With the fall legislative session fewer than two weeks away,
the Corbett administration continues to make its rounds to talk about the need
for public-sector pension reform.
Secretary of the Commonwealth Carol Aichele was the guest
speaker today at the Greater Harrisburg Association of Realtors Commercial
Council’s breakfast event, where she reinforced the message that legislative
action is needed this fall.
Without reform, the pension problem — more than $50 billion
in unfunded liabilities slated to grow to $65 billion by 2018 — will only get
worse for school districts and the state, which puts further property tax
pressure on businesses and residents, Aichele said.
“It’s a benefit to the people of Pennsylvania if the pension
issue is addressed this session,” said Aichele, who supports the hybrid reform
bill proposed by Rep. Mike Tobash (R-Schuylkill County).
The Tobash proposal, which Gov. Tom Corbett favors, would
enroll new state employees and public school workers in a “hybrid” retirement
plan. The first $50,000 of an employee’s salary and first 25 years of service
would be covered by a defined-benefit plan, like the current system. That
threshold would rise by 1 percent each year.
A 401(k)-style plan would cover the other portions of
employees’ salary and service above that threshold.
“I think it begins the process of addressing the pension
problem,” Aichele said, citing potential long-term savings of $11 billion to
$15 billion. “It’s a move in the right direction.”
Failure to address the pension debt will likely result in
budget cuts in other areas, including education, health care, infrastructure
and public safety, she said: “Dismissing it as a not-important issue is
irresponsible.”
The General Assembly returns to session Sept. 15. It might
be the last chance for the Corbett administration to get pension reform done,
as he is in a tough re-election campaign against York County Democrat Tom Wolf.
Source: Central
Penn Business Journal
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