Office of the Mayor

Mayor and City Manager’s Statement on Pension “Spiking”

The following is an official statement from Surprise Mayor Sharon Wolcott and City Manager Chris Hillman, dated May 5, 2014, regarding the pension practice known as “spiking.”

Recently, there have been news reports about the cities of Phoenix and Tucson and the pension practice referred to as “spiking” by some of their respective city employees preparing to retire.

Pension spiking is a practice in which employees convert benefits, such as unused sick or vacation time, to boost their final salary or extend their credited length of city service. Salary and length of service are basic criteria used in calculating public employees’ pension amounts.

Pension spiking is prohibited by both the Arizona State Retirement System (ASRS) and Public Safety Personnel Retirement System (PSPRS), which Surprise employees are members of, as the city does not have its own retirement plan. Both of these state retirement systems are subject to Arizona statutory regulations and have specific rules as to when and how Surprise employees are eligible to retire.

Thus, represented (union) and non-represented employees are not allowed to convert unused sick and/or vacation time to inflate their final salary figure or years of service prior to retiring from the city of Surprise.