Read the Full List of Pennsylvania Auditor’s Pension Recommendations

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Pictured: Eugene DePasquale

Earlier this week, Pennsylvania’s Auditor General turned in his recommendations to Gov. Tom Wolf for improving the funding of the state’s municipal pension systems.

Auditor General Eugene DePasquale was the head of a panel tasked with sketching out the funding solutions and recommendations.

Now, the report has been released in full and we can see the list of specific recommendations. Some are much more likely to be implemented than others.

[Read the full report here.]

The recommendations, summarized by Philly.com:

The state, the task force said, should:

– Stop underfunded municipal pensions like Philadelphia’s from increasing pensions through union collective bargaining.

– Cut state aid to towns that are not paying enough to prevent their plans from becoming more insolvent under a basic funding formula (the Minimum Municipal Obligation). Philadelphia, which has met its target in most years under Mayor Nutter (exception for the worst of the recession), received more than $60 million of state money this year for its “severely” underfunded plan.

Ban towns from using state aid to pay administrative fees, which state officials have separately estimated cost small-town pensions more than $1,400 per year, per member, four times what big-city plans pay their administrators.

– Force communities with underfunded pensions to curb the use of overtime and stop the use of accumulated leave in calculating benefits, a practice popular among police.

Prevent new hires in towns with underfunded pensions from joining local pension systems, and put them instead into a “newly created statewide municipal pension system”

Limit management fees paid to private money managers who invest local pension assets, to one-half of one percent a year. (That could limit pension funds’ use of hedge-fund, private-equity and real-estate managers, especially if it is applied to “carried interest,” the slice of profits that managers often get to keep and which is often unreported by pension plans.)

Click here to read the full list of recommendations.

 

Photo by Paul Weaver via Flickr CC License

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One Response to “Read the Full List of Pennsylvania Auditor’s Pension Recommendations”

  1. […] week, DePasquale gave Gov. Wolf a series of recommendations for improving the funding of municipal pensions. The full report can be read […]

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