Posted by AzBlueMeanie:
The Arizona Senate today will consider major changes to three public-pension systems with a bill that would force police, firefighters, politicians and corrections officers to pay more to fund their retirements and suspend cost-of-living raises for retirees. Arizona Senate set to consider big changes to pensions:
Senate Bill 1609 would improve the financial health of three underfunded Arizona pension plans. But it would provide no immediate relief for taxpayers, who have been forced to pay more to prop up the Corrections Officer Retirement Plan, the Elected Officials' Retirement Plan and the Public Safety Personnel Retirement System…
Because? The banksters of Wall Street destroyed the value of everyone's retirement and pension funds by nearly destroying the World's financial system and economy with casino capitalism, betting on highly speculative and exotic investment devices like derivatives and credit default swaps, causing the Bush Great Recession, the worst economic catastrophe since the Great Depression. The villains here are the banksters of Wall Street and hedge fund managers, not public employee unions.
The trustee of the state pension funds, the state of Arizona, owes both fiduciary duties and contractual obligations to manage the funds in a fiscally prudent manner and not to engage in risky or highly speculative investments to preserve the value of the pension funds for the benefit of future retirees, the beneficiaries. This detail always seems to get left out of reporting.
The legislation makes no changes to the Arizona State Retirement System, the state's largest pension plan, which also has been targeted for changes by other legislation.
Sen. Steve Yarbrough, R-Chandler, SB 1609's sponsor, said the additional money raised by the bill would fund the trusts' deficits, not lower contributions from public agencies. The plans are funded at levels ranging from nearly 66 percent to almost 83 percent. Yarbrough said that over time additional funds raised by the legislation would prevent employer contributions from skyrocketing further.
Sen. Yarbrough's bill is more reasonable than the ideologically crafted bill to be offered by House Speaker Kirk Adams (R-Mesa). The Senate Finance Committee, which Yarbrough chairs, will hold a special hearing at 9 a.m. today in Senate Hearing Room 1 to debate the bill. Yarbrough expects the bill to pass and head quickly to the full Senate.
The Senate plan being introduced today is different than a House proposal by Speaker Kirk Adams, R-Mesa, who wants to more significantly raise contributions by employees in the three pension programs to lower the cost for employers, and thereby taxpayers.
A spokesman for Adams said the speaker is confident he can work with his Republican colleagues in the GOP-controlled Senate to pass pension reform. The Governor's Office said it had no comment.
Legislation to change the pension programs was proposed after The Arizona Republic in November published an eight-part series that found the public's cost to help fund these pensions had grown significantly. In the past 10 years, as the stock market has twice plunged, the public's tab to fund the pension systems has increased 232 percent for corrections, 325 percent for elected officials and 574 percent for public safety, according to records obtained by The Republic.
And yet, the Arizona Republic is on something of a jihad against the public employee unions, carrying the water for right-wing think tanks that want to end public employee pensions rather than to honor the state's fiduciary and legal obligations as the trustee of the pensions. In essence, they are making an argument for default. This is unacceptable.
Read the Pew Center of the States' report on underfunded state pension systems and potential solutions to the problem. "The Trillion Dollar Gap" (PDF)