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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session


Posted: December 11, 2018 10:33 AM
From: Senator Kristin Phillips-Hill and Sen. Mike Folmer
To: All Senate members
Subject: Restricting Public Pensions for Future Association Employees
As a small step in fixing the many problems of Pennsylvania’s public pension system, we will be re-introducing House Bill 205 of last session and what was Senate Bill 370 also of last session that will remove future employees of the Pennsylvania School Boards Association (PSBA), a private sector non-profit advocacy group, from being eligible for public pension benefits in the Pennsylvania School Employees Retirement System (PSERS). The legislation will accomplish this by amending the definition of “governmental entity” in Title 24 (Education) of the Pennsylvania Consolidated Statutes to exclude an association authorized to receive membership dues from a public school entity.

As of 2013, a reported 72 current and 47 former PSBA employees are vested in PSERS, already costing taxpayers millions of dollars over the decades with costs expected to escalate as the actively working 72 employees begin to retire. Some of these employees are registered as lobbyists.

Many people have inquired as to how PSBA’s employees come to be part of PSERS. It is interesting to note that at the time PSBA hired its first employee, the PA Attorney General ruled that the association was an extension of local school districts, and funded by them to provide information, training, publications, services and advocacy on their behalf. As a result, association employees were and are currently required to become members of PSERS at the current contribution rate upon hiring, and PSBA is required to pay the ever-increasing employer contribution. Since that time, PSBA employer and employee contributions to PSERS have been noted in the PSERS annual report, accepted by state treasurers, and reviewed and approved by auditors general through their regular review of the retirement system.

Due to the escalating costs of PSERS and the significant need for reform of the system, school employers are struggling to make their required contributions to the system. Removing new employees prospectively from the system will not only allow the Association of School Board Directors the opportunity to lead by example, it will also provide a cost-savings for PSBA and its member school districts, and give the association flexibility in offering employee retirement savings options similar to other private and nonprofit employers.

PSBA and school districts across the Commonwealth are fully supportive of this legislation and welcome the opportunity to lead by example in moving to a more affordable defined contribution system for all future association employees.

If you are not a public employee, you should not be in Pennsylvania’s pensions system. Please join us in taking this small, yet important step in fixing our public pension system.

Introduced as SB84