Title
Resolution to Authorize Increase to Amortization Period for Public Safety Personnel Retirement System Plan and to Establish the Public Safety Personnel Retirement System Reserve Fund (Resolution 21552)
Description
Request to authorize the City Manager to request the Public Safety Personnel Retirement System (PSPRS) increase the amortization period for the PSPRS plan from 20 years to 30 years and authorize the City Manager to submit a written request to the PSPRS Board of Trustees to increase the amortization period for the PSPRS plan. Future budget processes, beginning with Fiscal Year (FY) 2018-19, will reflect City Council's intention to pay more based on a 25-year amortization schedule. Further request to authorize the City Manager to establish the PSPRS Reserve Fund.
Report
Summary
The Arizona State Legislature enacted HB2485, which allows employers who contribute to PSPRS, like the City of Phoenix, to make a one-time request to the PSPRS Board of Trustees to increase the amortization period from 20 years to 30 years. Under HB2485, the City may choose the longer amortization period and make it apply to the June 30, 2016 actuarial valuation that sets out the City's contribution to PSPRS. This action will lower the City's employer contribution rate for FY 2017-18. To exercise this right under HB2485, the City must make a one-time request to lengthen the amortization period from 20 years to 30 years and submit this written request to the PSPRS Board of Trustees. PSPRS must receive this request in time for its June 28, 2017 board meeting. As discussed in the Policy Session on June 13, 2017, the City can pay more than the actuarial valuation.
Concurrently, the City seeks to establish the PSPRS Reserve Fund to hold any excess funds generated by the increased amortization period in FY 2017-18 as well as any other funds designated by the City Council. These excess funds will be held in reserve to pay any City obligation to PSPRS.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance Department.