Pennsylvania pension reforms badly needed, panel says
The commission charged with reviewing Pennsylvania's public pension systems issued a “serious call to action” on pension reform in a 264-page report it released on Monday.
The report, which was issued a week before Gov. Tom Corbett's annual budget proposal, presented a variety of options to finance unfunded obligations and concluded that “the only unacceptable option is to do nothing” with pension benefits for more than 800,000 eligible public employees and retirees.
Warning that taxpayer costs for state and school pension contributions are scheduled to rise from $1.2 billion this year to $3.2 billion in 2017-18, James McAneny, director of the Public Employees Retirement Commission, or PERC, said the commission steered clear of political considerations. Options the commission laid out include:
• Seeking voluntary benefit reductions in pensions that are protected by law in return for maintaining retiree health care benefits that lack strong protections.
• Seeking increased employee contributions.
• Rolling back prior retiree cost-of-living adjustments.
• Raising taxes.
• Privatizing government assets to generate additional income.
• Selling pension bonds.
McAneny warned there is no single fix. He said Pennsylvania faces a two-pronged dilemma: finding a way to cover its growing unfunded obligations after years of short-changing pensions, then redefining what a public pension should be.
Corbett has called pension obligations a “Pac-Man” that is gnawing away at the state budget.
“Much like PERC, the administration realizes that the issues surrounding the pension system are complex and require a combination of many different solutions. We know the $41 billion in unfunded liability, coupled with increasing contribution costs, make it very difficult for the commonwealth to fund core programs and services,” said Corbett spokeswoman Christine Cronkright.
Reform can't come too soon for school districts, which must underwrite their employee pension contributions out of local tax revenues, said Pennsylvania School Boards Association spokesman Steve Robinson.
In the Pine Richland School District, for instance, budget documents show pension costs will increase to $4.7 million next year, or more than three times the $1.33 million the district paid in 2009-10.
Carnegie Mellon University economist Robert Strauss, who has studied the pension issue for a decade, said the state can't afford to maintain the status quo.
“The PERC report is a useful first step in preparing taxpayers and public employees for the collision that is happening around the country between pension promises made by departed politicians and an aging labor force that expects these promises, no matter how unrealistic, to be kept.”
Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Beloved teacher at 3 Western Pa. schools hears from students across nation
- Oakland eatery Fuel & Fuddle to reopen under new owners
- Feds admit cooperation remains obstacle with corporations, cyber threats
- 2 sentenced for avoiding arrest after Steelers player was stabbed
- Victim identified in Pleasant Hills apartment fire
- 30 cited for blocking street at union rally at UPMC facility
- Pittsburgh Public Safety Director Bucar upset with DA Zappala for alert
- Foreign influx in Allegheny County at ‘tipping point’
- Giant Eagle provides assistance to fight proposed Wal-Mart in McCandless
- Newsmaker: Brian Stein
- Duquesne teen to stand trial on charges he shot, killed unborn child