Contact Information 

Meadville District Office
900-920 Water Street
Downtown Mall
Meadville, PA  16335
Phone (814) 336-1136
Hours 8 a.m.- 4:00 p.m. (M-F)

Fairview Office (Mondays Only)
Fairview Township Building
7471 McCray Rd., Fairview, PA
Hours 9 a.m. - 4 p.m. (Monday)
1-800-770-2377

Cranesville Office (Thursdays Only)
Cranesville Borough Office
10195 John Williams Ave.
Cranesville, PA 16410
Phone: 1-800-770-2377
Hours 9 a.m. - 3 p.m. (Thursday)

Capitol Office
Hon. Brad Roae
151 East Wing
Harrisburg PA 17120-2006
Phone: (717) 787-2353
Fax: 717-782-2902

E-mail:
  broae@pahousegop.com

Q & A - Public Pension Reform Update
6/20/2013

QUESTION:  You previously provided an outline of the public pension problem.  Can you tell me if any steps have been taken to address this issue?

ANSWER:  The governor unveiled a robust public pension reform proposal when he outlined his budget priorities in February.  As with most proposals, the governor’s original plan has been modified as it made its way through the legislative process.

A state Senate committee recently approved a watered-down bill that still contains some important public pension reforms.

The largest and most important change the bill would implement would be to enroll new hires into a defined contribution retirement plan.

The current State Employees’ Retirement System (SERS) and Public School Employees’ Retirement System (PSERS) pension plans are defined benefit plans.  Employees contribute part of their paychecks to pay for the system.  Employers – the state for SERS and a combination of the state and local school districts for PSERS – also make contributions to the system.  The money is then invested and the returns are used to pay for benefits.  Under this type of system, if the investments fail to provide adequate returns to cover pension costs – as they did during the recent recession – taxpayers are on the hook to make up the difference.

The new defined contribution plan would shift that risk from taxpayers onto employees.  Under this system, workers and employers would still make contributions.  However, the money would be invested and the rate or return on those investments would determine the workers’ pension benefits.

In addition to new hires, the reforms also would apply to legislators.  That means that for future years of service, we would be enrolled into the new plan.

The public pension changes are so important because the obligations are eating up larger and larger portions of the state budget.  If nothing is done, there will come a time in the near future where $1 out of every $10 paid by taxpayers would go to support public pension obligations.  It is hard to provide support for the Titusville Area School District, the University of Pittsburgh at Titusville campus, Titusville Area Hospital, Drake Well, Oil Creek State Park and other state-funded things when $1 out of every $10 tax dollars is going to pay for public pensions.

The Senate’s plan would have to be approved by the House before it could be signed into law by the governor.  While I support additional reforms to further reduce future pension costs, I recognize that the legislation must be able to receive a majority of support in the House and Senate.
Share |