11 March 2014 0 Comments

Pension Crisis How It Began Act 9 of 2001 Act 38 of 2002 and Act 40 of 2003

Morning Call 9 February 2013 Time Line of Pennsylvania Public Pensions Key Dates and Debates 

See also The Liberty Blog Act 120 of 2010 Kicking the Can Down the Road   

 

Morining Call:

2001: Act 9 raises pensions for legislators by 50 percent and state workers and teachers by 25 percent. Since it is retroactive, all SERS and PSERS members benefit; also reduces the amount of time to become vested in the pension systems from 10 to five years. Because no new revenue offsets the expenses, this is seen as one of the biggest reasons for the current crisis; after Sept. 11, goes into a tailspin that crushes SERS’ and PSERS’ investments.  [Note here are the votes on Act 9 of 2001 with Republican Majority in House and Senate. This was signed into law by Governor Tom Ridge]

2002: PSERS surplus plateaus at $6.9 billion before it descends.

2002: Act 38 gives retirees a cost-of-living hike, which adds $1.75 billion in unfunded costs for SERS and PSERS; also puts a one-year cap on employer contributions at 1.15 percent, which further underfunds SERS and PSERS.

2003: Act 40 spreads out employers’ SERS and PSERS’ pension obligations from 10 years to 30 years. 

 

2003 Act 43 An Act amending the act of August 31, 1971  known as the County Pension Law, changing vesting rights; and providing additional class options.

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