The heads of Pennsylvania’s two public pension funds are putting a good face on their underfunded status.
At a hearing before the state House Appropriations Committee, the director of the State Employees’ Retirement System encouraged lawmakers to put the state’s $41 billion pension debt in perspective.
David Durbin says the systems were even more drastically underfunded in the 1980s, and as the economy began to rebound, so did the funds.
“Time is probably our greatest ally,” Durbin said. “The reason we came out of the underfunding in the 1980s is not just the investment program but the compounding nature of time.
But a Republican state lawmaker points out that waiting for the pension funds to regain their footing would take up to 30 years based on projections, and the state and school districts would have to supplement the pension funds with billions of dollars in the meantime.
Gov. Tom Corbett has proposed a pension overhaul that calls for shrinking the scheduled payments the state must make to the pension funds and enrolling future public workers into a new kind of 401(k)-style retirement plan.
It has come under fire by the state’s two largest public sector unions, as well as the Democratic state treasurer