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FOR IMMEDIATE RELEASE |
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Rep. Peter J. Daley |
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Daley introduces measure to create
new COLA system for state, teacher retirees
HARRISBURG, Dec. 19 – House Commerce Committee Chairman Rep. Peter J. Daley D-Washington/Fayette, today unveiled a new plan to provide permanent cost-of-living adjustments for future teachers and state retirees.
Daley’s proposal also includes a 5 percent cost of living adjustment for current retirees who left active service before the 2001 pension changes.
“This plan would provide greater financial certainty for many of Pennsylvania’s retirees,” said Daley. “Retirees will feel confident that their pensions will keep pace with their expenses from year to year.”
Daley’s plan would create a new voluntary class for current actively employed members of the state’s pension funds for teachers and state employees. Those electing to join this category would contribute 1 percent of their gross pay each pay period. In exchange, the pension fund would guarantee them a permanent annual cost of living adjustment equal to the Consumer Price Index, up to a 3 percent maximum.
“It has to be laid out on the table,” Daley said, referring to the 5 percent adjustment for current retirees. “If we believe that legislators need a cost of living adjustment, then our retirees need and deserve one, too. And it’s way overdue.”
Daley acknowledged that the 5 percent adjustment would require additional funding from either the pension funds, or from the annual General Fund. He said his preference would be to fund the adjustment from the General Fund. “We have to do these things on a pay-as-you-go basis,” he said.
Based on earlier studies, the 5 percent increase would cost about $125 million annually for the next 10 years – or about what the projected General Fund budget surplus is for this fiscal year.
Daley noted that the new voluntary contribution system would also make it less expensive to provide ad hoc COLA’s in the future for those not retired, since currently active employees will be covered under the new system.
“This is the most accurate, sensible means of providing COLA’s for employees of the state and the public school system,” said Daley.
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CONTACT: Destiny Zeiders |