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The Republic | azcentral.com

Administrators of the Public Safety Personnel Retirement System dole out raises as high as 27 percent%2C ignoring law

The state's worst-performing public-employee retirement system includes two of the state's highest-paid employees

At a woeful 57 percent funding ratio%2C the PSPRS is teetering on insolvency%2C a threat to taxpayers

Where high-handed arrogance and indifference to authority are concerned, the people at Arizona's worst-performing public-employee pension system could give lessons to the Veterans Administration.

This is truly world-class nose-thumbing:

The administrators of the financially troubled Public Safety Personnel Retirement System — the $7.8 billion retirement plan for the state's public-safety officers — were instructed last year to stop paying bonuses to their employees.

So, what do they do instead? The pension administrator and its board last fall approved pay raises of up to 27 percent, making them retroactive to July 2013. At least one employee received a $69,000 retention bonus, payable at the end of a three-year contract that includes guaranteed annual raises.

A state law enacted in 2012 precisely to head off these sorts of shenanigans is air-tight. It forbids the directors of Arizona pension funds from awarding raises without approval of the Arizona Department of Administration.

So, how did they get around that one? Why, they just ignored the law and awarded the raises anyway.

We must give PSPRS trust administrator Jim Hacking his due in one respect: He is a brassy one.

Pension & Investments magazine in June found that of 38,884 state employees in Arizona, the PSPRS's top investment officer ranked as the state's best-paid employee with a base salary of $268,000. Hacking is Arizona's third best-paid employee. And they weren't even among the pension system employees getting the improper raises.

Hacking defiantly, knowingly broke the law. He expressed a level of contempt for the Jan Brewer administration and for the law that one rarely sees in state governance.

And the state of his pension system can only be described as an unholy mess.

Hacking's office is under a state workplace-violation investigation for, among other things, suspected sexual harassment of an employee. It is under a federal criminal probe for allegedly inflating the value of real-estate investments in order to trigger employee bonuses.

Sound familiar? Yes, that sounds very much like what went on at Veterans Administration hospitals, where officials fudged patient wait-times and lied about meeting performance metrics in order to get bonus pay.

In addition to all that, the pension system for years has been one of the state's worst performing systems. At a woeful 57 percent funding ratio, it is sinking dangerously close to the point of no return — the point at which it cannot reasonably be expected to meet its long-term payment requirements to pensioners without a massive infusion of taxpayer funds.

Yet the people in charge of its investments keep getting raises, even if it involves breaking the law.

Hacking's contract with the pension system was extended by the PSPRS board until mid-year 2015. It states he can be terminated for "cause," which is defined as malfeasance, gross negligence, insubordination or for failure to comply with trust policies.

He would appear to qualify for his walking papers. It's time to clean house.