Pa. retirees to receive pension boost

More than 50K retired state workers to get cost-of-living hike

More than 50,000 retired state workers and teachers will get their first cost-of-living increase in their pension benefits in decades under a provision included in the state budget.

The cost-of-living adjustment benefits retirees who left the workforce before 2001, prior to a 2001 law that boosted pension benefits for other state government workers and teachers.

On average, the retirees impacted by the change had been getting about $20,000 in benefits a year, according to the Pennsylvania State Education Association. Retirees in the State Employees Retirement System will see an average monthly pension increase of $190 a month, while retirees in the Public School Employees Retirement System will get an additional $250 a month.

The cost-of-living adjustment will cost the state an additional $170 million a year in pension obligations over the next 10 years, according to an analysis by House Republicans.

But proponents say the measure is overdue and follows years in which retirees have watched their pension benefits remain unchanged as inflation spiked.

"There are people who've had to sell their homes" because they could no longer afford to live in them because their pension benefits were insufficient to pay their bills, John Werner, a retired math teacher and president of the Pennsylvania Association of School Retirees, told CapitolWire/State Affairs in a Monday afternoon interview.

Werner said that retirees who left work prior to 2001 were working at a time when government jobs didn't pay as much as they do now and the benefit calculations were less generous.

As a result, the pension changes included in the budget "is a significant increase."

An April actuarial note completed by the Independent Fiscal Office estimated that the cost-of-living adjustment would impact just under 20,000 retirees covered by the State Employees Retirement System and 34,190 retirees covered by the Public Schools Employees Retirement System. The average age of the SERS pensioners who will benefit is 81, while the average age of the PSERS retirees impacted is 84.

The retirees' group, along with unions representing government workers, have been lobbying for the cost-of-living adjustment for the pre-2001 retirees for years.

In floor debate on the bill, Rep. Stephen Malagari, D-Montgomery, said that the struggle to boost the pension benefits for the pre-2001 retirees has dragged on so long, the number of people benefiting from the change has been tumbling as literally thousands of pensioners have died waiting for the Legislature to fix the problem.

"We have lost almost 10,000 dedicated public servants who deserved this long-overdue raise to help them live a better life, to help them with medication costs, to help them with grocery costs, to help them get to and from their doctor's appointments -- to help them simply live," he said. "Ten thousand individuals did not get the help they so deserved because some on the other side of the building here decided not to act."

Malagari was the prime sponsor of House Bill 411, which would have provided the pension boost. The bill was approved by the state House in April 2025 but never advanced out of the Finance Committee in the Senate.

Werner said changing tactics to push to get the pension boost included in the omnibus budget bills rather than trying to get the measure enacted as a standalone bill paid off. But, the years of lobbying certainly helped too, he said.

"I'd like to think our persistence had something to do with it," he said.