READING, Feb. 26, 2015 – Frustrated by inadequate proposals to address Pennsylvania’s multi-billion dollar public and municipal pension problems, Sen. Judy Schwank today said she has formally introduced her bill to create an expert panel that would devise the best solution to the crisis.
Senate Bill 564 would create the Public Pensions Review Commission and the 25-member panel would have six months to propose Pennsylvania’s path to pension solvency.
“Make no mistake,” Sen. Schwank said during a press conference here, “every senator in my caucus – and most public officials I have talked with – believe the gaping unfunded pension gap is a very serious problem. To say or think otherwise is disingenuous.
“What has been the problem with the ideas that have been floated is they, at best, would do very little to help the situation and, at worst, would exacerbate it.
“The PPRC would be given the time and the resources to light a path that ends the burden for Pennsylvania taxpayers and frees the commonwealth to use those dollars to properly invest in education, in businesses, and our communities,” Schwank said.
The Public Pensions Review Commission would include the governor; the revenue secretary; state budget director; director of the Office of Administration; the leaders of the four legislative caucuses; the director of the Administrative Office of Pennsylvania Courts; the chancellors of the PA State System of Higher Education; the presidents of Penn State, Pitt, Temple and Lincoln universities; executive directors of the Pennsylvania League of Municipalities, County Commissioners Association of PA, Pennsylvania State Association of Township Supervisors, Pennsylvania State Association of Boroughs, and Pennsylvania School Boards Association; representatives of the three public employee unions; and three public members possessing special expertise in issues relating to public pensions appointed each by the governor, president pro tempore and speaker of the House of Representatives.
The PPRC would be authorized to conduct hearings and receive appropriate information and analysis and be supported by the Joint State Government Commission. Its budget would be $1 million.
The commission would also be subject to right-to-know, sunshine and state ethics laws.
“At the end of six months, the PPRC would be required to do as the law would suggest and ‘recommend statutory and or regulatory changes needed or desirable to achieve … long-term, sound, stable, public pension structure for state and local governments’,” Sen. Schwank said.
While the combined unfunded pension liability for the Public School Employees’ Retirement System and the State Employees’ Retirement System is about $50 billion, Auditor General Eugene DePasquale said in January the municipal pension shortfall is $7.7 billion.
In 2013, PSERS paid $5.5 billion in retirement payments statewide, and SERS paid $2.9 billion.
Nearly half of Pennsylvania’s 1,223 municipalities (562) are distressed and underfunded.
“Much is at stake, and it’s important we get this right the first time,” Sen. Schwank said. “It’s why we need the PPRC, and it’s why we must start this process now.”
Joining Sen. Schwank at today’s press conference where:
- Reading City Councilwoman Marcia Goodman-Hinnershitz
- Craig Hafer, principal, Walsky Investment Management Inc., Wyomissing, and
- Dr. Solomon Lausch, executive director, Berks Business Education Coalition and retired superintendent for the Schuylkill Valley School District.
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More information on Sen. Schwank is available on her website, Facebook and Twitter.