THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE RESOLUTION

INTRODUCED BY MILNE, AUMENT, BARRAR, CLYMER, CREIGHTON, CUTLER, DALEY, FARRY, GABLER, GEIST, GINGRICH, GRELL, GROVE, HENNESSEY, HESS, LAWRENCE, MAJOR, MILLER, O'NEILL, PRESTON, PYLE, ROSS, SANTARSIERO, SONNEY, STEVENSON, SWANGER, TALLMAN, TAYLOR, VULAKOVICH AND WATSON, MARCH 12, 2012

REFERRED TO COMMITTEE ON STATE GOVERNMENT, MARCH 12, 2012  

A RESOLUTION

Directing the Public Employee Retirement Commission, in

conjunction with the Public School Employees' Retirement

System and the State Employees' Retirement System, to conduct

a comprehensive study of the respective State-sponsored

pension systems.

WHEREAS, The Public School Employees' Retirement System

(PSERS) and the State Employees' Retirement System (SERS) are

responsible for administering pensions for current and retired

public school employees and State employees; and

WHEREAS, Reports from PSERS and SERS indicate that while the

actions taken by the General Assembly in recent years have

decreased obligations for future employees, PSERS and SERS have

a combined $29.4 billion in debt; and

WHEREAS, The unfunded liability within PSERS is expected to

reach 25% of total employer costs within the next 10 to 15

years; and

WHEREAS, SERS expects its unfunded liability to grow to

$10.79 billion within the next 10 to 15 years; and

WHEREAS, PSERS and SERS attribute this debt to employer-based

contributions that do not meet normal costs, investment losses,

benefit increases without increased funding streams and funding

changes to extend time to pay down liabilities; and

WHEREAS, As a result of this debt, employer contributions,

which are made by the Commonwealth and its school districts, are

expected to dramatically increase in the coming years; and

WHEREAS, The PSERS employer contribution rate is expected to

reach 27% in 10 years; and

WHEREAS, The SERS employer contribution rate is expected to

reach 16% in the next five years; and

WHEREAS, The respective contribution rates for PSERS for

Fiscal Year 2011-2012 is 8.65% and SERS is 8%; therefore be it

RESOLVED, That the House of Representatives direct the Public

Employee Retirement Commission (PERC), in conjunction with the

Public School Employees' Retirement System (PSERS) and the State

Employees' Retirement System (SERS), to conduct a comprehensive

study of the respective State-sponsored pension systems; and be

it further

RESOLVED, That the study detail the impact a switch to a

defined contribution plan, hybrid plan or cash balance plan

would have on PSERS and SERS for future State and public school

employees; and be it further 

RESOLVED, That PERC examine legislative action in other

states that addresses pension-funding issues and determine the

feasibility and impact these measures would have in this

Commonwealth; and be it further

RESOLVED, That PERC examine the average pension disbursal to

both State and public school retirees and compare it to average

retirement compensation private-sector employees typically

received; and be it further

RESOLVED, That PERC identify strategies that provide for the

transition of at least some portion or all of the current State

and public school employees to a defined contribution plan,

hybrid plan and cash balance plan; and be it further 

RESOLVED, That PERC include any legal ramifications a change

impacting the retirement compensation of current employees might

have on this Commonwealth; and be it further

RESOLVED, That PERC, in conjunction with PSERS and SERS,

provide recommendations necessary or desirable to decrease the

unfunded liabilities within PSERS and SERS and lessening

necessary employer contribution rates; and be it further

RESOLVED, That PERC report to the House of Representatives

the result of its studies and recommendations and file the

report with the Chief Clerk of the House of Representatives not

later than June 30, 2012.