The state House voted Thursday to scrap the generous retirement plan enjoyed by elected officials and judges — but not in a way that would affect any of them.
Current law puts them into a “defined benefit’’ plan where the amount of their pensions is strictly set based on their salaries and number of years of service. It permits them to retire after 20 years at 80 percent of their top average wage, a system nearly twice as liberal as the one offered to most other state workers.
But the system is sharply underfunded. So HB 2608 would have anyone who joins the system in the future put into a “defined contribution’’ plan, similar to what now exists in most businesses, with the state and employees each contributing 5 percent of their income and the pension dependent on how well their investments do.
Despite its prospective application the measure passed on just a 35-23 vote.
Rep. David Stevens, R-Sierra Vista, said the change actually will create more financial losses for the state, at least in the short run.
Closing off the Elected Officials Retirement Plan to new enrollees still leaves the financial burden of paying the pensions of those already retired and those current elected officials who will retire — but without any new people being added to the system to make contributions to help pay the $13 billion in liabilities.
Stevens also pointed out that a study committee looking at financial problems of all the state pension plans proposed other alternatives that he said should be tried first.
House Minority Leader Chad Campbell, D-Phoenix, said scaling back pensions to what would be the least generous of all of them would create a financial hardship. Campbell said he understands that public service can be a hardship.
“We have to allow people to run for office and not make too much of a personal sacrifice,’’ he said.
But Rep. Karen Fann, R-Prescott, said that misses a key point. She said being in the Legislature is not supposed to be a career.
The measure now goes to the Senate.
