Tartaglione, Senate Dems, Offer Solution to Protect Pension Systems, Save Taxpayers Billions
HARRISBURG, March 12, 2014 – State Sen. Christine M. Tartaglione today said she is supporting a proposal that would save Pennsylvania taxpayers billions of dollars and solve the state’s pension problems.
The proposal, introduced by members of the Philadelphia lawmaker’s Senate Democratic Caucus, would refinance $9 billion of the $50 billion in unfunded liabilities now owned by the State Employees’ Retirement System and the Public School Employees’ Retirement System, further reform state pension laws to stop charter schools from receiving double-dip state reimbursements, and lower the collars on state and school district payments to provide short-term budget relief.
“This is a bold proposal that promises to immediately take the pressure off the state’s pension systems,” Tartaglione said. “I am supporting it because it avoids the expensive court challenges other proposals will bring, and it reassures thousands of state workers, educators, and retirees that they will not be affected by attempts to change participation rules.”
Sen. Tartaglione said she is also encouraged by the proposal because it builds on Act 120, which implemented significant pension reforms in 2010, including the delivery of $3 billion in savings for the commonwealth and school districts.
Act 120 reforms capped collars for current employees; reduced the collar, or multiplier, for new employees from 2.5 percent to 2.0 percent; returned the vesting period from 5 years to 10; eliminated lump-sum withdrawals by employees at retirement; and established “shared risk” rules for new employees.
“With the proposal being put forth today by Senate Democrats, school district pension payments would decrease by $600 million over the next five years, including by $75 million in 2014-’15,” Tartaglione said. “Also, the commonwealth’s combined SERS and PSERS payments would drop by $1.2 billion over the same time period, including by $120 million in the coming budget year.”