Valley institute sues to stop Phoenix pension spiking

PHOENIX — Arizona’s second largest city is doing away with pension spiking.

The city of Tucson will stop letting police, firefighters and other city workers count things like their unused sick and vacation time as compensation when figuring out their retirement benefits. The decision was made after the Tucson City Attorney’s Office determined that pension spiking is illegal under Arizona law.

The Goldwater Institute agrees.

“There’s a state law that’s real clear that you can’t use things like vacation leave or sick leave for retirement benefits,” said Jon Riches, attorney for the Goldwater Institute.

The institute is suing the city of Phoenix for allowing pension spiking. Riches said, not only is pension spiking illegal, it also puts a big burden on taxpayers.

“Phoenix pension costs alone have increased over the last 10 years from about $7.2 million to over $120 million today,” he said.

The lawsuit is currently making its way through the courts.

“Just last week, our clients, Phoenix taxpayers, filed what’s called a preliminary injunction to ask the court to stop the pension spiking in Phoenix while the court reviews all of the underlying issues in the case,” Riches said.

The judge is now in the process of scheduling a briefing in the case.

In October, the Phoenix City Council approved a plan that would do away with any future pension spiking, but allows workers to continue doing it until July. The Goldwater Institute said that’s illegal, but Mayor Greg Stanton is satisfied with the decision.

“The pension spiking that we passed, moving forward, would say that you cannot allow for pensionability of things like a car allowance, or phone allowance, or vacation payback or any of that moving forward,” he said. “We just did not ‘claw’ back for those benefits that had already been accrued. That would have likely been illegal.”

Stanton said he would have more comment about Tucson’s decision after he receives a full briefing about it.