Fixing Funded Status:
Demand action to help solve Arizona's
$14 billion pension crisis
Financial markets and demographic trends changed faster than the state could adapt.
Now the ASRS pension system faces a funding challenge that threatens retirement
security for public workers.1
Educate yourself – and demand action to help retirement system leaders fix this.
The basics of funded status in Arizona
Your pension has been promised to you
Regular contributions from public workers like you and your employer sets money aside to be invested by the Arizona State Retirement System (ASRS) for retirement benefits, including your pension – your slice of the pie for life.
ASRS is falling behind
For many years, the state has set overly optimistic assumptions about investment returns, resulting in a massive shortfall. To help the state keep up, public employees are required to contribute more and more money to ASRS.
Is this fair to you?
Arizona should stop forcing public employees to foot the bill for bad legislative policies and pension fund mismanagement. It’s time to set a path to fully funding your pension through a responsible approach to funded status.
What is funded status – and why does it matter?
Watch this video for starters
Share the ChallengeEmail
What is funded status – and why does it matter?
The real danger of the $14 billion funded status shortfall.3
ASRS pensions are still being paid to retirees — the state constitution mandates it. But with a $14 billion shortfall, ASRS lacks assets and investment returns needed to pay future benefits. Even worse, the state continues to fall behind – it’s like always being short on ingredients to make more retirement pies.
How did Arizona let this happen?
ASRS is playing catch up – and it’s impacting you.
As the state continues to choose overly optimistic assumed rates of return that aren’t met, you’re feeling it in your wallet. In fact, 11.94% of your salary now goes to pension contributions. In 2001, it was only 2%.7 That’s more than a 5x increase in less than 20 years – with no promise it won’t get worse. In addition, the state’s lack of funds can lead to raises that are smaller than expected.
You’re also feeling the impact of ASRS funded status shortages in…
Retired? ASRS has run out of funds for post-retirement benefit increases. And public employees hired after 2013 have no promised cost-of-living adjustment at all. So pensions will stay the same while inflation makes things more expensive.
As pension debt rises, taxes on property owners often increase – and some AZ cities have raised sales taxes as well. Whether you’re working or retired, this means less money for everyday living.
Other public programs
Funding for roads, schools, parks and environmental programs, public housing and other municipal services are being cut as pension debt takes a bigger bite from public budgets.
Explore Funded Status for ASRS in-depth and demand improvements
In the early ’90s, ASRS benefits were 9% of the AZ economy. Legislative decisions and an expanded public workforce now mean promised benefits exceed 15% of state GDP.8 The challenges require action now – and you can help bring about improvements by learning more about the challenges facing ASRS,
then contact your state and local representatives to demand improvements.
Let’s take action together.
Arizona should stop forcing public employees to foot the bill for bad policies and pension fund mismanagement, and set a path to fully funding ASRS instead. Here’s what you can do.
Contact your state and local representatives
Sustained communication from educated, informed voices like yours can play a key role in fixing funding status for ASRS. Contact your state and local representatives now.
Share with a friend
Help amplify our message by spreading the word through your favorite social media channels.
Equable is committed to helping you learn more about the challenges facing pensions today.
Connect with us
Learn how to join the growing numbers of employees, employers, policy makers and others working together to address the funded status challenge and create real retirement plan sustainability and affordability.
1ASRS is a retirement system offering pension benefits based on final average salary. The system serves most civilian public workers in Arizona, including teachers, university employees, most municipal workers, and state agency employees. Separate retirement systems cover police, firefighters, corrections officers, elected officials, and city of Phoenix employees.
2Equable Institute analysis of ASRS financial reports
3Equable Institute analysis of ASRS financial reports
4Equable Institute analysis of ASRS financial reports
7Equable Institute analysis of ASRS financial reports
8Equable Institute analysis of ASRS financial reports