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Pennsylvania Teachers Union’s support pension legislation

07.11.10

July 2010, Allentown/Bethlehem/Easton edition of The Union News

Pennsylvania Teachers Union’s support pension legislation

BY PAUL LEESON
THEUNIONNEWSABE@AOL.COM

REGION, June 16th- The Pennsylvania House of Representatives passed a comprehensive pension reform bill on June 16th that tempers the dramatic spike in pension costs faced by the state and school districts and creates new rules for future employees in an effort to stabilize the finances of public pension funds in future decades.

House Bill number 2497 passed the House of Representatives by a vote of 192 to 6 and now moves to the Senate for consideration.

The measure includes two key elements: mitigating the skyrocketing employer contribution costs faced by the state and school districts by changing the systems’ funding methodologies, and reducing benefits for future state and public school employees.

Under the plan, increased costs to the state and school districts would be capped by a set percentage that increases each year for four years up to 4.5 percent. The increase for subsequent years would remain at 4.5 percent until such a time as the increased costs borne by the state and school districts are less than what is required.

Once that level of payment is reached, neither the state nor the school districts would be permitted to contribute less than the “normal cost” to maintain benefits as determined by actuaries. Meanwhile the state’s two school employees unions, the American Federation of Teachers of Pennsylvania (AFT) and the Pennsylvania State Education Association (PSEA), are supporting the legislation.

“Our organization supports the legislation as a balanced solution to address pension concerns, while preserving the defined benefits pension system for current and future school employees and reducing costs to taxpayers in 2011 and beyond,” said James Testerman, President of the PSEA.

“This bill helps preserve and protect jobs and quality education now, and keeps the promise of a secure retirement in the future,” stated Ted Kirsch, President of the AFT of Pennsylvania.

The PSEA is not affiliated with the American Federation of Labor and the Congress of Industrial Organization (AFL-CIO) in Washington while the AFT is affiliated with the labor federation.

Under the amendment, new public school employees will contribute 7.5 percent of their pay to their pension, currently they pay 6.25 percent.

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