|Posted:||October 28, 2019 10:41 AM|
|From:||Senator Thomas H. Killion|
|To:||All Senate members|
|Subject:||Option to Prepay Pension Liability for Responsible Budgeting and Cost-Savings|
|I plan to introduce legislation that would allow participating employers in the State Employee Retirement System (SERS) to pre-fund all or a portion of their “unfunded actuarial liability” (UAL).
In other words, a 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.
Any prepayment would be 100 percent optional; this is not a mandate. 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 maintain its world-class education affordable for all students, especially Pennsylvanians.
Please join me in co-sponsoring this legislation.
Introduced as SB931