HARRISBURG – Municipal pensions and their mounting unfunded liabilities were under the microscope during a joint public hearing chaired by Senator Scott Wagner (R-York).
The Senate and House Local Government Committees convened Monday morning to hear feedback from municipal groups, including professional service organizations representing law enforcement and firefighters.
“Today we heard that progress has been made under Act 44 of 2009, a previous municipal pension reform measure, but it is clear that the current system still needs improvements and the status quo is no longer the answer,” Chairman Wagner said. “Statewide we are looking at $8-10 billion in unfunded municipal pension liabilities.”
Wagner believes the approach needs to be twofold: better investment returns and long-term changes to shift the risk away from taxpayers.
“The current proposal is focused on achieving funding levels within the pension plans that provide sustainability into the future,” said Wagner. “We need such accountability and reforms of these systems to ensure the long-term success both for the taxpayer and the men and women who serve in our communities.”
“We also need to ensure we are not losing money through administrative and investment costs,” Wagner stated. “At the state level, we have had embarrassing investment returns by money managers who are drastically overpaid and returning investments that a personal savings would rival. We cannot afford such losses within any of our public pension systems.”
Overall, Senator Wagner was pleased with the testimony given at the hearing and looks forward to working with his colleagues, as well as stakeholders, to address outstanding concerns and ultimately, find a solution to the issue.
You can listen to Senator Wagner’s question regarding the unfunded municipal pension liabilities here.
More information on the hearing can be found on the Senate Local Government Committee’s website.