An overhaul of Phoenix’s consternating employee-pension system could be in the hands of voters later this year after a political-action group last week submitted a petition for a ballot initiative.
The Citizens for Pension Reform Committee, a group operated by out-of-state lobbyists, says it gathered more than 54,000 local signatures in support of its initiative to turn the city’s pension system into a 401(k)-style retirement plan for new employees, which the group says also would curb pension spiking by current employees. Current employees’ pension benefits would be capped, the committee said.
Pensions of public safety employees would not be subject to the initiative, the group said.
The group secured more than double the 25,480 signatures of registered Phoenix voters required to get the issue on a ballot this year.
“The outpouring of support from Phoenix residents wanting real pension reform has been tremendous,” committee chairman Scot Mussi said. “The power brokers at City Hall have refused to fix our broken pension system, instead passing sham reforms thinking they can hide the problem from taxpayers. Voters are fed up with the games and deserve an opportunity to decide the issue for themselves.”
The City Clerk’s Office has 35 days from last Tuesday, when the initiative was submitted, to verify the signatures. If enough signatures were collected the Phoenix City Council must call a special election, likely in the fall.
City Councilman and Ahwatukee resident Sal DiCiccio has long been a proponent of an overhaul to the pension system and prefers that voters have the final say.
“Politicians are lame,” DiCiccio said. “They’re not going to do anything. The mayor and City Council are typical politicians. They want others to do the work for them.”
DiCiccio initially voiced criticism for the committee’s timing of its announcement, which came the same day as the funeral for Detective John Hobbs, the Phoenix police officer who was killed during a shootout two weeks ago.
“It is so incredibly insensitive for them to file the day after we lost one of our officers,” DiCiccio said. “That is just mind-boggling and reckless. If that is how they’re planning on starting this campaign then they’re going to have major problems throughout the election.”
DiCiccio stood by those comments later in the week, but that doesn’t mean he opposes the initiative.
“I love the concept. It’s what I’ve been driving for the last four years,” the fiscally conservative DiCiccio said.
Phoenix currently operates a defined-benefit retirement system that guarantees retired city workers a set monthly benefit for life regardless of how the pension fund performs. Taxpayers foot the bill for pension payments not covered by employee contributions and investment yields.
The cost to fund the pension system ballooned from $28 million in 2000 to $110 million last year.
Phoenix would move to a defined-contribution retirement system if voters approve the proposed ballot initiative. Under that format, the city would contribute a set percentage to a new employee’s retirement account.
“We have plenty of time before this goes to the ballot, if it goes to the ballot,” DiCiccio said. “There are still three main areas needing clarity: One, public safety, police and fire were to be excluded from the impacts of the proposal. Although I believe it does indeed exclude our heroes, there is still considerable disagreement from both sides.”
DiCiccio plans to meet with attorneys for the city’s public safety labor groups and the Citizens for Pension Reform Committee lawyers to confirm this point.
“Two, the legality of the actual proposal,” DiCiccio continued. “And three, the financial impact to the city of Phoenix budget.
“There are many good concepts in the proposal, but this is potentially a big change for Phoenix and a thorough vetting is now required.”
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