At the November 29th PSPRS Board of Trustees meeting, Trustees voted unanimously to approve an increase in the Tier 3 compensation limit from the current $115,868 to $140,952 based on the wage index analysis effective January 1st,2024. Tier 3 members are those statewide PSPRS members hired after July 1st, 2017. What this means is that wages earned by Tier 3 members up to the new limit will be considered pensionable. This is a 21.65% increase, the largest since Tier 3 began on July 1st, 2017. The initial Tier 3 wage limit for pension benefits was $110,000 and was increased to $115,868 in 2021 which was the first three-year review since the new Tier 3 went into effect.
Per statute, the PSPRS Board is required to adjust the annual compensation limit that is subject to pension calculations every three fiscal years for Tier 3 members. To calculate the index, PSPRS is required to analyze pay scale information from three groups totaling twenty-six employers statewide. The employer groups are made up of law enforcement agencies, fire districts and fire departments and are grouped by small size, mid-size and large size and the pay scales reviewed are those in effect on the fiscal year end date, six months prior to the implantation date. In this case it was the pay scale plans in effect by June 30th, 2023. Employers who had significant pay scale changes after the June 30th date, such as the Phoenix Fire Department, a member of the large category, will be included in the wage index calculation that will take effect in January 2027.
The first group of Tier 3 hires, if hired in 2017 and after July 1st of that year, will be eligible to retire with 25 years of service in 2042. It should be noted that there will be 6 more wage index calculations performed that will ultimately increase the pensionable wage limit. As a reminder for Tier 3 members, at 25 years of service, the multiplier is 62.5% of wages, 30 years is 75% and 32 years is 80% with pay averaged over 5 years instead of 3 years as is the case in Tier 1. So for example, if a member had 25 years of service today and 5 years of average pay of $140,952, the pension would be 62.5% of that amount or $88,095.
2024 56th 2nd Legislative Session starts with Governors State of the State Speech.
NewsEastern Arizona PFFA Meeting February 13, 2024. Hosted by Mesa Local 2260.
NewsThere will be a PFFA meeting for all PFFA member locals located in the eastern portion of the state. The meeting will be on February 13, 2024 from 11:30am to 1:30pm at the United Mea Fire Fighters Hall, 52 South Center Street Mesa, Arizona 85210. Lunch will be provided to those who attend in person. Parking is best across the street from the Union Hall. A zoom link will also be provided. Please RSVP to [email protected]
2024 PFFA Fallen Fire Fighter Memorial is January 14th at 10am
NewsPSPRS RETIREE, SURVIVOR TAX FORMS TO ARRIVE IN FEBRUARY
NewsPSPRS-managed plan retirees and survivors can expect to receive their 2023 tax forms in early February 2024. The 1099-R forms are mailed to home addresses on file no later than January 31. Each year, PSPRS sends roughly 28,000 forms – and receives more than 400 “return to sender” 1099-Rs that landed at former addresses of retirees. Retirees are encouraged to log on to their Members Only accounts to check their mailing information to ensure tax information arrives promptly. Changing addresses on file requires completing and submitting an address and name change form. Downloadable electronic copies of 1099-R forms will also be made available in the Members Only portal no later than January 31. PSPRS also distributes 1099-R forms to all individuals who receive lump sum payments during the calendar year, including primary beneficiaries, death benefit recipients and former plan members who have refunded their account balances.
REMINDER: PSPRS CANCER INSURANCE ‘ADVANCE REIMBURSEMENT’
misc, NewsThe PSPRS Cancer Insurance Plan is switching to an advance reimbursement policy in 2024 to make the system easier for members and retirees already struggling with a cancer diagnosis. The change allows PSPRS to provide an additional $1,000 to the $15,000 cancer diagnosis payment, as well as incremental reimbursements when member/retiree out-of-pocket expenses exceed set financial thresholds. All members and retirees who file cancer insurance diagnosis claims are encouraged to save documentation for uncovered cancer related care to apply for potential advanced reimbursement payments.
56th Arizona Legislature – 2nd Regular Session Convenes in 35 Days
miscThe bill pre-filing period began on November 15th. No fire, EMS, or related bills have been filed to date. Anticipate around 1,500 bills to be filed again this session. See pre-filed bills: https://www.azleg.gov/bills/
PSPRS Board of Trustees Approves Tier 3 Compensation Increase
NewsAt the November 29th PSPRS Board of Trustees meeting, Trustees voted unanimously to approve an increase in the Tier 3 compensation limit from the current $115,868 to $140,952 based on the wage index analysis effective January 1st,2024. Tier 3 members are those statewide PSPRS members hired after July 1st, 2017. What this means is that wages earned by Tier 3 members up to the new limit will be considered pensionable. This is a 21.65% increase, the largest since Tier 3 began on July 1st, 2017. The initial Tier 3 wage limit for pension benefits was $110,000 and was increased to $115,868 in 2021 which was the first three-year review since the new Tier 3 went into effect.
Per statute, the PSPRS Board is required to adjust the annual compensation limit that is subject to pension calculations every three fiscal years for Tier 3 members. To calculate the index, PSPRS is required to analyze pay scale information from three groups totaling twenty-six employers statewide. The employer groups are made up of law enforcement agencies, fire districts and fire departments and are grouped by small size, mid-size and large size and the pay scales reviewed are those in effect on the fiscal year end date, six months prior to the implantation date. In this case it was the pay scale plans in effect by June 30th, 2023. Employers who had significant pay scale changes after the June 30th date, such as the Phoenix Fire Department, a member of the large category, will be included in the wage index calculation that will take effect in January 2027.
The first group of Tier 3 hires, if hired in 2017 and after July 1st of that year, will be eligible to retire with 25 years of service in 2042. It should be noted that there will be 6 more wage index calculations performed that will ultimately increase the pensionable wage limit. As a reminder for Tier 3 members, at 25 years of service, the multiplier is 62.5% of wages, 30 years is 75% and 32 years is 80% with pay averaged over 5 years instead of 3 years as is the case in Tier 1. So for example, if a member had 25 years of service today and 5 years of average pay of $140,952, the pension would be 62.5% of that amount or $88,095.
2024 Retiree Benefits Guide
NewsThe 2024 Retiree Benefits Guide is now available to view via the retiree benefits page on the member login side of the website.