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    Capitol recap: changing who gets to request an analysis of pension changes

    David Carmichael

    David Carmichael

    What a new law limiting who can ask for a pension bill to be analyzed means.

    Pennsylvania lawmakers recently passed a law that changes the way potential modifications to state pension plans are evaluated. This concerns both state and municipal pensions. Gov. Wolf signed it into law last week.

    Pennyslvania’s state pensions are underfunded by about $50 billion, the second-worst level of underfunding in the U.S.

    The law, Act 100, spells out which legislators are allowed to request an “actuarial note” when there is a proposed change to state pension law. An actuarial note analyzes the short and long term impacts of the proposed changes. The note is important because even the smallest of suggested tweaks to how pensions work might mean billions of dollars over decades, with thousands of retirees affected.

    Before the law took effect, any of the 253 state lawmakers could request an actuarial note. Now, far fewer. Ten, to be exact.

    The short list includes both parties’ legislative leaders and respective heads of key committees.

    Before Act 100, the system to move pension legislation through the approval process often worked in this limited fashion, unofficially, with leadership getting faster or exclusive access to notes, 

    The process effectively shuts out 96 percent of the General Assembly from fully participating in the process of lawmaking about pensions. 

    Reaction

    “This is unique,” says Rick Dreyfuss, a senior fellow at the Commonwealth Foundation.

    Bills dealing with health, transportation — really any other topic — don’t have this kind of procedural restriction, according to Dreyfuss, who’s been watching the Pennsylvania legislature for a decade.

    State Rep. Dan Truitt, R-Chester, introduced an amendment that would’ve let anyone request a note.

    But the House voted it down 146-53. One might wonder why the House itself would limit its members’ ability to request an actuarial note.

    Rep. Seth Grove, R-York says he would like a more open process. “But I know where it would lead, politically,” he said.

    Lawmakers might use actuarial note requests to derail legislation, Grove says.

    Dreyfuss says that’s a legitimate concern, but he calls the process laid out by Act 100 an “overcorrection.” A more appropriate control might be some sort of “credibility criteria”, such as delaying notes until bills reach a certain stage or evidence meaningful support, he says.

    Truitt says he plans to propose something to expand participation in pension lawmaking.

    “If anyone can request them, that’s an awful lot of [actuarial] notes,” Truitt says. “And they are expensive, …. but anything we do pension-related is a big deal with really long-term impacts. And at the cost of $2,000 for a note, it’s worth it.”

     

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