This is general information, and retired individuals should check their mailboxes or bank accounts to see what they will be paid. The amount will depend on when one retired. There is a lot going on behind the scenes with potentially big changes proposed before the next general election. I should have more posts about COLA's soon as a clearer picture emerges about what exactly will be on the ballot. I usually end these posts with the request to "Stay tuned," but the next five months are a time when everyone really should take that to heart. We may wake up the morning after November 4, 2014 with permanent, unchallengable modifications to PSPRS. So, once again, STAY TUNED.In compliance with the Supreme Court decision regarding post benefit increase (PBI) payments, the Public Safety Personnel Retirement System is issuing a retroactive post benefit increase payment for its eligible members (those members who retired effectively on or before July 1, 2011). Please read the following notice for details regarding this payment.Retroactive PBI payments:
- Notifications of the retroactive post benefit increase (PBI) payment were sent on Tuesday, June 10, 2014 via U.S Mail and e-mail. Your notification contains the exact dollar amount you will receive for the retroactive post benefit increase.
- Eligible members will receive their retroactive PBI payment in the same manner they receive their monthly pension payment.
- Checks will be mailed on Tuesday, June 10, 2014. Please allow 5-10 business days for U.S. Mail delivery.
- Direct deposit payments are being sent Tuesday, June 10 and Wednesday, June 11, 2014.
- Retroactive PBI payment information will also be available in the Members Only site (click here). Check your Member Account Record under the section "PBI History."
Public Safety Retroactive PBI payments (per member) July 2012 $6.07 per member ($159.13 total per member) July 2013 $121.19 total per member
CORP Retroactive PBI payments (per member) July 2011 0.57% additional paid July 2012 1.95% additional paid July 2013 0.55% additional paid July 2014 PBI payments:
EORP Retroactive PBI payments (per member) July 2011 1.53% additional paid July 2012 4.00% additional paid July 2013 4.00% additional paid
Requesting Changes:
- In July 2014, the PBI will return and be awarded as usual.
- The July 2014 PBI payment will be included in the regular pension payment on July 31, 2014.
- The amount of the July 2014 PBI payment is currently being figured by the PSPRS actuaries. This information is expected to be available at the end of June 2014.
For the most up-to-date information, please check this area of the PSPRS website, or listen to the PSPRS voicemail greeting (602-255-5575), as it is frequently updated with time sensitive notices.
- Member information changes (for mailing address, email address, etc.) are not accepted over the phone; they must be submitted in writing.
- Retirees can submit change of address, telephone number, direct deposit information, and tax withholding elections through the Members Only site (click here and go to "Personal Data Changes")
- All other changes must be requested by completing the applicable form and submitting it to the PSPRS Administrative Office. Click here for a list of forms available for download to request changes to your account.
Information and analysis of the Arizona Public Safety Personnel Retirement System (PSPRS) and issues that affect public defined benefit pensions.
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Wednesday, June 11, 2014
Better late than never: PSPRS pays retroactive COLA's
For those of you who haven't had a chance to visit the PSPRS website, here is the latest on the permanent benefit increases (aka COLA's) that retirees are due in the aftermath of the Fields case:
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Hi, I have a comment about the COLA's...
ReplyDeleteOnce again, it seems that CORP retirees are getting screwed, blued, and tattooed by the PSPRS!
If you look at the above numbers, you'll see that CORP is getting a .57% for July 2007. This is because that year we received a 3.43% COLA vs. PSRS's 4%. So PSPRS is making good on this one. No issue here.
For 2012 We are receiving a whopping 1.95% COLA. That year, PSRS received a less than 4% COLA, and per the chart above, they are now receiving the rest of that COLA. So...CORP gets 1.95%, and PSRS gets their full 4%.
For July 2013, PSRS is getting approximately 3%. CORP is getting .55%. Why is this?
If you go to the PSPRS web site, look at the annual reports for BOTH PSRS and CORP and compare them...You will find that both plans earnings/losses for these years are the same. The biggest difference that I could find, (other than the number of participants in each plan) is that CORP is better funded than PSRS. Yet we still get only the crumbs.
If you read ARS 38-905 (CORP) and ARS 38-856 (PSRS), you will see that they are almost identical and that benefit increases are calculated the same way. The only difference that I can see is that for CORP members; the COLA is a percentage of each individual's pension. For PSRS, it is a percentage of the "average" pension amount for the plan.
Because Corrections and Detention Officers are paid far less than Police Offcers/Deputy Sheriffs, our raises, even at the full 4% are usually about 1/2 to 2/3's as much. I don't think there are many CO/DO's retiring w/ a 6 figure pension, which helps bump up the average in PSRS.
What I would like to know is:
1. WHO decides the amount of the COLA.
2. If the earnings/losses of PSPRS and CORP are identical, why is the percentage of the COLA for CORP so much less?
Thank you for your time and for this blog.
