MARICOPA News from the Maricopa Community Colleges Retirees’ Association
Issue Highlights: 2 Chancellor Retires 3 Interim Chancellor Named 4 Faculty Receive Emeritus Status 4 Eight Colleges Awarded Prize 6 Where Are They Now? 8 Tuition Break for Seniors
Spring 2016
Mark Your Calendar
Retirement information and updates on legislation relative to changes in pension funds will be provided. Attendees will have the opportunity to interact with experts from the Arizona State Retirement System (ASRS), United Healthcare, and MCCCD Human Resources.
MCCRA Pre-Retirement Planning Seminar Thursday, April 21, 2016 A planning for retirement meeting hosted by MCCRA is set for Thursday, April 21 at the Rio Salado Conference Center located at 2323 W. 14th Street in Tempe, adjacent to the District Office. A continental breakfast will be served starting at 8 am, where Q & A with retirement and health care representatives will begin and will continue immediately following the meeting. The formal meeting is scheduled from 9 am – 12 noon.
Retirees – come on out and share your expertise with former colleagues who may be thinking about their retirement plans. Please RSVP to Jim Hogan: jhoganaz@msn.com.
A Financially Healthy Retirement System From the Arizona State Retirement System The Arizona State Retirement System (ASRS) has not been immune to the ups and downs of the market over the past several months. The closing prices of several market indexes as compared to the daily value of the ASRS trust fund can attest to that. But the strategic asset allocation model the ASRS uses mitigates severe market movements. At the close of the most recent fiscal year (June 30, 2015), the ASRS trust fund had an investment gain of 3.2%. This return allowed the ASRS to be in the top 32nd percentile of returns across its peer universe.
The retirement benefit you receive will be for your lifetime. Such returns are an impressive accomplishment by the ASRS Investment Management Division considering the market’s volatility over the most recent 3, 5, and 10 year periods. The ASRS average annualized return for the fund since inception is 9.9%. The funded status of the ASRS stands at 77.5%, which has been increasing over the past five years. Retirement systems with a funded status of at least 80% are deemed to be financially healthy. The trend and the current funded status indicate your retirement system is in good financial health.
A note about contribution rates. The current ASRS pension contribution rate is 11.35%. Beginning next fiscal year (July 1, 2016), it will drop to 11.34%. The contribution rate is in a declining trend based on several factors: investment gains; increase in membership which generates an increase in the dollar amount of contributions; declining number of retirements; and, retirements beginning later, to name a few. Unfortunately, the level of contribution is such that not only is a member paying for his or her future retirement benefit, but they are also paying down the deficit in the funded status which is amortized over 30 years. In the absence of the amortization, the normal cost, or the cost to fund only your retirement benefit, would average approximately 6.5% (over the past 20 years the normal cost has fluctuated between about 5.5% and 6.8% per year). On a most positive note, the retirement benefit you receive will be for your lifetime no matter which option you elect. And, you may elect to provide continued ASRS retirement benefits to your beneficiary. The ASRS provides retirement income that, coupled with Social Security benefits and income generated from your personal savings, should provide a standard of living that is sustainable, beneficial, and worry-free.