State Government
6:21 am
Thu May 30, 2013

State Senate Pension Hearing Offers Few Answers

State Senate lawmakers are beginning the public vetting of a three-part proposal from the governor's office to deal with the state's multi-billion dollar pension debt.

Months of debate leading up to the hearing have only made the groups on either side of the issue seem as entrenched as ever.

Gerry Oleksiak, vice president of the Pennsylvania State Education Association, reiterated the unions' position that the governor's plan to reduce the future benefits of current employees is an unconstitutional breach of contract.

"When our pension benefits were raised, we had to agree to that. Every individual member in the system had to sign off on that," Oleksiak said. "And I guess if the governor wants to poll every one of our members now to see if they want to go into a defined contribution plan, he's certainly welcome to do that."

The Corbett administration has outlined the legal defense of the proposed pension overhaul, voicing confidence that it would end up in court.

Budget Secretary Charles Zogby acknowledged part of the reason the state faces huge public pension debt is because lawmakers under former Republican Gov. Tom Ridge gave a green light to higher benefits while underfunding the pension plans. But he said that's exactly why changing the structure of the pension plans is crucial - to prevent them from being similarly fiddled with in the future.

"It's the very nature of the defined-benefit plan that is the problem," Zogby said. "It's subject to this manipulation of granting benefits that aren't paid for or underfunding the systems when it's convenient to do so."

The Senate hearing was framed as a way to be clear about the state's pension debate, but nothing about this debacle has been cleared up by talking. Groups on either side of the issue have been ramping up their respective information campaigns since last summer. Public sector unions have held briefings and conference calls. Corbett has visited newspaper editorial boards across the state, making his case for the three-part proposal he laid out in February.

On Wednesday, Sen. Rob Teplitz, a Democrat representing the state employee-rich Dauphin County, put words to the raw nerve at the center of the debate, blaming the Corbett administration for casting state and school workers as greedy for having cushy pension benefits that were hiked by the General Assembly and the Ridge administration. The accusation was quickly refuted by the governor's Budget Secretary Charles Zogby.

"It's not fair to demonize employees and teachers - which has been an unfortunate part of this discussion - when you know they were along for the ride," Teplitz said.

Zogby said the administration is simply trying to deal with an unsustainable situation, one in which pension costs will soon eat up 66 cents of every buck rolling into the state's revenue coffers.

Corbett's pension overhaul plan is three-pronged: It would reduce the scheduled payments the state has to make on its pension debt, reduce the future benefits of current employees and enroll future employees after 20-15 in a 401(k)-style plan - similar to what's common in the private sector. His budget office has said if all three pieces of the plan are enacted, the state's pension debt will not grow, even though the debt payments will be spread out over a longer period of time.