Time for Action on Municipal Pensions is Now, Lawmakers Say
5/14/2015
HARRISBURG – State Reps. Keith Greiner (R-Lancaster) and Seth Grove (R-York) today responded to the news of Gov. Tom Wolf’s planned task force to examine municipal pension plans across Pennsylvania.

Grove and Greiner are co-authors of House Bill 316, which would address the statewide municipal pension crisis. According to a report released by Auditor General Eugene DePasquale, 562 municipalities out of 1,223 that administer pension plans are distressed and underfunded.

The lawmakers issued the following statement regarding today’s announcement:

“As Pennsylvania’s municipal pension crisis grows worse by the day, with the unfunded liability reaching almost $8 billion, it is clear the time for action is now. The Commonwealth cannot afford to wait any longer as the latest audit puts Scranton two years away from bankruptcy because of growing pension costs. This problem is not isolated to Scranton. York City cannot meet its minimum pension payment despite borrowing money. Pittsburgh has also seen its pension system continue to deteriorate. The list goes on.

“While we appreciate the governor’s interest on this issue, we simply cannot afford to wait any longer for the results of yet another study. We have put forth a solution (House Bill 316) to address Pennsylvania’s municipal pension crisis that has support from both Democratic and Republican municipal leaders across the Commonwealth. We agree with the auditor general that the task force should focus on reviewing the proposed solutions, including House Bill 316, and remind elected leaders that their job is not to delay as the problem grows worse, but to take action.

“House Bill 316 is designed to address Pennsylvania’s municipal pension crisis by allowing current employees to keep their existing benefits. In order to eliminate the unfunded liability in our municipal pension system, House Bill 316 removes pensions from collective bargaining and freezes benefits at current levels while creating a separate benefit plan for new employees. Under House Bill 316, new full-time municipal employees would enter defined benefit plans with mandatory employee and employer contributions and an employer guaranteed interest credit.

“Sen. John Eichelberger (R-Blair) is also introducing legislation which would address this issue by placing new employees into a defined contribution plan. Until Act 111 is reformed, the only way to ensure that our public safety workers receive a good retirement and local governments receive financial relief is to change pension benefits for new employees. Failure to act now on municipal pensions will ensure a situation like Detroit happens here in Pennsylvania. That is not acceptable.

“It is not enough to just recognize that this is a major crisis facing the Commonwealth. It is time for lawmakers on both sides of the aisle to join together to solve this problem now, before municipalities across the state are forced cut their workforces, cut benefits, or even worse, file for bankruptcy.”

Representative Seth Grove
196th District
Representative Keith Greiner, CPA
43rd District
Pennsylvania House of Representatives

Media Contact: Nick Ruffner
717.260.6258
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