The Daily Item, Sunbury, PA

News

November 26, 2012

Corbett: State pensions $41 billion in the hole

HARRISBURG —  Pennsylvania must consider all available options to get control of a public pension crisis in which the two main pension systems have a combined unfunded liability of more than $41 billion, Gov. Tom Corbett said Monday.

Benefits for the 310,000 retirees already collecting pension benefits are off-limits, Corbett said.

“Retirees earned their benefits. We cannot, nor do we contemplate any changes to their benefits,” Corbett said.

But the governor’s legal advisers believe that, while mid-stream changes for the 386,000 existing state and public school employees contributing to the pension system would be challenged in court, the state could make a strong case that the funding crisis justifies changes.

Existing employees would not lose any benefits they have already earned, but the state may look to change the rules moving forward.

Possible changes could include raising the retirement age, increasing the contribution rate paid by employees and adopting a defined contribution type of plan to replace the defined benefits plan currently used by the public sector unions, but almost nowhere else.

Corbett said that even among trade unions, most have agreed to changes to pension plans that eliminate defined-benefits models. Public sectors unions are an aberration.

None of the prior pension reform efforts in Pennsylvania have tried to change the rules for existing employees, focusing on changes for newly hired workers, said Budget Secretary Charles Zogby.

Zogby said the pension crisis was caused by short-sighted legislation from the months before 9/11 when the stock market was performing so strongly that legislators believed that investment growth could sustain the pension system without requiring the state or school districts to fully contribute their employee contributions. Pennsylvania has consistently under-funded its pension for more than a decade since even as the stock market tanked, causing the investment performance of the pension fund to suffer. Pennsylvania contributed a smaller share, 30 percent, toward its pension liability than 48 other states, Zogby said.

The average of all state pension systems was 89 percent.

Zogby said that projected increases in 2013-14 in pension costs, medical assistance costs, corrections costs and debt service will top $1.3 billion.

Of that, $511 million would be in the form of increased costs to the state as employer contributions to the pension systems, Zogby said.

Altogether, assuming the state sees 3 percent revenue growth, there would be only $818 million in additional revenue to cope with those increased costs.

1
Text Only
News
  • Prize claim cost man $1,829

    WINFIELD — Western Union is doing what it can to educate people about the risks in wiring money. An entire section on its website (www.westernunion.com) is devoted to providing information that might reduce the risk of people falling victim to fraud schemes.
     

    April 19, 2014

  • Reel good time enjoyed by 200 young anglers

    TREVORTON — It only took about three minutes for J.C. Wallish to reel in his first fish at the Little Shamokin Creek Watershed Association’s annual Youth Trout Derby on Saturday.
     

    April 19, 2014

  • Elytte Barbour's 'bad trip' put him on the road to prison, friend says

    SUNBURY — A former roommate of slaying suspect Elytte Barbour drove 450 miles from North Carolina to spend 45 minutes in the Northumberland County Prison with his best friend last week, and was not surprised when he heard Barbour say: “I am afraid to spend the rest of my life in jail.”

    April 19, 2014

  • bonehunt20a.jpg 60 dogs battle for biscuits at annual bone hunt

    It was a scene similar to ones playing out all over the nation this weekend: nervous parents holding baskets and bags, watching their little ones search for goodies in the grass.

    April 19, 2014 1 Photo

  • Arizona tribe set to prosecute first non-Indian under a new law

    PASCUA YAQUI INDIAN RESERVATION, Ariz. — Tribal police chief Michael Valenzuela drove through darkened desert streets, turned into a Circle K convenience store and pointed to the spot beyond the reservation line where his officers used to take the non-Indian men who battered Indian women.
     

    April 19, 2014

  • Danville parents hope strike ends quickly

    DANVILLE ““ First-grader Madison Wild was sad she missed school Thursday.

    April 19, 2014

  • Schools ask state to waive 180-day rule

    Three area school districts have asked the Pennsylvania Department of Education to add up their hours instead of their days in order to reach the required amount of instruction time in the school year.

    April 19, 2014

  • Former Bucknell star in NBA playoffs

    ATLANTA — It really hit Mike Muscala a few days ago when he was listening to the Nets’ starting lineup at the Barclays Center in Brooklyn.

    April 19, 2014

  • State: Discard raw milk from Greenfield Dairy

    MIDDLEBURG — Consumers should discard raw milk purchased recently from the Greenfield Dairy of Middleburg, which also has temporarily suspended production after Listeria monocytogenes was discovered in the product following routine testing, the state Department of Agriculture announced today.

    April 18, 2014

  • Penn State police: Three posed nude at Nittany shrine

    STATE COLLEGE — Penn State police say three male students who reportedly posed nude for a photo at the university’s Nittany Lion Shrine face school discipline.

    April 18, 2014

The Daily Marquee
Poll

How do you eat your chocolate Easter bunny?

Feet first
Tail first
Ears first
     View Results
Photo Galleries
The Valley

Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.