Pension Reform Proposals Introduced in AZ, WA, CA

The Arizona Republic reports that the proposal would require Arizona State Retirement System (ASRS) employees hired starting in July to work until they are 62 with 10 years of service, or 65 with less than 10 years of service, before they could retire. The measure would also force ASRS employers to make payments into the pension trust when they rehired ASRS retirees beginning July 2012. Currently, no payments are made for so-called double-dippers, according to the news report.  

In addition, under the proposal, cost-of-living adjustments for pensioners would end beginning this summer. Starting in January 2012, the way pensions are calculated for elected officials would change so they are more in line with what public employees receive for their pensions.  

The bill proposes to make police officers, firefighters, elected officials and corrections employees pay more for their pensions starting in July. Over a five-year period, they would eventually pay the same amount into their retirement as their employers, with the amount based on an employee’s wages.  

The proposal also calls for the Board of Investment, which reports to the Arizona treasurer, to complete a study by December 31 on the feasibility and cost of moving public employees to a 401(k)-style retirement plan. 

Reuters reports that Washington State Treasurer Jim McIntire and a bipartisan group of lawmakers are proposing to amend the Washington constitution to require state contributions to pension plans be sufficient to fund at least 80% of their long-term benefit costs. The constitutional amendment would also create a payment plan to pay-off the current unfunded liability in the pension system.