PSEA Vice President to Senate Committee: Corbett's pension plan costs taxpayers more
Gov. Tom Corbett's pension plan fails the tests that any legitimate pension reform proposal must pass before it should be taken seriously by the General Assembly, said PSEA Vice President Jerry Oleksiak at a May 29 pension hearing.
Oleksiak testified before the Senate Finance Committee today on Senate Bill 922, legislation that was introduced on May 7, more than three months after Gov. Corbett unveiled his pension plan.
“The governor's plan fails to meet any of the criteria that would make up a meaningful pension reform proposal,” Oleksiak said. “It's unfair to current and future school employees, it's unconstitutional, it carries a higher overall cost than the current system, and it passes the buck to future taxpayers.
“The governor's plan doesn't reform anything. It actually costs taxpayers more and guts the retirement security that hundreds of thousands of Pennsylvanians have earned - and paid for. Legislators should reject it.”
Oleksiak pointed out that the governor's plan falls far short of the far-reaching reforms the General Assembly approved in 2010, which will result in $33 billion in future benefit cost savings over the next 30 years. The Pension Reform law of 2010, Act 120, increased contributions for new employees, increased vesting requirement from five to 10 years, and increased the retirement age.
“In 2010, legislators, the governor, and public employees all worked together to design pension reforms that actually made sense,” Oleksiak said. “The governor's plan doesn't include any of those attributes and will actually end up making the current problem worse.”
Two dozen retired educators were also present during the committee hearing, evidence that the governor's pension plan impacts retired state and school employees.
"Closing the doors on the current pension systems could put the pensions of retired educators at risk," said PSEA-Retired President Sue Jones. "Forcing new employees into a defined contribution system will starve the current defined benefit funds.
"You can't run two retirement systems for the price of one without taking a huge risk. That risks the commitment the Commonwealth has made to hundreds of thousands of retired Pennsylvanians."
Oleksiak also emphasized that state and school employees have always paid their fair share toward their pensions, even when the state and school districts didn't.
“You can't blame this on state or public school employees who have made their required contributions while the state and school districts ran theirs up on a credit card,” Oleksiak said. “We've done more than our part. The governor's plan doesn't do anything but attack public employees' pensions and cost taxpayers more.”
Learn more at www.psea.org/pensions.