For Small Towns In PA, There Are Better Ways To Manage Pension Plans

May 8, 2015

Homer City Police Chief, Louis Sacco, is one of just three people – two active and one retired – in his pension plan. He drives around the tiny borough, about 50 miles East of Pittsburgh, with views of looming power plant stacks in the distance and a partly shuttered Main Street.

He’s constantly waving at passersby, many of them people he grew up with, people whose tax payments help fund his pension. What’s it feel like to be the guy in such a small plan? I ask.

He laughs. “That’s not only the pension, that’s a lot of things. You know, when somebody needs something, everybody’s got that guy, I’m that guy in Homer City.”   

Turns out, many communities have a guy, or gal, like that. Most of the state’s thousands of municipalities have multiple plans -- one for police, firefighters, office workers, road crews – and nearly 70 percent of those plans have 10 or fewer members. Pennsylvania has more than a quarter of all pension plans in the United States.

Pennsylvania likes keeping things local. On the one hand that results in intimate governance, on the other hand that kind of fragmentation introduces systemic issues that can weaken pension funds. The very nature of how pensions are organized in the Commonwealth makes them unwieldy and inefficient.

Read more of this special report at the website of our partner Keystone Crossroads.