In 2011, 10 employees retired and received $700,000 in cash and THEN began receiving annual pensions of over $110,000. One fire official received a cash payment of $795,000 and that spiked his yearly pension from $90,000 to $130,000 by cashing in vacation and sick time along with other benefits.
Currently, Phoenix allows staff to cash in accumulated time off that is then used to calculate a higher lifetime pension, at times greater than their ending salary.
It is a system that is rife with abuse and completely unfair to those left paying the tab … you.
During Mayor Greg Stanton’s campaign he promised to completely eliminate pension spiking. In the 620 days after Mayor Stanton made that promise and numerous requests on my part to schedule a vote, Councilmembers Thelda Williams, Jim Waring and I sent a joint letter to the mayor requesting action. The mayor set up a committee to analyze proposals with a tentative vote set for the end of October. This is good, but he should not have needed this much pressure to move forward. It also tells me more pressure will be needed to get a real solution.
Ending spiking is just a start to an unsustainable system. Phoenix has $2.4 billion in unfunded pension debt. It is a long-term problem needing repair. If you want to create a model for business growth, you must create an environment of stability. Businesses and jobs will begin to follow those cities, regions and states demonstrating financial stability.
Imagine the message we send to the nation if we successfully tackle our long-term financial obligations. Imagine the message we send to Washington D.C. if we solve our long-term debt. And, imagine the message we send to job creators that our fiscal house is in order.
I have started an online petition, http://stoppensionspiking.com, to end pension spiking. It has collected more than 17,000 signatures in about a week. This is obviously an issue the public wants addressed.
The public deserves an open and transparent discussion and the time to act is now. No more delays, no more phony arguments.
Pension spiking isn’t the only problem. Here are other areas needing reform:
• 12 million hours — accrued vacation and sick leave for Phoenix staff still owed. Phoenix allows staff to roll over year after year unused time off. At retirement, employees can cash these hours in.
• 40.5 — the number of days off an entry-level employee gets their first year at work. It goes up from there.
• $105,000 — average compensation for over 14,000 employees at Phoenix.
• $283 million — what Phoenix paid out in total retirement costs in 2013.
I have successfully pushed for many fiscal reforms that have benefited taxpayers including no water/sewer rate increases, no property tax increases and no fee increases. Solving our long-term pension debt is the next step and completely eliminating pension spiking is where we start.
• Phoenix Councilman Sal DiCiccio represents District 6, which includes Ahwatukee Foothills. Reach him at firstname.lastname@example.org or (602) 262-7491.