Taxpayers in the politically volatile surroundings of Arizona have shown interest in a new plan that could radically reform the retirement benefits for the state's elected officials.
According to the Arizona Republic, a new proposal to substitute a 401(k)-style plan for professional politicians and judges might save the public hundreds of millions of dollars.
Two Republican State Representatives are hoping to gain support for the plan, suggesting that the state's existing Elected Officials' Retirement Plan is financially unsustainable.
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Instead, they propose substituting what will be called the Arizona Leadership Savings Account, transferring the existing generous DB plan into a DC-styled plan more akin to those found in private industry.
Superior Court judge representatives have already said that any moves to block or transform existing benefits will discourage more qualified lawyers from serving as judges.
"If there is going to be something different, it has to be a sensible package to attract those lawyers," said David Byers, director of the Administrative Office of the Courts, to the Republic. "We are engaged with the Legislature and will be at the table to talk with them.
During the last fiscal year, records show that the public helped contribute over $21 million to the elected officials' retirement trust fund, with approximately $6.8 million added by the leaders themselves.
The sponsors of the reform project made a similar attempt in 2011, which required officials to contribute more to their own pensions and also adjusted cost-of-living raises for existing retirees. Current elected officials will have to start paying 13 percent of their income into their pension plan this summer, up from the previous 7 percent requirement.
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