Pension Reform Blooms in the Garden State
Just over the border from Philadelphia-the city that accounts for 80% of the aggregate shortfall of all local pension plans in the Commonwealth-reform of public sector pensions is taking shape.
According to an article in the Philadelphia Inquirer, the reforms would include a roll back of a 9 percent pension increase approved in 2001, a requirement that new part-time workers to receive 401(k)-like plans rather than defined benefit plans, and a minimum threshold of weekly hours worked for employees to qualify for a pension. A constitutional amendment would force the state to fully fund its pension obligations over a seven year period.
These changes follow several attempts earlier in the decade to obtain long-term change in the state’s pension system. With long range pension and health care obligations estimated to be around $112 billion (that’s for the state only, not the locals), some lawmakers have decided to take the issue on. There will be tremendous pushback from the state’s public sector unions. Consider it a prelude to life in Harrisburg in 2011.