|
|
FOR IMMEDIATE RELEASE |
|
State
Rep. Peter J. Daley |
|
Daley introduces legislation to create new COLA system
HARRISBURG, April 29 – 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 plan, H.B. 32, would create a new voluntary class for currently employed members within 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.
The additional 1 percent contribution would not be eligible for withdrawal by the employee under the "lump sum" program.
"We’re confident, given the outstanding track record of performance by our two pension funds, that they can return up to 3 percent at a date in the future in return for a 1 percent contribution today," Daley said.
He noted, too, that the 1 percent figure is from gross active pay, while the COLA 3 percent is on the lower retirement pay base.
The value of this strategy is that it would remove all future retirees from the estimated cost of any COLA given to the population of current retirees.
"While this alone will not solve the problem of paying for any new round of ad hoc COLAs, it will, permanently, lay to rest the struggle to provide COLAs for future retirees," Daley said.
Daley noted that the new voluntary contribution system would also make it less expensive to provide ad hoc COLAs 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 COLAs for employees of the state and the public school system," Daley said.
###