In response to the recent article titled “Municipal Pension Reform Not on Radar,” Maroney had it right in the lead paragraph when he wrote “State lawmakers are way too busy trying to resolve the state’s pension crisis to give much attention to the pension problems of municipalities.”
What wasn’t right, however, was a statement attributed to me that I never said: “Nearly one-third of the state’s municipal pension plans are considered distressed, and nearly every county in the state has at least one municipality with a pension plan under a high level of financial stress.” I know I didn’t say this because it is somewhere between misleading and false.
However, I would like to clarify further our association’s position on the municipal pension issue. Although it is true that some local governments, primarily large and midsize cities like Philadelphia, Pittsburgh, Harrisburg, and Scranton, have severely distressed pension programs, it is inaccurate to paint the picture that every municipal pension plan is troubled, or “woefully underfunded,” as some have suggested.
The truth is, most communities, including a number of our member townships, oversee plans that are doing OK, and in some cases, they’re doing much better than OK. As Sen. Yaw and Representatives Baker, Everett, and Mirabito indicated in your article, the focus of any major pension reform right now needs to be on state and public school employees.
The state needs to fix its own pension mess before trying to impose its remedies on municipal pension plans, many of which don’t need fixing. The General Assembly and others are searching for solutions to the state’s pension problem, some of which have come to light during a series of fact-finding meetings hosted by the Pennsylvania Employee Retirement Commission. It appears the meetings have also served as a stage to exaggerate the degree of Pennsylvania’s local pension troubles, with calls to consolidate hundreds of healthy municipal plans to fund the debts of a few. This “redistribution of pension wealth” is a bad idea and penalizes the successful while rewarding those in trouble.
There’s no doubt that some municipal pension plans are indeed in trouble, but there are some solutions already on the table that would help all municipal pension plans right away. One proposal would enable municipalities to move away from the defined benefit plans mandated by law for some uniformed employee participants, remove retirement benefits from the collective bargaining process a practice responsible for strapping current and future generations with budget-draining obligations, and move towards 401K-type plans where the risk is not borne by the taxpayers.
The pension crisis remedy shouldn’t be to make the healthy swallow the same bad medicine as those in trouble. Instead, we should be tailoring solutions that keep healthy plans off life support and put ailing ones back on the road to recovery.
David M. Sanko, Executive Director
Pa. State Association of Township Supervisors
Submitted by E-mail