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Corbett wants to confront pension costs 'tapeworm'
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Candidate
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| Contributor | Scott³ |
| Last Edited | Scott³ May 05, 2012 03:08pm |
| Category | News |
| News Date | May 05, 2012 03:00pm |
| Description | "Gov. Tom Corbett has added a new item to his agenda: the increasing costs of pensions covering more than 800,000 retired and current state workers and public school employees.
Aides are analyzing options to deal with the spiraling pension costs as the Republican governor surveys what could be an entire first term , and perhaps second term, too , of difficult budget-making.
"It's a big issue," Corbett said Wednesday. "I've been going to school. There are legal issues that we are taking a look at and nothing has (been) presented to me just yet, but there are approaches that may be available to be taken."
Any action won't happen until at least next year, Corbett said. But even then, legal analysts, labor union leaders and retirement system officials say they know of little that can be done to moderate the cost spike.
For one thing, reducing the benefits of retired or already hired employees , even requiring that they switch into a 401(k)-style plan , runs into a principle of state constitutional law called the "impairment of contracts" doctrine.
Plus, a November 2010 law that reduced benefits for newly hired state and school employees also deferred billions of dollars , blunting what would have been an even steeper spike , by spreading the unfunded accrued liability farther into the future.
That leaves little else that can be deferred.
Benefits for future employees could be reduced again, but that would have little effect on immediate costs." |
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