If Pensions Be Pac-Man…

If Pensions Be Pac-Man…

Then does that make the various methods of reform the ghosts? The video game reference, made by the Governor and noted in a new report on pensions from the state Budget office, arises from the state’s pension contributions in which money put toward pensions devours dollars that would otherwise go to the fundamental areas of state policy such as public safety, infrastructure, education, and health.

The report deals with the two pension plans administered directly by the state-one for state employees (SERS) and one for public school employees (PSERS)-and no mention is made of dealing with the pension plans that exist at the county, municipal, or authority level. There are about 2,000 of those in Pennsylvania, but diagnosis of the problem (the report looks at the dozen years or so of legislative enhancements and corrections to pension funding) and exploration of solutions deals with the two big statewide plans. Believe it or not, the funding ratio for both hover around 68%, making them "moderately distressed", which is where the beleaguered City of Pittsburgh’s plans are as of now.

The report lays out a framework for how to achieve changes, including looking at other states for guidance. Interestingly, with data from the National Conference of State Legislatures there has been a fair amount of reforms that have affected new and current employees as opposed to just singling out employees that have yet to be hired. Increasing employee contributions, a reduction in increases to post-retirement benefits, and restrictions on return to employment tended to hit current and new employees in recent years. If there were changes to age and service requirements, changes to average final salary calculations, or vesting changes they tended to fall on new hires predominantly or exclusively. Pennsylvania’s Act 120 of 2010 made changes that mostly affected new hires.