PRINTER'S NO. 1039
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE RESOLUTION
No.
167
Session of
2019
INTRODUCED BY RYAN, GROVE, PICKETT, JAMES, READSHAW, SAYLOR AND
KORTZ, MARCH 25, 2019
REFERRED TO COMMITTEE ON FINANCE, MARCH 25, 2019
A CONCURRENT RESOLUTION
Urging the State Treasurer to petition the Federal Reserve to
remit $24 billion, less applicable benefit, to the
Commonwealth to reimburse the State Employees' Retirement
Fund and the Public School Employees' Retirement Fund for
lost earnings due to quantitative easing.
WHEREAS, The Federal Reserve System is a Federal agency,
comprised of a board of governors and 12 independent regional
reserve banks; and
WHEREAS, The Federal Reserve directs the central banking
system of the United States and was created to respond to
banking panics; and
WHEREAS, In response to various financial troubles, the
Federal Reserve introduced new money into America's financial
system by purchasing assets from commercial banks at various
points between 2009 and 2014 by a process called quantitative
easing; and
WHEREAS, Quantitative easing had negative side effects that
limited the earning potential of municipal and Commonwealth
pension portfolios; and
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WHEREAS, Pennsylvania seeks restitution from the Federal
Reserve to reimburse the Commonwealth for lost earnings of
pension plans due to the negative impacts of quantitative
easing; and
WHEREAS, The estimated amount of net damages for the years
2009 to 2016 is 200 basis points per year for 40% of the
Commonwealth's portfolio and municipal portfolio of pension
assets, totaling $24 billion; and
WHEREAS, The Commonwealth has benefited from lower interest
rates on State obligations for the years 2009 to 2018; and
WHEREAS, A calculation of net damages incurred by the
Commonwealth should take into account benefits that have accrued
to the Commonwealth; and
WHEREAS, The State Treasurer should calculate net damages
incurred by the Commonwealth by determining the amount of
benefits accrued to the Commonwealth as a result of lower
interest rates and subtracting that amount from $24 billion; and
WHEREAS, The State Treasurer should petition the Federal
Reserve to remit an amount of money to the Commonwealth equal to
the net damages incurred by the Commonwealth; and
WHEREAS, Any money received from the Federal Reserve shall be
deposited into the State Employees' Retirement Fund and the
Public School Employees' Retirement Fund; and
WHEREAS, The amount of money deposited into the State
Employees' Retirement Fund and the Public School Employees'
Retirement Fund shall be calculated by applying the ratio of
each of the retirement fund's assets to the total amount of
assets in both retirement funds at the close of fiscal year
2017-2018 to the total money received; therefore be it
RESOLVED (the Senate concurring), That the General Assembly
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of the Commonwealth urge the State Treasurer to petition the
Federal Reserve to remit $24 billion, less applicable benefit,
to the Commonwealth to reimburse the State Employees' Retirement
Fund and the Public School Employees' Retirement Fund for lost
earnings due to quantitative easing; and be it further
RESOLVED, That a copy of this resolution be transmitted by
the Clerk of the House of Representatives to the Governor, the
State Treasurer and to each member of Congress from
Pennsylvania.
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