Petri Bill to Address Municipal Pension Debt Subject of Hearing in Montgomery County
HARRISBURG – Rep. Scott Petri (R-Bucks), chairman of the House Urban Affairs Committee, and Rep. Kate Harper (R-Montgomery), chairman of the House Local Government Committee, held a joint public hearing on legislation to address the mounting pension debt threatening municipalities across the Commonwealth.
A growing number of municipalities are sinking in pension debt,” said Petri. “My legislation would require municipalities to come up with a plan to address the debt so they can honor their pension obligations to their police officers, firefighters and other municipal employees.”
According to findings released in June by the Governor’s Task Force on Municipal Pensions, 22 municipal pensions are classified as severely financially distressed - having less than 50 percent of the funding needed to satisfy their retirement obligations. The report shows that 562, or nearly half of the 1,223 municipal pension plans, are distressed.
House Bill 974, sponsored by Petri, targets severely distressed pension funds and requires municipalities to make meaningful corrections to improve their solvency.
Last spring, Petri held an Urban Affairs Committee public hearing in Pittsburgh where city officials are grappling with $485 million in unfunded pension liability.
“Pittsburgh’s problems are not over, but the city has made significant progress toward solvency,” said Petri. “Other municipalities may benefit from some of the strategies used in Pittsburgh to bring pension costs under control.
“My legislation would require any municipal pension plan deemed severely distressed for two consecutive biennial actuarial rating periods to enter into the Financially Distressed Municipal Pension Recovery Plan, administered by the Public Employee Retirement Commission (PERC), which is charged with ensuring the viability of public pension plans,” said Petri. “Once in the program, a severely distressed municipality would have six months to submit a recovery plan to PERC for approval. The plan may involve the sale or lease of public assets.”
Under Petri’s bill, participating municipalities would be required to make supplemental disbursements of not less than 1 percent of its total liability each year to pay down the unfunded liability and improve its financial condition over a period not to exceed 10 years. It would also be required to submit annual reports on its progress to PERC. House Bill 974 is now under consideration in the House Urban Affairs Committee.
To hear Petri’s comments on his bill, go to his you tube video.
Representative Scott Petri
178th District
Pennsylvania House of Representatives
Media Contact: Donna Pinkham
717.260.6452
dpinkham@pahousegop.com
RepPetri.com