Pennsylvania Spends Over $1 Million to Study $47 Billion in Pension Liabilities

Pennsylvania lawmakers have their hands full with $47 billion in unfunded pension debt. 

Without meaningful long-term reform, each Pennsylvania household could be faced with an additional $900 per year to fund the pension contribution increases.

The State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System’s (PSERS) liabilities have pushed pension reform to the forefront of lawmakers' agenda as short-sighted solutions miss the mark and continue to place the burden on future generations.While lawmakers are considering several proposals to confrontthe outstanding obligations, the old adage ‘time is money’ comes to fruition as Pennsylvania taxpayers are shelling out more than $419 per hour for an accounting firm to analyze the state’s pension reform plans. Last month, Milliman Inc. renewed its contract with the Corbett administration; the Seattle based accounting firm has already received $900,000 since 2012 and is under contract for as much as $1.1 million until the end of June, 2014.

Pennsylvania’s unfunded pension liabilities have seriously hindered the state’s economic growth. According to Fitch Ratings service, Pennsylvania’s bond rating has been downgraded as pensions consume nearly two-thirds of every new dollar of revenue.  If lawmakers want to improve the lives of Pennsylvania pension recipients and taxpayers, enacting meaningful long-term pension reform and curbing overall government spending is vital to ensure fiscal stability.

Rick Dreyfuss of the Manhattan Institute puts this absurd approach simply: “We are spending $1.1 million to compute how to put less money into already underfunded plans in the name of reform."

TAGS: Spending, Entitlement Reforms, Budget Reform, issues

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