Right now, the city’s pension fund would not qualify for the proposed takeover because it’s not less than fifty percent funded. But dozens of municipal pensions across the state are.
State lawmakers have introduced legislation to allow Philadelphia to increase the sales tax and make changes to pension financing. Approval of these bills is critical to balancing the city’s budget. Another proposal in Harrisburg would force a state takeover of municipal pension plans that are severely underfunded.
Right now, the city’s pension fund would not qualify for the proposed takeover because it’s not less than fifty percent funded.
But dozens of municipal pensions across the state are.
James McAneny directs the Public Employee Retirement Commission, which is pushing for the takeover legislation.
McAneny: What we were going to do was take them over, assume control, there would no longer be a bargaining issue involved with these. They would be managed by the state and all new hires would go into a new plan controlled exclusively by the state and never be subject to amendment or improvement at the local level.
That means those pensions would no longer be within union contracts, and future employees would likely get less benefits.
But Philadelphia officials oppose the plan. The city’s finance director says their own pension funding plan has a shorter time table.