NW Valley Times

The city of Peoria, Arizona, approved a budget amendment June 6 to catch up on pension payment requirements for the city's local first responder departments.

Mayor Jason Beck and city officials from Peoria voted on a $6 million budget amendment to transfer a lump sum from their general fund into their public safety retirement accounts. City Manager Henry Darwin and chief financial officer Kevin Burke introduced the item to the council, which came as a result of their vote back in May 2022 to create a pension liability payment plan.

The city of Peoria is a part of an aggregate investment group with other nearby municipalities, including their pension obligations, called the Public Safety Personnel Retirement System (PRPRS). All the money goes into one main investment pot, although each city is liable for its individual department and employee contributions within the whole. 

This system means all employee benefits are the same across all participating municipalities, which “puts us on an equal playing field” according to Burke, and “employees can move from one to the other and keep their benefits,” which is very rare in the public safety professions.  

Peoria must fund its portions of the police and fire departments 100% by 2036. 

As of June 30, 2022, the Peoria police pension plan was funded 76.4% and the fire department pension plan was funded 77.1%. From the same date, the consolidated plan was funded 65.3%. 

“Based upon actuarial assumptions this will require a total of $270 million in contributions between 2020 and 2036 to achieve,” Beck said.  

The city has decided that, instead of paying its required minimum $18 million each year up until 2036 to fully fund the plan, it will make more aggressive payments early on to save money in the long run. 

To accomplish this, the city has been tracking surplus funds at the end of the fiscal year and making a budget amendment to transfer those extra funds into the pension plan, cutting down its obligation as quickly and responsibly as it can.