The solution to the Pennsylvania Pension crisis has yet to be found but the state is in search for a solution, as the debt continues to grow several billions of dollars per year. It has been said by legislatures that this issue is the greatest threat to the state today. There are several ideas on how to minimize the problem but many feel it will still leave room down the road for a larger issue. It has come down to choosing what group to place the pension crisis burden on. A true solution to this crisis may not come for a long time.
New legislation is currently being put in place to stop the further growth of the problem which is the Pennsylvania pension crisis. To resolve this issue Pennsylvanians and/or state programs will have to take on the burden. Some state programs which could be affected by government trying to cut spending and fix the pension crisis include education and infrastructure.
One legislature, John McGinnis, proposed a plan in Harrisburg to help remedy the crisis. His plan included paying the debt over a 20 year period. His plan called for State and school districts to increase their payments in the 2018 fiscal year by about $800 million, this is a 14% increase.
In 2016, the most recent full year for which data are available, states were more than $1.4 trillion in the red. Pension debt has increased for 15 straight years, and shows no signs of abating.
Another is to just have the federal government bail out insolvent pensions. Will states that took care of their pension problems really want to pony up for those that didn't? But this isn't satisfactory.
The easiest reform would be to put all new employees into defined-contribution 401(k)-style accounts with some matching by their employer. That would mean that employees, not taxpayers, finance their own retirements — as is now the case in almost every private industry in this country. Unfortunately, the state and local government worker unions aren't likely to agree to that.
New legislation is currently being put in place to stop the further growth of the problem which is the Pennsylvania pension crisis. To resolve this issue Pennsylvanians and/or state programs will have to take on the burden. Some state programs which could be affected by government trying to cut spending and fix the pension crisis include education and infrastructure.
Pension overhaul has been signed into law change the retirement savings plans for future state government and public school employees hired in 2019 and after.
The plans move away from the current guaranteed pension system that public employees in Pennsylvania participated in for about a century, and to one that includes in part or in whole a 401(k)-style plan that many in the private sector have. A fear of many legislatures is that it does little to pay down the more than $70 billion unfunded liability that the State Employees' Retirement System and Public School Employees' Retirement System carry.
The solution to the Pennsylvania Pension crisis has yet to be found but the state is in search for a solution, as the debt continues to grow several billions of dollars per year. It has been said by legislatures that this issue is the greatest threat to the state today. There are several ideas on how to minimize the problem but many feel it will still leave room down the road for a larger issue. It has come down to choosing what group to place the pension crisis burden on. A true solution to this crisis may not come for a long time.
New legislation is currently being put in place to stop the further growth of the problem which is the Pennsylvania pension crisis. To resolve this issue Pennsylvanians and/or state programs will have to take on the burden. Some state programs which could be affected by government trying to cut spending and fix the pension crisis include education and infrastructure.
One legislature, John McGinnis, proposed a plan in Harrisburg to help remedy the crisis. His plan included paying the debt over a 20 year period. His plan called for State and school districts to increase their payments in the 2018 fiscal year by about $800 million, this is a 14% increase.
In 2016, the most recent full year for which data are available, states were more than $1.4 trillion in the red. Pension debt has increased for 15 straight years, and shows no signs of abating.
Another is to just have the federal government bail out insolvent pensions. Will states that took care of their pension problems really want to pony up for those that didn't? But this isn't satisfactory.
The easiest reform would be to put all new employees into defined-contribution 401(k)-style accounts with some matching by their employer. That would mean that employees, not taxpayers, finance their own retirements — as is now the case in almost every private industry in this country. Unfortunately, the state and local government worker unions aren't likely to agree to that.
New legislation is currently being put in place to stop the further growth of the problem which is the Pennsylvania pension crisis. To resolve this issue Pennsylvanians and/or state programs will have to take on the burden. Some state programs which could be affected by government trying to cut spending and fix the pension crisis include education and infrastructure.
Pension overhaul has been signed into law change the retirement savings plans for future state government and public school employees hired in 2019 and after.
The plans move away from the current guaranteed pension system that public employees in Pennsylvania participated in for about a century, and to one that includes in part or in whole a 401(k)-style plan that many in the private sector have. A fear of many legislatures is that it does little to pay down the more than $70 billion unfunded liability that the State Employees' Retirement System and Public School Employees' Retirement System carry.