With its Public Safety Personnel Retirement System (PSPRS) funded ratios at just 20.4% for the Fire Department and 72.3% for the Police Department, the Town of Clifton‘s need for a sustainable solution in managing its pension liabilities became increasingly evident back in June of 2022.
After researching possible solutions and holding thorough internal discussions, Clifton’s Council decisively adopted the PSPRS-sponsored IRC Section 115 Arizona Employers Pension Prefunding Program (AEPPP), administered by Public Agency Retirement Services (PARS).
“PARS made addressing our public safety’s pension liabilities approachable and easy to navigate. Our town is thrilled and proud to be one of the first local governments in the state to adopt the AEPPP and we hope that we can encourage other agencies to consider it as an option as well.”
Rudy Perez
Town Manager, Town of Clifton
The AEPPP’s innovative design enables Arizona local governments to accumulate funds into a Section 115 Trust to prepare for future PSPRS obligations as well as help to enhance budgetary stability.
With PARS serving as Trust Administrator and U.S. Bank as Trustee, participating local governments benefit from the seasoned guidance of highly experienced industry pioneers, as well as a full-service approach that is IRS-approved, GASB 74/75 compliant, and ready-to-go.
Most importantly, the program allows local governments to maintain local control over assets and investment decisions and is designed so that assets can be transferred to PSPRS for pension-related costs at any time.
By taking decisive action to prefund long-term costs and mitigate pension-related risk liabilities, agencies such as Clifton prove their commitment to fiscal responsibility and can reap numerous benefits from their proactive leadership and pension management.
Interested in exploring the AEPPP for your Arizona-based agency? Contact our team today:
Carter Kimberly
Senior Consultant
As Senior Consultant, Carter’s focus is on developing and fostering relationships with public agencies to understand their unique needs and develop retirement plans and trusts that save agencies money and address their long-term OPEB and pension liabilities. Carter specializes in working with educational agencies, counties, and special districts within California, as well as counties, cities, towns, and fire districts in Arizona.
You can learn more about our dedicated team of public agency retirement consultants here.
Photo Credit: visitcliftonaz.com