Rendell: Workers Should Pay More Toward Pensions
Former Gov. Ed Rendell says public workers should pay more for pension benefits to help offset Pennsylvania's growing pension crisis
By Eric Boehm | PA Independent
HARRISBURG — Former Pennsylvania Gov. Ed Rendell said recently that public-sector workers in Pennsylvania should have to pay a larger part of their salaries for pension benefits.
Such a pronouncement from Rendell, a Democrat, may come as a surprise. But it serves as another acknowledgement the state will have to take drastic steps to address a combined unfunded liability of more than $40 billion in two major pubic pension systems. Expected annual contributions from the state are expected to climb to more than $2.2 billion next year, and more than $4 billion annually by 2016.
Rendell said he gave the advice reluctantly, “because our public workers didn’t cause this crisis.”
The state’s public pension crisis has three primary causes — an increase in pension benefits for current and retired workers, for which public-sector unions pushed; a decision by the state in 2003 to defer required pension contributions for 10 years; and investment losses after the 2008 economic crash.
Dave Fillman, executive director of AFSCME Council 13, the public-sector union that represents about 65,000 public workers, said employees made their 6.25 percent contributions to the pension system every year while the state decided to avoid its payments for many years during Rendell’s administration.
“I find it ironic that he’s advocating that the employees should have to make up the difference,” Fillman told PA Independent on Monday. “If they had put in the actuarial amount the whole time, we might not have the same situation we do now.”
Gov. Tom Corbett has targeted the first half of 2013 for reforming the state’s pension systems and dealing with the spiraling debt.