The reason is simple my friend, Fire and Police are the at the TOP OF THE FOOD CHAIN. While we are considered 'civilian' Correctional Officers (i.e. prison guard wannabee cops) and are therefore bottom feeders. When I graduated COTA in 1986, I made $15,600 a year while Phoenix Police were hiring recruits in at $19,000. Nowadays, a new Correctional cadet makes $31k and tops out at $39k but police/fire are coming in mid $50's. With overtime, some officers are making up to $100k+. Also, PSPRS employees used to be able to add all their $50-70 an hour off-duty work including overtime into their retirement calculations. When I retired, CO's still could add any overtime into the calculation. What will fix these inequities are making COTA a certified peace officer academy like California did. An additional action California took years ago was legislating that a Correctional Officer cannot be paid less than 5% of the highest paid Police Departments in California. Also, by making them AZPOST Peace Officers, a CO could then promote into positions such as I&I. This as opposed to the current system where I&I administrators who are all former police, hiring their crony friends from their old police departments into investigator positions. At least I made it out and alive to retirement.
DeleteSomething I left out for all you CORP members/retirees. Were you aware that all these years while we were paying 8.5% that DPS officers were and are paying like 3%???? It's true!!! DPS subsidizes the contributions of it's officers as an incentive. DPS covers the rest right out of their Departments budget.We pay/paid three times as much contribution off our paltry salary and wind up getting screwed out a full 4% COLA. Police/Fire get $160 a month while CO's can't even get the full $65 we are owed.
DeleteI apologize, 2007 should be 2011. Blog admin, please feel free to edit.
ReplyDeleteThank you,
Thank you for your comment. Unfortunately, I am not as familiar with CORP as I am with PSPRS. I was not aware that the CORP COLA was paid based on individual retirement amounts and not an average. That explains why the PSPRS COLA is expressed in dollars and not percentages.
DeleteI have not seen the aggregate numbers for the excess earnings, nor I have I seen a breakdown for each individual plan. As I am sure you know all three plans are invested as a pool, and returns or losses are divided proportionally. However, because PSPRS is so much larger (76% of the aggregate) than either CORP (19%) or EORP (4%), it gets the bulk of returns or losses. The math for calculating COLA's it is then up to the administrators based on the number of eligible retirees and the actual dollar amount of excess returns available. Not having access to all the numbers, this is as much as I can say.
I don't know if CORP's dollar share of excess returns was not sufficient to pay a full 4% for FY 2013 or FY 2014. This is further complicated by the fact that, as you point out, CORP is better funded than PSPRS or EORP. This meant that even under new COLA formula CORP retirees still may have gotten a COLA when PSPRS and EORP retirees were ineligible because their pensions were below 60% funded.
I suspect that once PSPRS administrators took the dollar amount of CORP's excess returns, less any COLA's already paid, they arrived at the percentages listed. All excess funds being exhausted, the listed percentages were the maximum that could be paid. That is my best guess. I hope this give you some answers to your questions.
Thank you for getting back to me on this.
DeleteI suspected (but didn't know as a fact) that all plans invested as a pool.
I called down to PSPRS on Friday to try and get some answers. One thing that I was repeatedly told was that all 3 plans are completely separate.
After a couple of transfers, I spoke w/ a gentleman by the name of Jared. He was very polite and listened to all of my questions. When I asked about the egregious (in my mind) difference in the COLA's awarded PSRS and CORP (considering the same percentage of losses and gains for 2012 & 2013). He gave me an analogy of 2 people making the same money, but with different bills. He was unable to provide me with specifics regarding the "bills" of CORP vs. PSRS. In other words I got nowhere...
I would just like to see the numbers. How was the amount available for COLA's determined in light of the Fields decision and FOP law suit?
Even w/ the majority of assets (76% to CORPS 19%), How can PSRS get a COLA that is approximately 6 times the amount of CORP? PSRS has 30,519 members w/ 10,159 retired and 1,482 in DROP (including DROP, about 38% of PSRS members are retiree's). CORP has 19,853 members w/ 3,810 retired (about 19% of CORP members are retired). The stats above are from the 2013 PSRS and CORP annual reports on the PSPRS.com web page.
CORP is better funded than PSRS. CORP's end of year balance increase was slightly better than PSRS (9.84% vs. 9.36%). CORP has 1/2 the amount of retirees (as a percentage) vs. PSRS. With all these things considered, CORP gets a COLA that is approximately 1/6 that of PSRS.
The difference between the 2 COLA's is amazing. The $121.19/month to PSRS means that the retiree can take their significant other out for a very nice meal an extra time a month. For me, the 0.55% means that I can take my wife to McDonalds for a meal (No "super sizing" honey!) once a month.
I have my opinions as to why the egregious difference in the amounts of the COLA's, but we all know that old saying about opinions...so I will keep them off of this forum.
Again, thank you for having this forum, and thank you for letting me say my peace. Maybe someday I'll be able to get answers; however, I'm not counting on it.