Tagged: Pension reform

Gov. Tom Corbett and his allies in the state Legislature have introduced controversial legislation to reform the pension systems for state employees and public school teachers.

The sponsors say the bills make necessary cuts to reduce the state’s massive liability problem. Unions argue that the measures are illegal because they cut current workers’ future benefits.

Gov. Tom Corbett and his allies in the state Legislature have introduced controversial legislation to reform the pension systems for state employees and public school teachers.

The sponsors say the bills make necessary cuts to reduce the state’s massive liability problem. Unions argue that the measures are illegal because they cut current workers’ future benefits.

To get a handle on how Pennsylvania’s two public pensions ended up in their current funding crisis, one has to look more than a decade into the past.

A Big Commitment

Gov. Tom Corbett is reluctant to pull any legislative issue from the very top of his crowded agenda.

But other legislative leaders appear more than happy to do it for him.

The governor has said he wants four things done before lawmakers leave for their summer recess: a budget, liquor privatization, a transportation funding package and an approved overhaul of the state’s two pension plans and the debt that comes with them.  

One state lawmaker is raising the controversial idea of borrowing money to help put a dent in the state's $47 billion unfunded pension liability.

Rep. Glen Grell (R-Cumberland), who's been working on pension overhaul proposals, has suggested one way to pay down some of the state's pension debt would be to issue a pension obligation bond - not as a way to cover required state contributions to the two pension plans, but as a way to borrow money at a better rate and produce some savings.

The heads of the state’s two public pension systems are working to represent their members while delivering straight-talk about the size of the state’s pension debt to lawmakers.  

The commonwealth and school districts now face spiking payments to the funds, scheduled as part of reforms known as Act 120.

The Coalition for Sustainable Communities (CSC) is calling on state lawmakers to include municipal pension reforms in upcoming deliberations.

“We have literally dozens and dozens of municipalities with very severe pension problems across Pennsylvania. These are pension problems that, without changes to pension laws, municipalities will never be able to pay off,” said Brian Jensen, executive director of the Pennsylvania Economy League of Greater Pittsburgh, and member of the CSC.