2014 Phoenix Pension Reform Initiative
Submitted by admin on Mon, 11/11/2013 - 13:42
LIBERTARIAN SCORE B
Background: The Phoenix Pension Reform initiative was filed with the Phoenix City Clerk on March 11, 2014 with the submission of 54,000 signatures. The clerk validated 33,000 signatures on April 25, 2014 more than the minimum 25,480 signatures required to appear on the November 4th, 2014 ballot. The initiative will amend the city charter to eventually eliminate the underfunded pension system by introducing reforms. Phoenix has only funded 50% of their public employee pension plan with unfunded liabilities greater than ($2,000,000,000) 2.0 billion dollars. The deterioration in funding and performance has escalated dramatically during the financial crisis.
This initiative will end pension spiking that allows public employees to significantly boost pension payments by inflating the hours worked during their last two years of employment prior to retirement. Padding hours includes using accrued vacation, car allowances and sick days. Pension spiking currently adds a $12,000,000 annual liability to Phoenix's underfunded plan.
Analysis: The Phoenix City Council has failed to act in the interest of Phoenicians proposing only minor reforms that "kick the can down the road" and opposing the transition to a defined benefit plan. Changes that bring this plan inline to what is offered by local employers offers some protection against future tax increases and service cuts.
- Initiative Eliminates Pension Spiking.
- Initiative Eventually Eliminates Unfunded Pension Liabilities
- Initiative Protects Taxpayers
- Initiative Protects Core City Services
Conclusion: It's no secret that public employee pension plans have caused serious problems with municipal budgets. Look no further than Detroit for evidence of fraud and mismanagement by short sighted politicians. The Maricopa County Libertarian Party supports this initiative and public pension reform that changes defined benefit to defined contribution. Pension spiking hurts all citizens and is nothing more than institutionalized public theft.