Pima County is facing more than $4 million in additional retirement costs for the coming fiscal year, a result of a recently passed proposition and reductions in investment-return assumptions.

County contributions to the Public Safety Personnel Retirement System — the pension plan for firefighters and law enforcement workers — will increase by more than 10 percent for sheriff’s deputies, resulting in additional costs of $3.1 million, according to a memo from County Administrator Chuck Huckelberry.

Smaller increases are on tap for probation and correction officers, as well as investigators with the county attorney’s office. The total increase for all other county employees, whose pensions are covered by the Arizona State Retirement System, is $58,000.

As it stands, the increased costs are not budgeted for in fiscal year 2018, and would have to be “accommodated in next year’s budget through a tax increase or cost shifts from other programs,” Huckelberry wrote.

Tom Burke, a deputy county administrator, said that a 4-cent property-tax increase per $100 of valuation would cover the increases, though he clarified that no such decision has been made.

“Some of this is going to be very difficult for the department to absorb on its own,” said Sheriff Mark Napier, whose department will incur around 88 percent of the increased costs. “There’s a limit to the cuts that we can make on our own without significant impacts on service delivery.”

“We’ll find a way to make this work,” he added later.

Proposition 124, which ties benefit increases to the consumer price index and caps them at 2 percent annually, was approved by voters in May 2016.

In the long run, the measure will result in significant savings, but at the outset “employers are going to see their contributions increase,” public safety retirement system spokesman Christian Palmer said.

Additionally, the retirement system reduced its investment-return assumptions from 7.85 percent to 7.5 percent, “resulting in a reduction in funding levels,” according to a recently released financial report on several state pension trust funds.

As of June 30, the public safety retirement system has less than half of what it needs to fund benefits for current retirees and members paying into the system, according to the same report.



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