The Arizona Free Enterprise Club has launched an initiative campaign to reform the City of Phoenix pension and employee retirement system. The initiative will be called the Phoenix Pension Reform Act.
The initiative seeks to repair the broken pension system for City of Phoenix employees, which is currently only 62.2% percent funded. This initiative will also end the abusive practice of pension spiking, which allows city employees to receive six-figure pension windfalls that were never earned and are paid for by taxpayers.
The Phoenix Pension Reform Act would make changes to the way the pension system functions for new city employees hired after the initiative is approved by the voters and takes effect. Those changes would create a defined contribution system along the same lines as a 401K-style retirement plan for new city employees. Current employees would stay on the plan in which they are currently enrolled although they will have the option of switching to the new plan. The initiative does those who have already retired, or any participants of the Public Safety Retirement System (police and fire fighters).