Phoenix voters reject proposed change to city pension system

Nov 4, 2014, 11:40 PM | Updated: 11:41 pm

PHOENIX – Proposition 487, also known as the Phoenix Pension Reform Act, was rejected by voters Tuesday night by a wide margin.

The referendum would have replaced Phoenix’s pension system for new employees with a plan similar to 401(k) used by many companies.

The City of Phoenix Employees’ Retirement system currently functions under a defined benefit plan in which retirees are guaranteed payments based on their credited service and age, regardless of returns on the pension fund’s investments. The last time Phoenix passed a pension reform was in 2013, which raised the amount new employees can contribute their pay toward their investment from 5 percent to 14.8 percent.

The plan proposed by Prop 487 would have allowed new employees, not the employer, to carry the risk of market performance and require a set city contribution of 8 percent of an employee’s pay.

Supporters of the proposition said it would have addressed a drain on the city’s budget and deter pension spiking. According to the Citizens for Pension Reform Committee, the change would have saved taxpayers at least $400 million over the next 20 years.

However, opponents of the proposition argued that it could end up costing taxpayers money instead. They said an estimated $350 million in legal fees could be used defending against lawsuits because of the state and local laws that the proposition conflicts with.

City firefighters had been vocal about their opposition to 487 because they said it would eliminate disability-retirement and death benefits provided to public safety employees under the city’s pension system.

Catherine Alonzo, a spokeswoman for Fire Fighters Opposed to Prop 487, the group leading the fight against the measure, said that Phoenix voters made the right choice.

“They made a decision that was ultimately good for taxpayers, good for Phoenix public safety and good for the community as a whole,” she said.

Vice Mayor Jim Waring, a supporter, said although voters decided that Proposition 487 wasn’t the way to fix Phoenix’s pension issues, something still needs to be done.

“If you were against this initiative, now’s the time to step up with your plan to solve this problem,” he said.

Lifetime Windows & Doors

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

(City of Mesa Photo)...
Kevin Stone

CO+HOOTS co-working community opens in Mesa at Benedictine University

A new CO+HOOTS co-working community for entrepreneurs, startups, small businesses and students opened Thursday in Mesa.
7 hours ago
(Unsplash Photo)...

Police investigating homicide of 42-year-old man in south Phoenix

Police are investigating the homicide of a 42-year-old man who was found shot in his front yard in south Phoenix, authorities said Saturday.
1 day ago
(Pexels Photo)...

Police exchange late-night gunfire with man on Phoenix street

Police in Phoenix exchanged gunfire with a man late Thursday and later found him wounded at a home, where they took him into custody.
1 day ago
FILE - Jerry Emmett, who was born before women won the right to vote in the U.S., leaves the Yavapa...
Associated Press

Top election officials in Arizona county leave amid threats

The elected county recorder and the elections director in Arizona's Yavapai County are resigning after more than a year and a half of threats and heated criticism from backers of former President Donald Trump who accept his lie that he lost the 2020 election because of fraud.
1 day ago
(Facebook Photo/City of Mesa Police Department)...

Mesa police shoot at suspect who allegedly fled traffic stop; suspect outstanding

Mesa police fired shots at a suspect early Saturday after they allegedly fled during a traffic stop, authorities said. 
1 day ago
Deborah Sciortino...

Silver Alert canceled for 67-year-old woman last seen in Mesa

A Silver Alert was canceled Saturday morning for a 67-year-old woman last seen in Mesa, authorities said.
1 day ago

Sponsored Articles

Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
Phoenix voters reject proposed change to city pension system