Bill Would Create Pension Commission to Address One of the State’s Biggest Fiscal Issues
Pennsylvania’s multi-billion dollar public and municipal pension issues have long been cited by lawmakers as an obstacle to economic growth. To address pensions, Senator Judy Schwank (D-Berks) has introduced a bill that would create the Public Pensions Review Commission.
“To examine the current systems, and to recommend statutory or regulatory changes needed to achieve and maintain a sound, stable public pension structure for both the state and for local governments,” said Schwank.
The 25-member group would be authorized to conduct hearings and receive appropriate information and analysis. Some of the questions to be addressed, said Schwank, are what does Pennsylvania’s future workforce like? How can the state attract and retain talent, and how can the state achieve retirement security?
“How do we protect taxpayers? How do we put a focus on the sustainable funding formula to pay what we owe know and also for future benefits?” Asked Schwank.
The panel would include the governor, the revenue secretary, state budget director, leaders of the four legislative caucuses, county and municipal officials, higher education system officials, union representatives and others. The panel would have six months to propose a plan to solvency for the pension system.
“It might be said that this process would take too long to get the results we need,” said Schwank, “I would counter that what we have done in the past and continue to do hasn’t worked. We need a pension solution for the long-run and this is the ideal way to get there, in my opinion.”
The PPRC be supported by the Joint State Government Commission and have a $1 million budget. It would also be subject to right-to-know, sunshine and state ethics laws.
The pension liability for the Public Schools Employees’ Retirement System and the State Employees’ Retirement System is about $50 billion, and PA Auditor General Eugene DePasquale said in January the municipal pension shortfall is $7.7 billion. Nearly half of the commonwealth’s municipalities' pension funds are distressed or underfunded.
“You may not recognize that this is one of the huge funding liabilities that the commonwealth faces,” said Schwank, “but when you complain about the services that you don’t get, or the funding for education that’s not there, you need to understand that this is part of the reason that we’re in the place that we’re in right now.”