PENSION NEWS

An ARPO meeting was held on Wednesday, October 24th, 2007 at 7:00 PM at the FOP Lodge 2, 19th Ave and Sweetwater, in Phoenix. (See the entire MINUTES from that meeting on the first page of this ARPO Web site.)

Jim Hacket, Administrator of the PSPRS was present and gave a report on the health of our retirement fund. The best news is that the July 2008 raise in our monthly pension checks will amount to $134.34. That pretty well indicates that the plan is still healthy.

According to Mr. Hacket, the System did NOT lose money, but rather, had a 17+% gain for the FY ending June 30, and the system is healthy. What DID occur, and was somewhat disturbing, is that the payouts for the past year were almost double the normal amount, due to the first year of DROP payments, which amounted to $152MM or 27.4% of payouts. He says this is expected to drop, in percentage. The fund had a $197MM negative cash flow for FY 2007, due to the large expenses. It's value was $6.3 Billion, and the surplus that our annual increases come from increased. There is more than enough money to fund three to five years more of increases.

The actuarial status of the system is less sound. It is currently funded at just about 70%, and has stayed there since 2005 (and even improved VERY slightly). What this means for those of us who are retired, is essentially our retirements are secure (as are those who are already in the system). The possibility exists that FUTURE hires MAY not get the same benefits...but that has not yet been decided and would still have no effect on us.

The link to the Public Safety Retirement System Web site is http://www.psprs.com/

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FUND MANAGERS

There are five Fund Managers, appointed by the Governor, and one Fund Administrator, who is appointed by the Fund Manager Board. The Fund Administrator is James Hacking, formerly the administrator of a very large pension system in Illinois.

The Fund Managers are appointed to represent various interests as required by law and are all appointed by the Governor:

Chairman and Representative of Elected Officials Retirement Plan such as a Judge or Elected Official - Pinal County Attorney, Carter Olsen.

Representative of the State - James Gentner, Retired DPS Major

Representative of the members - Phoenix Firefighter Billy Shields, president of the firefighters union, represents PSPRS members and sits on a local pension board.

Advisor and Representative of the cities - Tucson Firefighter Brian Delfs represents interests of the cities.

Representative of the Public - Required to have extensive financial background. Fritz Beesemeier.

Consult the PSPRS Web site at www.psprs.com for more information

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Social Security

Regarding the Social Security offset, it takes into account pension earnings for those who weren't eligible to retire until after the windfall regulation went into effect in 1986. There is a very active effort to address the "Social Security Windfall Elimination Provision≤ (WEP) on a national level by the FOP. It is suggested retirees take a look at the National FOP Legislative priorities

available through the Arizona FOP web page at www.azfop.com. All retirees should keep abreast of legislative action and become actively involved with our legislators. We all need to understand the issues and seek a common age