The Daily Item, Sunbury, PA


July 11, 2014

Keller: Corbett "childish" in blaming pols for lack of pension fix

HARRISBURG — While the Legislature has been unable to shift away from the defined-benefit pension style that is creating a crippling unfunded liability, small rural governments have quietly been adopting pension plans that don’t carry the same risks.

A new study by the Center for Rural Pennsylvania found that 4 in 10 rural townships and boroughs use 401(k)-style pensions for their employees. And most of those plans are in no financial difficulty at all.

In contrast, the city pensions and the state-run pensions for Pennsylvania government employees and public school workers are teetering under the weight of future costs that far outstrip what they will have in the bank.

Unfunded liability stands at $50B

The pensions for state employees and public school employees are burdened by a combined $50 billion unfunded liability. Gov. Tom Corbett has endorsed plans to shift future public school and state government workers into 401(k)-style plans.

Despite repeated pleading from the governor, the Legislature recessed for the summer without taking any major action on pension reform. The House failed to pass any legislation; the Senate passed a bill that would move elected officials — including lawmakers and the governor — into 401(k)-style plans, while not forcing other government employees to follow suit.

In the 401(k)-style plans, most common in the private sector, the employer and employee both contribute, but the pension benefit is determined by how much is in the employee’s account at retirement. Under the defined-benefit approaches used by both the State Employee Retirement System and the Public School Employees Retirement System, the employee’s pension payments are guaranteed, based on a calculation that includes years of service and the average salary of the worker at the end of his or her career.

Corbett has become so frustrated by the General Assembly’s failure to act on pension reform on Thursday he used his line-item veto powers to cut $65 million from the Legislature’s budget and axed more than $7 million in earmarks tucked into the budget. That included $5 million the Legislature had agreed to pay for parking around the Capitol.

“They are a full-time Legislature,” Corbett told reporters Thursday. “They need to return and enact meaningful pension reform.”

Retorted said Rep. Fred Keller, R-85, Kreamer; “I think the governor probably didn’t sign the budget in the first place because it wasn’t written in crayon. He’s being childish.”

Keller took umbrage with the governor’s comments about the General Assembly being a full-time Legislature. “I work full-time whether I’m in Harrisburg or not.”

Keller said he feels like Corbett failed to lead effectively on the pension issue until it was too late.

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