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Politics & Government

Pension Reform: Big Part of PA Budget Debate?

Governor Tom Corbett is expected to focus in part on the state’s rising public pension costs in his budget address Tuesday.  

Corbett has suggested he’s interested in a reform package that includes reducing the unearned benefits of current state and school employees.

But Dave Fillman, director of Council 13 of the Pennsylvania American Federation of State County and Municipal Employees, the state’s largest public sector union, said his group will definitely take the commonwealth to court if legislation is passed to change the benefits of current employees.

“Not only that but we can’t even as labor organizations bind our members on a constitutional issue,” Fillman said.

Mike Crossey, president of the Pennsylvania State Education Association said such a move is blind to the whole issue of the debt the state has already accrued because of under-funded pension systems.

“In their proposal they’re trying to compare just the costs going forward. They’re not addressing the unfunded liability, which the current Act 120 does.  So they’re saying, well we could do this, but their plan is not addressing this huge unfunded liability, which also needs to be paid off,” said Crossey. 

Act 120 was a package of reforms passed in 2010 that refinanced the state’s existing pension debt and reduced benefits for future employees.  

Both unions say amending the pension benefits of current employees is a breach of contract that has been deemed unconstitutional in past court cases.

Republicans and Democrats have suggested that changing current employees’ pension benefits would not have any effect on the state’s current pension debt, which tops 41 billion dollars.