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FOR IMMEDIATE RELEASE |
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State
Rep. Peter J. Daley |
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Daley says 30 and out needed now more than ever
Savings generated from early retirements would pay for the cost
HARRISBURG, Dec. 5 – House Commerce Committee Chairman Peter J. Daley, D-Washington/Fayette, today said he will reintroduce his two early retirement proposals for teachers and state employees in the 2009-10 session.
"Economic conditions in Pennsylvania call for an early retirement proposal for teachers and state employees now more than ever," Daley said. "We are aware of the current financial difficulties of the two pension funds and this package is financially neutral with respect to any impact on those funds. As before, I will introduce two separate bills, one for the teachers’ pension system and one for the state employees' fund."
Daley said the separate bills are needed because of the significant differences in the procedures necessary for the recapture of net savings from the early retirement of more senior workers and teachers.
"These will still be the ‘pay as you go’ proposals," Daley said. "If adopted, the will be funded solely from the actual savings from hiring younger teachers and workers, and they will accomplish our objective of saving millions of dollars and creating jobs in a struggling economy."
As for an early retirement for teachers, Daley said the savings that would be left on the table for school districts would cushion any extra pension fund costs they have this year because of market-based losses resulting from the economic recession.
"At same time, the education system component of this proposal would generate approximately 10,000 new job openings for younger teachers, critical during a recession when jobs are hard to come by," Daley said.
Daley said the system for recapturing the 60 percent of net savings necessary for the teachers’ proposal is simple and straightforward. For example, a teacher who retires at a higher level salary will be replaced with a new teacher who would not start at the retiree's pay grade. He characterized the second proposal for state employees as potentially more difficult to administer, but achievable.
"It is unquestionably the case that Governor Rendell will have to look at layoffs to achieve the kind of budgetary savings that he is suggesting," said Daley. "If that’s the case, why not accomplish that through early retirements?" Daley asked.
"It’s no different than the early buyouts now being offered by many major corporations to achieve a smaller workforce."
Daley said previous surveys have shown that most Pennsylvania retirees tend to keep their principal residence in Pennsylvania, meaning that they will spend a good portion of their retirement income in the local economy, thus investing back into Pennsylvania.
In 2006, the results of a comprehensive cost-benefit analysis and policy study of early retirement proposals concluded that the Commonwealth would save about $217 million with an early retirement bill.
The study was the result of legislation (H.R. 299) introduced by Daley in 2005.
The approval of an early retirement bill could open as many as 10,000 teaching jobs and almost 4,000 state civil service positions, according to Daley.
Both bills would offer two-year "windows" and early retirement without penalty. Criteria for the early retirement would be either 30 or more years of service, or a combination of age and years of service equal to 80.
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