|Posted:||October 21, 2019 04:27 PM|
|From:||Representative Kerry A. Benninghoff and Rep. Garth D. Everett|
|To:||All House members|
|Subject:||Option to Prepay Pension Liability for Responsible Budgeting and Cost-Savings|
In the near future, we will be introducing legislation to allow participating employers in SERS to pre-fund all or a portion of their “unfunded actuarial liability” (UAL).
In other words, any SERS employer who is able or seeking to responsibly manage their pension liability payments, will have the option to pre-fund. This is a win-win-win; a win for the Commonwealth, a win for employers and a win for retirees. The pre-funding of accrued liability would allow employers to better control and plan for future costs, while at the same time improving the health and stability of the state-wide pension system.
We want to be clear. This would not be a mandate. Any prepayment would be 100 percent optional. Additionally, any employer who chooses to take advantage of this responsible budgeting option would continue to be liable for future changes in their UAL. Employers would not be opting out of SERS, they would simply be “refinancing their debt.”
Penn State University is a good example of an employer who could benefit from this option. In consultation with SERS, Penn State has determined that pre-funding its UAL would result in significant cost-savings for the university, allow it to operate more efficiently and create a predictable budget landscape for the future. All of these tangible benefits would help Penn State keep its world-class education affordable for all students, especially Pennsylvanians.
Please join us in cosponsoring this legislation.
Introduced as HB1982