Judges Win Partial Victory Against Ariz. Pension Reform

March 29, 2013 (PLANSPONSOR.com) – Arizona state lawmakers acted illegally in requiring most sitting judges in that state to pay more into their retirement system, a judge ruled.

The Arizona Daily Star reported that Maricopa County Superior Court Judge Douglas Rayes found Arizona judges were “effectively made a promise about their pensions when they went on the bench,” namely that they would be paying 7% of their salary into their retirement system, the Elected Officials Retirement Plan (EORP).

However, legislation in 2011 raised the employees’ (i.e., judges’) contributions to 10% of their salary, with automatic increases up to 13% depending on the retirement system’s performance. Also changed was how cost-of-living adjustments (COLA) were calculated.

Rayes noted though that a 2000 law said benefits for participants of the EORP do not vest when they are hired, but rather when they retire, the news report said. This means those Arizona judges not already on the bench in 2000 are not entitled to the same legal protections against higher contributions and COLA.

The decision was made in a case filed by Arizona Supreme Court Chief Justice Rebecca White Berch and Maricopa Superior Court Presiding Judge Norm Davis to convince the Arizona Senate Finance Committee to exempt judges from a bill to close out the EORP to new judges and place them into a 401(k)-style plan (see “Judges Seek Exemption from Arizona Pension Reform”).

If passed, the bill, HB 2608, would take effect January 1, 2014.