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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: March 13, 2015 12:35 PM
From: Representative Jaret Gibbons
To: All House members
Subject: Parity for Pre-Act 9 Retirees (Former HB 1645)
In the near future, I plan to re-introduce legislation, former House Bill 1645 of 2013-14, will provide parity to members of the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS) who retired prior to Act 9 of 2001

As you may know, Act 9 of 2001 increased the contribution rate by 1.25 percent for employees that retired after January 1, 2002. In addition, Act 9 increased the retirement benefit for these employees from 2 percent to 2.5 percent for each year of service, which is based on the average salary of the highest three years. As a consequence of this legislation, employees who retired before July 1, 2001 earn 25 percent less in pension benefits than employees who retired after this date. Considering the additional benefits enjoyed by post-Act 9 retirees, the fact that Pennsylvania is last of all fifty states in the number of cost of living adjustments (COLAs) granted to retirees (there have only been a total of seven COLA increases since 1968), and the poor salaries and wages of many of the older retirees when they retired, providing parity through a "Catch-Up COLA" is necessary for restoring equity amongst both past and future state and school retirees. Some of the oldest of these pre-Act 9 retirees subsist entirely on their pension as they were not eligible for Social Security at the time.

Specifically, my proposal would disburse a supplemental annuity over a five-year period that is equal to a percentage of the monthly annuity payment. This percentage would be determined by the most recent effective date of retirement. During these tough economic times when everyone is forced to do more with less, a "Catch-Up COLA" is needed in order to provide pre-Act 9 retirees with a sense of financial security. As talk begins on pension reform during this legislative session, we should not forget retirees who have been falling behind in recent years.

I invite all members to co-sponsor this legislation.

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Introduced as HB1608