Pa. Repubs still pushing a pension "fix" that will increase costs to the state

It is widely recognized that the state budget and budgets of cities and school districts are straining under rapidly increased pension costs. Part of the problem stems from the fact that the state and many school districts did not contribute to the pension funds for many years, while employees continued to pay into it.

Another part of the problem is that SOME public workers can work for 30 years and then instantly start collecting full pension benefits, which can continue for another 30 years, based upon a typical lifespan. That math doesn't work - the State can't generate enough pension revenue in 30 years of work to pay for 30 years of pension benefits.

(Note - the rules for various public employees vary greatly, and some state employees cannot collect full benefits until after 35 years and they reach age 65).

However, as described in the linked AP article, leading Pa. Repub legislators are still trying to force through ideological changes, instead of addressing the increased current costs. They are trying to force Wolf to agree to shift new state workers to individual IRAs, before they will agree to do anything that Wolf wants to fix the looming $1.5 billion state deficit.

The problem is that this change would make the current crisis MUCH WORSE. New workers would no longer be paying into the state pension funds, but instead would be paying into their own accounts. Those dollars from new workers are needed to pay for benefits of current retirees.

(Note - courts have ruled that the state cannot reduce benefits of current retirees.)

A few years ago, legislators were able to take home amazingly large lump-sum pension payouts, but the worst of those abuses were reduced. However, state legislators are now vested after only 5 years and can collect after age 50.

Several years ago, pension benefits were also reduced for new state employees.

http://www.philly.com/philly/news/politics/20141227_ap_40e609a793ab4710a6d2ecffb6b2de1c.html

http://sers.pa.gov/members-class-of-service.aspx