Protect your pension fund
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Resources for
PSEA Members:
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Stay Informed
Talking Points: Warning: changes to your pension system are bad for your employment and retirement health.
Story: Have you made the call for your pension? Whether you’re 22 or 82 - you and your family are counting on it.
Video: Hands Off Our Pensions! Changes to school employees' pension system would affect all current and future school employees:
Updates on HB 2497:
The Senate has not yet acted on pension reform.
The Senate could take up HB 2497 this fall. The looming pension spike has not yet been addressed, so passage of HB 2497 in the fall will be even more important to Keep the Promise and protect school employee pensions.
Continue to watch your e-mail inboxes and check this page for updates. Tell your state senators to quickly pass HB 2497 as passed by the House.
Facts about HB 2497:
- House Democratic Appropriations Committee Chair Dwight Evans introduced House Bill 2497 in May focused on addressing the financial liabilities facing the Public School Employee Retirement System (PSERS) and the State Employee Retirement System (SERS).
The bill includes a number of actuarial changes – including some of those suggested by PSERS and SERS as well as the Governor’s Office – to establish a “payment plan” for the pension systems moving forward. Some of these changes include:
- Reamortization of unfunded accrued liabilities
- Increasing asset smoothing period from five to ten years
- Restructuring future liability amortization payments
- Imposing a system of employer contribution rate “collars” (progressively increasing until 2013, these collars would cap increases in the Employer Contribution Rate at 4.5% each year) to limit state and school districts’ financial exposure in any given year
- Equates the increase in the Employer Contribution Rate for 2010-2011 to the amount determined in the FY2010-2011 state budget, but no less than a 1% increase, rather than the rate established by the PSERS Board of Trustees in December 2009 (8.22%).
- Rep. Evans moved HB 2497 out of House Appropriations Committee without amendment on Monday June 7.
- PSEA issued a position statement of support for HB 2497 without amendment following the Committee meeting on Monday evening. In the statement, PSEA strongly encouraged the legislature to consider leaving the PSERS Employer Contribution Rate (ECR) for 2010-2011 at 8.22%, but we also recognized that allocating an additional $165 million in state funds for the pension systems may not be feasible given some of the economic challenges facing the Commonwealth, namely, the $1.2 billion deficit for this current year’s budget.
- On Wednesday, June 9, House Democratic and Republican leaders met with PSEA and other union members and informed us that they were working on an omnibus amendment to the bill that they passed on Tuesday June 15, following review of the language by the Public Employee Retirement Commission.
- The amendment implemented benefit changes for all new public employees - both PSERS and SERS - effective July 1, 2011 and January 1, 2011 respectively:
- Increase vesting from 5 years to ten years.
- Increase the age of retirement from 62 years of age to 65 years of age (35 years of service still qualifies for superannuation).
- Eliminate Option 4 (the ability of members to withdraw their accumulated contributions with interest at the point of retirement and receive a reduced annuity).
- Offer two different multiplier options:
- 2.0 multiplier with a 7.5% employee contribution rate; OR
- 2.5 multiplier with a 10.25% or 10.31% employee contribution rate.
- Members will have 45 days to elect their multiplier.
- The House passed HB 2497 on June 16.