Commission recommends PSPRS pension funding policy that holds contribution rates near current level

Mr. Gephart presented a draft PSPRS (public safety) pension funding policy required by Arizona statutes and told commissioners the town’s police and dispatcher plans are currently about 101%–102% funded. He said actuaries recommended lowering employer contributions (to roughly 10.47% from the current ~12%), but staff proposed keeping the higher contribution so the town maintains a 100% funding target amid recent MOU wage changes and market volatility.

Commissioners asked for clarifications about how the dollar figures were calculated and whether the actuarial numbers accounted for negotiated wage increases; staff explained the base rate calculation and said their payroll assumptions are conservative relative to the town’s known MOU increases. Mr. Gephart summarized the staff recommendation: continuing higher employer contributions would add approximately $214,000 in excess contributions next fiscal year, helping preserve the funded ratio and reduce the risk of a large future rate jump.

Commissioner Moonhart moved to recommend Town Council approve the updated PSPRS pension funding policy for the fiscal year ending June 30, 2027; Commissioner Croft seconded and the motion passed by voice vote.

Why it matters: Decisions about PSPRS contributions shift town budget capacity across fiscal years and affect long‑term pension liabilities; staff argued the tradeoff favors steadier, higher contributions now to avoid larger shocks later.

Next steps: The commission will forward the recommendation and supporting actuarial figures to Town Council for formal action.