Corbett Announces Possible Changes to the Pension System

Governor Corbett and his team are working on reducing future pension benefits for current Pennsylvania state employees and teachers. In a press conference where the results of the“Keystone Pension Report,” were released, Corbett discussed the difficulties faced by the state in funding the two major pension systems. Legislation in 2001 increased benefits and allowed for reduced contributions to the systems,while the bad economy of the past four years significantly reduced investment returns. The combination of factors has resulted in steep increases for the next decade and beyond, a situation cash strapped municipalities and school districts can ill afford.


Despite case law interpreting the state constitution that bars reductions in benefits for current employees, Corbett said he believes it is legally possible to limit the reduction to future benefits employees have yet to accrue. If this proposal survives the legal challenge and took effect, it would mean the current employees of (SERS)and (PSERS) would see a reduced pension amount on retirement from what they are currently promised. Such a reduction would be a tough blow to school district employees who value their pension as a substantial benefit. Corbett’s suggestion is actually not unique to Pennsylvania; a similar proposal is circulating in Rhode Island and could indicate the start of a trend.

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