Corbett Administration Expects State Pension Proposals to Withstand Court Challenge

Mar 27, 2013

The Corbett administration says proposed changes to state pensions will ultimately withstand a court challenge because they can be proven to serve the public good.

One piece of the governor’s plan would reduce future unearned benefits of current state and school district employees.

Public sector unions have promised a court battle if the change is signed into law, saying it would be struck down for breaching the state’s contract with workers.

But the governor’s Chief Counsel James Schultz says the court would look kindly on the pension overhaul since it attempts to save hundreds of millions of dollars in pension payments for both the commonwealth and school districts.

"Even if they found that some type of impairment existed, we believe that there’s a – that there’s a reasonable, that the measures are reasonable and necessary – again, broad-based reform – to accomplish an important public purpose," Schultz said.

Corbett’s staff also disagrees with union leaders who say changing future benefits would amount to a broken contract.

They say past court rulings have only specified that already-earned employee benefits cannot be changed – so future benefits are not protected.

The head of the state’s largest school employees union says the administration is spreading false information and the Legislature would be wise to reject the pension overhaul effort entirely.

Schultz says the state Supreme Court has not yet ruled on a plan similar to the governor’s.

But the state’s largest teachers union says this isn’t true. The two cases the state’s high court ruled on in 1984 did involve changes to employees’ future contribution rates to their pensions, and those changes were struck down.