A newly created panel will study the Tucson, Ariz. police and firefighter retirement systems as the city seeks to avoid huge payments in the future for the plans, which have less than one active member for each retiree.
“The ratio between actives to retirees is really what is driving this,” said Finance Director Kelly Gottschalk at last week’s city council session when the task force was created.
The contribution rate in fiscal 2014 will be 44% of the annual salary for a covered employee. Without changes, the city said, the contribution rate could be 66% or more of the annual salary by 2027.
Other area police forces, including municipalities and college systems, have much lower contribution rates. Scottsdale will contribute 26.4% of police and fire salaries into its system in fiscal 2014, while Phoenix’s contributions are 34.5%.
Tucson’s annual payments into the retirement systems have gone from $5 million in 2004 to an expected $42 million in 2014. The city’s contribution rate for the police system has increased by 99% since 2008, with an 80% increase in the firefighter plan.
Unfunded liabilities for Tucson’s public safety systems are set at 50%, or about $540 million.
In contrast to the public safety systems, Tucson’s pension plan for municipal employees requires a city contribution of 28% of annual salaries. The $940 million program has an unfunded liability of 37%.
