Public Safety Personnel Retirement System (PSPRS) in Arizona Offering New Pension Trust Program, Administered by PARSCategories: National Developments,PARS News,Pension Rate Stabilization
PSPRS Press Release, July 20, 2021
PSPRS launched the Arizona Employers Pension Prefunding Program (AEPPP), a program that enables local governments to accumulate funds in a trust to prepare for future pension contributions and obligations.
The multiple-employer trust program is set up under Section 115 of the Internal Revenue Code and dedicated solely for prefunding defined benefit plan (pension) costs. Employers can choose to participate in AEPPP as part of their funding and pension-management strategies.
“PSPRS is excited to provide our members with this flexible new vehicle to help them prudently plan ahead for their long term PSPRS obligations,” said Michael Townsend, Executive Director of PSPRS. “We are proud to provide another tool as an option for employers to consider as they determine how to effectively continue managing their pension liabilities.”
AEPPP is administered on behalf of PSPRS by PARS, an experienced IRC Section 115 trust administrator that pioneered the pension prefunding trust concept with an IRS Private Letter Ruling in 2015. U.S. Bank, the nation’s fifth largest bank, will serve as trustee to safeguard participating employers’ assets, and can provide investment advisory and management services under a discretionary trustee arrangement. Vanguard Institutional Advisors oversees passively-managed investment strategies designed specifically for the trust program with very low fees that decrease as assets grow across all strategies.
“The PARS team looks forward to providing Arizona public employers with proven trust service providers to meet their pension prefunding objectives,” said Maureen Toal, Executive Vice President of PARS. “The trust was carefully crafted to meet strict federal requirements and has a favorable Private Letter Ruling from the Internal Revenue Service covering all employers that join the trust.”