|Posted:||February 2, 2015 12:04 PM|
|From:||Representative Keith J. Greiner and Rep. Seth M. Grove|
|To:||All House members|
|Subject:||Cash Balance Municipal Pension Reform|
|On January 14th, Auditor General Eugene DePasquale released a report updating the commonwealth on the crisis in our municipal pension system. In his report, the Auditor General detailed a statewide increase in the unfunded liability of $1 billion in our municipal pensions over the last two years. Across Pennsylvania, the unfunded liability is now a staggering $7.7 billion. In a separate report, the Auditor General highlighted the dire situation facing the City of Scranton, which has less than 4 years until pension funds are bankrupt.
Addressing the rapid increase of pension costs now poses the single greatest challenge facing many of our local governments. In particular, local governments now struggle to fund essential services as growing pension costs continue to exhaust local budgets. These essential services include providing for public safety, as our police and fire fighters are often hardest hit by the pension crisis. Too often local governments are financially forced to delay hiring additional safety workers or even reduce the number of public safety workers to pay the increases in pension costs. This was recently evidenced in York City, as Mayor Bracey proposed a budget, which eviscerated police and fire departments. The reason for such an extreme budget proposal was due to increasing pension costs. The unfortunate result is an increased danger to the heroes who keep our communities safe and secure.
In order to address this growing problem, we plan to reintroduce House Bill 1581 as amended last session, which would provide a quality pension benefit for municipal public safety employees while ensuring predictable and sustainable costs for local governments. The cash balance plan established in this legislation would be for new hires only and have the following features:
There is no quick fix to the current pension crisis without a huge influx of revenue and even that won’t fix the underlying problem of the benefit structure. By addressing the crisis in our municipal pension system now, we improve the safety and quality of life in our local communities.
Please join us and cosponsor this legislation. If you have any questions, please contact Eric Reath by telephone at 464-5285 or via e-mail at email@example.com.
Introduced as HB316