The defined benefit pension plan is a relic of the past.
Most companies that offer retirement plans long ago shifted to more cost-effective offerings, such as the 401(k).
The time has come to eliminate the overly expensive, taxpayer-funded defined benefits systems before they bankrupt Pennsylvania.
The Pennsylvania Institute of Certified Public Accountants joins with Gov. Tom Corbett and other stakeholders in urging the members of the General Assembly to take action before the cost of funding Pennsylvania's two pensions systems - the Public School Employees Retirement System and the State Employees Retirement System - overwhelm our state budget.
The two systems have a combined unfunded liability of more than $41 billion.
Over the course of the next three budget cycles (2013-14, 2014-15, 2015-16), Pennsylvania's contributions to fund PSERS and SERS are expected to increase by more the $2 billion.
The budgetary impact will be a significant crowding-out of funding on the rest of the Commonwealth's vital programs and services over the next several years.
These systems are simply no longer sustainable.
The PICPA Fiscal Responsibility Task Force has offered a number of policy options to address the crisis.
The PICPA believes pension reform in Pennsylvania must include addressing the nature of the benefit type as well as funding the obligations already promised to current employees and retirees.
The report of the task force can be found at www.picpa.org/fiscal.
The time to play the blame game is over and, at this crisis point, irrelevant.
Kicking the can down the road is no longer an option. Real, measurable public pension reform is needed now.
Robert C. Jazwinski
Pennsylvania Institute of CPAs