Compliance

Arizona High Court Rolls Back 2011 Pension Reform

Estimates show the Public Safety Personnel Retirement System will have to pay contribution refunds and retroactive benefit increases up to $220 million.

By Rebecca Moore editors@plansponsor.com | November 17, 2016

The Arizona Supreme Court has ruled that reforms to the Public Safety Personnel Retirement System (PSPRS) made in 2011 are unconstitutional.

The decision follows a 2014 ruling by the court in a case brought by Arizona judges that also found benefit reductions for retirees and requiring more contributions by judges violated the state’s constitution.

According to the Arizona Republic, the decision means hundreds of PSPRS members whose employee contributions were increased will receive refunds, while some retirees will receive retroactive benefit increases. The Prescott eNews says preliminary and unaudited estimates by PSPRS indicate that contribution refunds and retroactive pension increases could reach $220 million. However, the news report notes that these costs are offset by further pension reform that became law this year.

The ruling has no effect on the much larger Arizona State Retirement System, which covers state and local government workers and teachers.

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