Pennsylvania labor leaders pan pension proposals
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HARRISBURG -- Gov. Tom Corbett continues to indicate that part of his upcoming pension reform plan will include changes for current state employees.
The governor pointed to potentially excluding overtime from counting toward an employee's pension eligibility and decreasing the "multiplier" used to calculate future benefits, during interviews with reporters last week.
Both options mentioned as possibilities drew resistance from labor leaders, who said any changes for current employees would run afoul of state court decisions.
Mr. Corbett's comments came shortly after his administration released a report pegging the state's unfunded pension costs at more than $41 billion.
That report said changes for current state employees and teachers should be considered, listing as options the exclusion of overtime pay from calculations, increases to employee contributions, hiking the retirement age, and altering the benefit formula.
Benefits are based on a formula involving the number of years an employee worked, their final average salary, and a multiplier of several percentage points.
Asked about those options, Mr. Corbett said he would aim to have any reductions in benefit calculations affect all members of the public retirement systems: state workers, teachers, lawmakers and judges.
Despite arguments about case law protecting both the benefits that current employees have accrued as well as any they stand to earn during their future years of employment, the governor said he believes some changes could be made to future calculations.
"They still have the benefit of that period when they had the higher multiplier," Mr. Corbett said. "Legally, can you do that? I believe you can."
Union leaders point in part to a 1983 case in which a local chapter of American Federation of State, County and Municipal Employees sued then-Gov. Dick Thornburgh over a legislatively approved increase in the workers' contribution rate.
The state Supreme Court sided with the union, stating that pension benefits are deferred compensation and subject to contract negotiations.
"We still feel he's going into possibly illegal territory," said David Fillman, executive director of AFSCME Council 13, of the governor's pension comments. "There's a whole lot of unanswered questions that we have."
First Published December 5, 2012 12:00 am