Legislation Returns Retirement Contribution Rate to 50/50
AEA Victory for Public School Employees
On May 7, 2012, Governr Brewer signed legislation (HB2264) that returns the Arizona State Retirement System (ASRS) contribution rate back to an equal 50/50 split between the state and its workers. It also requires the state to refund any contributions made in excess of 50 percent.
HB2264 was passed as a result of AEA’s legal victory last month in Arizona Superior Court. The Court found it to be illegal to reduce the salaries of school employees/public employees by increasing the retirement contribution rate. AEA filed this lawsuit on behalf of our members.
During the 2011 Legislative Session, Governor Jan Brewer, former Senate President Russell Pearce, and former Speaker of the House Kirk Adams crafted a budget deal that reduced public school employees’ take-home pay by increasing the percentage of employee paid contributions to the retirement system. Rather than a 50 percent employer and 50 percent employee contribution split, your contribution rose to 53 percent and the employer rate was reduced to 47 percent. The legislation did not allow school districts to have access to the savings; instead the legislature kept it to reduce the state’s budget deficit.
The Arizona Constitution, based on an amendment AEA helped pass in the 1990s, protects public school employees’ retirement benefits from legislative raids. This constitutional provision, through AEA's lawsuit, protected our members from this attempt to decrease their retirement benefits by increasing their contribution rate.
HB2264 contained an emergency clause which means that bill became law when the governor siged it and the rate will go back to 50/50. Thus, the amount owed employees will be for the duration of July 1, 2011 until May 8, 2012.
AEA urges our members to Check Your Check for the change in the ASRS contribution rate back to 50/50 by comparing current paystubs to previous ones. Depending on the school district and how quickly payroll departments can implement the change, members should notice it in their paycheck as early as the first pay period in May. Members should contact their local association president if they notice the change or have questions.
This victory was made possible because the AEA, the professional association of Arizona’s public school employees, fought for our members. Our members should take pride in their membership and what it has accomplished. AEA urges members to be proud and tell colleagues about this victory and ask them to join the Association. Without our collective strength and legal expertise, the legislature might continue to raise our retirement contributions. Standing together, we are stronger.