| ITEM #: 4. DATE: 06/09/2025 AI #:2624 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | ADOPTION OF PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM (PSPRS) FY2026 PENSION FUNDING POLICY |
| STAFF PRESENTER(S): | Jared Askelson, Finance Director |
SUMMARY
Adoption of the (PSPRS) FY2026 Pension Funding Policy
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
Adopt the Public Safety Personnel Retirement System FY2026 Pension Funding Policy. (Jared Askelson, Finance Director)
FISCAL IMPACT
Adoption of this policy maintains all of our current budgetary practices related to pension funding.
BACKGROUND AND PREVIOUS ACTIONS
With the 2018 passing of House Bill 2097, every governing body of a PSPRS plan is required to pass a Pension Funding Policy no later than June 30th of each year and post the policy on the governing body’s website. Council has adopted the Pension funding polices for each year beginning with FY2019. As presented, the pension policy mirrors the prior year's policy with one addition clarifying that all unapplied contributions remaining at year end will be applied towards the unfunded balance. The "city of Goodyear Public Safety Personnel Retirement System FY2026 Pension Funding Policy" is based upon the model policy created by the League of Arizona Cities and meets all requirements of state law.
STAFF ANALYSIS
The proposed City of Goodyear PSPRS FY2026 Pension funding policy continues to commit the city to funding annual contributions from operating revenues. PSPRS administrative practices changed with regard to prepayment amounts, requiring all remaining balances to be automatically applied against unfunded liabilities rather than carried forward to the next fiscal year to be applied at the city's discretion. While this practice seeks to maximize potential interest earnings and reduce unfunded liabilities, it limits the city's flexibility with respect to pension funding. The policy has been revised to allow discretion in the amount of prepayment to limit the automatic application of remaining balances. The pension funds will receive additional funding only when approved by the City Council.
To fulfill the statutory requirements of Arizona Revised Statute 38-863.01, the city must annually enact a policy to outline and communicate the Council’s pension funding objectives as follows: Beginning on or before July 1, 2019, each governing body of an employer shall annually:
1. Adopt a pension funding policy for the system for employees who were hired before July 1, 2017. The pension funding policy shall include funding objectives that address at least the following:
3. Post the pension funding policy on the governing body’s public website.
The Public Safety Personnel Retirement System FY2026 Pension Funding Policy is included as Attachment A.
To fulfill the statutory requirements of Arizona Revised Statute 38-863.01, the city must annually enact a policy to outline and communicate the Council’s pension funding objectives as follows: Beginning on or before July 1, 2019, each governing body of an employer shall annually:
1. Adopt a pension funding policy for the system for employees who were hired before July 1, 2017. The pension funding policy shall include funding objectives that address at least the following:
a. How to maintain stability of the governing body’s contributions to the system.
b. How and when the governing body’s funding requirements of the system will be met.
c. Define the governing body’s funded ratio target under the system’s actuarial valuation report.
2. Formally accept the employer’s share of the assets and liabilities under the system based on the system’s actuarial valuation report.c. Define the governing body’s funded ratio target under the system’s actuarial valuation report.
3. Post the pension funding policy on the governing body’s public website.
The Public Safety Personnel Retirement System FY2026 Pension Funding Policy is included as Attachment A.