City staff: Retirement options weighed | Local News

The City Council asked staff to provide a more detailed and balanced presentation before discussing the possibility of enrolling in the Arizona State Retirement System (ASRS).

Deputy CEO/Director of Administration Dave Trimble provided an overview of the board’s program during his retirement late last month. Trimble said that based on employee feedback, staff would offer to move forward with transitioning to the state pension program.

“ASRS provides current and future employees with predictable retirement income and additional benefits not available under the city’s current defined contribution 401A retirement program,” Trimble said in its report. “The City has made an effort to educate employees through a series of meetings and the majority of employees are in favor of ASRS membership.

Trimble noted that by far the majority of jurisdictions eligible to participate in the program in the state do so.

“Because the City of Fountain Hills competes with other Arizona municipalities and government agencies to recruit highly skilled employees, the city is at a disadvantage when it comes to recruiting and retaining employees,” Trimble said.

He also noted that the City’s current retirement program is seen as a factor in filling current staff vacancies.

A conversion to ASRA is initially expected to have a slightly higher cost to City employees in the first year. However, Trimble said this is expected to decline and could be a saving for the city in years to come.

The current 401A program calls for the City to contribute 11%.

Some board members were skeptical of Trimble’s presentation.

Deputy Mayor Gerry Friedel has a background in financial services and said he found information indicating the ASRS is currently underfunded. He also said he was somewhat skeptical of the argument that the change would help retention. He noted that no fewer than 19 current employees have opted to stay here under the current plan.

Councilman David Spelich is currently a state employee and contributes to ASRS, and said he was frustrated with the program.

“I’m six years under ASRS, and I would run if I could,” Spelich said. “Costs continue to rise.”

Spelich also said he did not recall the board approving a staff survey regarding ASRS.

“If we oppose, we seem to be against city staff,” Spelich said.

It was also noted that the Fountain Hills Health District recently joined the ASRS. Councilman Mike Scharnow said it was his understanding that resulted in a pay cut for district employees.

This led to discussion about whether City staff would want to be “healed” with any conversion. In other words, any additional cost to them for the retirement program would be offset by a salary increase. This could result in additional costs for the City.

City Manager Grady Miller said staff would collate all of their research information, including survey questions and results, and obtain additional information related to the council’s specific concerns. The presentation is to be brought back to the board at a later date for further discussion.

About Jefferey G. Cannon

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