Pennsylvania’s two pension systems’ debt outweighs their assets by more than a combined $47 billion. That number is expected to reach nearly $65 billion within the next five years.
A combination of factors has contributed to today’s problem. Pension investments have not met expected returns. Changes in legislation over the last decade have artificially suppressed the employer contribution rate to provide short-term budgetary relief to the commonwealth and school districts. This was done without any savings offsets and may have contributed to the problem we face today.
Absent meaningful reform, the commonwealth will continue to struggle to make its employer contributions, may have to choose to either pay pension obligations or fund programs and services for Pennsylvanians, and faces a continuing growth in pension debt for future generations.
Governor Corbett has proposed a bold pension reform plan that will not only address budgetary relief, but will also tackle the long-term pension debt Pennsylvania now carries and put in place reforms that will ensure this problem does not occur again in the future.
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