The defined-benefit pension plan is a relic of the past. Most companies long ago shifted to more cost-effective offerings, such as the 401(k).
The time has come to eliminate overly expensive, taxpayer-funded defined-benefits systems before they bankrupt Pennsylvania.
The Pennsylvania Institute of Certified Public Accountants (PICPA) joins with Gov. Tom Corbett and other stakeholders in urging the General Assembly to take action before the cost of funding Pennsylvania's Public School Employees' Retirement System (PSERS) and State Employees' Retirement System (SERS) overwhelms our state budget.
The systems' combined unfunded liability is more than $41 billion. Over the 2013-14, 2014-15 and 2015-16 budget cycles, Pennsylvania's contributions to fund PSERS and SERS are expected to increase by more than $2 billion.
The budgetary impact will be a significant crowding-out of funding on the rest of the commonwealth's vital programs and services. These systems are simply no longer sustainable.
The PICPA Fiscal Responsibility Task Force has offered a number of policy options to address the crisis. The PICPA believes pension reform must include addressing the nature of the benefit type as well as funding the obligations already promised to current employees and retirees. The task-force report is at picpa.org/fiscal .
The time to play the blame game is over and, at this crisis point, irrelevant. Kicking the can down the road is no longer an option. Real, measurable public pension reform is needed now.
Robert C. Jazwinski
The writer, a CPA, is president of the Pennsylvania Institute of Certified Public Accountants.
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