding policy that is adopted annually beginning on or before July 1, Ms. Meinerts said in a memo to the council.

Dedicated revenue in the city includes a tax rate effective Sept. 2, 2016-Sept. 1, 2026 of 0.2% for mandatory payments to the Public Safety Personnel Retirement System and unfunded liability related to the system, according to the memo.

Apache Junction Police Department employees are in the Public Safety Personnel Retirement System. (AJPD)

The Public Safety Personnel Retirement System provides retirement benefits and programs to nearly 59,000 active members, retired members and surviving beneficiaries. It was established on July 1, 1968, to provide a uniform, consistent and equitable statewide retirement program for Arizona’s public safety personnel, according to psprs.com.

The retirement system is administered as an agent multiple-employer pension plan. Each agency participating in the plan has an individual trust fund reflecting that agencies’ own funded ratio, contribution rate and annual actuarial valuation, the policy approved by the council states.

The City of Apache Junction’s estimated combined annual required contribution for fiscal year 2019-20 of $2,355,532 will be able to be paid from operating funds without diminishing city services, according to the policy.

The city’s pension funding for police retirement has $13,622,307 in assets and $37,767,601 in accrued liability, with $24,145,294 in unfunded actuarial accrued liability for a funding ratio of 36.1%, the policy states.

“The City of Apache Junction plans on paying down our unfunded liabilities in accordance with the payment schedule provided by the PSPRS actuary with a payoff date of June 30, 2036,” it states.

Editor Richard Dyer can be reached at rdyer@newszap.com

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.

Facebook Comment