The legislature’s 55th second regular session began on January 10 and lasted 167 days. This legislative session was one of the longest in Arizona’s history, with over 2000 bills filed. This year, the Arizona Retirement Security Coalition (ARSC) fought back against two bad bills that would weaken the Arizona State Retirement System (ASRS) for public employees and retirees:
SB1145, sponsored by Senator Warren Petersen, would have allowed Arizona universities to no longer provide a defined-benefit pension plan from ASRS to all new employees, and in its place, offer their optional retirement program (ORP), otherwise known as a defined-contribution plan. SB1145 was posed as a bill that would give university employees more freedom in choosing their retirement plan, but in reality, it would weaken retirement security for those workers and likely cost the universities more money. If passed, the ASRS estimated that this legislation could have cost the system approximately $675 million over 20 years. This bill was ultimately defeated.
Through the hard work of ARSC, HB2637, sponsored by Representative Jake Hoffman, was defeated this session. This bill, if passed, would have caused significant fiscal harm to the ASRS and the Public Safety Personnel Retirement System (PSPRS) by mandating an investment policy based on ideology and not fiduciary standards. The bill would have required the State Board of Investment, ASRS, and PSPRS to adopt a policy for identifying and divesting from companies that donate to or invest in organizations that promote, facilitate or advocate for abortions and/or comprehensive sex education for minors. The ASRS’s primary responsibility is to maximize the investment returns. With a lack of clear definitions of sexually explicit materials and advocacy for abortion, this bill would have forced the ASRS and PSPRS to divest from companies based on ideology and not investment performance. Since 56.35% of the state’s pension funds generate revenue from investment earnings, this bill could have had a disastrous effect on the systems.
Moving forward, ARSC’s primary focus will be on monitoring the 2022 midterm elections. To learn more, follow ARSC on Facebook, Twitter, or sign up for action emails here.