The Tribune Democrat, Johnstown, PA

Breaking News

Local News

February 6, 2013

Pension plan would save districts millions

HARRISBURG — Gov. Tom Corbett’s plan to reform the funding for the two main public sector pension systems would save local school districts $138 million in the 2013-14 school year.

Over the next five years, the savings provided by Corbett’s plan would amount to $1 billion to local school districts.

While the governor’s plan calls for changing the pension plan by putting new employees in a 401k-style plan and would make other changes to existing employees’ plans, the savings would come from lowering the amount the state and local school districts pay in the form of employer contributions.

Corbett’s plan reduces current annual employer contribution limits from the mandated

4.5 percent to 2.25 percent in 2013-14.

Over the next five years, through the employer contribution limit changes, the commonwealth will realize nearly $2 billion in savings.

The governor’s office has estimated that without the changes, the pension costs would consume 60 percent of all new revenues for 2013-14, roughly $500 million that could be spent elsewhere.

The governor also proposes changing the funding formula for State Employee Retirement System members beginning on Jan. 1, 2015, and Public School Employee Retirement System members on July 1, 2015.

The governor and Republican lawmakers argue that the state has the right to adjust the formula for funding the pension system moving forward. All benefits earned by employees up until the new formula kicks in will remain unchanged.

Benefits for existing retirees are unchanged.

The key changes proposed for existing employees would be: Reducing multipliers used to calculate pension benefits; setting a ceiling of 110 percent of the average salary of the last four years of an employee’s career; capping the amount of pensionable income at $113,700; and determining retirement benefits by averaging the last five years of work. Some of those reforms are intended to limit excesses associated with employees who run up large amounts of overtime in their final years of work to boost their pensions, said Sen. John Gordner, R-Lycoming County.

A Pittsburgh-Tribune Review investigation in 2012 found that PSERS pays 336 pensioners $100,000 a year, compared with 322 in SERS. Most of the six-figure pensions from SERS go to retirees from Penn State.

Among the six-figure pensioners in PSERS was Robert Witten, the retired former chief executive officer of the Central Susquehanna Intermediate Unit, based in Northumberland County.

Witten’s annual pension payment is $187,674.

Capping the pensionable income would limit the opportunity for public employees to get such generous pensions, Gordner said.

Other lawmakers said that the governor’s pension reforms may have merit, but that they still do not address the looming issue of what can be done about the $41 billion unfunded liability.

“He’s nibbling around the edges,” said Sen. John Wozniak, D-Westmont.

Wozniak added that he does not believe that the state should alter benefit formulas for existing employees. “That is a covenant,” Wozniak said.

Public sector unions have said that tampering with the pension calculations of existing employees is illegal and would be challenged in court.

Click here to subscribe to The Tribune-Democrat print edition.

Click here to subscribe to The Tribune-Democrat e-edition.

1
Text Only | Photo Reprints
Local News
  • _DSC0769c.jpg Johnstown drug sweep: State, county, local authorities target 30 suspected dealers

    Nine months of investigation - conducted by multiple law enforcement agencies - culminated in a safely executed, massive street-level drug sweep in Johnstown and surrounding communities on Thursday.

    July 31, 2014 1 Photo

  • _DSC0769c.jpg Three arrested as early morning Johnstown drug raid launches major sweep

    A booming voice called out: “Occupants of 742 Menoher Boulevard, this is the police with a search warrant. Surrender the residence.”

    July 31, 2014 1 Photo

  • amd 31 New filtration system targets mine water

    Orange stones surround a black plastic discharge pipe at the Rock Tunnel abandoned mine drainage site.
    There is a rusty tint to some nearby water and mud, too.
    Soon, though, a new filtration system, consisting of shallow vegetative wetlands, a settling basin, concrete trough, buried limestone and aeration component, is expected to help return those elements back to their natural appearances.

    July 31, 2014 1 Photo

  • Richland to weigh speed study

    A group of Theatre Drive residents has convinced Richland Township’s supervisors to look into the costs of a special traffic study weighing whether their residential neighborhood’s current 35 mph speed limit should be reduced.

    July 30, 2014

  • Border battle lingers: Adams Twp. wants court to become involved

    Adams Township officials are asking the Cambria County court to once again become involved in its long-running boundary line dispute with Richland Township.

    July 30, 2014

  • Tribune Treasure!

    July 31, 2014

  • FRANK BURNS 31 Officials urge creation of crime watch groups

    State Rep. Frank Burns told the crowd about the night his life changed forever.
    After leaving a AAABA game, the then-16-year-old Burns was surrounded by three males, “dancing” around him like boxers and taunting him.
    They attacked and he was on the ground. He took a powerful kick to the face.

    July 30, 2014 1 Photo

  • Injured officer back on duty

    Two people were injured in a three-car accident Tuesday evening when a truck failed to yield to a Johnstown police officer who was rushing to assist another patrol car, police said.

    July 30, 2014

  • Grimm, Michael Child rapist to report to jail Monday; medical concern cited

    A Johnstown man set to pick a jury today on charges he sexually abused two boys, entered a guilty plea in Cambria County court Wednesday.

    July 30, 2014 1 Photo

  • LIFT JOHNSTOWN ‘They got it done’: Lift Johnstown recognizes pair for trailhead work

    Rob McCombie and Steve Coy showed up Wednesday at a Path of the Flood Trail spur in East Conemaugh dressed like they were ready to get to work.
    Instead, a group of community advocates were waiting there to thank them for the hard work they’ve already put in.

    July 30, 2014 1 Photo

Poll

Do you think pet obituaries should be included with death notices?

Yes, my pet is considered a member of the family.
No, pet obituaries are inappropriate.
Pet obituaries should be placed on a different page in the newspaper.
     View Results
House Ads