Facts & Figures

Facts & Information

The Arizona State Retirement System has served teachers and government workers for more than 75 years through periods of growth and economic downturns and has always met its obligations of paying monthly benefits to our retirees as it is outlined in the Arizona Constitution and State Law.

Here are current facts and information that substantiate why the ASRS is sustainable and in a position to continue meeting its current and future obligations to today’s retirees and actively contributing members:

Plan Design & Funded Status

At the inception of the defined benefit plan (1975), the funded status was 37.5 percent. Since then, our actuarial value funded status has more than doubled and remains on a path to being fully funded in the long-term future.

Likewise, when the ASRS began in 1995 managing the Health Benefit Supplement program, which provides a monthly benefit to help qualified retirees offset the cost of health insurance, the program had a funded status of 52.8 percent. Today, it is fully funded and one of the most financially sound state retirement health benefit funds in the U.S.

With a solid funding plan in place, the ASRS has stayed the course and seen the funded status rise and fall (due to previous benefit enhancements and market-force ups and downs) and yet remains on target to attain full funding over a period of 25 years; this while maintaining relatively stable contribution rates for members and employers.

The ASRS has retained an independent actuarial firm to audit its assumptions and methods, which continue to confirm that the assumptions and calculations used are appropriate and are based on generally accepted actuarial principles and practices. In addition, a separate actuarial firm conducts a valuation at fiscal year end and has concluded that the ASRS has a solid funding policy and is on a projected path to full funding with stable contribution rates.

Contribution Rates & Benefits Received

 A somewhat unique feature of the ASRS plan is contributions are paid equally by the employee and the employer. This equal sharing has helped the plan remain stable over time. Contribution rates are expected to move marginally over the coming fiscal years on an overall slight and steady downward trend. These small changes ensure sustainability of pensions at only a fraction of the volatility that could occur with defined contribution plans similar to 401(k) plans.

Importantly, a member never receives less than their contributions plus interest. Each and every member is able to choose a benefit that is greater than their contributions, no matter how long they worked or how much they contributed. Members always have a choice of taking the highest of either the pension they have earned, or the contributions they have made plus interest. Those with a membership date prior to July 1, 2011, with five years of service also receive a portion of their employer’s contributions plus interest. In addition, all retirees have access to a group health insurance plan, and retirees with five or more years of service have a health insurance supplement to offset their health insurance costs.

The benefits produced by this pension plan are significantly higher - and are provided at a lower cost - than what would be produced by an alternative defined contribution plan.