Corbett's plan to cut Pa. pension watchdog questioned
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Gov. Tom Corbett's budget proposal would eliminate the Public Employee Retirement Commission, the watchdog agency that last year allowed Pittsburgh to keep control of its pension fund.
Mr. Corbett has proposed transferring the commission's pension-law enforcement responsibilities to the state Department of Community and Economic Development and assigning its other responsibilities to the state employee and public school employee retirement systems.
Pittsburgh City Councilman Bill Peduto, who became acquainted with the commission during the city's fight to avert a state takeover of the pension fund, said it would be a mistake to eliminate the body when pension funds across the state are struggling and consolidation of more than 3,000 municipal pension plans is needed.
"They are a very professional organization," he said of the commission.
Mr. Peduto said he also is concerned about transferring enforcement powers from an independent commission to the Department of Community and Economic Development, an executive branch agency. Pensions aren't the department's main mission, and politics could creep into executive-branch decisions about investments and pension-law enforcement, he said.
House Majority Leader Mike Turzai, R-Bradford Woods, said he's open to Mr. Corbett's proposal, which could save money. He said the proposal gives state officials an opportunity to assess the commission's performance, including whether it's been vocal enough on policy and enforcement issues.
The commission is one of five agencies that Mr. Corbett would eliminate for efficiency reasons.
He would do away with the State Tax Equalization Board and give its property assessment-related duties to the Department of Community and Economic Development; assign the duties of the Health Care Cost Containment Council and the Patient Safety Authority to the Health Department; and merge the Securities Commission into the Banking Department, which would become the Department of Banking and Securities.
Mr. Corbett's office couldn't be reached Tuesday.
Established in 1981, the Public Employee Retirement Commission has a budget of about $700,000 and seven employees, including James McAneny, the executive director. The commission has nine members, five appointed by the governor and the others by legislative leaders.
The commission assesses the financial impact of pension-related legislation, recommends pension policy and annually reviews the actuarial statements of the State Employees' Retirement System and the Public School Employees' Retirement System, which, like many government pension plans, are underfunded.
It also advises and monitors more than 3,000 municipal pension systems. Municipalities must submit actuarial statements to the commission every two years.
He said the commission has been a strong voice for pension reform and worries that the actuarial review of pension-related legislation would end with the commission's elimination.
State Sen. Daylin Leach, D-Montgomery, a member of the retirement commission, called the proposal "regrettable."
He said the governor is willing to trade the commission's independent expertise for what could be politically motivated advice from one of his own departments.
Under a 2009 state law, Pittsburgh's long-struggling pension plan had to be at least 50 percent funded on Dec. 31, 2010, to avert a state takeover.
After consulting with Mr. McAneny, council approved a bailout that tapped more than $735 million in parking tax revenue over 31 years. The creation of that asset was enough, the commission ruled last year, to boost the pension plan's funding level to 62 percent and avert a takeover.
Mr. Peduto said he appreciated Mr. McAneny's "strictly by-the-numbers" style.
First Published February 22, 2012 12:00 am