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Was it constitutional for Proposition 124 to replace PSPRS' permanent benefit increases with a capped 2% COLA?

In this blog I and multiple commenters have broached the subject of the suspect constitutionality of PSPRS' replacement of the old perma...

Friday, May 24, 2013

First they came for the Elected Officials Retirement Plan (EORP) . . .

This previous post discussed House Bill (HB) 2608, which would close the Elected Officials Retirement Plan (EORP) to new hires, and this article by Associated Press reporter Bob Christie, Arizona bill on politicians' pensions passes Senate on 2nd try, gives the latest information of HB 2608's progrss.

HB 2608 would lead to the eventual elimination of defined benefit pensions for elected officials and judges in Arizona.  The pension will continue for those retirees already in EORP as well as for those active members of EORP who have not yet retired, but future hires will be put into a new defined contribution plan.  As current Arizona legislators retire, lose reelection, or are term-limited out, the number of state-level decision-makers with a defined benefit pension like PSPRS will dwindle down over the years.  Judges with defined benefit pensions will also become rarer and rarer as current judges are replaced over the years.

HB 2608 will still need to return to the Arizona House to approve amendments made in the Senate and need Governor Jan Brewer's signature to be passed into law.  It has already passed in the Arizona House once and should easily pass again.  While I can find nothing that indicates the Governor's intentions, it seems unlikely that Republican legislators would have brought forth this bill without a good expectation that she would sign it.  While the passage of HB 2608 ostensibly should have no tangible impact on PSPRS since they are two separate systems, the symbolic impact of this bill is highly significant.

The legislature appears to be voluntarily giving up their own defined benefit pension.  Of course, none of those who are currently voting for it are giving up their own personal defined benefit pensions, but they are committing future legislators and judges to a less generous retirement.  This will create a two-tier system, not unlike the two-tier system in PSPRS for those hired before 2012 and those hired in 2012 and after, though the disparities between the two tiers for elected officials will be much greater than those in PSPRS.  Of course, today's legislators will save future legislators from any charges of hypocrisy if those future legislators want or need to enact more reforms to PSPRS, the Arizona State Retirement System, or the Corrections Officer Retirement Plan.  Going forward, this will be the real impact of HB 2608.


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