| AGENDA ITEM #: 7. DATE: 02/08/2021 CAR #: {ud_fi4} |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | ADOPT PUBLIC SAFETY RETIREMENT SYSTEM FY2022 FUNDING POLICY |
| STAFF PRESENTER(S): | Doug Sandstrom |
OTHER PRESENTER(S):
None
SUMMARY:
Adopt the Public Safety Personnel Retirement System (PSPRS) FY2022 Pension Funding Policy.
Recommendation:
Adopt the Public Safety Personnel Retirement System FY2022 Pension Funding Policy. (Doug Sandstrom, 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. Although the provisions included in the attached policy mirror those adopted in prior years, the financial information presented consists of only tier I & tier II in accordance with the statutory requirements of Laws 2018, Chapter 122. Prior policies presented information which included tier III employees as well. The City of Goodyear 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 Public Safety Personnel Retirement System (PSPRS) FY2022 Pension funding policy continues to commit the city to funding annual contributions from operating revenues and further commits us to pre-pay all employer and a portion of employee contributions. These pre-payments maximize interest earnings which increases the financial strength and sustainability of our public safety pensions. Included in the pre-payment of 100% of budgeted city funds are all amounts budgeted for vacant positions, as well as funds budgeted for employees in the DROP program for which no city contribution is required. By committing 100% of all budgeted funds the City of Goodyear is actively reducing the unfunded liabilities of the system and increasing the long-term sustainability of our public safety pensions.
To fulfill the statutory requirement of Laws 2018, Chapter 122 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:
To fulfill the statutory requirement of Laws 2018, Chapter 122 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:
- 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:
- How to maintain stability of the governing body's contributions to the system.
- How and when the governing body's funding requirements of the system will be met.
- Define the governing body's funded ratio target under the system and the timeline for reaching the targeted funded ratio.
- Formally accept the employer's share of the assets and liabilities under the system based on the system's actuarial valuation report.
- Post the pension funding policy on the governing body's public website.