Saturday, September 19, 2009

Streamline Pension Reform Signed Into Law

Governor Ed Rendell has signed pension reform legislation into law. The State Senate approved the measure after many of the reforms the Senate inserted earlier were removed by the House.
The legislation gives the city of Pittsburgh a 2 year reprieve before state takeover of its pension plan. At the request of Mayor Luke Ravenstahl, state lawmakers gave the city 2 years to bolster its pension plan which is only funded at 28% of its obligations to retirees and current employees. City Council President Doug Shields is a member of the Pittsburgh Municipal Pension Board says this will give officials time to seek bids and then lease city-owned parking garages. The mayor wants to use that revenue to help bring the city to the 50% threshold of funding the pension system.
The legislation also allows Philadelphia to raise its sales tax to 8% for 5 years to address a budget deficit and to improve its pension fund balance.
The Senate okayed the bill even though the House stripped provisions that had been approved by the Senate that would freeze pensions and change the way new hires would contribute to a pension plan.

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