Pennsylvania Confronts $41 Billion Pension Deficit

Monday, 26 Nov 2012 05:09 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Pennsylvania’s two public pensions face a combined shortfall of $41 billion, and their costs will consume 62 percent of fiscal 2014 revenue growth, according to a report from the state budget office.

The State Employees’ Retirement System has 65 percent of assets needed to cover projected liabilities, and the Pennsylvania Public School Employees’ Retirement System is 69 percent funded, the report said. The plans cover 817,000 people.

In July, Moody’s Investors Service cut the state’s general- obligation debt rating to Aa2, its third-highest, citing rising pension obligations that will weigh on its economic recovery. Funding for state retirement plans across the U.S. fell in fiscal 2011 for a fourth straight year, to a median coverage ratio of about 72 percent, data compiled by Bloomberg show.

“Absent meaningful structural pension reform, the state’s general-fund budget is on a very predictable path that will force a choice between either fully funding pension obligations or making cuts to the core functions of government,” Charles Zogby, Pennsylvania’s budget secretary, said in a statement.

State revenue is projected to rise by about $818.7 million in fiscal 2014, according to the report. Pension cost increases, estimated at $511.2 million, will account for almost two-thirds of the additional revenue, the report shows.

Governor Tom Corbett intends to propose a pension overhaul in his 2014 spending plan, for the year that begins in July, according to the report. Retirees and current employees with accrued benefits won’t be affected, it said. Steps taken by other states, such as increasing worker contributions, raising the retirement age and adjusting payment formulas such as credit for years of service, provide potential models for Pennsylvania.


© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Judge Overturns Mississippi Same-sex Marriage Ban

Tuesday, 25 Nov 2014 21:52 PM

A federal judge has overturned Mississippi's ban on same-sex marriage, but he is putting his order on hold for two weeks . . .

Judge Rules Arkansas Ban on Same-Sex Marriage Is Unconstitutional

Tuesday, 25 Nov 2014 20:45 PM

A U.S. district judge ruled on Tuesday that an Arkansas constitutional amendment defining marriage as being only the uni . . .

Obamacare Architect to Testify on ACA's 'Deceptions'

Tuesday, 25 Nov 2014 20:12 PM

Obamacare architect Jonathan Gruber, whose comments citing the healthcare law's lack of transparency and mocking "the st . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved