Pennsylvania Lawmakers: Municipal Pension Reform Needed

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Two Pennsylvania state Representatives – Rep. Seth Grove (R) and Rep. Keith Greiner (R) – have penned a column on Lancaster Online arguing for the reform of municipal pension systems.

Specifically, they argue for reforms that would remove pension negotiations from the collective bargaining process and would transfer new hires into a cash balance plan.

Grove and Greiner explain:

Gambling with pension funds needs to end by both local governments and employee unions. Pension negotiations need to be permanently removed from the collective bargaining process to ensure that our police and firefighters are not at risk of having their pensions destroyed, and taxpayers aren’t put on the hook because of short-term and short-sighted decisions.

These two fixes are both long-term solutions, but what can we do in the short term? The answer is change the pension benefit structure for new hires to a cash balance pension plan. A short-term solution will require new revenue to reduce the unfunded liability. A cash balance plan allows municipalities to use excess stock market earnings to pay off the unfunded liability.

Instead of raising taxes or creating new taxes, this allows the pension plan to fund itself. The cash balance concept also has long-term taxpayer protections built in. New hires will have their own accounts, just like a 401(k), which allows them to transfer their retirement between jobs and ensures taxpayers are not on the hook for future underfunding of pensions.

It also provides employees with the ability to take their retirement by monthly payments, which is just like a traditional defined benefit plan. And since a cash balance pension concept is considered a defined benefit pension plan by IRS guidelines, you can still combine pension funds together and ensure you do not underfund the old pension systems. Lastly and most importantly, it will not affect our current public safety personnel’s pensions, but will ensure that new hires will still receive a good pension, which they deserve.

We do not want to honor the dedication and service of public safety personnel by putting them in the poor house after retirement. However, we also do not want to shift costs from pensions to welfare.

Ultimately, these changes are actually about hiring more police and fire personnel and protecting the pensions of current police and fire personnel.

Furthermore, the changes are about ensuring that all municipalities across Pennsylvania are financially stable and that commuter taxes go away. There are tremendous upside benefits to all stakeholders.

Read the entire piece here.

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One Response to “Pennsylvania Lawmakers: Municipal Pension Reform Needed”

  1. Al Moncrief says:

    THE COLORADO SUPREME COURT . . . “POLITICIANS IN BLACK ROBES.” (AS IT TURNS OUT.)

    “Truth is the daughter of time, not of authority,” Bacon.

    For decades I refused to believe it, but it is now incontrovertibly established. The Colorado Supreme Court is indisputably a political actor. Our Colorado Supreme Court exists to serve Colorado political parties. At present, the Colorado Supreme Court is more rightly considered an adjunct of the Colorado Legislative Branch, than a check on the Colorado Legislative Branch. Rather than “truth-seeking,” the Colorado Supreme
    Court now sees its role as “political-outcome seeking.” Litigants successfully use the Colorado Supreme Court to achieve political purposes. In the Ralph Carr Justice Center, rather than meeting impartial guardians of the law, litigants meet their political allies on the bench. The Colorado Supreme Court has accepted its role as a political and partisan tool, and recognizes no constitutional limits on the authority of the Colorado Legislative and Executive branches. We have no “Rule of Law” in Colorado, we simply have shifting political power. That is all.

    “I think there are many who think of judges as politicians in robes. In many states, that’s what they are.” “They seem to think judges should be a reflex of the popular will.”

    Sandra Day O’Connor

    In this article, I provide an example of the political and partisan role of the Colorado Supreme Court. I describe a case in which the Colorado Supreme Court summarily erases billions of dollars of debt owed by Colorado state and local governments. That
    is, one branch of Colorado state government relieves another branch of Colorado
    government of its legal debts. The case involves Colorado statutory contracts that create financial obligations on the part of Colorado governments. Over decades, political considerations induced the Colorado Legislature to mismanage the financial obligations. In recent years, the terms of these statutory contracts were deemed politically inconvenient and politically unpopular. The Colorado Legislative Branch asked the Colorado Supreme Court to discard the contracts.

    In 2010, the Colorado Legislative Branch requested that the Colorado Supreme Court grant this political favor by ignoring the Contract Clause of the US Constitution, ignoring the history of legislative mismanagement of these state financial obligations,
    and relieving Colorado governments of their accrued legal debts. No trial, no discovery, billions of dollars seized by the state.

    In granting this political favor, sanctioning the breach of Colorado PERA pension contracts, the Colorado Supreme Court was forced to ignore its own long-standing case law precedent, the court failed to conduct a “contract analysis,” the court ignored evidence of Colorado PERA’s attorneys stating that the pension benefit was indeed a Colorado PERA contractual obligation, the court ignored the bill (SB10-001) sponsor’s
    testimony that the pension benefit was in fact a Colorado PERA contractual obligation, the court ignored recorded legislative history of the contractual nature of the public pension benefit, the court failed to engage in the “heightened scrutiny” of the abandonment of state financial obligations required under federal case law (US Trust) and finally, the court embraced a discredited Denver District Court decision that did not bother to mention Colorado’s on-point public pension case law. In the United States, political connections can be used to summarily erase billions of dollars of government debt.

    Colorado politicians’ premeditated scheme to claw back accrued Colorado PERA pension benefits, from its inception in 2009, was to take Colorado PERA retiree’ assets outside of bankruptcy. (State governments cannot declare bankruptcy under federal law.) The only means by which the Colorado Supreme Court (in concert with the Colorado Legislative Branch) could achieve this goal was by ignoring on-point Colorado public pension case law, and all evidence in the Colorado PERA retiree lawsuit, Justus v. State. In its October 2014 decision in the case, the Colorado Supreme Court ignored the testimony of Colorado PERA’s own lawyers (in 2009) stating, on the record, that the Colorado PERA COLA benefit was a contractual obligation of Colorado-PERA affiliated employers. The Colorado Supreme Court embraced the original Denver District Court decision in this case, which failed to mention Colorado’s public pension case law, (Bills and McPhail.) Is it possible that Denver District Court Judge Hyatt and his staff (in 2011) just happened to be such bad legal researchers that they were unaware of Colorado’s on-point public pension case law that was being read by Colorado’s relatively unsophisticated PERA retirees? Not likely. This case law was indeed recognized by the forthright members of the Colorado Court of Appeals (in 2012) who found the case law to be “dispositive” in establishing the contractual right of PERA retirees to their accrued PERA COLA (ABI) benefits.

    In this article, I address the Colorado Supreme Court’s lack of independence, integrity, and impartiality. I provide a brief history of the efforts of the Colorado Legislature and the Colorado Supreme Court to escape Colorado governmental financial obligations. I comment on the recent (October, 2014) Colorado Supreme Court Decision itself, which summarily erased these billions of dollars of Colorado public sector debt. I highlight some of the numerous factual and logical errors that exist in the Colorado Supreme Court’s Decision in the case. I express incredulity at the Colorado Supreme Court’s willful ignorance of public pension administration, knowledge that was necessary to any court claiming to “seek truth” in the case.

    The Colorado Judiciary had an obligation to ensure that all evidence in the case,
    Justus v. State, was examined prior to breaking Colorado PERA pension contracts. They ruled in ignorance. This ignorance may have been willful. Rather than honoring their debts, Colorado PERA-affiliated governments will now inflate away that debt courtesy of the Colorado Supreme Court.

    My intent in writing this article is to enhance the public record of, and further document, what I consider to be one of the greatest “crimes” in Colorado history.

    Verba volant, scripta manent.

    On October 20, 2014, the Colorado Supreme Court ruled that Colorado PERA pensioners have no contractual right to their accrued public pension COLA benefits. Yet, here we have documentation of Colorado PERA’s own lawyers acknowledging, in legislative testimony, Colorado PERA’s contractual obligation to pay the PERA COLA as recently as 2009.

    December 16, 2009

    Colorado PERA officials in written testimony to the Joint Budget Committee: “The General Assembly cannot decrease the COLA (absent actuarial necessity) because it is part of the contractual obligations that accrue under a pension plan protected under the Colorado Constitution Article II, Section 11 and the United States Constitution Article 1, Section 10 for vested contractual rights.”

    http://www.kentlambert.com/Files/PERA_JBC_Hearing_Responses-12-16-2009_Final.pdf

    Discover the true nature of Colorado state government at saveperacola.com.

    Read the complete article at http://coloradopols.com/diary/64487/the-colorado-supreme-court-politicians-in-black-robes-as-it-turns-out

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