Kick off the Year in Arizona with New Trust for Pension Funding

Categories: National Developments,PARS News,Pension Rate Stabilization
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The New year is a time to set new goals and plan for the long-term. One new option for Arizona cities and counties in 2021 is the PARS Pension Prefunding Trust, an IRS Section 115 trust vehicle to set aside funds to help manage PSPRS and ASRS obligations.

Offered in collaboration with Vanguard, U.S. Bank and HighMark Capital, PARS’ program is the only such trust available in Arizona. The first of its kind trust is also the largest in the nation with over 230 participating agencies.

Operating separate and apart from your retirement systems, the PARS’ program can help your municipality address its pension costs and liabilities in the following ways:

  • Contributions into the trust can be invested in a diversified manner for potentially higher returns than your general fund budget account
  • Proceeds from POB’s and COP’s can be contributed to the trust to help address long-term obligations
  • Assets can be used to pay PSPRS/ASRS costs directly or reimburse your agency for pension related expenses
  • Investment selections and contribution/disbursements are locally controlled
  • Low-cost, fully flexible investment options designed for pension prefunding are available from industry leaders Vanguard and HighMark Capital
  • The Trust can also be used to prefund OPEB costs, if desired, and brings significant economies of scale

To learn more about our program and to take steps to address your PSPRS and ASRS costs, contact PARS today! 

Maureen Toal, Executive Vice President