House Democrats Welcome Pension Commission’s Report
Dermody says it validates retirement systems’ overall strategy
HARRISBURG, Dec. 20 – The special panel charged with finding new ways to save money for Pennsylvania’s two pension systems issued its final report today and House Democratic Leader Frank Dermody said he is pleased it acknowledges the State Employees’ Retirement System’s and the Pennsylvania School Employees’ Retirement System’s efforts to save money and streamline services as they continue to pursue diverse investment strategies.
The Public Pension Management & Asset Investment Review Commission voted to approve its final report today after holding public meetings and engaging with respected public pension experts throughout the fall. The panel was established by a 2017 law and tasked with doing this report.
“What we heard during the public meetings is PSERS and SERS have been working to save money on investment fees,” Dermody said. “Remember, they have already saved billions of dollars.
“But the commission identified new ways in which PSERS and SERS could save even more, and I am sure each retirement system’s board of trustees will thoroughly and seriously consider those recommendations.”
Dermody said House Democrats generally support the commission report’s emphasis on transparency, stress testing, the consolidation of investment activities, and making sure the systems are getting the best value for each dollar invested.
“While we agree with many of the principles outlined in the report, we have some differences of opinion and expressed these concerns with our own analysis, which is included in the report’s appendices.
“Too many people wrongly believe Pennsylvania’s investment fees have somehow contributed to our pension funding problems. They have not,” the House Democratic leader said. “While fees are in the billions of dollars, many people overlook the billions more these fees have returned as investment profit to help keep the retirement systems alive and protect taxpayers from footing a very large bill.
“What Pennsylvania’s taxpayers need is a constitutional amendment that would prevent lawmakers from ever again borrowing from the pension systems to balance state budgets. This conversation is perhaps more important than the fee discussion, and we hope the Republican majorities in the House and Senate continue to work with us in that direction.
“This unbreakable promise to repay old pension debt is a promise that protects Pennsylvania’s taxpayers from what could be dire economic consequences,” Dermody said.