“Pension reform” deal undercuts retirement security
Misinformation on pensions is running rampant as Pennsylvania legislators try to impose a “reform” bill on both new and current employees. Arm yourself with knowledge before it’s too late!
- The new pension plan design would not reduce the state’s unfunded pension liability and could increase it.
- The new pension plan delivers little or no savings for this year’s budget.
- The new pension proposal would cut retirement benefits for state and school district employees by as much as 18 percent, and a significant part of these members’ retirement checks would be based on the performance of the market, at their time of retirement.
- As a result of 2010 budget cuts, Pennsylvania’s pension benefits for new school and state employees are already among the lowest of all public sector workers in the nation. This pension proposal would make the public employees retirement systems the third worst in the nation.
- The proposed new pension design would provide a guaranteed benefit more than 20 percent lower than federal government pensions put forward as a model and significantly inferior to many of the existing state pensions that include both smaller traditional pension and individual defined contribution savings accounts.
- Courts are likely to reject the only potential savings from the new pension proposal as unconstitutional, as it would cut benefits for current employees.
- A 1 percent multiplier is one of the lowest defined benefits and hybrid plans in the country. There are only a few other states with one percent multipliers in their hybrid plans, but their retirees receive cost of living adjustments (COLA). There are no COLA in the new pension proposal.
- This pension proposal would eliminate a secure pension, making it extremely difficult to recruit and retain high quality public employees.
AFSCME members should call their State Representatives and State Senators and urge them to vote against these destructive changes to public employee pensions. Do it for current and future pension recipents, and your union brothers and sisters.