National Conference on Public Employee Retirement Systems

The Voice for Public Pensions


Public Pension Profiles: Arizona Public Safety Personnel Retirement System (PSPRS) Administrator, Mike Townsend

“A lot of people don't realize the impact we have on the economy in Arizona. Our work impacts not only plan participants and retirees, but taxpayers in every community across the state,” says Townsend.
Arizona Public Safety Personnel Retirement System (PSPRS) Administrator, Mike Townsend

By Lizzy Lees, NCPERS

As part of an ongoing series of public pension executive profiles, NCPERS spoke with Mike Townsend, Administrator of the Arizona Public Safety Personnel Retirement System (PSPRS).

Please note: This interview has been edited for clarity. If you would like to participate in a public pension profile interview, please contact

This was the second year in a row Arizona PSPRS was recognized in Pensions & Investments 1,000 Largest Retirement Plans annual report for its asset growth rate, outpacing peer plans nationally. What factors do you think contributed to this impressive achievement?
Honestly, there's a lot of factors. We're a multi-employer plan, so every employer has their own individual plan in terms of their liabilities and their assets. Providing that education and explaining how pensions worked to the employers was key to coming up with solutions for their unfunded liabilities. It's the same math that has been in place for decades—wanting to do what's in the best interest of the taxpayers and the members has always been the same thing. But the bottom line is, if they don't trust what we're going to do with the money, there's no way they'll even put the money into the system.

Since I joined PSPRS in 2019, we've started to rebuild the relationships with stakeholders and build trust in the agency. The silver lining was the low interest rate environment and the ability to do virtual meetings to really increase our outreach, though. Over the past three years, we were able to do over 200 individual presentations around the state. Pre-pandemic, everything was face-to-face and informal meetings, so there's no way we could've had that level of outreach before. Then, because we had the low interest rate environment, they also had a completely different option in terms of debt financing to help pay down liabilities.

What kinds of strategies did you implement while working with so many different employers and stakeholders across the state that resulted in a combined $2.85 billion in employer contributions for FY22?
The strategy was to do educational outreach to ensure stakeholders understood the benefits of paying down their unfunded liabilities. Using my 25 years of experience working with local government, I focused on getting them to understand what caused this in the past, how it works, what opportunities they may have, and how we may be able to help them. Once they understood the changes that we put in place at Arizona PSPRS—with the new staff, the changes to our computer systems, getting the audits right, and building that trust—then it was just allowing them to make those decisions about what they were going to do and what opportunities they have.

One of the things that I did early on was create a new position so there would be someone else who understands the accounting and actuarial information in a way that they could explain it to employers. I was fortunate to find Clark Partridge. Clark was the Arizona State Comptroller for many years. So, I had the relationships with cities and the counties from my time in local government, and then he had relationships with a lot of the state agencies that are also part of our system.

Since I started three years ago, about 80 percent of the staff at PSPRS are new. We have new actuaries, new auditors, and we're also putting in a new pension administration system. We revised our pension funding policy and built in metrics to measure those policies. We have an advisory committee that's made up of stakeholders—with employers, retirees, and labor representatives—and we reengaged that advisory committee to work through the changes on the funding policy.

We're actually phasing in changes that are increasing annual contributions for all employers. The employers unanimously agreed that this is what we needed to do, because once we got that understanding, and they got to where they were going to trust what we're going to do with the money, they saw the benefit for the taxpayers long term.

By rebuilding those relationships and having that understanding, we got everybody on the same page and that really led to the dollar amounts that are coming in. When you're talking about local government and budgets, it's not a mathematical question or a finance question. It's a relationship question.

In your previous role in Coconino County, you led policy initiatives that increased the county's PSPRS funded status from 25% to 70%. How did your experience there prepare you for your current role?
I spent 25 years working in local government. I had been on the board of the larger state retirement system here in Arizona, so I had a pretty good understanding of pensions, but I was very frustrated. I couldn't get answers about the public safety system and what was going on with the continued increase in unfunded liabilities. I kind of had to figure that out on my own. I worked with the local board of supervisors in Coconino County, and I was also doing some education with the city council of Flagstaff about their process.

Going through the math, I figured out how to use some funding that we had in place to put additional contributions in and show how that was going to create savings over the next 20 years for the taxpayers. I got my board to understand that this was really a win-win, because you get the money to make sure the benefits are there for the first responders, but you're also creating taxpayer savings. And so, that was really the reason that I applied for this job. I was frustrated, and I knew that there were the same issues across the rest of the state. Figuring out how to explain pensions to people that don't come from the pension world was really one of the key things that was needed.

Again, the timing was very coincidental. Once I started this job as the PSPRS administrator, I was asked to make a formal presentation to the full city council in Flagstaff. They were the first ones to utilize debt financing to pay down their unfunded liability. Then, I had some other employers start asking questions about how the city of Flagstaff paid down their unfunded liability, and we went through that process with other employers and it just kind of snowballed.

What do you enjoy most about working at Arizona PSPRS?
It's an incredible team, and they're all focused on the mission. To me, it's very meaningful and satisfying work. A lot of people don't realize the impact we have on the economy in Arizona. Our work impacts not only plan participants and retirees, but taxpayers in every community across the state.

A little over three years ago, state taxpayers owed $12 billion in unfunded liabilities. This has been substantially reduced since then through additional contributions, investment returns and actuarial assumption changes. Not only are we funding the retirement for first responders and their families, we're making structural improvements to the system. We've already accomplished a lot and really made a positive impact. It's pretty cool to be a part of it.

May 7-13th is Public Service Recognition Week. Is there any advice you'd give to someone considering a role in the public sector or, more specifically, a pension fund?
People talk a lot about finding something that's meaningful or having an impact with their work. And in the public sector, you can really have a lasting impact and make a difference for future generations. It's very satisfying work, and I really, really love working in pensions. Maybe it's because I'm a math geek, but I think I have the perfect job.


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